First Notes Towards a Critique of America In Decline

1. Intro

  1. These are some comments about the book America In Decline,Vol. 1, by Raymond Lotta with Frank Shannon, (Chicago: Banner Press, 1984). No further volumes were ever published.
  2. A friend of mine, knowing my view that AID is not that big of an advance, challenges me to say why I don’t think so.
  3. I hope to someday write a considered review of AID. This paper isn’t that review; these are just rough notes.
  4. I should say to begin with that I see myself as still in the beginning stages of a fairly serious investigation of political economy that I’m finally returning to again after a lapse of a couple decades. Although my poor style frequently gives the impression that I’m unalterably certain about everything, this really isn’t the case. So take everything I say with a grain of salt; I do!
  5. I hope I don’t offend the authors of AID or anybody else with these comments. I am really interested to hear others’ reactions to them.
  6. One topic—how tied together is AID with what most of us now see as the RCP’s erroneous "80s analysis" (that world war and/or revolution was virtually inevitable during the 1980s).
  7. Another topic—AID as a more or less an official RCP document. Should a party, any party, adopt any book of this sort as its "official" line (at least in practice)? Should it become so wedded to it?
  8. Another topic—AID’s approach of returning to first principles. I think this is a good idea, but only if those first principles are really correct!
  9. Another topic—AID’s theory of capitalist economic crises. This is a major part of the book. But does it really break any new ground, or is it just a rehash of Engels’ brief remarks in Anti-Dühring that doesn’t take things much further?
  10. Continuing that topic—AID’s excessive reliance on anarchy as a complete explanation of crises.
  11. Another topic—"General Crisis Theory". This is tied into AID’s crisis theory; basically it’s a competing view of capitalist crises, at least for the imperialist era.
  12. Final topic—why, despite all my criticisms, I still think AID is a very important work to focus on.

2. First topic: How tied together is AID with the RCP’s "80s analysis"?

  1. There are three possibilities:
    1. The 80s analysis is incidental. Even if the 80s analysis is woefully wrong, AID itself is basically correct.
    2. The 80s analysis is essential. The whole book is meant as a justification of it.
    3. Something in between those extremes.
  2. I think the second explanation is basically correct. You know, many people have a kind of idealized view of how scientific theories arise and develop. They imagine that investigators study a group of phenomena without having any theory to begin with, and then construct the best theory they can that fits all the facts that they gather. Actually, in most cases, people start off the process already in possession of a theory—one that they were indoctrinated with, or a conclusion that they jumped to without anything like fully adequate evidence. At that point they look for confirming evidence and arguments to back up their theory. (Popper is dead wrong about how scientists actually operate, with his notion of falsifiability.) Only if painful facts, or other more important or plausible conflicting theories present themselves, do people modify or abandon their original theory, and jump to a new one. And I am not criticizing people for doing this; it is actually in accord with the Marxist theory of knowledge. Competing theories arise usually in the same manner in the minds of other people. All these theories then fight it out. Science as a whole is more self-correcting and rational than the activity of any one scientist or investigator.
  3. So what I am suggesting is this: The RCP already had the basic elements of its "80s analysis", and set out to back it all up theoretically, and at length. This was the basic motivation behind the AID project.
  4. This suggests (though it doesn’t prove), that if the "80s analysis" was way off the mark, that perhaps AID in general is fundamentally in error.
  5. Since the RCP thought the 80s were a special new situation where push was coming to shove, they were motivated to reject without serious consideration any theory that implied that the 80s were nothing very special, or any theory (such as "general crisis theory") that implied that the entire imperialist era was all of one piece. Similarly, they were motivated to accept theories which suggested that economic contention would soon lead to war, that there could be no escaping it except through revolution, and so forth. It seems to me that it is close to undeniable that their mistaken view of the actual objective situation did in fact more than color their political economy—it restricted fundamentally what it could be.

