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Debate: understanding the decline of a mode of production, part 2

Updated: Jun 7, 2022


The changes in capitalism at the start of the 20th century


By Link


This is a corrected version of the original text which contained too many errors, for which I apologise - Link.


Introduction


In response to a request from me for clarification on his reasons for seeing the decadence of capitalism as starting in the 21st century, CMcl has produced a significant reply both to my first text [1] detailing many of the questions that I had, and I much appreciate the effort he has made. In the first part of my reply I looked at the theoretical aspect of Historical Materialism [2] and how to interpret decadence. This is Part 2 of my response which addresses the historical elements of CMcl's arguments regarding the changes in capitalism at the start of the 20th. To understand the decadence of capitalism it is also important to identify what was happening during its period of ascendancy. and 21st centuries and his review of decadence in previous modes of production. These issues are contained in both Part 1 and Part 2 of his tex t[3]. CMcl regards the 20th century as part of capitalism's ascendant period and believes that the start of the 21st century is the start of capitalism's decadent period. These ideas are based on the belief that the period of decadence of any mode of production is determined purely by internal economic factors and more specifically by its capacity to grow economically or not.


One element of this discussion which I raised in Part 1 that appears to impact quite heavily on the discussion is the issue of causes and phenomena of decadence of a mode of production. It is not something which CMcl tries to identify, in fact he appears to present economic growth in determining decadence and specifically that growth is a feature of ascendancy and economic decline as a cause of decadence. This is a generalised view of the process but, in reality, we need to also look at each mode of production as historically specific and as such recognise that the causes and phenomena of its decline are also likely to be specific.


Unfortunately CMcl’s text generally does not present a strong historical analysis and falls back onto critical polemics instead of discussing the strengths and weaknesses of both my and his own analyses of historical materialism and periods of decadence.


It is easy to make polemics sound entertaining when you make ridiculous interpretations of what was actually said and I'm afraid this is CMcl’s approach. I have no intention of detailing all of f misrepresentations and distortions that CMcl uses against my views - and yes, I know that English is not his first language, but I have pointed out these problems and he is just not interested, he has made no effort to adjust his criticisms.


Instead of responding to all the errors I would ask the reader to look at my original text to see what I actually said and allow me just to point out here that I do not say the following absurdities - despite what CMcl contends:


  • that capitalist decadence is caused by factors external to capitalism

  • that external factors are more important than internal factors

  • that accelerated economic growth causes capitalist decadence

  • that nature causes capitalist decadence

  • that I present a theory that capitalist growth is cancerous.


CMcl produced a strong text with detailed empirical criticisms of the ICC and its view of decadence but I am afraid that Part 2 of his critique of me is poorly argued and inconsistent


In this text therefore I am to address the serious issues that we have both raised regarding the ascendancy and the decadence of capitalism. Firstly into a review of the changes taking place in capitalism prior to the start of the 20th century and in terms of the world market, the state and national economy, war, colonialism and imperialism, banking, transportation, and nationalism and compare that to the events post World War 1 and 2.


Capitalism before 1914



The World Market before 1914


C.Mcl. says he will define a world market but fails to do so and instead goes on to give 5 points as to why it could not have been achieved by 1914. These 6 points are 1) it was only a colonial market at that time; 2) protectionism existed in the 1930s; 3) post WW2 the market was neo-colonial; 4) the Russian bloc, China, India and many third world countries were behind the Iron Curtain and isolated; and finally: 5) the world market was only completed with the emergence of neo-liberalism in the 1990s and as the iron curtain came down.

From this, the clearest thing that we can learn is that CMcl believes that protectionism, autarky and the 2 bloc system prevent a world market existing. Perhaps this means that the world market has already disappeared with the isolation of Russia after its invasion of Ukraine? Capitalist powers do not decide who is imperialist or not and who is in or out of the world market.


In fact Marx said this about autarky and protectionism:


"Moreover, the protectionist system is nothing but a means of establishing large-scale industry in any given country, that is to say, of making it dependent upon the world market, and from the moment that dependence upon the world market is established, there is already more or less dependence upon free trade. Besides this, the protective system helps to develop free trade competition within a country. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute government, as a means for the concentration of its own powers and for the realization of free trade within the same country." [4]


As can be seen here, Marx believed that autarky and protectionism do not separate individual countries from the world market, they are merely implementing (conjunctural?) policies with regard to the world market that are presumably intended to strengthen these countries' position on the world market.


Perhaps C.Mcl. should have started by asking himself what a world market is rather than by trying to oppose colonial and world markets without defining either. very well. A market is simply a place or environment where goods and services are sold and bought. It does not matter where it is, what products are present, how transactions take place, what policies are followed by buyers and sellers, nor how big the market is, it is still a market because market is a very general term. Now, it is true that there is a significant difference between the world market in 1900 and in 2000 but it is to be expected that throughout the life of capitalism new phases would emerge so that is not the defining point. What is significant about 1900 is that the period before this saw the establishment of capitalist national economies and imperialist expansion across the world. Even at this point the mass of world trade took place between the developed powers and not with the colonies. What was important was the spread of commodity and financial trading across almost the whole world by the 20th Century. This is the important point for this phase, the geographical spread of the market. The intensification of trading activity would follow later.


Marx said that the world market was already in existence in his lifetime and Luxemburg said that by 1914 capitalism dominated the greatest part of the world and that the remaining non-capitalist regions of the world were insignificant. Lenin and Bukharin went a little further empirically and quoted the economist Hübner’s estimate that only 28 million sq km out of a total of 134 million sq km, i.e. only 21% of the global lands, were not under capitalist control. [5]. During the previous 40 years the regions under capitalist domination had actually doubled, which demonstrates the speed at which capital was expanding at the time.


Bukharin [6] also makes the point that we should recognise that the spread of capitalism was not just about an external geographical expansion across the world but also an intensification of capitalist relationships, particularly economic but also national political. Capital had spread its networks across each nation and created national economies and as the world became dominated by capitalist competition, the national economies had begun to fight it out on an international scale. The world market therefore originates with the completion of national economies and the geographical spread of capitalism irrespective of the levels of intensification of its activities. Having said that though, the impact of capitalism across the world was significant by 1914, certainly much more than previously.


Bukharin devotes the first chapter of his book 'Imperialism and the World Economy’ to defining the world market, so perhaps we should recognise that it is a little more complex than mentioned so far. After mentioning an international exchange of commodities, financial capital and an international division of labour, he emphasises the existence of a world market quite simply due to the established network of a world market in the sphere of commodity exchange, a world market of money capital, and other economic relations such as emigration, immigration, migration of labour power and the transfer of money back home, foreign enterprises and the repatriation of profits from steamship companies. All of which are an expression of how the world market functioned in that period.


