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The crisis of capitalism and the disappearing centre



By William Briggs

June 6, 2022 — Links International Journal of Socialist Renewal — The political centre is shrinking. The evidence is there for all to see and it is keeping the ruling class in all countries awake and uneasy.

There is a phenomenon that can be observed across the world. Bourgeois political legitimacy is crumbling. The old verities of a tightly held two-party system of centre left/centre right domination that increasingly merges in ideology and practice is being challenged as never before. People are deserting the traditional parliamentary parties, and what were only recently seen as irrelevant edges, are becoming stronger.

There is another phenomenon that has been emerging over the past few decades and is a causal factor that affects the shrinking of the political centre. There has been an economic squeezing of the middle class. It has shrunk, as its members are increasingly returned to the working class, from whence they came in earlier generations. The crisis in global capitalism has led to a rise in social inequality, the concentration of wealth into fewer hands, the proletarianisation of the developing world, a loss of security and, within the developed economies, a middle class that is becoming smaller and more threatened.

Bourgeois politicians are well aware of this. Immediately following the United States presidential election of 2012, Barack Obama pledged that "with respect to the issue of mandate, I've got one mandate. I've got a mandate to help middle-class families and families that are working hard to try to get into the middle class. That's my mandate." It was an unspoken acknowledgement that something had gone terribly awry. The symbolism of that presidential comment was clear.

The middle class is of vital importance to the capitalist state. The state has consciously sought to promote the view that it is not simply a relevant or significant layer in society, but that we are all middle class, or at least capable of becoming members of this relatively affluent, comfortable, and secure strata. The middle, however, only holds and grows when there is a sense of stability and upward mobility. Obama saw the necessity to promote the values of the middle class, because that class was and is under economic threat. That threat has been rising for decades and living conditions have been deteriorating, slowly at first and now at an increased and frightening pace.

Middle class values in any capitalist society help enormously to engender a sense of unity of purpose; a glue of legitimacy. But even as Obama was making that pledge, the number of US workers who were no longer identifying as middle class but as part of the working class was growing. In 2016, that number had risen to 52% of the population. For decades the great majority of US workers had regarded themselves as middle class. This shift in identification and economic position is similarly reflected in most developed capitalist states. What is significant here is that identification with a class has a direct correlation to the overarching health of the economy.

A central theme in classical Marxist theory is the base/superstructure argument. Social institutions of the state and society rest on an economic base. The theory is often the subject of critique but the structural crisis that exists in all capitalist states have their roots in a failed economic system. Marxism and Marxist theory needs no validation but the twin factors of a shrinking political centre and a shrinking economic middle class are worth serious consideration. These interrelated issues point to a future where the crisis of capitalism assumes a new and existential threat.

The conscious creation of a class

When Karl Marx and Friedrich Engels wrote the Communist Manifesto, the middle class was relatively small. They considered that this class would, in time, be swallowed up as the clash between bourgeoisie and proletariat intensified and the crisis of capitalism sharpened. It was a view that came in for more than a little criticism. Decades went by and the middle class, rather than disappearing, became larger. In many cases this was an illusion, built on an idea rather than any solid foundation. The “middle-class” was an almost artificial construct. Sections of the working class were able to be convinced by the apparatus of the state that their interests were not those of their own class, but that they were a class apart: a middle class. Many accepted this. The brief “golden age” of capitalism after World War II seemed to confirm it. Life and expectations for many appeared to be much better, economically and socially. A general class acquiescence reigned.

This relative rise in affluence and the apparent numerical growth of the middle class suited the purpose of the capitalist state. Open confrontation between classes would quickly end in the defeat of the bourgeoisie or lead to a protracted class war that would mean stagnation for the economy that the state served. Class collaboration became an important tool of the state and the middle class offered a bastion for collaboration.