3. AID as a more or less official RCP document.

  1. Should a party, any party, adopt any book of this sort in toto as its official line? Should it become so wedded to it? As I imply, I don’t think so.
  2. An important theoretical work like AID is fairly rare. And when one is produced, as many people as possible in and around a party or group should be encouraged to read it—study it, actually—and give a lot of thought to it.
  3. And yet, when such a work is produced by one, or two, or a few people—even if they are respected top leaders of the party—it should not be embraced uncritically. Nor should it usually be adopted in toto as the party line, even when it is clear that there are lots of good things in the book.
  4. In Lenin’s party, a number of leaders and party intellectuals produced important books—not just Lenin. And probably most of these books played a quite positive overall role, even if there were sometimes erroneous comments in them, a lack of balance, or even some serious errors and shortcomings.
  5. It is very difficult—close to impossible—to write a significant theoretical book without any serious shortcomings. Even Marx, Lenin and Mao made mistakes, sometimes!
  6. This is one of the reasons that the party line should be kept "svelte". We only want to include the most essential points, the ones we are most sure of, and the ones which are most essential to our revolutionary work. Moreover, we want to maintain a party of thinking individuals, people capable of thinking about lots of issues and willing to do so on their own and in group discussions. We don’t want to have everything "all wrapped up" for everybody, and stifle all thought. When we have discussions about books like AID, of course we are hoping to help educate everybody. But we should also be trying to get everybody to do some more thinking themselves, even if this means (as it must inevitably do so) that it spurs disagreement as well as agreement!
  7. What I am criticizing here is not the book itself, but how I think the RCP and its members approached the book.
  8. A party or group must be circumspect and cautious about what it unreservedly adopts or endorses. This principle was not followed with AID, and the results were predictable:
    1. The Party adopted certain views and made certain predictions that were erroneous.
    2. The Party locked itself into a partially incorrect analysis for quite a long period. They still haven’t fully extricated themselves from it in my opinion. (Here, as everywhere, they seem unwilling or unable to critically sum up their own past viewpoints and experience, directly face their errors, correct those errors, and moreover, do so publicly. This, more than anything, has pretty much caused me to lose all hope for the Party.)
      Note added 2/18/00: The recent publication by the RCP of its Notes on Political Economy, which partially faces up to and criticizes the errors of their 1980s analysis, and the recent call for building a new Party programme, have rekindled that hope to some degree. It remains to be seen how much will really change, however. My critical review of Notes on Political Economy is at:

4. AID’s approach of returning to first principles.

  1. The first chapter of AID is 170 pages long, almost 2/3 of the book. It is entitled "Political Economy in the Epoch of Imperialism and Proletarian Revolution", and so seems to have the goal of presenting an entire theory of political economy.
  2. Actually, however, AID is not intended to be a textbook of political economy. It has a much more specific purpose—namely, I believe, deriving a theory of capitalist economic crises which is appropriate to the imperialist era, and which serves to back up the RCP’s 80s analysis.
  3. AID says this explicitly in the preface: "Yet comprehension of the laws and mechanisms of imperialist crisis, of the historical momentum behind the current crisis, and where it is heading have seriously lagged. Indeed, such an analysis has been most conspicuous by its absence. It is to this task that America in Decline is addressed. This work examines the forces shaping U.S. imperialism, the reasons for its enormous strength in the postwar period, the causes of its decline, and the historic significance of the developing international situation." (p. 13)
  4. So the return to "first principles" of Marxist political economy is done for the purpose of proving a "conclusion" they already had (the 80s analysis). Again, I’m not arguing that this is invalid; on the contrary, I think this is more or less the way everybody proceeds (though few admit it and not everybody has a coherent enough view to even attempt a justification of their "conclusions" in terms of their "first principles").
  5. But my point is that the "first principles" which are selected, accepted and/or assumed are just the ones that will lead to the results they want. That is the whole reason they are going through the exercise.
  6. This suggests that maybe those "first principles" selected might be somewhat suspect, twisted or distorted, in light of the fact that the "conclusion" being aimed at has proven to be erroneous—at least in some very important respects.
  7. Some of the specific "first principles" I have doubts about (such as the adequacy of the "anarchy theory of crises") will be discussed below.