Capitalist imperialism became the new phase of capitalism as it dominated the world and imperialism became the term for international competition between nations on what we must now call a world market.


Imperialism is a problematic term in that imperialism existed before capitalism and related to emperors and their conquests of land, which is why Bukharin and Lenin used the term capitalist imperialism on occasions. They used the term imperialism to first of all explain the mad colonial rush at the end of 19th Century as the major powers raced to out compete each other for control of non-capitalist lands and their resources. Secondly, to explain the new phase capitalism had entered because they saw the new period more as one of financial monopoly and financial domination of the market. In the late 19th Century this was a new phase for capitalism but nowadays imperialism is just the capitalism that we see everyday.


"At a certain stage in the development of exchange, at a certain stage in the growth of large scale production, namely, at the stage that was reached approximately at the end of the 19th and the beginning of the 20th Centuries, commodity exchange had created such an internationalisation of economic relations, and such an internationalism of capitalism, accompanied by such a vast increase in large-scale production, that free competition began to be replaced by monopoly. The prevailing types were no longer enterprises freely competing inside the country and through intercourse between countries, but monopoly alliances of entrepreneurs, trust. The typical ruler of the world became financial capital, a power that is peculiarly mobile and flexible, peculiarly intertwined at home and internationally…" [7]


I do not intend to reproduce all the statistics that Lenin produced in Imperialism: The Highest Phase of Capitalism to explain the changes in period from the mid 1870s until the early 1900s. To summarise his analysis of the change in the conditions of capitalism at that time however he saw the massive increase in colonial possessions gained as well as the changes in the economy towards large scale production, cartels and monopolistic controls on industry and the massive increase in banking’s involvement in the management of the investments in manufacturing. Exports of goods were overtaken by export of capital by which the major powers came to dominate competition at a global level. It was also noted that capitalist imperialism is a stage of competing imperialisms not just of one. Lenin provided the following definition:


"(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed." [8]


Bukharin also wrote substantially on the emergence of imperialism and linked it par­ticularly to what occurred during the 19th Century, i.e. the technical progress, economic expansion and trade expansion across the world (as might be expected from the title). He also recognised the connection between the expansion of international networks of trade and finance with the internal establishment of national economies.


"The destruction, from top to bottom, of old, conservative, economic forms that was begun with the initial stages of capitalism, has triumphed all along the line. At the same time, however, this “organic” elimination of weak competitors inside the framework of “national economies” (the ruin of artisanship, the disappearance of intermediary forms, the growth of large-scale production, etc.) is now being superseded by the “critical” period of a sharpening struggle among stupendous opponents on the world market. The causes of this phenomenon must be sought first of all in the internal changes that have taken place in the structure of “national capitalisms” causing a revolution in their mutual relations. Those changes appear, first of all, as the formation and the unusually rapid spread of capitalist monopoly organisations: cartels, syndicates, trusts, bank syndicates. We have seen above how strong this process is in the international sphere. It is immeasurably greater within the framework of ‘national economies’." [9]


We should all of us respect the analysis expressed by Bukharin and Lenin as they provide a detailed insight into the internal changes that capitalism had gone through and the new stage of imperialism which came with towards the start of the 20th Cen­tury. ([10])They provide significant evidence for the recognition of this new period as a period of decay for capitalism in that it is losing its core characteristics of freely com­peting production and leading into a period of increased exploitation of the working class, increased competition between national states and an exacerbation of the “rich get richer” motif that capitalism represents.


They saw rapid development of monopolies and cartels and the interrelationship with financial monopolies which had come to dominate national capitals and were then moving to dominate the international economy. The increasing export and import of products but also finance capital drew all nations into the global network. These financial and monopoly systems inevitably led to state competition at a global level.


Luxemburg discussed at length the development of capitalism during the 18th and 19th Centuries and identified what this process had achieved in terms of the emer­gence and development of national markets and nation states. With the emergence of imperialism, she linked the capacity of the nation state to manage its own eco­nomy and society in general to the stage where its capacity to represent the nation on the world market was accomplished.


"The nation-state is also simultaneously that indispensable historical form in which the bourgeoisie passes over from the national defensive to an offensive position, from protection and concentration of its own nationality to political conquest and domination over other nationalities. Without exception, all of today’s “nation-states” fit this description, annexing neighbours or colonies, and completely oppressing the conquered nationalities.” [11]


It was not only the development of the state mechanism and manufacturing systems but also the creation of a “national society” that provided a rounded environment to facilitate the functioning of the national economy.


"... capitalism creates a whole new culture: public education, development of science, the flowering of learning, journalism, a specifically geared art. However, these are not just mechanical appendages to the bare process of production or mechanically separated lifeless parts. The culture of bourgeois society itself constitutes a living and to some extent autonomous entity. In order to exist or develop, this society not only needs certain relationships of production, exchange, and communication, but it also creates a certain set of intellectual relations within the framework of contradictory class interests. If the class struggle is a natural product of the capitalist economy then its natural needs are the conditions that make this class struggle possible; hence not only modern political forms, democracy, parliamentarianism, but also open public life, with an open exchange of views and conflicting convictions, an intense intellectual life, which alone makes the struggle of classes and parties possible. Popular education, journalism, science, art – growing at first within the framework of capitalist production – become in themselves an indispensable need and condition of existence of modern society. Schools, libraries, newspapers, theatres, public lectures, public discussions grow into the normal conditions of life, into the indispensable intellectual atmosphere of each member of the modern, particularly urban society, even outside the connection of these phenomena with economic conditions. In a word, the vulgar material process of capitalism creates a whole new ideological “superstructure” with an existence and development which are to some extent autonomous.[12]


The State before 1914


C.Mcl. begins his discussion of state capitalism with this statement:


"There is also another legend peddled by the ICC, which consists in making people believe that State intervention in all areas of society is a characteristic of the twentieth century compared to the previous one, a legend unfortunately also taken up by Link… whereas this State intervention was also very important in the nineteenth century. [13]


But this misses the point entirely. The capitalist states were becoming well estab­lished, if still under development well into the 19th Century, so it is not that state inter­ventions weren’t taking place. The nation states were active in the forming of nations and in the national economies and their interventions were highly important in that process.


