Economic crisis and class struggle

Are recessions better for the left or right?

The most fundamental argument in favor of socialism is that capitalism is an irrational system that over the long term cannot meet the basic needs of the majority of the population because of its tendency to go into economic crisis. But what if economic crisis leads not to the growth of the left but to the rise of the far right? This is the argument of the radical economist Doug Henwood in a short article published in May on the MRzine Web site.

Henwood begins by criticizing “radicals [who] have fantasized that a serious recession—or depression—would lead to mass radicalization,” and he goes on to argue that there is empirical support for the opposite view—that economic crisis actually benefits the far right not the radical left. The evidence he cites is recent research by the economists Markus Brükner and Hans Peter Grüner. Brükner and Grüner studied sixteen European countries and discovered that between 1970 and 2002, every 1 percent decline in economic growth in these countries was associated with an increase in the vote share of far right and nationalist parties of between 1 and 2 percent.  

By contrast, Brükner and Grüner found no corresponding increase in electoral support for communist parties during the same periods of economic decline. Henwood concludes that “recessions are not good for the left and are good for the right,” and that Brükner and Grüner’s research “helps explain the rise of the Tea Partiers and other strange life forms on the right.”

The first thing to note is that this is an incredibly narrow study on which to base the sweeping conclusion that “recessions are not good for the left and are good for the right.” In fact Henwood himself immediately notes one “major exception,” namely the United States during the Great Depression, when economic crisis led to a series of mass strikes, the birth of industrial unions, and the growth of the Communist Party to about 80,000 members. However, he adds that this was only because the scale of the crisis was so severe, with unemployment rates reaching 25 percent and, additionally, the “Great Depression didn’t do much for the left in Europe.”

In fact that last claim is not accurate. While the far right obviously grew as a result of the Depression, eventually seizing power in Germany, Spain, and Austria, the left also grew in many European countries, and there was nothing inevitable about its ultimate defeat. In Germany, the Social Democratic and Communist Parties had millions of supporters, and in the election of November 1932, the last genuinely free vote before Hitler took power, their combined support was several percentage points ahead of the Nazis. The tragedy was that the two left-wing parties were fatally divided and unable to agree on a common strategy to defeat the far right in the streets as well as at the ballot box. Similarly in Spain the left grew significantly. It eventually lost the civil war as a result of major conflicts between the different left-wing parties and outside support for Franco’s fascists.

Second, economic crises are a fact of life under capitalism, and one of the main arguments in favor of a different kind of economic system. Henwood instructs the left to “stop hoping for the worst,” but our hopes either way are irrelevant to how the economy actually performs, and severe recessions will periodically take place no matter what we think about them. If it were true that in such circumstances the right will grow and the left will not, there would be grounds for thoroughgoing political pessimism. During periods of economic growth and stability, the radical transformation of society would seem unnecessary, while during periods of economic crisis it would be impossible.

 Henwood is certainly right about one thing—there is no automatic relationship between economic crisis and “mass radicalization.” But it is equally wrong to think that there is an automatic connection between crisis and the growth of the right. Whether or not an economic slump results in an increase in class struggle and gains for the left depends on a whole set of complex factors, including the nature of the crisis and the constellation of political forces going into it.

Perhaps no one has written about the relationship between economic booms, slumps, and political consciousness with more insight than the Russian revolutionary Leon Trotsky, who addressed these issues several times in the 1920s and the 1930s. In a report he wrote for the Communist International in 1921, Trotsky noted that, “there is no automatic dependence of the proletarian revolutionary movement upon a crisis. There is only a dialectical interaction. It is essential to understand this.” The example that Trotksy used to illustrate this point is worth quoting at length:

Let us look at the relations in Russia. The 1905 revolution was defeated. The workers bore great sacrifices. In 1906 and 1907 the last revolutionary flare-ups occurred and by the autumn of 1907 a great world crisis broke out. The signal for it was given by Wall Street’s Black Friday. Throughout 1907 and 1908 and 1909 the most terrible crisis reigned in Russia too. It killed the movement completely, because the workers had suffered so greatly during the struggle that this depression could act only to dishearten them. There were many disputes among us over what would lead to the revolution: a crisis or a favorable conjuncture?

At that time many of us defended the viewpoint that the Russian revolutionary movement could be regenerated only by a favorable economic conjuncture. And that is what took place. In 1910, 1911 and 1912, there was an improvement in our economic situation and a favorable conjuncture which acted to reassemble the demoralized and devitalized workers who had lost their courage. They realized again how important they were in production; and they passed over to an offensive, first in the economic field and later in the political field as well. On the eve of the war [in 1914] the working class had become so consolidated, thanks to this period of prosperity, that it was able to pass to a direct assault.