5. AID’s theory of capitalist economic crises.

  1. What is "the Marxist theory of economic crises" anyway?! The answer is: this has never really been settled. I’ve got to digress into a bit of history here.
  2. First, Marx himself never got to the point of writing down his complete theory of crises. Aspects of his theory of crises appear throughout his writings, from the Communist Manifesto on, but nowhere the whole theory, with the proper weight given to the various factors, a full explication of their interconnections, and so forth. There are a few references in vol. 1 of Capital (which of course Marx completed himself), and in vol. 2 (which Engels edited from more or less complete manuscripts left by Marx). But the main discussion of crises was to be in vol. 3 of Capital, whose manuscript was in a far less complete and coherent state at the time of Marx’s death. And the sections on crisis theory, in particular, were poorly developed and elaborated.
  3. So it was left to Engels to try to come up with such a theory, almost as much on his own as on the basis of Marx’s notes. Unfortunately, he didn’t come up with anything like a definitive explanation of crises either. Engels struggled with the editing job on vol. 3 of Capital for about a decade and only got it published about 9 months before he died. And the discussion of crises in vol. 3 remains disjointed and incomplete.
  4. There seem to be some important differences in Marx’s tentative approach to crises, and Engels’ tentative approach. Marx, for example, seems to stress the role of the tendency of the rate of profit to fall (see chapter 25 in vol. 3 of Capital), whereas Engels tends to downplay this. Engels, for his part, focuses more on the question of the anarchy of the overall process of production under capitalism.
  5. Because there has never been a definitive Marxist explanation of economic crises, and because there are many things going on in crises, many factors involved, there have developed several different competing theories of crises—within the Marxist milieu itself—each of which tends to be based on one factor or set of factors at the expense of the others. That is, since nobody has yet convincingly put the whole puzzle together, there are different competing theories focusing on this group of pieces or that group of pieces. Some people (such as the Trotskyite Ernest Mandel) have thrown up their hands and just said, in effect, that all the pieces are of equal importance. (That’s wrong too, and undialectical, since it fails to recognize that in any process or sub-process one thing is key, one contradiction is fundamental, while other factors—even if very important—are secondary.)
  6. The basic viewpoint of most Marxist-Leninists towards crises comes not so much from vol. 3 of Capital, or any other of Marx’s writings, but rather from Engels’ informal remarks in Anti-Dühring. And this is true of AID too; AID’s crisis theory is straight out of Anti-Dühring. And honestly, I can’t see that they’ve gone much beyond it. The key concept, the key word in both, is anarchy.
  7. Anti-Dühring was written in 1876-78, after vol. 1 of Capital was published (1867) and while Marx was still alive. But neither Marx nor Engels had then worked out (or ever did work out) a complete and fully coherent theory of crises. So what Engels says in Anti-Dühring can not be taken be a fully adequate crisis theory. The fact that more than 120 years later we haven’t advanced much beyond such early efforts is really something of a disgrace for Marxist political economy. (This is a criticism of our whole movement, of all of us, not just AID.)

