Late capitalism
Encyclopedia
"Late capitalism" is a term used by neo-Marxists to refer to capitalism
from about 1945 onwards, with the implication that it is a historically limited stage rather than an eternal feature of all future human society. Postwar German sociologists needed a term to describe contemporary society. Theodore Adorno preferred "late capitalism" over "industrial society," which was the theme of the 16th Congress of German Sociologists in 1968. This period includes the era termed the golden age of capitalism.
in his 1902 magnum opus Der Moderne Kapitalismus; Sombart distinguished between early capitalism, the heyday of capitalism and late capitalism. The term began to be used by socialists in Europe towards the end of the 1930s and in the 1940s, when many economists believed capitalism was doomed and it was used in the 1960s particularly in Germany and Austria, among others by Western Marxists writing in the tradition of the Frankfurt School
and Austromarxism
. At the end of World War II
, many economists including Joseph Schumpeter
and Paul Samuelson believed the end of capitalism could well be nigh, in that the economic problems might be insurmountable.
famously declared that there are no "absolutely hopeless situations" for capitalism.
This, however, does not deter critics of the system, who point to its relative newness, the rapid collapse of prior orders of much greater duration, the effects of modern communications on class consciousness
, and a general perceived inadequacy of its ability to deal with various crises of its own making and other long term structural problems.
But there are also others, like Murray Bookchin
, who argue that capitalism has already been superseded; in a modern information society
the old industrial system is a thing of the past, and the reference to capitalism is an anachronism
(although Marx never defined capitalism as being purely industrial). Similarly, Immanuel Wallerstein
believes that capitalism is in the process of being replaced by another world system in several of his works and lectures on world-systems theory. Wallerstein places the time at which this process began as somewhere around 1968, during the so-called revolutions of 1968 and as the hegemony
of the United States
began to move into a period of decline. Wallerstein does not state what sort of system the world is theorized to be transitioning to, indeed he believes it is impossible to know until the transition has already been made.
, who popularised the term with his 1972 PhD dissertation, late-stage capitalism will be dominated by the machinations – or perhaps better, fluidities – of financial capital
.
In his work Late Capitalism, Mandel argues for three periods in the development of the capitalist mode of production
. The first is freely competitive capitalism, which occurred from 1700 to 1850 and is characterized largely by the growth of industrial capital in domestic markets. Secondly there is the phase of monopoly capitalism, which lasted until approximately 1940, and is characterized by the imperialistic
development of international markets as well as the exploitation of colonial territories
. Finally there is the epoch of late capitalism emerging out of the Second World War, which has as its dominant features the multinational corporation
, globalized markets and labor
, mass consumption
, and the space of liquid multinational flows of capital.
In the tradition of the classical Marxists
, Mandel tried to characterize the nature of the modern epoch as a whole, with reference to the main laws of motion of capitalism specified by Marx, in order to show how the same forces which boosted profitability after the world war must ultimately turn into their dialectical opposites, and cause its decline. Mandel's aim was to explain the unexpected revival of capitalism after World War II
, and a long economic boom which showed the fastest economic growth ever seen in human history.
For Mandel, profitability could be influenced by numerous different factors, and was only the general indicator of the condition of the system as a whole; his critics (such as Paul Mattick
) however argued that Mandel is too eclectic, and failed to give an orthodox Marxist explanation of the famous "tendency of the rate of profit to fall
".
Whereas Mandel organised his explanation of the long boom mainly in terms of factors counteracting the falling rate of profit, he did not distinguish clearly between the rate and volume of profit and considered effective demand an important variable. This invited the accusation that Mandel subscribed to a theory of underconsumptionism, i.e. attributing crisis phenomena to a lack of buying power by workers. Such an approach, it was argued, is conducive to a reformist redistribution of wealth, rather than total revolution.
s, preferred the concept of state monopoly capitalism
, or reject any periodisation of capitalism in terms of "early" and "late" stages as unscientific.
The American literary critic and cultural theorist, Fredric Jameson
, also used Mandel's third stage designation as the point of departure for his widely-cited Postmodernism, or the Cultural Logic of Late Capitalism, in which, among other issues, Jameson argues that this period involves an emergence of a Cultural Dominant or Mode of Cultural Production which differs markedly in its various manifestations (Jameson comments on developments in Literature, Film, Fine Art, Video, Social Theory, etc.) from those of its predecessor, referred to collectively and broadly as Modernism, mainly in its treatment of "subject position," temporality and narrative.
