General Crisis of Capitalism

the revolutionary process of the collapse of the world capitalist system and the formation of world socialism and communism, which extends over an entire historical epoch. The beginning of this historical epoch was marked by the victory of socialism in a single country, the USSR. As the collapse of the world capitalist system progresses, the internal contradictions of capitalism in the countries where it still persists grow more intense, and the process of decay becomes extremely pronounced. This indicates that the capitalist system is in a state of general crisis. According to Lenin, the epoch in which the general crisis of capitalism unfolds is characterized by “worldwide revolutionary crisis” (V. I. Lenin, Poln. sobr. soch., 5th ed., vol. 27, p. 305), the rise of the “world socialist revolution” (ibid., vol. 37, p. 74), and “the collapse of capitalism in its entirety and the birth of socialist society” (ibid., vol. 36, p. 48). It is also marked by the breaking away of an increasing number of countries from the capitalist system and by the growth of the world socialist system.

Lenin revealed the source and fundamental causes of the general crisis of capitalism. He described the epoch of imperialism as the eve of socialist revolution and showed that the irreversibility of the general crisis is inherent in imperialism. By disclosing the law of the uneven economic and political development of capitalism in its imperialist stage, Lenin established the fact that the general crisis of capitalism would extend over an entire historical epoch. The preconditions for the general crisis ripen with the transition from premonopoly capitalism to monopoly capitalism. The point that marks the transition from the maturing of the preconditions for the general crisis of capitalism to the emergence and development of the crisis is determined by four factors.

First, capitalism’s inherent, internal contradiction between the productive forces and production relations develops into an acute conflict under imperialism. The general crisis of capitalism means not only that this conflict becomes more intense but also that it is resolved in a revolutionary way through the abolition of the political, economic, and social relations of reactionary bourgeois society. A growing number of countries break away from the capitalist system.

Second, the entry of capitalism into the epoch of imperialism marks the beginning of its death. As Lenin pointed out, “monopoly, which grows out of capitalism, is already dying capitalism” (ibid., vol. 30, p. 165). The general crisis of capitalism implies more than the beginning of the death of capitalism. The number of countries in which capitalism is overthrown increases steadily, and the irreversible process of the disintegration of the capitalist system continues.

Third, the passage from premonopoly capitalism to imperialism means that capitalism has entered the stage in which the preconditions for the socialist revolution reach maturity. Under the conditions of the general crisis these preconditions are actualized: the revolutionary process of the overthrow of capitalism and the victory of socialism continues in an increasingly broad range of countries. Socialism no longer develops only as the scientific theory of socialist revolution. It develops as the revolutionary practical work of the proletariat, which is headed by the Communist parties, and as the revolutionary work of the allies of the proletariat.

Fourth, before the general crisis, capitalism was a world system whose condition was determined by its own inner laws of development and by the balance of forces within it. The concept of the “general crisis of capitalism” includes the idea that the capitalist system is opposed by the socialist system. The two systems confront each other in economic competition and in ideological and political struggle. At times imperialism imposes military conflicts on socialism. The balance of forces between socialism and capitalism in the world arena exerts a growing influence on the position of capitalism. The general crisis of capitalism, which is a particular condition of capitalism, is manifested by the weakening of capitalism and the strengthening of socialism. Because it is the process of the collapse of the world capitalist system, the general crisis includes tendencies toward a more intense internal disintegration of capitalism in particular capitalist countries, where the economic and political “products of decay” of the world capitalist system crystallize and accumulate.

The essential features of the general crisis of capitalism are listed in the Program of the CPSU: “The breaking away from capitalism of a growing number of countries; the weakening of imperialist positions in the economic competition with socialism; the breakup of the imperialist colonial system; the intensification of imperialist contradictions with the development of state-monopoly capitalism and the growth of militarism; the mounting internal instability and decay of the capitalist economy, as evidenced in the increasing inability of capitalism to make full use of the productive forces (low rates of production growth, periodic crises, steady underutilization of productive capacity, and chronic unemployment); the mounting struggle between labor and capital; an acute intensification of contradictions within the world capitalist economy; an unprecedented growth of political reaction in all spheres, rejection of bourgeois freedoms, and establishment of fascist and despotic regimes in a number of countries; and the profound crisis of bourgeois politics and ideology—all these are manifestations of the general crisis of capitalism” (1973, pp. 25–26).