6. The excessive (almost exclusive?) reliance on "anarchy" in AID’s explanation of crises.

  1. The many theories of capitalist crises can be categorized in various ways and under various names. But here is one common way of doing it:
    1. Overproduction of commodities theory. (I.e., underconsumptionism.)
    2. Overproduction of capital theory.
    3. Declining rate of profit theory.
    4. Disproportionality or disequilibrium or interruption theories.
    Within each category there are many variations, and the last category in particular is sort of a catch-all. Disproportionalities, disequilibriums, and/or interruptions, can be said to result from a variety of factors, and develop in a variety of ways (including as a result of various types of overproduction or as a result of a falling rate of profit). One source often focused on is simply the anarchy of production as a whole under capitalism (as opposed to the social nature of production within a single enterprise). I call this variation of a disequilibrium theory the anarchy-of-production theory of crises, or just "the anarchy theory" for short. This is the theory championed by Engels in Anti-Dühring and by the RCP in AID.
  2. Virtually every champion of all 4 basic kinds of crisis theories listed above, and of all their variations, recognizes that at least some of the other factors come into play in the working out of crises, but deny that they are as important or fundamental as the factor they champion. Virtually all the theorists call crises "crises of overproduction", even if they emphasize something else besides overproduction in their theories—because they all admit that overproduction of commodities is the most glaring surface feature of crises, at least, (and because that is what Marx called them!). Moreover, virtually all crisis theorists (at least within the Marxist milieu) say that the fundamental contradiction of capitalism, between social production and private appropriation, is the basic source of crises. It is only after that initial point of (apparent) agreement that they all go their separate ways, interpreting that contradiction variously, and focusing on one subsidiary thing at the expense of the others. The problem, as I see it, is that none of them give a full and complete theory explaining just how all these factors tie together, how they influence each other, and how the whole thing actually works out. In short, they are all one-sided, crude and unfinished. And that includes the anarchy theory in AID.
  3. In Anti-Dühring Engels explains crises this way:
    1. On p. 208 (Peking ed., 1976) Engels refers to "the periodic alternation of speculative production booms and commercial crises, and to the whole of the present anarchy of production."
    2. "We have seen how the capacity for improvement of modern machinery, which is pushed to a maximum, is transformed by the anarchy of social production into a compulsory commandment for the individual industrial capitalist constantly to improve his machinery, constantly to increase its productive power. The bare factual possibility of extending his field of production is transformed into a similar compulsory commandment for him. The enormous expansive force of large-scale industry, compared to which that of gases is mere child’s play, now appears to us as a need for qualitative and quantitative expansion that laughs at all counteracting pressure. Such counteracting pressure is formed by consumption, by sales, by markets for the products of large-scale industry. But the capacity of the market to expand, both extensively and intensively, is primarily governed by quite different laws which operate far less energetically. The expansion of the market cannot keep pace with the expansion of production. The collision becomes inevitable, and since it can yield no solution so long as it does not burst the capitalist mode of production itself, it becomes periodic. Capitalist production generates a new ‘vicious circle’." (pp. 354-5) [If you consider this one passage carefully, it actually seems to be a blend of various different crisis theories, but the anarchy theory is still the leading one.]
    3. "In these crises, the contradiction between social production and capitalist appropriation ends in a violent explosion. The circulation of commodities is for the moment reduced to nothing; money, the means of circulation, becomes an obstacle to circulation; all the laws of commodity production and commodity circulation are turned upside down. The economic collision has reached its culminating point: the mode of production rebels against the mode of exchange, the productive forces rebel against the mode of production, which they have outgrown.
      "The fact that the social organization of production within the factory has developed to the point at which it has become incompatible with the anarchy of production in society which exists side by side with and above it—this fact is made palpable to the capitalists themselves by the forcible concentration of capitals which takes place during crises through the ruin of many big and even more small capitalists." (p. 356)
      Note that Engels does not mention the falling rate of profit.
  4. In AID crises are explained this way: "What this suggests, then, is that while the tendential laws of capital force their way through the process of accumulation, including, for instance, the tendential decline in profitability of internationalized capitals, it is the anarchy of a single global reproductive process which drives imperialism into crisis, exactly because accumulation depends in a qualitatively new and greater way on the functioning of interdependent and international links which are drawn more tightly by finance capital." (p. 110) This is the same theory of crises as Engels put forward, except that: 1) it is for the global imperialist system instead of for a single capitalist country, and 2) the RCP removes Engels' secondary references to a different crisis theory they don't agree with, that the power of capitalist production grows faster than the ability of society to consume the things produced and placed on the market. The RCP even seems to agree with Engels (and on this point I agree with both Engels and them) that the tendency of the rate of profit to fall is a secondary factor in the whole equation.
