Louis Proyect: The Unrepentant Marxist

December 18, 2007

Gindin, Brenner and capitalist catastrophe

Filed under: economics — louisproyect @ 7:11 pm

On the horizon?

On December 7th, there was an interesting debate on the current economic situation between Sam Gindin and Robert Brenner at the Brecht Forum in New York that can be seen here.

Gindin is associated with a current within Marxism that tends to be skeptical of claims that the capitalist system is passing through some intractable crisis. In his presentation, he characterized the post-WWII boom as an exception to the general rule, one in which the capitalist system is marked by instability, stagnation and growing income differentiation, etc. Measured by the criterion of the late 19th century, today’s world is fairly consistent with the long term tendencies of the capitalist system. To drive his point home, Gindin quoted Alan Greenspan about dire problems facing the American economy and then identified the quote as dating from 1980.

Brenner is Gindin’s polar opposite. Since 1998, when he wrote a book length article in the New Left Review titled “The Economics of Global Turbulence,” Brenner has tended to look for signs of a new worldwide depression in the style of 1929. (You can read an abbreviated version of this in Against the Current magazine.) A more recent example of his thinking can be found in a Guardian blog titled “That hissing? It’s the sound of bubblenomics deflating,” which concluded:

Yet there is reason to doubt the efficacy of the Fed’s reduced rates. How can consumers again rise to the occasion, when declining house prices increase saving, not spending? The consumption-led boom seems set to peter out. Will not the fall in the dollar that is bound to accompany the Fed’s move force up longer-term rates, threatening to drive down asset prices and curtail real growth? How can lower borrowing costs reduce the massive mortgage security losses that cannot but result from the tide of defaults that has only just begun? There is little doubt that rough times are ahead: the expansion may end with both a whimper and a bang.

In addition to the Brecht Forum video, you can sample Gindin’s latest views in a MRZine article titled “Is the Big Ship America Sinking? Contradictions and Openings.” In contrast to Brenner, Gindin finds continuing strength in the American economy:

The U.S. is losing manufacturing jobs at an alarming rate: the number of manufacturing jobs in the U.S. is today below where it was fifty years ago, and as a share of total jobs, manufacturing employment is today less than half of what it was then. Yet because of the high productivity of the remaining workers, manufacturing production is not disappearing: the volume of manufactured goods produced in the U.S. has increased six-fold since 1950. Remarkably, given the decline in manufacturing jobs, manufacturing production has maintained its share of the American economy’s real (after adjustments for price inflation) output. The U.S. continues to generate half the research and development done amongst the G-7 leading capitalist economies. According to the U.S. National Science Foundation, the American share of the global production of high-tech goods, in spite of all the outsourcing and the imports, actually increased from 25% a quarter of a century ago to 42% in 2003. It is certainly true that high-tech production in China and South Korea has increased much faster, but they started from a low base (about 1% in each country) and their global share has risen to what is still a fraction of the U.S. levels, at only 9% and 4% respectively.

Marxists are pretty evenly divided over these questions. Lining up with Gindin are Doug Henwood, Leo Panitch (Gindin’s writing partner and co-editor of Socialist Register, where many articles on this subject can be found) and Peter Gowan. Although they differ sharply on various other questions and even over the exact nature of the emerging economic crisis, Patrick Bond, David Harvey and Immanuel Wallerstein tend to line up with Brenner.

For obvious reasons, the organized Marxist-Leninist left goes even further than Brenner in seeing looming 1929’s on the horizon. The most intelligent defense of the “catastrophist” outlook can be found in the “In Defense of Marxism” website, associated with the Grant-Woods Trotskyist current. If you go to the economy subsection, you will find many “doom and gloom” articles authored by Michael Roberts. The latest, titled “Credit Crunch,” has this teaser:

Everywhere the cry is: credit crunch! You can smell the sweat on the brows of bankers as their necks are squeezed by the tightening credit noose. In all the offices of the great investment banks of Wall Street, the City of London and gnomes of Zurich, you can hear the hissing sound of the global financial bubble bursting and deflating.

This year my wife completed a PhD dissertation on whether three financial crises (the most recent involved the LTCM debacle) supported the hypothesis that the U.S. was in decline. In general agreement with the Gindin perspective, she demonstrated how each crisis was exploited by the American bourgeoisie to further its own interests globally, even though the resolution always involved new contradictions and dangers.

I confess to being wishy-washy on the topic. Perhaps I became immunized to the kind of hard-core catastrophist analysis associated with the Marxist-Leninist vanguard parties after hearing leaders of the American SWP describe the late 1970s in cataclysmic terms. For nearly the past 30 years, they have been predicting a global depression in the 1929 style. There is a certain logic to this. If you are trying to hold together an isolated and shrinking sect, hope takes the form of such predictions. While the rest of American society has fond hopes of prosperity, the far reaches of the Marxist left go to sleep at night fantasizing about Hoovervilles.