C.Mcl. suggests 5 examples that supposedly support his argument, which frankly demonstrate just how much he misses the point. He argues that laws were enacted to disrupt feudal structures and create an environment suitable for capitalists; that imperialism was conducted by the state: that the nation states in some European countries were more interventionist and protectionist; that debt was high in the 19th Century not just the 20th and that this helped the UK develop.


He is correct in every one of these 5 points but, as I say, they are not at all at issue; what was important was the process that was taking place.


The bourgeois state was a new creation, a product of the class struggle between the bourgeoisie and the old feudal ruling class. Feudal society did not just give up and disappear overnight, it took centuries of pressure applied to the economic and polit­ical development of capitalist systems. This newly emerging state form was an im­portant sign of developing bourgeois class rule and it supported the advances being made by the industrialists and weakened the power of the old feudal classes. It ad­vanced capitalist “freedoms” for employers, employees and politicians in the process of developing the capitalist national economies and it was used to eliminate feudal practices. Of course this was happening, and it is possible to point to innumerable important state interventions in every single nation state. This was however not state capitalism in the way we know it today, this was the period in which the bourgeois state was being built and throughout, the 17th, 18th and 19th Centuries, it was helping to create the environment for capitalism to flourish.

There was no single plan for these bourgeois nation states and the states’ activities and format varied from state to state depending on local conditions. The UK favoured a laissez-faire approach because its economy was generally in advance of other countries, whereas various European countries, especially Russia, France and Germany, had a larger state apparatus and used protectionist tariffs to aid their eco­nomic development. These are all bourgeois policies and do not mean they weren’t aiding capitalist development – and yes, I know, Russia had an absolutist monarch but below him was a substantial state totally unlike the old feudal states. C.Mcl.’s suggestion that high tariffs mean a country is excluded from the world market is just not credible.


There were various institutions that were developing in this period which supported the expansion of national capital.


State Institutions


Regarding State Institutions themselves, although the impact of the state is signific­ant, the size of nation states prior to the 20th Century was very small, as what was happening was the emergence of very new types of institutions. Feudal societies had been localised institutions with only a small central authority based around the royal courts.


Early bourgeois governments themselves remained small and comprised little more than royalty, the army and parliament but they were more centralised and represen­ted a changing attitude to the management of society.In Britain, in 1797, the central government employed only 1,500 civilians and by 1869 this figure was still only 17,000. There would have been some local employees such as tax collectors, and of course there was the army. The latter accounted for 80% of state employees in 1851 and by 1914 was still as much as 55%. ([14])Up to the early-mid 19th Century you could argue that the central government was really only about the armed forces, the court and the central coordination of revenue to pay for them. Most domestic policy – education, health relief, local justice, etc. – were administered and largely paid for (or not) by local communities.


The development of state bureaucracies was essential for the administration of capit­alist society. It is “... estimated that in 1919 for every 10,000 inhabitants Belgium had 200 government officials, France 176, Germany 126 and Britain 73”, [15] whereas if we look at the figures for today, for every 10,000 inhabitants in the UK there are over 800. [16] The UK civil service itself accounted for about about 50,000employees in 1900, whereas today number is approximately 472,000. [17]


There were an estimated 5.70 million employees in the public sector as a whole for September 2021. [18]


The UK is not an isolated example, in the USA government officials have gone from 540,000 in 1910 to nearly 12 million in 2015 (which is over 8% of total employment) and this excludes education. [19]


The 19th Century saw a steady development away from local institutions and autocratic monarchies and the gradual formation of parliamentary systems, centralised bureaucracies, banking systems and some social welfare schemes. After 1815 Europe saw constitutions being created and parliamentary systems established which although they were based initially on a small electorate nevertheless they established new precedents as they were replacing autocratic institutions. State bureaucracies were:


."..more and more organised as fixed hierarchies with the salary paid to each member dependent entirely upon his official rank. ... Fixed hierarchies, fixed pay scales, fixed entry and disciplinary procedures, pensions, all mean that in some parts of Europe, truly modern civil services were coming into existence. The offi­cial could now feel as never before that his position had been given him by the state, not by a patron or even the monarch." [20]


From the middle of the century, the administrative apparatuses of the regimes in Europe were improving.. Recruitment was becoming more competitive and new governmental departments and independent organisations were established across Europe dealing with social welfare provision, health systems with registered doctors, teachers, lawyers, factory inspectors, prison inspectors and railway officials.


"The evolution of Europe since Waterloo had not made authoritarian government impossible: in some important respects it had made it easier. But it had made necessary the evolution of new forms of authoritarianism – more flexible, better informed and better served, more conscious of and responsive to the feeling of the ordinary man. Rouher, the most authoritarian and efficient of the ministers of Napoleon III, summed up one aspect of the position when he said that, after the establishment of the Second Empire in 1852, everybody thought it impossible not to take into account the new political habits which the country had acquired in the preceding 50 years." [21]


Colonialism and Imperialism


Colonialism was initially conducted not by the state, but by private capitalists as mer­chants and entrepreneurs formed joint stock companies from the 16th Century on­wards and set up chartered companies under governmental authorisation which gave them rights and privileges to trade in specific parts of the world. These were established by many European states for the exploitation of commercial opportunities and resources in the newly discovered regions of the world. One of the earliest and most famous of English companies was the East India Company which was given rights to operate in East India and employed its own army to support the trading in and plun­der of the area. It became effectively the ruler in the region and it usurped local rulers and this was by no means unique.


In the UK, the chartered companies were disenfranchised in the mid 1800s and the state took over their activities across the world, effectively initiating the period of im­perialism. This corresponded to the increasing size and influence of the state bureaucracies. The whole point about imperialism which differentiates it from early colonialism, is that it was a phase that developed at the end of the colonial phase (in the late 19th Century) when the nation states took over foreign policy and international relations and represented an intensification of economic and military competition between nation states.


Banking


Banking obviously existed before the onset of capitalism but it played a more limited role in pre-capitalist societies, taking in deposits, lending and exchanging money, and there were limited numbers of banks. Only capitalism requires the use of money on a daily basis for all exchanges and hence banks evolved to match this task and became particularly important to maintaining and supporting the expansion of industry and commodity markets.


The modern capitalist banking sector could be said to have started in Italy in the 11th Century but spread across Europe and the emergence of national central banks began in the 16th and 17th Centuries when Amsterdam and Barcelona set up banks which became important because of the international trade through their ports. The Bank of England came later in 1694 but because of the strength of Britain and ster­ling, London soon came to dominate as the centre of international trade and finance.