  5. If "anarchy" is such a basic explanation of crises, it’s worth looking into just what this anarchy amounts to, really. Engels is quite clear on the matter:
    1. "But every society based on commodity production has the peculiarity that the producers in it have lost command over their own social relations. Each produces for himself with the means of production which happen to be at his disposal and in order to satisfy his individual needs through exchange. No one knows how much of the article he produces is coming onto the market or how much will be wanted, no one knows whether his individual product will meet a real need, whether he will cover his costs or even be able to sell it at all. Anarchy of social production prevails." (pp. 349-350)
    2. "The seizure of the means of production by society eliminates commodity production and with it the domination of the product over the producer. The anarchy within social production is replaced by consciously planned organization. The struggle for individual existence comes to an end." (p. 366)
    3. "What, once again, is the ‘cause giving rise’ to this rashness [of individual producers leading to overproduction] and private imprudence? Precisely this very planlessness of capitalist production, which is manifested in the planless multiplication of private enterprises." (p. 374)
    It’s quite clear that by the phrase "the anarchy of social production" under capitalism, Engels has in mind primarily (and perhaps exclusively) the multiplicity of capitals that operate without an overall plan. "Anarchy of production" means for him "working without a plan". (It is true that there are other forms of economic anarchy besides that due to the "manyness of capital" and the fact that individual capitalist enterprises do not work in concert according to an overall plan. See my 1983 letter to the RCP, "The Many Types of Capitalist Economic Anarchy", which I have posted at:
    But Engels never hints that he also has any of these other types of anarchy in mind.)
  6. Now I am about to critique Engels’ anarchy theory in a similar way to that which he himself critiques the Sismondian/Dühringian underconsumption theory of crises. Recall that Engels points out (pp. 371-2) that underconsumption by the masses cannot be the explanation of capitalist crises since the forced underconsumption of the masses has always existed in class society, including under slavery and feudalism, and yet overproduction crises only began under capitalism. This is a valid point—at least in showing that underconsumption cannot be the complete explanation of crises. (It doesn’t prove that underconsumption is not the "ultimate" cause, as Marx said.) But anyway, Engels’ generalized argument is that any explanation of specifically capitalist economic crises must involve factors that always and only hold sway under capitalism.
    Now let’s consider a society in which the overall anarchy of production (in Engels’ sense) is eliminated, but one in which capitalism still exists, one where we have state capitalism of the sort which existed in the revisionist Soviet Union. Let us consider such a society to be, in effect, one big corporation where all production is organized according to the overall corporate production plan. The question is, can such a society have capitalist overproduction crises or not? The plain fact is that they can and must. It is true that the characteristics of such crises seem to be somewhat different, with financial panic and credit collapse playing (apparently) much less of a role. But the experience of the revisionist period of the Soviet Union shows unquestionably that their state capitalist economy did in fact gradually sink into an ever-deeper crisis, one where the restrictive pressures on production grew ever tighter even while the masses still went without many things they needed and desired. Soviet state capitalism did sink into crisis and stagnation; that’s the actual fact of the matter. The most essential characteristics of a capitalist crisis developed in the Soviet Union even if the form of the crisis did show some differences from that typically seen under Western-style multi-capital economic crises.
    So what does this mean? It means that Engels’ explanation for capitalist crises—the overall anarchy of production—can’t be correct, since even when this anarchy, due to the multiplicity of capitals and production not on the basis of an overall plan, is eliminated, capitalist crises can and still do develop. Engels was wrong, and those (including AID) who accept his theory are also wrong. History has already proven this!
    Now it is true that the overall anarchy of production is very intimately involved with crises under multi-capital conditions (i.e., under non-state-capitalist forms of capitalism). Engels (and Marx) was right about that, and right to emphasize its importance. But Engels was wrong to say that this was the most essential thing going on. There is something much more basic going on which manifests itself (or works itself out) in one way under non-state capitalism, and in a somewhat different way under state capitalism. (I’m not going to try to present here what that more basic underlying contradiction is. I’ll be doing that later in another essay.)