James P. Cannon and Felix Morrow: the Brenner and Gindin of their time?

It should be mentioned that some American SWP’ers have refused to accept the “catastrophist” recipes of the leadership in the past. In the last year of WWII, a debate broke out between party leader James P. Cannon and Felix Morrow, best known for his “Civil War in Spain.” Cannon spoke for the majority of Trotskyists when he proposed that American capitalism had begun an “absolute decline” in 1929 and that postwar Europe would face nothing but “dismemberment and degradation, and the propping up of the capitalist system with American bayonets”.

Morrow had a different take on Europe’s future. Anticipating the Marshall Plan and the eventual recovery, he wrote that the U.S. would invest in Europe so as to forestall the very revolution that Cannon predicted:

Trotsky never said that America would not sell or lend heavy machinery to the European countries. It was not in this way that he thought of America as ruining Europe. He knew very well that it was with the aid of America’s 1924-1928 loans that German industry was reconstructed and that this could happen again after the next war, if not in Germany itself, then certainly in other countries of Europe. Simultaneously, however, with its loans to Germany, US imperialism was spreading everywhere so that when German industry was reconstructed it found its possible markets preempted by American and other imperialisms. America was aiming to put Europe “on rations,” said Trotsky, in the sphere of world markets.

According to wikipedia, Morrow was expelled from the SWP in 1946 for “unauthorised collaboration” with Shachtman’s Workers Party, whatever that meant. Based on my experiences with the organizational norms of the SWP, this might have meant that he shared blintzes with Shachtman.

Despite my skepticism about 1929’s looming on the horizon, I do not think that the prospects for American capitalism are very good. In fact, when Peter Camejo wrote an article in Against the Current taking exception to Brenner (not online unfortunately) in ways that I found disturbingly bullish, I wrote a response that was influenced by Harry Shutt’s “The Trouble with Capitalism,” a book that shares Brenner’s main point, namely that competition between the U.S. and the recovered economies of Western Europe and Japan was responsible for declining profits. One of my observations seems eerily prescient:

Another interesting contrarian position found in Camejo’s article is that Americans do save a lot, despite all reports to the contrary. He bases this on home ownership and designates a mortgage payment as a form of savings. A house is not a home in Camejo’s world, but an investment. Based on this approach, “The fact is that U.S. citizens on the average have a larger ‘savings’ account than those of any other country, almost 40% higher than supersaver Japan.” Somehow this does not square with my understanding of the post-WWII situation, when most American workers not only owned a house, but had a savings account as well. Beyond this, most employees of Fortune 500 companies also could look forward to cashing in on a company pension plan, which guaranteed a fixed income based on longevity. The fact that most Americans today own nothing but their house, and owe a greater percentage of income to consumer debts–a fact neglected by Camejo–seems expressive of a general downturn, despite the number of laptop computers seen in Starbucks or the number of people walking down the street with a cell phone glued to their ear.

One can understand why Marxists, either in “vanguard” parties or in the academy, would tend to look for 1929’s on the horizon. For the past sixty years or so, starting with the period accurately described by Felix Morrow as one of capitalist expansion, the socialist movement has experienced nothing but contraction. Furthermore, after 1990 the Soviet Union collapsed and the parties associated with it, leaving aside their revolutionary credentials, also went into a steep decline. This leaves Marxists, except for the unrepentant types, looking a bit out of place.

This is not to say that things will always look so bleak. In a September 21, 2006 New York Review article (only available to subscribers) titled “Goodbye to All That?,” Tony Judt–certainly no friend of Marxism–admitted:

If Marxism fell from favor in the last third of the twentieth century it was in large measure because the worst shortcomings of capitalism appeared at last to have been overcome. The liberal tradition—thanks to its unexpected success in adapting to the challenge of depression and war and bestowing upon Western democracies the stabilizing institutions of the New Deal and the welfare state—had palpably triumphed over its antidemocratic critics of left and right alike. A political doctrine that had been perfectly positioned to explain and exploit the crises and injustices of another age now appeared beside the point.

Today, however, things are changing once again. What Marx’s nineteenth-century contemporaries called the “Social Question”—how to address and overcome huge disparities of wealth and poverty, and shameful inequalities of health, education, and opportunity—may have been answered in the West (though the gulf between poor and rich, which seemed once to be steadily closing, has for some years been opening again, in Britain and above all in the US). But the Social Question is back on the international agenda with a vengeance. What appears to its prosperous beneficiaries as worldwide economic growth and the opening of national and international markets to investment and trade is increasingly perceived and resented by millions of others as the redistribution of global wealth for the benefit of a handful of corporations and holders of capital.