In the 18th Century in the UK there were a limited number of local or country banks which were usually set up by local businesses who were already managing money. They provided services only for the locality. They could issue banknotes but were not regulated and needed little capital. They were there to support private entrepreneurs and employers with deposits, credit and payment facilities and they issued their own notes so generally there was little control over the money in circulation and little in­surance to cover losses. These local banks increased in number at the end of the century and by 1810 there were nearly 800 small banks across the country issuing banknotes. [22] Workers and the poorer sections of society would not have had the type of current accounts that exist today but there were savings banks which were set up specifically for workers.


What existed at the start of the 1800s were a few national banks, an expanding num­ber of merchant banks and the well established local banks. The earliest merchant bank had dated from the late 1700s and dealt specifically with governments, merchants and manufacturers both nationally and internationally. They became larger and more important during the 1800s but remained primarily private, family-owned businesses.


"This increased in the early 19th Century, especially in the ... largest trading countries such as the UK (Barings, Britain’s first merchant bank which was estab­lished in 1762 by brothers Francis and John Baring), Germany (Schroders, Berenbergs) and the Netherlands (Hope & Co., Gülcher & Mulder). At the same time, new types of financial activities broadened the scope of merchant banking, taking it far beyond its narrow origins. The merchant-banking families dealt in everything from underwriting bonds to originating foreign loads. Bullion trading and bond issuance, for example, were just two of the specialities of the Rothschild’s. They also began to form cross-country strategic alliances…” [23]


The expansion of industry and trade and the consequent requirements for more and more funding and credit facilities meant that merchant banks became ever more in­fluential during this century and by the early 20th Century merchant banks were start­ing to merge and combine as corporations to be able supply the level of funding needed by industry by this time and had become an important part of how the state managed internally and internationally the large industrial and financial sectors.


The national or central banks were initially private firms which became more import­ant as bankers but also as regulators of the national banking systems. During the 19th Century they were performing effectively state functions. The Bank of England for example, despite remaining in private hands, took on regulatory responsibilities and from 1844 was officially responsible for the issue of bank notes and the manage­ment of gold reserves. The local banks were from then on limited to the amount of notes they could issue themselves although it was not until the early 20th Century that this practice was stopped altogether.

As Lenin suggests, by the end of 19th Century, the banking sector was hugely influ­ential as the level of financial activities grew across the world:


"But capitalism only became capitalist imperialism at a definite and very high stage of its development, when certain of its fundamental characteristics began to change into their opposites, when the features of the epoch of transition from capitalism to a higher social and economic system had taken shape and revealed themselves in all spheres. Economically, the main thing in this process is the displacement of capitalist free competition by capitalist monopoly. Free competition is the basic feature of capitalism, and of commodity production generally; monopoly is the exact opposite of free competition, but we have seen the latter being transformed into monopoly before our eyes, creating large-scale industry and forcing out small industry, replacing large scale by still larger-scale industry, and carrying concentration of production and capital to the point where out of it has grown and is growing monopoly: cartels, syndicates and trusts, and merging with them, the capital of a dozen or so banks, which manipulate thousands of millions. At the same time the monopolies, which have grown out of free competition, do not eliminate the latter, but exist above it and alongside it, and thereby give rise to a number of very acute, intense antagonisms, frictions and conflicts. Monopoly is the transition from capitalism to a higher system." [24]


By the start of the 20th Century the modern banking systems were well established as part of the national economies that capital had created in its period of ascend­ancy. The banking systems have obviously developed since, particularly with the end of the gold standard in 1933 and the extension of individual bank accounts in de­veloped countries to the working class from the 1950s. In recent decades we have seen the transfer to the electronic records, payments and communication systems to which banking is ideally suited. These however do not particularly change the basic systems, but what they do is intensify the transactions possible and make the sys­tems far more efficient and profitable for the banks themselves.

The changes up to the 19th Century reflect the emergence of institutions suitable for the emerging capitalist society. The 20th Century changes reflect the needs for im­proved efficiency and cost reductions by the ruling class, not reforms to benefit the working class.


Transportation Networks


Another major factor that also facilitated the creation of capitalist national economies between the 17th and 19th Centuries was the development of transportation systems.

Certainly, shipping had been the basis of colonial expansion and international trade from the early 17th Century onwards and as we have seen this was closely linked with the development of banking systems and trading offices at ports as well as the ports themselves.

In the UK, the improvement of road systems during the 18th Century was particularly significant for the development of a national economy. According to Daunton, [25] previously they had been under the control of local parishes and communities which meant there was no national coordination in the planning or maintenance with the obvious results. From the mid 1700s, the turnpike system (i.e. charging tolls to travellers) under the control of trusts gradually took over and this led to a more extensive and coordinated national network. It also led to an improvement in technology and efficiency of road transportation itself.


The canals in the UK were also developed and extended during the 18th and early 19th Century They were primarily built by joint stock companies because of the in­vestment involved and, because they were cheaper for carrying heavy goods, tended to respond to the needs of local industries. By the early 1800s there was a substantial national network.

The railways network began when engine power took over from the local horse-drawn tramways and wagon ways to transport heavy goods locally to rivers and canals but by the mid 1800s they had expanded rapidly across the nation.


The national transportation systems were a key part in establishing integrated na­tional networks for industry and society generally. It was the creation of such net­works that drew the nation together to function as a single entity. As an example, it was the construction of railway timetables that led directly to the establishment of a standard time for the whole of the UK. They were significant also in reducing operat­ing costs for industry and reducing travelling time.


During the period pre-1914, as well as professional bureaucracies we also see the formation of the press, taxation systems, certain welfare and health services, the provision of public services such as water and electricity and professional armies. Perhaps something that should not be forgotten was the evolution of industry from small craft producers and small factories, there was the gradual advance of large scale production systems. Although during the 19th Century there was legislation which, for example, ended corporal punishment for breaking work contracts, limited child working hours, improved ventilation, sanitation, and factory conditions in general, and provided for enforcement by government inspectors. However in comparison to today, employers were nonetheless left relatively well alone concerning the management of workers. This can be seen in Engels’ book The Condition of the Working Class in England (1845), while Marx devotes Chapter 25 of Capital, Volume 1 to the conditions of the working class too and calls the employment regimes of the time “despotic”.


Nationalist Ideology


Last but not least it should be recognised that along with the growth of the nation state came the growth of nationalism. This was a new concept at the start of the 19th Century as previously, under feudal systems and even slave systems, it mattered not where individuals were born or lived, what mattered was in whose current kingdom the individual resided. However, for the national economy and for the coherence of the nation state, the ruling class needed to encourage a group identity based to some extent on local characteristics (whether racial, religious, regional) so as to provide support mechanisms for national policies and politics. Certainly, there were exceptions, but this was well established by the start of the 20th Century as illustrated by the betrayal of social democracy and the start of World War I itself.