  7. Engels even goes further. He says that "In proportion as the anarchy of social production vanishes, the political authority of the state dies away. Men, at last masters of their own mode of social organization, consequently become at the same time masters of nature, masters of themselves—free." (p. 369)
    If that were to be believed we would have to admit that the Soviet Union—even during the revisionist period!—had no "state", that people were "masters of themselves—free." Actually, the revisionist Soviet Union was a mild form of fascism. People were anything but "free".
    The only way that this comment of Engels can possibly be taken as true is if we recognize other kinds of economic anarchy (besides that due to the "manyness" of capital and the lack of an overall plan), types of anarchy which did in fact continue to exist even under state capitalism of the Soviet variety. (This is another point which should be followed up on, but I won’t try to do it here.)
  8. On pp. 48-49 in AID the authors talk about the revisionist USSR and point out quite correctly that the capitalist market still existed there and operated through the state economic plan. They also correctly point out that it is the history of the origin of state capitalism in the Soviet Union that explained its vastly higher degree of planning—evolving as it did from a previous socialist state. They are wrong, however, in claiming that state capitalism of the Soviet variety was not qualitatively different from western-style monopoly capitalism. As writers who are arguing how central the anarchy of many capitals is for capitalist economic crises, they are almost forced to imply that somehow—despite all appearances—there were "many capitals" in the USSR too, which could still lead to crises despite the overall plan. And in the debates over the Soviet Union, Lotta even went so far as to say that "For all its top-down planning, the Soviet economy is fundamentally unplanned." ("Part II", p. 60) The logic goes like this: if our anarchy theory is correct, and if there is no real "manyness" of capitals in the Soviet Union, and if there is actually an overall economic plan there, then there can’t be any crises. But there are crises. Therefore, there must be a hidden manyness of capitals there, and the plan must not really be a plan. In some quarters, that passes for good logic. In short, Lotta is forced to try to see state capitalism as being no different in any significant way than western-style monopoly capitalism, and is willing to twist facts to make it seem that way—all in order to save his preconceived theory of crises.
  9. It is true that Engels pushed the anarchy theory of crises, and so did Lenin quite briefly in some of his early writings. But the theory also has its share of somewhat unsavory advocates (as of course do all the main types of crisis theories!). One such prominent individual was Nikolai Bukharin:
    "Marx, as you know, gave us a theory of capitalist crises. These crises he showed to be caused by a general lack of planning (‘anarchy’) of the capitalist methods of production, by the impossibility of attaining correct proportions between the various elements of the process of reproduction under capitalism, especially between production and consumption. In other words he showed the cause to be the incapability of capitalism to maintain an equilibrium among the various elements of production." [Bukharin, "The Notes of An Economist", Pravda, 1928; quoted in Kenneth J. Tarbuck, Bukharin’s Theory of Equilibrium (1989), p. 75.] People won’t like to hear it, but the anarchy theory of crises is a disequilibrium theory, and it does lead right into Bukharin’s notorious "equilibrium theory" that Marxist-Leninists have attacked for decades as undialectical.
  10. Economic anarchy is a very big topic in AID; it pervades the book (or at least the first chapter, the first 2/3 of the book). And this makes sense given that they (even more than Engels) see the overall anarchy of production under capitalism as the explanation of crises, and as the thing which society most needs to overcome. There are several points to make about this:
    1. AID, like Engels, seems to have only the anarchy due to the "manyness" of capital in mind. Hints at other types of anarchy only occur where they try to show that the "manyness" of capital exists where in fact it does not (at least in any full-blown way).
    2. AID is even more wrong than Engels in seeing anarchy as the most basic explanation of crises. (Engels at least recognized other important causes of economic crises, especially the imbalance between production and consumption.) Far from making an advance on Engels, they have turned Engels' undue emphasis on "anarchy" into a monomaniacal obsession!
    3. The excessive focus on the anarchy of production brings out the shallowness of AID; the shallowness of both its economic and political analysis.
    4. This expectation that the mere removal of multi-capital anarchy is the key to solving the basic problems of society is dangerously wrong. We do not want to follow once again in the footsteps of the Soviet revisionists! Even a whiff of this notion smells to me of the thinking of old CPers or the Monthly Review school (even though their crisis theory itself is different).
  11. The very best theory of crises presented by anybody so far is, in my opinion, still to be found in the writings of Karl Marx himself (meaning primarily vol. 3 of Capital and "vol. 4"—Theories of Surplus Value). True, he didn’t wrap up all the threads in one coherent essay, but there are many hints about how one might go about doing so. This is why I believe it is really correct to "return to first principles" by following Marx in his implied derivation of a complete "unified" theory of capitalist economic crises. But AID just did not do this.