Lenin frequently stressed the wide variety of forms in which the general crisis of capitalism is manifested. In 1917 he wrote: “The crisis is so profound, so widespread, of such vast worldwide scope” (Poln. sobr. soch., 5th ed., vol. 32, p. 28). Of course, owing to the uneven development of capitalism, as the general crisis intensifies, certain features may become prominent, while others recede.

In the early 1960’s some of the most acute manifestations of the general crisis, such as chronic unemployment, became less serious. Other features assumed paramount importance—for example, the weakening of imperialist positions in the economic competition with socialism, the collapse of the imperialist colonial system, and the mounting internal instability and decay of the capitalist economy.

The characterization of the general crisis of capitalism given in the documents of CPSU congresses and the theoretical documents of the world communist movement is by no means irrevocably bound to a particular “set” of symptoms. It is a flexible description reflecting the contradictory, multifaceted, and changing quality of the collapse of the capitalist system.

The development of the general crisis is not linear, nor can it be said to intensify steadily from year to year. It is an uneven, extremely complex process, and, as Lenin predicted, it passes through “prolonged and arduous stages” (ibid., vol. 27, p. 305).

In addition to long-term tendencies toward the intensification of the internal contradictions of capitalism, the general crisis of capitalism includes short-term processes—for example, rapid inflation, severe balance of payments problems in various countries, or sociopolitical outbursts such as the one in France in May 1968. Such phenomena may emerge and be overcome only to reappear later, sometimes in another country. Their brief disappearance may be regarded as proof that modern capitalism is able to partially or temporarily attenuate the expression of some of its internal contradictions. The general crisis is characterized primarily by the long-term tendencies that make the final, complete collapse of the entire capitalist system inevitable from a historical perspective.

As long as capitalism is not brought down by a socialist revolution, it will adapt to changing conditions. “The specific characteristics of modern capitalism can, to a considerable extent, be explained by the fact that it has adapted to the new world situation…. However, adaptation to new circumstances does not mean the stabilization of capitalism as a system. The general crisis of capitalism continues to deepen” (Materialy XXIV s”ezda KPSS, 1971, pp. 14–15).

It is incorrect to judge the development of the general crisis by economic data alone. The crisis is a complex combination of many economic, social, and political processes that eat away at the imperialist system. As history progresses, the general instability of capitalism increases. This trend is typical not only of periods of economic decline but also of times of increased production. The factors contributing to the increasing instability of capitalism are, on the one hand, the intensified contradictions of the capitalist economy and, on the other, the increase in the economic strength, defense potential, and political influence of the socialist world. Other factors include various political, national, and social crises in the capitalist world. These are outgrowths of monopoly domination, which leads to an increasingly harsh, cruel exploitation of the peoples of the world.

One of the manifestations of the general crisis of capitalism is the intensification of the decay of imperialism, despite the increased volume of output of capitalist industry and the improvement of its technical equipment. The Leninist thesis of the decay of imperialism does not imply that capitalist productive forces cease to grow. Lenin speaks of two conflicting tendencies—one toward decay and the other toward a higher level of technological development and a greater volume of production. During the severe economic crises of the 1930’s the tendency toward decay was very sharply manifested. Even then, however, it was incorrect to assume that no progress was being made anywhere. In the early 1970’s the indexes of capitalist production and investment gave evidence of significant growth, but that did not mean that the decay of capitalism had come to an end. In the present period this decay is most glaringly revealed in the gap between the potential capacity of the productive forces and the actual extent to which they are used in the capitalist world.

Between 1950 and 1972 the volume of industrial output in the USA increased by a factor of approximately 2.6, but during the same period, scientific research created a potential that was many times greater. In the search for higher profits the monopolies make use of modern technology, but to a far lesser extent than is possible at the present level of scientific knowledge. There is still a tremendous gap between the level of development of the productive forces in the advanced capitalist countries and those in the developing countries, where two-thirds of the population of the nonsocialist world lives. Another sign of the decay of contemporary capitalism is the catastrophic increase in environmental pollution in the capitalist countries, owing to the self-interested exploitation of the achievements of modern science and technology by the monopolies.