"However, capitalism does not create that intellectual spirit in the air or in the theoretical void of abstraction, but in a definite territory, a definite social environment, a definite language, within the framework of certain traditions, in a word, within definite national forms. Consequently, by that very culture it sets apart a certain territory and a certain population as a cultural national entity in which it creates a special, closer cohesion and connection of intellectual interests." [26]


Luxemburg is here identifying the formation of nations and nation states by the end of the 19th Century. They had now significantly eliminated the remnants of feudal controls (Russia is a good example of where the transformation was not complete but even there the needs of capitalism dominated) and what remained was swept away by the demands of World War I. Nations were now more or less fully formed and able to function fully in support of the needs of the bourgeoisie.


In summary then, what is important in the period up to the start of the 20th Century is the establishment of the national economy and a nation state to manage it. The foundation of the economic system is clearly essential but the foundation of super­structures required by capitalism is political as the bourgeoisie had to reduce and eliminate the influences of the localised and aristocratic feudal systems and establish a national network within which business and manufacturing could function. Given the nature of capitalism, parliament, press, trade unions, legal profession in addition to the topics discussed needed incorporating into the new systems. This did not hap­pen by accident, it was the product of class struggle, and this feature of the develop­ment of new bourgeois systems eliminating the old feudal structures was a specific task undertaken during the period of the 16th to the 19th Centuries.


The nation state is the characteristic political form of capitalism and bourgeois rule, breaking down all feudal barriers to economic development: local customs tariffs, seigneurial authority, arbitrary law, aristocratic privileges, attachment of the peasants to the land, and even local systems of measurement. Today, it has long been obvious that the nation state, and the imperialist rivalries between nations, is one of the principle fetters on the development of the productive forces in general and on the world wide association of labour in particular. Yet despite all efforts (most notably the European Union), the bourgeois class has shown itself incapable of going beyond the nation state, and nationalism remains one of the most powerful, and indispensable, ideological weapons of its class rule.


Capitalism after 1914


The World Market after 1914


The latter part of the 19th Century had therefore set the foundations for changes that would take place across the world after World War I. The nation state’s role as manager of society and of the class struggle expanded with the failure of the working class uprising from 1917 to the late 1920s, and as manager of the economy as the agreements between national ruling classes at the end of the war failed from the late 1920s onwards. National conflicts intensified and during the 1930s nations generally took up autarkic policies presenting high tariffs to imports as a way of encouraging national production.


These failed too and World War II followed in 1939. After this war however the bourgeoisie had become a good deal more expert in handling both the class struggle and the international economy. International mechanisms were put in place by the USA to stimulate economic reconstruction across the parts of the world it controlled while the USSR established the Warsaw Pact and Comecon to manage its bloc of countries. These international mechanisms certainly led to the Cold War but also created tight networks within the 2 blocs of nations.


The end of colonial military occupations meant that imperialism achieved its full potential from the 1950s onwards. The financial controls exerted by the USA and other wealthy countries gave these ‘Third World’ countries the semblance of independence but ensured they remained under the financial control of the major powers. This financial imperialism kept many countries very poor (especially in Africa) and allowed major international firms to do what they really wanted, to get on with the job of making profits without the disturbance of nationalist movements and open confrontations.


It is not reasonable to suggest this is not a world economy as C.Mcl. does. Despite autarkic policies (especially in the Warsaw Pact) the two conflicting blocs continued to trade even it was limited:


"The Soviet Union conducted the bulk of its foreign economic activities with communist countries, particularly those of Eastern Europe. In 1988 Soviet trade with socialist countries amounted to 62 percent of total Soviet foreign trade. Between 1965 and 1988, trade with the Third World made up a steady 10 to 15 percent of the Soviet Union's foreign trade. Trade with the industrialized West, especially the United States, fluctuated, influenced by political relations between East and West, as well as by the Soviet Union's short-term needs. In the 1970s, during the period of detente, trade with the West gained in importance at the expense of trade with socialist countries. In the early and mid-1980s, when relations between the superpowers were poor, however, Soviet trade with the West decreased in favour of increased integration with Eastern Europe.


The manner in which the Soviet Union transacted trade varied from one trade partner to another. Soviet trade with the Western industrialized countries, except Finland, and most Third World countries was conducted with hard currency, that is, currency that was freely convertible. Because the ruble was not freely convertible, the Soviet Union could only acquire hard currency by selling Soviet goods or gold on the world market for hard currency. Therefore, the volume of imports from countries using convertible currency depended on the amount of goods the Soviet Union exported for hard currency. Alternative methods of cooperation, such as barter, counter trade, industrial cooperation, or bilateral clearing agreements were much preferred. These methods were used in transactions with Finland, members of Comecon, China, Yugoslavia, and a number of Third World countries." [27]


So their existence and the existence of autarkic policies cannot be said to deny the reality of a world market. As discussed earlier trade autarky is a reaction to others on the world markets and it is just one of the policies that capitalist nation states can adopt in the face of the world market. Besides it is never total isolation, even Albania never managed that! Indeed, if there were no world market the policies of high tariffs and autarky would be meaningless. For the USSR, and the Eastern European countries, and for China and India, the use of autarky was not permanent and they had to open back up to the world market in order to make up for their technological and economic backwardness.


What is true however is that the market changes over time and different phases of capitalism present different features in the market and as C.Mcl. suggests there is a new phase from the late 20th Century onwards. Neoliberal policies and technological developments have enabled a further intensification of trade globally and enabled the economic development we see in China and the Far East, as production of many commodities has been transferred from the US and European countries to the cheaper labour markets and more easy-going regulatory systems there. This is not the creation of a world market as C.Mcl. says (otherwise renewed isolation of China and/or Russia would mean the end of the world market and this would be a nonsense), this is a further stage of its development and simply a continuation of all that has gone before.


In the 20th Century therefore we have seen the completion of the international market network of trade between competing nations. Imperialism has entrenched its domination of the world and the major powers, primarily the USA, have cemented their financial and military roles in this new era.