In the background, however, was the constant threat imposed by the contradictions of the capitalist system. Among these contradictions are: the private ownership of the means of production and the social nature of the production process; the drive to maximise profit by expanding the productive processes and surplus value, which necessitates limiting real wages growth; the imperative to increase labour productivity contributing to the tendency for profit rates to fall; and the drive to a globalised economy while relying on the nation-state system. 

Keeping these contradictions in the background is a difficult task. There is always the threat that crisis might erupt, that profits might shrink. Added problems have made life even more precarious for capitalism and, more importantly, for the people who keep capitalism afloat. Today the world faces existential issues of climate crisis and pandemic. Global supply chains are breaking down and it is becoming impossible to keep crisis at bay.

In other words, capitalism has behaved in alignment with the laws of history that Marx described. Capital expands and seeks to escape the contradictions and crises that bedevil it. A comfortable buffer between the two warring class factions was able to be accommodated for a relatively long time. However, all good things must come to an end. The tendency for the fall in the rate of profit was always there, breathing down the neck of capitalism. The system adapted, as best it could. It expanded, controlled markets, became nationalistic and, in turn, when crisis kept on threatening, globalised. The trend to a globalised order failed to rid the system of the crisis and now the world is returning to hostile economic nationalist formations.

A feature of the past several decades has been the growth of inequality and the accumulation of wealth into fewer and fewer hands. Credit Suisse and Oxfam regularly provide updates of just how this inequality is growing. It is a global crisis of capitalism. Australia’s richest person, Gina Rinehart for instance, is wealthier than 2.27 million of her countrymen and women. World Economic Forum figures from the end of 2021 show that half of the world’s population control just 2% of global wealth. What is significant in their findings is that in the past 20 years, the average income gap between the top 10% and the bottom 50% within individual developed economies doubled. Capitalism, in its determination to secure profit and accumulate wealth is sacrificing not only those who directly produce the wealth, but that previously burgeoning and secure middle class. 

The middle as a precondition for state legitimacy

The fact that the middle class is under such threat should come as no surprise. It is not something that simply occurred. The creation, the rise, and now the decline of this grouping is fully in accord with Marxist theory. More than 20 years ago, Carl Dassbach indicated that the future did not look especially bright for the middle class:

It must also be remembered that the middle class is, in actuality, a brief historical phenomena and, in the larger sweep of history, an exception. Throughout most of history and throughout most of the world today, with the exception of a few nations, the middle class has been and is a minority. Hence, what would be surprising, at least from this point of view, is to see the persistence of the middle class. In other words, preindustrial societies were and are characterized by a relatively small middle class. Industrial society produced a large middle class for various structural reasons but it may well be the case that post-industrial society will approximate the class organization of previous societies and the middle class will shrink to insignificance.

Dassbach is but one theorist who has observed that the middle class is indeed shrinking. It is a dilemma that capitalism and the state are unable to resolve.

The state exists to facilitate capitalism and the same economic system, so clearly elucidated by Marx, sets in train a series of irresolvable contradictions that must inevitably derail it. The social and economic inequality that we witness on a daily basis show this to be fact. The period since the economic crisis of the 1970s and the end of the “golden age” of capitalism saw the state being compelled to privatise, to unravel the welfare state, and allow capital to take from the state and therefore from the people. Since that crisis and subsequent crises, labour’s share of global income has steadily declined in favour of capital. Wealth differentials grow. Labour is casualised, and this affects all workers, including those who imagine themselves to be safeguarded as being part of the middle class.

At the same time, and despite crisis and contradiction, the accumulation of capital continues and accelerates. This becomes just one more strain upon the state, whose task remains one of maintaining the fiction that class interests do not exist and that national characteristics, a “oneness” of purpose, and a universal supra-class interest must prevail for the safety of the “nation”.

The smooth functioning of the state relies on it maintaining a sense of legitimacy. A social contract is entered into. This can be paraphrased as being a state of play where we give you the right to govern us and you assure us a secure present and future. If the material basis of this is taken away, then some rather deep fissures appear. What follows very closely is a loss of faith in the political process that has been sold to the people as a means of ensuring their voice will be listened to and that they have a direct input into how society will be organised. Increasing numbers of people across continents are questioning these verities.