Much as I’d like to take Judt’s musings to heart, I am afraid that “shameful inequalities” in themselves are not sufficient to produce class consciousness and revolutionary action. If the entire postwar period has been marked by capitalist expansion and prosperity (admittedly for some and not all) in the developed countries, it has also borne witness to the kind of immiseration in the developing countries that was characteristic of nineteenth century Europe that gave birth to an examination of the “Social Question” alluded to above.

But even in the 3rd world, the masses can go on for decades without rising up against neocolonialism and exploitation. Usually, an uprising is associated with a major shift in the political arena than any specific detonator like an outbreak of unemployment or inflation. For example, Cuba’s economic conditions were as favorable in the 1950s as they had been in any prior period, even more so possibly. It was the very “prosperity” that convinced liberals and social democrats to question the need for an armed struggle against Batista.

Ultimately, it was the emergence of an oppositional political culture in Cuba that led to a revolutionary onslaught. This brings me to a point that Gindin made in his presentation. He said that the problem today is political more than anything else. He said that if you had told him in 1975 that the U.S. would undergo the loss of good trade union jobs and welfare state social legislation with so little protest over the next 30 years or so, he simply would have not believed it–and neither would have I.

If there is anything that we can learn from Cuba’s socialist revolution, it is that leftists have to learn to break with the two-party system that keeps opposition politics within acceptable, capitalist parameters. For us, the launching of a mass, left of center leftwing party would be equivalent to the launching of Granma in 1956. It would be less dangerous but just as fragile an enterprise given the power and wealth of our class enemies. But no other course makes sense, especially given the ripening of economic conditions that might even result in a catastrophe down the road, for in that eventuality extremism of the right would challenge civilization as we know it.


  1. I consider myself in the “doom and gloom” faction of the Left. Louis, this is another excellent analysis but I do not see anything in your post regarding the rising cost of crude oil and depletion of natural resources. This one fact is why I believe we are headed for certain economic catastrophe. I am also a “peak oil” theory believer. There will come a time in the very near future where oil production can not meet the world’s demand. Cube has survived its peak oil crisis. The question is….can America? I don’t think so. Time is running out for capitalism to make the change from fossil fuel to an environmentally friendly alternative.


    Comment by Doug — December 18, 2007 @ 8:19 pm

  2. Cuba not “Cube”. sorry.

    Comment by Doug — December 18, 2007 @ 8:20 pm

  3. I agree with Doug that mounting ecological problems will have more and more importance. In fact, I think that water will easily surpass oil as the number one issue. That being the case, it doesn’t affect my underlying point–namely that worsening conditions do not automatically lead to a radicalization.

    Comment by louisproyect — December 18, 2007 @ 8:22 pm

  4. Louis, you might be interested in this paper by Paul Kellogg, a leading member of the International Socialists in Canada. He argues that the recurring crises after 1998 have been lessened by the scale of a new industrial revolution in China.

    Click to access Kellogg.pdf

    Comment by Doug N. — December 18, 2007 @ 9:24 pm

  5. I remember in the 60s, some believed, if the police attacked, radicalization will follow. Instead there was only scrambled brains.

    What we have that is most radical, is our utopian vision, not our protest. Protest occured throughout US history.

    Comment by Renegade Eye — December 18, 2007 @ 11:43 pm

  6. […] in the process? Socialists are divided on the issue, says The Unrepentant Marxist Louis Proyect, referring to a debate between Robert Brenner and Sam Gindin […]

    Pingback by Politics in the Zeros » Capitalist crisis? — December 19, 2007 @ 5:19 am

  7. Marxists tend to underestimate the flexibility of capitalism and the fact that the bourgeoisie will always make concessions and adjustments in order to preserve itself in times of crisis. We will see massive investments in renewable energy and the like when fossil fuel depletion really begin to threaten the structures of capitalism. Of course, this won’t come soon enough to prevent millions from dying or being displaced by ecological disasters and rising sea levels…. but oh well.