I do have to make an apology to C.Mcl. for confusing the issue about what causes decadence. We need to define and differentiate what causes decadence and what are phenomena of decadence just as we have looked at phenomena of ascendancy of capitalism in the last section and C.Mcl. identified the following quote from my text which confuses these elements:


“He then argues that certain superstructural changes that occurred at the time of the First World War in the political, social and imperialist domains, as well as certain economic mechanisms, are sufficient to characterise the change of period. To cite: the constitution of the world market, the advent of state capitalism, indebtedness, world and regional wars, armament, increased exploitation, ideological control of the working class, imperialism, immigration to the central nations.” [28]


I will clarify this statement by saying that I see a distinction between causes of decadence and phenomena and debt, on which he writes a substantial section in the belief I am saying debt was a cause of decadence. This was not my intention and the list I presented mixed up causes and phenomena.


I think it is important to recognise that for capitalism, it is the completion of nation states, the creation of the world market and the emergence of imperialism that are the key causes of the onset of decadence. The role of the state is intrinsically tied up with these factors so it is a major element in the management of capital in the new period but I hesitate to call it a cause. However it is equally not really a product or a phenomena of decadence such as the other items I listed i.e. debt, inflation, wars of attrition, ideological controls, immigration back to central nations in that state capitalism also represents a change in the relations of production and therefore could be argued to be a cause. I will leave this debate to another time.


Regarding debt itself, I also agree with C.Mcl. that it needs careful examination because most states involved in the Napoleonic wars took on debt to pay for the war. One of the reasons Britain won this war was because it set up new systems to raise funds and loans to generate sufficient funds to conduct the war, whereas France had very limited funds in comparison. As a result UK debt was higher at that time as a percentage of GDP than at any time since. Debt systems prior to the early 20th Century were however primarily based on supporting the state and manufacturing whereas today there has come to be much greater emphasis placed on the financial sector and on household debt. In the last half century debt systems have changed significantly in the financial markets as capitalists come to realise they can make more profits from financial investments than they can by manufacturing. Also we have seen the emergence of household debt to such an extent that by itself it almost equals the value of total world production annually. The change though shows it as a feature of decadence, albeit very significant for the working class, just like inflation which has been a major presence since the early part of the 1900s and certainly in comparison with the UK in the 19th Century when there was an overall deflation.


World trade increased in the new century but it was not until 1950 that it escalated significantly (Graph 1). In this period, capitalism had learnt lessons from the end of World War I and set up international systems that meant cooperation at international levels between members of the Western bloc and subordinated the Eastern bloc to control by the USSR. The increase in international cooperation does not eliminate imperialist competition but it did provide for the major powers a means of strengthening their own economies whilst maintaining some control of other countries and trying to prevent disruptions in the world market. Lenin correctly criticised the notion of ultra-imperialism in which a unified and peaceful world was foreseen but what we actually have is a world where major powers use their powers to maintain influence and keep other countries in check; it has not eliminated competition nor war.


Graph 1: Value of Exported Goods as Share of GDP (1827 – 2014) [29]


Graph 2 shows a slightly different perspective on growth in that it compares exports with GDP. Because the percentages of growth are not so great in this comparison it shows a realistic figure for 19th Century growth and gives a better comparison between trade in the 19th and 20th Centuries.


Graph 2: Growth of Global Exports (1800 – 2014) [30]




The League of Nations was an early effort in 1920 to keep the peace and resolve disputes but was not very successful. Following World War II many new organisations were set up and have maintained themselves probably due to the influence of the United States and to a lesser extent Russia, the EU and China. We can identify the United Nations, the World Bank. the Organisation for Economic Cooperation and Development, the European Economic Community which has evolved into the European Union, the International Monetary Fund, The Council of Europe, Comecon, and many regional free trade agreements such as ASEAN, NAFTA, EFTA, MERCOSUR and so on. [31]


In summary, it is evident that different processes were at work pre-1914 and post-1914. Capitalism had moved on from establishing its basic systems, whether national or colonial, and in the 20th Century we see the ripening of international military and financial competition. Capital has come to dominate almost the whole world so imperialist competition takes over as each national economy seeks influence and financial gains from intensified economic relationships. The features of the period of decadence that appear alongside growth are state capitalism, wars of attrition, inflation, ideological control by the state (all wars now become about human rights, political conflicts not economic supremacy), household debt and financial systems, militarism amongst others.


Let us return to Lenin to end this section:


"Monopolies, oligarchy, the striving for domination and not for freedom, the exploitation of an increasing number of small or weak nations by a handful of the richest or most powerful nations — all these have given birth to those distinctive characteristics of imperialism which compel us to define it as parasitic or decaying capitalism." [32]


In other words: the goal of capitalism has been to strive for the domination of the world and the creation of a world economy, and in Lenin’s view this was completed by the start of the 1900s.


The State after 1914


Obviously the apogee of capitalism is not something that is set overnight. It was a process over decades at the end of the 19th Century and decades at the start of the 20th Century. World War I is simply a convenient marker for the change but just as C.Mcl. himself argues, there is a significant difference between the period of 1914-1945 both from what came before and from what came after. The war and the working class uprisings that followed should not be minimised. It marked a major development in social evolution which was recognised at the time as a new period of wars and revolution.


After the 1914-18 war and the period of intense working class struggle that followed 1917, the bourgeoisie was not particularly clever, its responses being to crack down on the working class, to swing to the right and to put up national barriers to defend the nation from other countries. The consequences were the crises of the late 1920s and 1930s and ultimately World War II.


The strengthening of the national state and its institutions was nevertheless still taking place through increased militarisation and the expansion of political systems to draw whole nations tighter together through the strengthening of party politics. As can be seen in Graph 3 this led to a massive increase in administrative departments of the state.


The post World War II society changed significantly as the US and to a lesser extent the USSR established control of their respective blocs of countries and set up international networks for trade and political cooperation – all to their own benefit of course. This facilitated economic reconstruction on a global level but enhanced their own power and influence and hence wealth.


The state and the national economies continue to expand, change and develop roles but the trend in these changes signifies the maturation of established state mechanisms rather than their creation such as was described in the section


Graph 3: UK Public Sector Employment (1855 – 2018) [33]


Also significant is the general expansion of the role of nation states and their institutions following World War II. In addition to expanded economic management, nations needed expanded health, pensions and general social welfare systems. Most of these came out of plans made during World War II as ways of keeping national populations fighting during the war. The ruling class needed to offer something to prevent outbreaks of class struggle (less successfully in Italy) and provide the carrots to hold the working class in check. These were generally successful so what followed was an enormous extension of the size of governmental and non-governmental institutions as they took on new extended roles as can be seen in the following growth of the UK public sector.


The increase in the role of the state was also reflected in a wave of nationalisation of industries too. Overall the level of state spending expanded greatly in all countries in this period as can be seen in Graph 4.