's influential cultural analysis of postmodernity
. A section of Jameson's analysis has been reproduced on the Marxists Internet Archive.
The theme of the end of history, recalling an idea from Hegel, was rekindled by A. Kojève in his Introduction to the Reading of Hegel. It is discussed by Francis Fukuyama
in a book of the same name, and criticised by Frank Furedi
http://www.spiked-online.com/Articles/00000006D8EE.htm The idea of the "end of history" is that liberal democracy
represents the highest and ultimate development of human society and that all societies tend towards liberal democracy as an end state.
A related term is late bourgeois society as contrasted with early bourgeois society in the 17th and 18th century, and classical bourgeois society in the 19th and early 20th century.
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
from about 1945 onwards, with the implication that it is a historically limited stage rather than an eternal feature of all future human society. Postwar German sociologists needed a term to describe contemporary society. Theodore Adorno preferred "late capitalism" over "industrial society," which was the theme of the 16th Congress of German Sociologists in 1968. This period includes the era termed the golden age of capitalism.
Origin of the term
The term "late capitalism" was first used by Werner SombartWerner Sombart
Werner Sombart was a German economist and sociologist, the head of the “Youngest Historical School” and one of the leading Continental European social scientists during the first quarter of the 20th century....
in his 1902 magnum opus Der Moderne Kapitalismus; Sombart distinguished between early capitalism, the heyday of capitalism and late capitalism. The term began to be used by socialists in Europe towards the end of the 1930s and in the 1940s, when many economists believed capitalism was doomed and it was used in the 1960s particularly in Germany and Austria, among others by Western Marxists writing in the tradition of the Frankfurt School
Frankfurt School
The Frankfurt School refers to a school of neo-Marxist interdisciplinary social theory, particularly associated with the Institute for Social Research at the University of Frankfurt am Main...
and Austromarxism
Austromarxism
Austromarxism was a Marxist theoretical current, led by Victor Adler, Otto Bauer, Karl Renner and Max Adler, members of the Social Democratic Workers' Party of Austria during the late decades of the Austro-Hungarian Monarchy and the First Austrian Republic...
. At the end of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, many economists including Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
and Paul Samuelson believed the end of capitalism could well be nigh, in that the economic problems might be insurmountable.
Background
Capitalism is perceived to be a flexible and adaptive system, able to survive terrible catastrophes including two world wars and an enormous number of smaller wars - suggesting, for many thinkers, that the end is not yet near. Vladimir LeninVladimir Lenin
Vladimir Ilyich Lenin was a Russian Marxist revolutionary and communist politician who led the October Revolution of 1917. As leader of the Bolsheviks, he headed the Soviet state during its initial years , as it fought to establish control of Russia in the Russian Civil War and worked to create a...
famously declared that there are no "absolutely hopeless situations" for capitalism.
This, however, does not deter critics of the system, who point to its relative newness, the rapid collapse of prior orders of much greater duration, the effects of modern communications on class consciousness
Class consciousness
Class consciousness is consciousness of one's social class or economic rank in society. From the perspective of Marxist theory, it refers to the self-awareness, or lack thereof, of a particular class; its capacity to act in its own rational interests; or its awareness of the historical tasks...
, and a general perceived inadequacy of its ability to deal with various crises of its own making and other long term structural problems.
But there are also others, like Murray Bookchin
Murray Bookchin
Murray Bookchin was an American libertarian socialist author, orator, and philosopher. A pioneer in the ecology movement, Bookchin was the founder of the social ecology movement within anarchist, libertarian socialist and ecological thought. He was the author of two dozen books on politics,...
, who argue that capitalism has already been superseded; in a modern information society
Information society
The aim of the information society is to gain competitive advantage internationally through using IT in a creative and productive way. An information society is a society in which the creation, distribution, diffusion, use, integration and manipulation of information is a significant economic,...
the old industrial system is a thing of the past, and the reference to capitalism is an anachronism
Anachronism
An anachronism—from the Greek ανά and χρόνος — is an inconsistency in some chronological arrangement, especially a chronological misplacing of persons, events, objects, or customs in regard to each other...
