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Walter Daum


Marx’s Revolutionary Economic Theory and Program: Against Reformist Distortions and Leftist Passivity

The “Great Recession” is deepening. The roots of the crisis lie deeper than the financial manipulations that immediately provoked it. Global profit rates have remained well below their post-World War II heights, despite: a) the capitalists’ success in cutting wages while raising productivity; b) the opening up of China and other countries to imperialist super-exploitation; c) the profit-enhancing information revolution. Three basic components of Marxist theory are essential for analyzing them.

1. Cyclical crises. Cycles of boom and bust have occurred throughout the history of capitalism. Capitalism’s crises are the bitter medicine required for the health of the system. The collapse of unprofitable firms helps purge inefficiencies and drive down workers’ wages, thus laying the basis for an upturn. But in the age of monopolies and imperialism, that has changed.

2. Capitalism’s epoch of decay. For over a century capitalism has been a decadent system that can no longer advance the productive forces in one sphere without destroying them in others. The imperialist epoch, foreseen by Marx, came to a head in the cataclysm of the First World War. In this epoch the law Marx discovered of the falling tendency of the rate of profit comes into full play and leads to major catastrophes like the Depression of the 1930’s.

3. Fictitious value. Credit and banking are necessary components of capitalist production. But debts and other paper claims to ownership can acquire a nominal value that differs, sometimes vastly, from the real value of the commodities they represent. Bubbles of fictitious capital in the past would be largely wiped out in the periodic crises, but in this epoch they can become so huge that their bursting can signal the collapse of the whole economy into permanent crisis.

These factors point to the real danger of another devastating depression. The Great Depression of the 1930’s was resolved only by means of fascism and world war. A recurrence can be prevented only through working-class socialist revolution. It is the task of revolutionaries to build a revolutionary leadership layer of the working class that can prove to wider and wider layers of our class, in the course of struggle, the necessity for socialist revolution.

Genuine Marxists are distinguished both from minimalists, those who offer reforms within the realm of capitalism but do not act on the conviction that as long as the capitalist class rules society, any reform will only be partial and temporary; and also from maximalists, who proclaim the necessity of socialism but disdain from taking a lead in advancing the class struggles of today which inevitably fight for reforms. The League for the Revolutionary Party, through its practical as well as theoretical work, seeks to fulfill the tasks outlined in the Communist Manifesto: communists not only “have over the great mass of the proletariat the advantage of clearly understanding the line of march, the conditions, and the ultimate general results of the proletarian movement,” but they also strive to be “the most advanced and resolute section of the working-class parties of every country, that section which pushes forward all others.” Our chief guides in this work are Lenin’s conception of the vanguard working-class party and Trotsky’s transitional program method, which shows how to fight for reforms while breaking illusions in reformism.

The talk is based largely on the article by Walter Daum and Matthew Richardson, “Marxist Analysis of the Capitalist Crisis: Bankrupt System Drives Toward Depression,” Proletarian Revolution 82, Winter 2010; www.lrp-cofi.org/pdf/bankruptsystem.pdf.


Walter Daum supports the League for the Revolutionary Party and is the author of The Life and Death of Stalinism: a Resurrection of Marxist Theory (1990) and several articles on Marxist economic analysis, all of which are available on the LRP website. He taught mathematics at the City College of New York for 35 years.

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