In the sense of planning the peace as we noted earlier, there was also an increase in international organisations which weren’t formally governmental institutions but un­dertook a statist role at the international level.


Growth of the states post World War II reflected the planning for more social systems installed as the ruling class learnt about managing the working class and society in general. Also the greater controls placed over international trade and trade agree­ments along with the nationalisation of industries contributed greatly to the increase in size of the state and the amount of government spending as seen in Graphs 3,4,and 5.


Graph 4: Public Social Spending as % of GDP (7 industrialized countries, 1880 – 2016) [34])



Graph 5: Government Spend­ing (6 industrialized countries, including Russia, 1880 – 2011) [35]



One new task that the nation state has taken on in the 20th Century (besides the nationalisation of industries) is the ideological management of society. Having been established as the major institution within each nation, the state has a role in the distribution of ruling class propaganda. Both single party dictatorships and multiparty governments have to justify themselves nationally and internationally. This is essential in a system which pretends to be based on free individuals. Consequently everything that happens becomes presented in political and economic terms as benefits for the national population and as defence of its actions internationally. This is a propaganda machine that becomes exaggerated in times of war and in times of working class struggle but remains active throughout history. To justify its actions the bourgeois state pretends and tries to convince its population (and others) of its good intentions whether this is defending human rights, freedom and democracy, national self defence, the hunt for weapons of mass destruction and the defence against nazis and NATO aggression. Every political party tries to justify its actions to benefit society, all in different ways of course, but this political system does this by covering up the real nature of capitalism.


Wars in the 19th and 20th Centuries


"For the ICC... war in the 19thCentury, “despite the calamities it brought with it, (…) was a moment in the progressive nature of capital”, whereas in the 20th Century, wars “are no longer moments in the expansion of the capitalist mode of production, but express the impossibility of its expansion." [36]


This is C.Mcl.’s basic argument against the distinctions drawn between wars up to 1914 and wars after that date. He criticises the ICC for its analysis of the distinction between wars in these two periods and uses certain examples which do not fit their pattern. The list of wars in Wikipedia is so long it gave me little hope immediately of analysing causes and types. All that is clear from such lists is that the wars in the 20th Century have been more murderous and that the two World Wars were on a sig­nificantly broader scale than those of the 19th Century. The almost innumerable wars since the start of capitalism are certainly depressing and should make the world ashamed. Capitalism however does not do shame, it just carries on and that is the problem.


Marx took the view that certain nations were progressive in the 1800s because they represented the development of capitalism and not a return to feudal values and sys­tems. I do think we have to apply this to wars too in that certain wars were under­taken by feudal states defending their status, so what was progressive in these wars was the role taken by capitalist elements whether they were international or national wars.


C.Mcl. criticises the ICC because "...it claims that wars in the twentieth century “ceased to be ‘national’ as in the nineteenth century and became imperialist”?! And weren’t all the colonial wars during the 19th Century imperialist?" [37]


This appears to depend on his particular definition of colonial but if we use Lenin’s and Bukharin’s definition (see the section entitled “The World Market before 1914” ) then, no, they weren’t, at least not until the last 2 decades of the 19th Century. The wars of the 19th Century tended to be ones grabbing colonial territories whereas the wars in colonies in the 20th Century tended to be either global wars, wars of national independence from the colonial powers and more lately regional conflicts. I don’t think it is disputable that the 20th Century has seen greater wars of attrition where the aim is destruction of an enemy. Certainly the numbers of dead in the 20th Century wars demonstrate that.


C.Mcl. is however correct to say they were international wars which included many countries on both sides from across the globe – the best examples being the Seven Years war, the Napoleonic wars, the Boxer Rebellion, the Franco Prussian War, the Franco-Mexican War, the Opium Wars, the Crimean wars, the Egyptian – Ottoman War. These are important events in the 19th Century. Nevertheless, what we need to consider is, as I have suggested, what was progressive for the period and what furthered the development of capitalism; hence the trends that we can see are the critical feature. These wars do not determine the cause of decadence for capitalism that is clear, they are features or phenomena of the periods. The nature of wars changes with the nature of the period so I do not see that C.Mcl.’s arguments present an overall challenge to the argument of ascendancy and decadence in 1914, even if they pose interesting questions as to the detail.


Summary


What we can see in this commentary on the state in the 19th and 20th centuries is that its role changed significantly. Assertions of the common ground between these peri­ods just do not make a satisfactory explanation from a viewpoint of historical materialism. Of course there is a continuity, it is still capitalism, but the state is important at any time in its evolution so C.Mcl.’s contention that state intervention always happens, does not mean that we cannot identify trends in the evolution of the bourgeois state. Firstly, the new form of the state, the bourgeois nation state is emerging and building its role in society up to the end of the 19th Century, when capitalism has come to dominate the world, whereas in the 20th, what we can see is a state that is well established and has the legal, political and administrative apparatus able to manage (or at least try to manage) all aspects of the society from manufacturing to social welfare to military conflict. Its role in a totally dominant capitalist society is fully established.


This also does not mean that capitalism does not change further during the 20th Century, it has clearly been going through different stages of development. Technology advances rapidly, spurred on particularly by the major wars, but also by the need to extract more and more surplus value from workers to maintain growth. The transfer to electronic and digital systems at the end of the century continues to impact the whole of society, and alongside the cheapening of transportation has been the basis for the globalisation at the end of the 20th Century. These technical and political changes are however developed on the basis established by the formation of nation states; they do not indicate significant qualitative changes in the system.


The generalisations we are able to make regarding the period up to the end of the 19th Century about economic and institutional development, the full establishment of capitalist states in all the major powers are therefore clear evidence that we should regard the end of the 19th Century as the completion of capital’s period of ascendancy. The developments during the 20th Century are of a very different kind.


C.Mcl. is right to question the simplifications of the issue of war but the point is not to fixate on one or two specific events especially in a period of ascendancy where there will clearly be factors that represent the decline of one mode of production and the ascendancy of another but to look for tendencies to understand what is going on in any period.


Overall however, C.Mcl. himself simplifies the periods and fails to investigate the real differences and the real trends in history.As I have shown, the growth not just of capitalist economic relations but of the structures that they need for support, whether this is banking, transportation, technical standards, health and welfare services as well as political, legal and bureaucratic systems. These are essential to capital and these by and large were well established by the start of the 20th Century. This was the period in which modern bourgeois society was founded.