(although Marx never defined capitalism as being purely industrial). Similarly, Immanuel Wallerstein
Immanuel Wallerstein
Immanuel Maurice Wallerstein is a US sociologist, historical social scientist, and world-systems analyst...
believes that capitalism is in the process of being replaced by another world system in several of his works and lectures on world-systems theory. Wallerstein places the time at which this process began as somewhere around 1968, during the so-called revolutions of 1968 and as the hegemony
Hegemony
Hegemony is an indirect form of imperial dominance in which the hegemon rules sub-ordinate states by the implied means of power rather than direct military force. In Ancient Greece , hegemony denoted the politico–military dominance of a city-state over other city-states...
of the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
began to move into a period of decline. Wallerstein does not state what sort of system the world is theorized to be transitioning to, indeed he believes it is impossible to know until the transition has already been made.
Mandel
According to the Marxist economist Ernest MandelErnest Mandel
Ernest Ezra Mandel, also known by various pseudonyms such as Ernest Germain, Pierre Gousset, Henri Vallin, Walter , was a revolutionary Marxist theorist.-Life:...
, who popularised the term with his 1972 PhD dissertation, late-stage capitalism will be dominated by the machinations – or perhaps better, fluidities – of financial capital
Financial capital
Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
.
In his work Late Capitalism, Mandel argues for three periods in the development of the capitalist mode of production
Capitalist mode of production
In Marx's critique of political economy, the capitalist mode of production is the production system of capitalist societies, which began in Europe in the 16th century, grew rapidly in Western Europe from the end of the 18th century, and later extended to most of the world...
. The first is freely competitive capitalism, which occurred from 1700 to 1850 and is characterized largely by the growth of industrial capital in domestic markets. Secondly there is the phase of monopoly capitalism, which lasted until approximately 1940, and is characterized by the imperialistic
Imperialism
Imperialism, as defined by Dictionary of Human Geography, is "the creation and/or maintenance of an unequal economic, cultural, and territorial relationships, usually between states and often in the form of an empire, based on domination and subordination." The imperialism of the last 500 years,...
development of international markets as well as the exploitation of colonial territories
Colony
In politics and history, a colony is a territory under the immediate political control of a state. For colonies in antiquity, city-states would often found their own colonies. Some colonies were historically countries, while others were territories without definite statehood from their inception....
. Finally there is the epoch of late capitalism emerging out of the Second World War, which has as its dominant features the multinational corporation
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
, globalized markets and labor
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
, mass consumption
Consumerism
Consumerism is a social and economic order that is based on the systematic creation and fostering of a desire to purchase goods and services in ever greater amounts. The term is often associated with criticisms of consumption starting with Thorstein Veblen...
, and the space of liquid multinational flows of capital.
In the tradition of the classical Marxists
Orthodox Marxism
Orthodox Marxism is the term used to describe the version of Marxism which emerged after the death of Karl Marx and acted as the official philosophy of the Second International up to the First World War and of the Third International thereafter...
, Mandel tried to characterize the nature of the modern epoch as a whole, with reference to the main laws of motion of capitalism specified by Marx, in order to show how the same forces which boosted profitability after the world war must ultimately turn into their dialectical opposites, and cause its decline. Mandel's aim was to explain the unexpected revival of capitalism after World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, and a long economic boom which showed the fastest economic growth ever seen in human history.
For Mandel, profitability could be influenced by numerous different factors, and was only the general indicator of the condition of the system as a whole; his critics (such as Paul Mattick
Paul Mattick
Paul Mattick Sr. was a Marxist political writer and social revolutionary, whose thought can be placed within the council communist and left communist traditions...
) however argued that Mandel is too eclectic, and failed to give an orthodox Marxist explanation of the famous "tendency of the rate of profit to fall
Tendency of the rate of profit to fall
The tendency of the rate of profit to fall is a hypothesis in economics and political economy, most famously expounded by Karl Marx in chapter 13 of Das Kapital Vol. 3. It was generally accepted in the 19th century...
".
Whereas Mandel organised his explanation of the long boom mainly in terms of factors counteracting the falling rate of profit, he did not distinguish clearly between the rate and volume of profit and considered effective demand an important variable. This invited the accusation that Mandel subscribed to a theory of underconsumptionism, i.e. attributing crisis phenomena to a lack of buying power by workers. Such an approach, it was argued, is conducive to a reformist redistribution of wealth, rather than total revolution.