    Comment by Adrian — December 19, 2007 @ 5:53 am

  8. Feedback from Sam Gindin:

    I pretty much agree with your comments. On the issue of savings and home
    ownership, I think your distinctions are important, though I don’t know
    whether we agree on the implications. American workers did have savings
    after WWII but they were soon also in debt not only for mortgages but for
    cars and appliances – and home ownership was not as extensive. Today,
    workers don’t have a lot of formal savings – their savings are in their
    homes and private pensions plus a little stock – and in terms of net assets,
    they look very good on average (home ownership is – was – at a peak), even
    after the sub-prime collapse (averages of course hide much). But workers
    are, as you say, vulnerable and this impacts on militancy: they don’t want
    to lose what they have and so are hesitant to strike and susceptible to
    concessionary pressures. On the one hand, this leaves the system itself open
    to the kind of crises brought on by people not being able to afford their
    mortgages; on the other, it means that – as Leo and I have argued – capital
    has a great deal of space to solve any imminent crisis on the backs of
    workers – witness the Big Three negotiations. So the system stumbles on
    until we become a barrier to its anti-social solutions. But it also changes
    and ‘corrects’ some of the problems (less mortgages in the future to poor
    blacks) and may even achieve higher levels of efficiency in terms of
    capitalist criteria (figuring out how to slow derivatives down but still let
    them grow – not anything that is inevitable so, but it seems to be

    Comment by Louis Proyect — December 19, 2007 @ 1:56 pm

  9. Dear Louis,

    Hi from London (I’ve been following your writings for some time).

    I wonder if you can help me find the text of Trotsky’s speech on the 3rd Anniversary of the October Revolution (1920).

    NB: Sorry about this irrelevant “post, but I couldn’t find your email…

    Comment by Rik Sorge — December 19, 2007 @ 2:04 pm

  10. Gindin cannot afford to contemplate the possibility of fissures in the capitalist globe otherwise his theory of imperialism would cease to be coherent. The question is whether he adheres to his argument out of sheer obstinacy drawing on the straw phantom that “others have made this argument before”, or whether his economic predictors will have any relevance even one year from now.

    Although not a fan of Brenner I have to side with him on this point. Most of us who have lived in the global south cannot but see how warped capitalist interests operate as if these peoples will now stay subdued by neo-colionists. Surely Russia and China now become bullying power brokers but, this does not mean that they are the instruments that will further agglutinate capitalism.

    Comment by nchamah miller — December 19, 2007 @ 10:44 pm

  11. “Remarkably, given the decline in manufacturing jobs, manufacturing production has maintained its share of the American economy’s real (after adjustments for price inflation) output.”

    In a Discovery Channel documentary, after demonstrating how the newly designed ship engine works, an engineer states sardonically that there were used to be a couple of workers dealing with it. But thanks to the development of new technologies, just pushing a button does the job. Then I though the amount of labor that is being spent to finalize that fabulous engine.

    “This year my wife completed a PhD dissertation on whether three financial crises (the most recent involved the LTCM debacle) supported the hypothesis that the U.S. was in decline…”

    One thing to bear in mind is, now the world financial market is multicentral. This is like deliberately not placing some pieces to a domino show. So, a financial crisis loses its destructive effect when it reaches to another center.

    Besides, now financial crises are practical tools for imperialist expansion.

    Comment by Mehmet Çagatay — December 20, 2007 @ 1:35 am

  12. I’m plugging this post at my blog.

    Comment by Renegade Eye — December 20, 2007 @ 7:39 am

  13. the organized Marxist-Leninist left goes even further than Brenner in seeing looming 1929’s on the horizon.

    I hope you’re aware that the ISO is one of the exceptions to this rule about “the organized Marxist-Leninist left” on this question. I think Gindin is more right than Brenner, and this point you made is very, very important:

    He said that the problem today is political more than anything else. He said that if you had told him in 1975 that the U.S. would undergo the loss of good trade union jobs and welfare state social legislation with so little protest over the next 30 years or so, he simply would have not believed it–and neither would have I.

    Comment by Binh — December 20, 2007 @ 3:28 pm

  14. […] enough there to get the picture. Otherwise, if you prefer not to stuff around with Google Video, Louis Proyect helpfully supplies links to both sides’ arguments in […]

    Pingback by Waiting for crisis « Scandalum Magnatum — January 5, 2008 @ 4:53 am

  15. […] I have received a number of emails over the past few days from some of the main principals in the Gindin-Brenner debate over “crisis” that were posted to the Marxism mailing list. They were touched off by […]

    Pingback by Follow-up commentary on the Gindin-Brenner debate « Louis Proyect: The Unrepentant Marxist — January 5, 2008 @ 6:54 pm

  16. […] The current debate follows on from a recent forum sponsored by the US socialist magazine Monthly Review between leading marxist political economists Robert Brenner and Sam Gindin, which is available online in video format here.  For those without broadband Louis Proyect has given an overview of the main arguments on his blog Unrepentant Marxist. […]

    Pingback by Marxists debate state of the global economy « Socialist Democracy — January 6, 2008 @ 1:01 am

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