One further, important issue that C.Mcl. does not address in his text is the question of crisis theory. Having rejected Luxemburg’s thesis of accumulation being based on non-capitalist markets, they do not discuss the causes of capitalist crises and how they impact upon decadence in particular, neither do they discuss what makes capitalism grow in the first place. I raised this issue in Part 1 but I would like stress again that the tendency of the rate of profit to fall is a very important element of understanding how capitalism has developed. As well as generating difficulties for capitalism due to the reduction of profit rates, it also stimulates competition and hence growth and as tendencies these are always present within capitalism both in its ascendant and decadent periods. This should not be ignored in that it is specific to capitalism, and not previous modes of production, and impacts upon both capitalism’s ascendant and decadent periods: the falling rate of profit quite clearly makes a simplistic adherence to a simplistic thesis of economic growth and decline untenable.

In the 20th Century, capitalism has continued to develop, it is true, but the founda­tions were already well established. This is the significance of the change in period, it has moved into its highest phase, a mature system, but do not misunderstand me, this is still a system that continues to grow because that is the characteristic of cap­ital. C.Mcl. however holds on to a concept, fundamentally following the ICC’s analysis and what the final phase of capitalism can be, that decadence can only mean economic decline. At the start of the 21st Century it is clear that this narrow-minded economism is an insufficient analysis of capitalism.


Link, April 8, 2022


Notes


[1] Link 2021 What are the fetters on the Productive Forces available at https://afreeretriever.wordpress.com/portfolio/discussion-contributions-on-the-question-of-capitalisms-decadence/8/. [2] Link 2022 Historical Materialism and Decadence Part 1 available at [3] CMcl 2022 In Defence of Historical Materialism Parts 1 and 2 available at https://afreeretriever.wordpress.com/portfolio/in-defense-of-historical-materialism-part-i/ [4] Marx 1848 Speech entitled On the Question of Free Trade, available at https://libcom.org/library/on-free-trade-karl-marx [5] Bukharin, 1972: Imperialism and World Economy, available at https://www.marxists.org/archive/bukharin/works/1917/imperial/01.htm [6] Idem [7] Lenin, 1914: Introduction in Bukharin, 1972, Imperialism and World Economy, available at https://www.marxists.org/archive/bukharin/works/1917/imperial/01.htm [8] Lenin Imperialism The Highest Stage of Capitalism, Chapter VII P237 [9] Bukharin, 1972: Imperialism and World Economy, Chapter IV P 64 available at https://www.marxists.org/archive/bukharin/works/1917/imperial/01.htm [10] Even if with hindsight there are criticisms that can be made of their analyses. [11] Luxemburg, 1909: The National Question. [12] Idem. [13] C.Mcl., January 30, 2022: In Defense of Historical Materialism (Part I), Ch.3. Myths and Reality of the Changes of Capitalism in 1914. [14] Anderson M.S., 2000 The Ascendancy of Europe1815-1914 Chapter 3 P174 The Silver Library, Pearson Education Ltd[ [15] idem Chapter 3 p 174 [16] Calculated from figures of 68 million population and 5.7 million public sector employees. This includes central and local government as well as state institutions like the NHS and teaching. [17] Institute for Government, 2022: Civil Service Staff Numbers. [18] ONS, 2022: Public Sector Employment (September 2021). [19] US Bureau of Labour Statistics, 2022: Employment by Industry (1910 and 2015). [20] Anderson M.S., 1985: The Ascendancy of Europe1815-1914 , The Silver Library. Chapter 2 P69 [21] idem Chapter 2 P104 [22] Umbra, 2019: A History of Merchant Banking. [the link checks OK] [23] idem [24] Lenin, 1916: Imperialism, The Highest Stage of Capitalism, Chapter VII P236 in Christman, 1971, ‘The Essential Works of Lenin’, Bantam Books. [25] Daunton, M., 1995: Poverty and Progress Chapter 11 P286 Oxford, University Press Chapter 11 P286 . [26] Luxemburg, 1909: The National Question. [27] Nations Encyclopedia 2022 Soviet Union Country Listing, Chapter 15 available at http://www.country-data.com/cgi-bin/query/r-12784.html#google_vignette [28] CMcl 2022 In Defense of Historical Materialism Part 1availabe at https://afreeretriever.wordpress.com/portfolio/in-defense-of-historical-materialism-part-i/3/ [29] Our World in Data, 2022: Growth of Global Exports.

[30] Our World in Data: Value of Exported Good as share of GDP. [31] “International planning for peace after World War II took place on a world scale. Within five years, in an extraordinary burst of energy and imagination, statesmen endowed the world with almost all its existing network of global institutions: the United Nations (UN), the Food and Agriculture Organization (FAO), the International Monetary Fund (the IMF), the International Bank for Reconstruction and Development (the IBRD, or World Bank), the United Nations Educational, Scientific, and Cultural Organization (UNESCO), the United Nations International Children’s Emergency Fund (UNICEF), the International Court of Justice, the General Agreement on Tariffs and Trade (GATT), the International Refugee Organization (IRO), the World Health Organization (WHO), the United Nations Relief and Works Agency (UNRWA), and the International Confederation of Free Trade Unions (ICFTU). Some of these, especially the UN, were to reveal limitations. But they embodied serious efforts to replace outdated national and bilateral diplomacy with permanent multilateral institutions”. From: Encyclopedia Britannica, The blast of World War II. [32] Lenin, 1916: Imperialism, The Highest Stage of Capitalism, Chapter X P 266/7in Christman, 1971, ‘The Essential Works of Lenin’, Bantam Books. [33] Our World in Data, 2022: Government Spending 1880-2011 (Source: Bank of England, A Millennium of Macroeconomic Data).

The League of Nations was an early effort in 1920 to keep the peace and resolve disputes but was not very successful. Following World War II many new organisations were set up and have maintained themselves probably due to the influence of the United States and to a lesser extent Russia, the EU and China. We can identify the United Nations, the World Bank. the Organisation for Economic Cooperation and Development, the European Economic Community which has evolved into the European Union, the International Monetary Fund, The Council of Europe, Comecon, and many regional free trade agreements such as ASEAN, NAFTA, EFTA, MERCOSUR and so on.

[35] Our World in Data 2022 Government Spending 1880 to 2011 available at https://ourworldindata.org/

[36] CMcL., 2022: In Defence of Historical Materialism Part 1 available at https://afreeretriever.wordpress.com/portfolio/in-defense-of-historical-materialism-part-i/5/ [37] C.Mcl., January 30, 2022: In Defence of Historical Materialism (Part I) , Ch. 3. Myths and Reality of the Changes of Capitalism in 1914.



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