7. "General crisis theory" (GCT).

  1. The last chapter of AID attacks the "theory of general crisis". Although I agree that there is a lot wrong with that theory, I think there are some aspects of it that are unjustly attacked.
  2. One of the main tenets of GCT is that "stagnation was imperialism’s normal state" (AID, p. 245). AID criticizes this view, but although GCT is not exactly correct here, it is not that far from the truth. Actually, the economic cycle continues under imperialism, so there are periods of boom, bust (crisis), stagnation, and recovery. However, under imperialism the contradictions of capitalism are greatly intensified, and the severity of crises are also greatly intensified. (I’ll qualify that just a bit in a moment.) The overproduction of capital leading to crises is greatly intensified, and the difficulty of purging that overproduction of capital and starting the cycle afresh grows enormously. Basically, as I argue in my 1979 letter to Bob Avakian on imperialist war and capitalist economic cycles, available at, in the imperialist era there is really only one truly effective way out of the stagnation phase of the cycle: war. And not just little wars, but wars which result in the massive destruction of capital. Given this fact, under imperialism the stagnation phase of the cycle tends to go on for a very long time until all the political developments that the economic situation "demands" fall into place and inter-imperialist war breaks out. Thus, in a way the GCT theorists were close to correct: stagnation has become imperialism’s "normal state" except for the relatively short periods of inter-imperialist war, and the much longer (but still limited) periods of boom after such wars.
    Of course more needs to be said about this. There are short-cycle business ups and downs within this basic capitalist economic cycle, and the crises and recessions associated with this short cycle are very mild in comparison. As I say in my letter to Avakian, the business cycle has split in two: there are now little crises and booms within the phases of the major cycle.
    If I am right about this, then the current economic crisis (which has been slowly developing since the early 1970s but is showing signs of edging ever-closer to a major precipice with events like the recent Asian crisis) amounts to a gradual return to the massive stagnation of the 1930s. Short-sighted views (like that of AID) gave up on this aspect of GCT because the long post-WWII boom seemed to refute it. Another reason for condemning AID as shallow—and pragmatic.
  3. Another tenet of GCT was that in the era of imperialism the general state of crisis tends to lead to the growth of fascism. AID seems to attack this view (p. 247). Although dogmatists like R. Palme Dutt did indeed carry this (and other GCT themes) to ridiculous extremes, the basic tenet is in fact correct. There is quite a bit of fascism in the world today, but as the world economic crisis develops and the bourgeoisie in many more countries feels more and more threatened by the unrest among the masses, many new military and fascist regimes will spring up. Fascism of some sort in Russia for example, where even bourgeois democracy is already pretty much a joke, is very likely. It can’t be totally ruled out anywhere.
  4. A third tenet of GCT was that underconsumption by the masses played a basic and important role in the development of economic crises. AID disagrees with this explicitly (p. 249ff.), as well as in its development of its one-sided anarchy theory of crises in chapter one of the book. I am presently working on a couple essays on the question of how underconsumption fits in with the rest of Marxist crisis theory; it’s a big topic and I definitely don’t want to launch into it here. I’ll just say that I totally disagree with the complete rejection of any role for underconsumption in crises, as is argued for in AID. The book is naïve and absurdly dogmatic on this topic. It really turns me off. AID is as simple-minded on this topic as Sismondi is in the other direction.
  5. Following Lenin’s early pamphlet "A Characterization of Economic Romanticism" (1897), AID in at least two places actually puts forward Say’s Law (despite Marx’s frequent attacks on it): "the expansion of capital requires the continual perfecting of the division of labor and generates its own demand and markets." (p. 260) Shades of Ricardo! (Another example of the shallow analysis of AID.)

8. How good a book is AID? Is it important?

  1. My brief answer is, AID is not a very good book, but it is an important book for many of us.
  2. The basic political economy presented in AID is simplistic and shallow. The theory of economic crises presented is completely incorrect (even though it, like every crisis theory, can’t help but talk about some of the actual factors involved in crises).
  3. AID’s summation of other theories, such as General Crisis Theory, is dogmatic and undialectical, failing to recognize most of the aspects of truth in them (even if they are wrong in many respects).
  4. AID has an uncanny knack for searching out and adopting just those ideas in Engels and Lenin that are most indefensible (e.g., the anarchy theory of crises; Say’s Law).
  5. Some of the most important and most central political conclusions of AID are outright wrong. The "80s analysis" of imminent world war and/or revolution was not correct, and AID could not possibly have proven that it was correct.
  6. AID’s expectations for the immediate future (the "80s analysis") were wrong, but beyond that, AID’s expectations for the further future (the next few decades after it was written) are also wrong. It provides little or no trustworthy and accurate theoretical guidance for us, which can allow us to predict in general outlines what is going to happen in the economy or in society as a whole, or frame an appropriate political line as a result.
  7. Do you want to know why there is so little in the RW about the Asian and global economic crisis? Nothing about what it means, or what to expect? The best answer seems to be that the Party doesn’t really know what to make of it. AID did not prepare them for what has actually happened, and for what is going to happen. They are clearly at a loss, reduced to struggling to react to events after the fact.
  8. Of course there are a lot of correct statements in AID, but the overall theoretical stance is wrong, not only many essential points of political economy itself, but also many of the central political conclusions drawn from it.
  9. As for "breaking new ground", I just don’t see it. Where AID is right, it is mostly just repeating things said by Marx and Lenin. Where it is wrong, it is also mostly just repeating the errors of the past. What is so new about it?
  10. AID is more of a point of view that needs to be studied carefully in order to understand exactly what is wrong with it, a point of view which needs to be struggled against. This is especially so for those who once fully accepted it. (I never did. I was already long out of the Party when it came out, and had many disagreements over political economy even when I was still in.)
  11. Most ex-RCPers who I’ve talked to have some disagreements with AID, but they are still struggling to sum it all up. One thing we have to realize is that when you first start to break away from a point of view, you are still infected with it to a considerable degree. And as long as you are still infected with it, you can’t make a complete break with it. Changing one’s perspective is a process, and usually a prolonged process.

—S.H. (2/12/99; with some editing on 2/18/00)

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