A crisis of political faith

Things are in a parlous state. Both capitalism and its state are in a deepening mire of crisis. Capitalism exists in crisis as it devours all before it to ensure its survival. The state faces a crisis of faith. It is finding it increasingly difficult to keep the ship afloat. People are less inclined to accept the old “truths”. If crisis is palpable, then it is logical to suggest that it would not be confined simply to capitalism, but to the state itself and to the political framework which has been used so successfully for so long: bourgeois democracy. 

Recent surveys of millions of people in their 20s and 30s across all developed capitalist countries reveal that 55% are now dissatisfied with how “democracy” is operating and that an even greater majority regard left-wing and populist politics as a better option than the old party structures. Similar surveys show a strong feeling that socialism has more to offer than the old capitalist order.

Surveys are one thing. Reality and attitudes of people at the ballot box are another and it is here that the depth of the crisis can be seen and felt.

There are similarities occurring across continents. The recent Australian election saw the problem spelled out in bold letters. There is a government that came to power with a record low vote. Less than one in three people supported the Australian Labor Party and yet it has claimed a “mandate” to govern. More than 30% of the electorate supported alternatives other than the two traditionally powerful parties. A scan of recent elections in capitalist democracies is adding to the sleep disorders of the ruling class everywhere.

The most recent presidential election in the home of capitalism, the United States, did not see a break from the two-party system, but it did see a continuation of populist politics on a grand scale. Trumpism had not gone away. In the run up to that election, the Democrats were sorely challenged by presidential nominee Bernie Sanders, whose limited socialist message captured the imaginations of millions of US voters who, until this crisis of faith in capitalism and democracy, had found socialism to be anathema.

The last British election, in similar fashion, saw an old-school left social democrat win huge political support.

The centre has collapsed in France as the far right and the newly reinvigorated left re-shape electoral politics. The story is repeated again and again. The left and progressive forces in Latin America have recorded success after success. The Colombian elections, as an example, saw the centre devastated as the left and a right-wing populist each outpolled the more established order.

What does all this mean?

None of this suggests that capitalism’s rule is over. It does not suggest that bourgeois democracy has lost its grip. It does not suggest that socialism will sweep to power tomorrow, although its star is clearly on the rise. It does, however, suggest that things have dramatically changed and that people sense this.

The crisis of capitalism has sharpened. Admittedly Marxists have been saying this for many years but capitalism has until this moment been able to run to escape the worst crises, or rather to postpone the final debilitating crisis. Capitalism grew to become a global force by expansion and by enveloping the world. In doing so it proletarianised the planet. It worked with its state everywhere to develop a political system that would best facilitate its progress and to keep the people in a state of calm and acquiescence. The people needed to be convinced to believe in the state, in capitalism and, in the final analysis, in their own entrapment. The state professed a deep faith in the political process of democracy. It was “of the people by the people and for the people”, or so it was decreed. 

Sections of the working class were subsumed into a growing and relatively affluent strata that became the middle class. The middle class burgeoned. Workers aspired to be “middle-class”, but all the while they still served capital. They continued to produce the goods that capital needed; to provide the labour and the surplus value that capital demanded for its survival. When things became difficult for capital, the middle class could be counted on to act as a buffer between the two antagonistic classes of proletariat and bourgeoisie.

All the while, the spectre of crisis continues to haunt and hunt capitalism. Global profit rates continue to weaken. Capital was forced to globalise to develop cheaper labour and therefore to maintain those profit rates but the problem did not go away. It simply grew. Capitalism might have had a degree of elasticity to it but there is no stretch left. Capitalism demands and its state must comply. Casualties mount up. The middle class shrinks. The centre cracks. The ruling class sleeps uneasily.

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