This period of class militancy was cut short by the outbreak of the First World War, when a wave of patriotism swept over the country, engulfing all but the most class-conscious workers. But as the war dragged on and Russia suffered massive casualties, patriotism gave way to cynicism and then anger, which eventually culminated in the successful revolutions of 1917.

One conclusion that Trotsky drew from examples like these was that class struggle was not simply the result of economic slump or of economic boom, but was often the result of the rapid shift from slump to boom and back again. Slumps can show the necessity for change, but they can also weaken the power of the working class as some lose their jobs and others become desperate to hang on to theirs. A return to economic growth can give workers renewed confidence to make significant demands, but if the new expansion is long-lived, the possibility for radical change will be lost until a new crisis begins. Here is Trotsky again:

Many of you will recall that Marx and Engels wrote in 1851—when the boom was at its peak—that it was necessary at that time to recognize that the Revolution of 1848 had terminated, or, at any rate, had been interrupted until the next crisis. Engels wrote that while the crisis of 1847 was the mother of revolution, the boom of 1849–51 was the mother of triumphant counter-revolution. It would, however, be very one-sided and utterly false to interpret these judgments in the sense that a crisis invariably engenders revolutionary action while a boom, on the contrary, pacifies the working class…

The irresolute and half-way Revolution of 1848 did, however, sweep away the remnants of the regime of guilds and serfdom and thereby extended the framework of capitalist development. Under these conditions and these conditions alone, the boom of 1851 marked the beginning of an entire epoch of capitalist prosperity which lasted till 1873. In citing Engels it is very dangerous to overlook these basic facts…. At issue here is not whether an improvement in the conjuncture is possible, but whether the fluctuations of the conjuncture are proceeding along an ascending or descending curve. This is the most important aspect of the whole question.

So it was the long period of capitalist expansion in the 1850s and 1860s that stabilized the system and led to a relatively low level of class struggle. By contrast, the period after the First World War, according to Trotsky, was one of long-term instability and decline, during which “upswings can only be of a superficial…character, while crises become more and more prolonged and deeper going.”

The effect of booms and slumps will thus depend in part on the underlying state of the economy—whether it is in a period of sustained expansion in which recessions are relatively minor interruptions, or whether it is in a period of decline in which the booms are short-lived and sustained growth cannot be achieved.

Today we find ourselves in a period of long-term economic instability, in which a return to sustained growth seems unlikely any time in the near future. During the past decade the U.S. economy has experienced two recessions—the most recent, the worst since the Great Depression—and low growth. Even when the economy was growing in the middle of the decade real wages continued to decline. Now the economy is growing again, but unemployment remains high (the real figure is around 15 percent) and there is a strong chance that there will soon be another recession.

Will the current period prove more favorable to the left or to the right? Over the past eighteen months we have certainly seen the growth of the right, including vicious scapegoating of immigrants and the emergence of the Tea Party, with its attacks on “big government” and the supposed socialism of the Obama administration, and its strong undercurrent of racism. Some commentators, including Noam Chomsky, are convinced that there is a real threat of fascism, with parallels to the decline of Weimar Germany and the rise of the Nazis.

There is certainly no reason to be complacent about these developments, but the comparison with Germany in the 1930s makes little sense. Far from being a mass movement, the journalists Anthony DiMaggio and Paul Street describe the Tea Party as “a top-down interest group led by national and local political officials and financed by corporate America” and “fundamentally dependent upon the Republican Party.”

While the Tea Party has been able to mobilize a few thousand people and demonstrations around the country, these have been dwarfed by recent progressive mobilizations, including hundreds of thousands demonstrating for LGBT and immigrant rights. But progressive demonstrations generally receive very little media attention, while the cable channels—particularly, of course, Fox News—have given Tea Party events a level of exposure totally disproportionate to the numbers involved.

DiMaggio and Street argue that, despite some impressive recent mobilizations, much of the left has been “significantly pacified and demobilized by Obama and the corporate Democrats, has surely failed to capitalize on the recent economic downturn, and has generally failed to establish a progressive movement in the short term.” But they also point out that “the Tea Party represents a concession from Republican Party elites that they (along with their Democratic counterparts) no longer enjoy much legitimacy among the American people.  Their only way of appealing to voters is to appear as if they are not political leaders, but ‘average people’ taking part in a populist uprising against a corrupt political system.”

Opinion polls show that there has been a significant shift to the left in terms of political attitudes over the past few years. In May, a survey by the Pew Research Center found that 43 percent of people under the age of thirty in the United States view socialism favorably, exactly the same percentage as those with a favorable view of capitalism. That figure alone shows that there is a remarkable opportunity for the left to grow in the current period. We have to honestly acknowledge that organizations to the left of the Democratic Party are tiny and that the labor movement in this country is at a low ebb. But if we are serious about changing the world, now is the time to get involved and rebuild them. The left can grow in a period of economic crisis.


Issue #62

November 2008

Crisis of Capitalism

Issue contents

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Critical Thinking


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