Criticisms
Other critics, such as the Marxist-LeninistMarxism-Leninism
Marxism–Leninism is a communist ideology, officially based upon the theories of Marxism and Vladimir Lenin, that promotes the development and creation of a international communist society through the leadership of a vanguard party over a revolutionary socialist state that represents a dictatorship...
s, preferred the concept of state monopoly capitalism
State monopoly capitalism
The theory of state monopoly capitalism was initially a Marxist doctrine popularised after World War II. Lenin had claimed in 1916 that World War I had transformed laissez-faire capitalism into monopoly capitalism, but he did not publish any extensive theory about the topic...
, or reject any periodisation of capitalism in terms of "early" and "late" stages as unscientific.
The American literary critic and cultural theorist, Fredric Jameson
Fredric Jameson
Fredric Jameson is an American literary critic and Marxist political theorist. He is best known for his analysis of contemporary cultural trends—he once described postmodernism as the spatialization of culture under the pressure of organized capitalism...
, also used Mandel's third stage designation as the point of departure for his widely-cited Postmodernism, or the Cultural Logic of Late Capitalism, in which, among other issues, Jameson argues that this period involves an emergence of a Cultural Dominant or Mode of Cultural Production which differs markedly in its various manifestations (Jameson comments on developments in Literature, Film, Fine Art, Video, Social Theory, etc.) from those of its predecessor, referred to collectively and broadly as Modernism, mainly in its treatment of "subject position," temporality and narrative.
Cultural critique
Late capitalism is also an important component of Fredric JamesonFredric Jameson
Fredric Jameson is an American literary critic and Marxist political theorist. He is best known for his analysis of contemporary cultural trends—he once described postmodernism as the spatialization of culture under the pressure of organized capitalism...
's influential cultural analysis of postmodernity
Postmodernity
Postmodernity is generally used to describe the economic or cultural state or condition of society which is said to exist after modernity...
. A section of Jameson's analysis has been reproduced on the Marxists Internet Archive.
The theme of the end of history, recalling an idea from Hegel, was rekindled by A. Kojève in his Introduction to the Reading of Hegel. It is discussed by Francis Fukuyama
Francis Fukuyama
Yoshihiro Francis Fukuyama is an American political scientist, political economist, and author. He is a Senior Fellow at the Center on Democracy, Development and the Rule of Law at Stanford. Before that he served as a professor and director of the International Development program at the School of...
in a book of the same name, and criticised by Frank Furedi
Frank Furedi
Frank Furedi is professor of sociology at the University of Kent, United Kingdom. He is well known for his work on sociology of fear, therapy culture, paranoid parenting and sociology of knowledge....
http://www.spiked-online.com/Articles/00000006D8EE.htm The idea of the "end of history" is that liberal democracy
Liberal democracy
Liberal democracy, also known as constitutional democracy, is a common form of representative democracy. According to the principles of liberal democracy, elections should be free and fair, and the political process should be competitive...
represents the highest and ultimate development of human society and that all societies tend towards liberal democracy as an end state.
A related term is late bourgeois society as contrasted with early bourgeois society in the 17th and 18th century, and classical bourgeois society in the 19th and early 20th century.
See also
- Advanced capitalismAdvanced capitalismIn political philosophy, advanced capitalism is the situation that pertains in a society in which the capitalist model has been integrated and developed deeply and extensively and for a prolonged period of time...
- Periodizations of capitalismPeriodizations of capitalismA periodization of capitalism seeks to distinguish stages of development that help understanding of features of capitalism through time. The most well-known periodizations that have been proposed distinguish these stages as:...
and state monopoly capitalismState monopoly capitalismThe theory of state monopoly capitalism was initially a Marxist doctrine popularised after World War II. Lenin had claimed in 1916 that World War I had transformed laissez-faire capitalism into monopoly capitalism, but he did not publish any extensive theory about the topic...
. - Post-industrial societyPost-industrial societyIf a nation becomes "post-industrial" it passes through, or dodges, a phase of society predominated by a manufacturing-based economy and moves on to a structure of society based on the provision of information, innovation, finance, and services.-Characteristics:...
- Wall StreetWall StreetWall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
- PostmodernityPostmodernityPostmodernity is generally used to describe the economic or cultural state or condition of society which is said to exist after modernity...
- Late modernityLate modernityLate modernity is a term that has been used to describe the condition or state of some highly developed present day societies...