In the historic confrontation between the forces of progress and the forces of reaction, socialism continues to be successful not only in material production but also in the worldwide struggle for the hearts and minds of the people. Social and political crises are constantly breaking out in many of the capitalist countries, and the labor movement is rapidly gaining strength. In some African and Asian countries the national liberation movement has taken a distinctly anticapitalist turn. “Despite difficulties and setbacks suffered by some of its detachments, the world revolutionary movement is still on the offensive…. Imperialism is powerless to regain the historical initiative that it has lost or to reverse the course of development of the modern world” (Mezhdunarodnoe Soveshchanie kommunisticheskikh i rabochikh parti: Dokumenty i materialy, Moscow, 1969, pp. 286, 289).

The general crisis of capitalism passes through definite stages, each of which is marked by specific features—the concrete expression of the general stages under the special circumstances in which they emerge. In the mid-1950’s the general crisis, which had passed through two complete stages, entered a third.

The epoch of the general crisis of capitalism is subdivided into stages on the basis of the fundamental changes in the balance of forces between capitalism and socialism. The beginning of the first stage of the general crisis coincided with the outbreak of World War I and, more specifically, with the Great October Socialist Revolution. A number of important features are associated with the first stage. The scope of capitalist exploitation was reduced for the first time in history, and a dictatorship of the proletariat was established and consolidated in Russia. Major revolutionary actions by the proletariat took place in a number of countries, profoundly shaking the capitalist system. Under the influence of the October Revolution, which put an end to national oppression in Russia, uprisings and wars of national liberation broke out in the colonial countries, and the crisis of the imperialist colonial system developed and spread. The contradictions of the capitalist economy sharpened as a result of the reduced area available for capitalist exploitation and the growing crisis of the colonial system. In its depth and extent the economic crisis of 1929–33 was unparalleled in the history of capitalism.

The first stage of the general crisis of capitalism falls into three distinct periods. The period from 1917 to 1923 was marked by revolutionary actions by the proletariat, as well as by economic convulsions. The subsequent period (1924–29) was one of relative, transient stabilization of the capitalist economy, relative strengthening of bourgeois political domination, and temporary reduction in the intensity of the revolutionary struggle of the proletariat. In the economic sphere the third period (1929–39) was marked by two crises (1929–33 and 1937–38), and in the political sphere, primarily by the establishment of fascist dictatorships in several imperialist countries (Germany and Spain, for example). Typical of the third period as a whole was a renewed, sharp intensification of capitalist contradictions between the major imperialist countries—above all, between Nazi Germany and Britain, France, and the USA. Ultimately, this led to World War II.

The second stage of the general crisis of capitalism opened with the outbreak of World War II and the advent of socialist revolutions in a number of European and Asian countries. The Soviet Union’s victory over fascism created conditions favorable for the strengthening of democratic forces in all countries. The Soviet victory inspired oppressed peoples to intensify their struggles against imperialism and national oppression and contributed to the powerful upsurge of the national liberation movement in the colonial and dependent countries. It encouraged progressive forces in a number of European and Asian countries, helping them, under the leadership of the working class, to overthrow reactionary regimes and establish people’s democracies. A number of countries broke away from the capitalist system, and their peoples took the path of socialist transformations. During the second stage of the general crisis of capitalism, socialism was transformed from a system limited to one country into a world system embracing a number of countries. The deepening crisis in the colonial system culminated in the total collapse of colonialism. The second stage was also characterized by the further intensification of the internal contradictions in the capitalist economy.

World capitalism is now passing through a third stage in its general crisis. This stage has developed not in conjunction with a world war but under peacetime conditions. Among its main distinguishing features is the fact that the world socialist system has become a decisive force in the anti-imperialist struggle. The system of colonial slavery has disintegrated, and its destruction is no longer manifested merely in the shattering of the colonialist political structure. The economic roots of colonialism are being undermined, and in some places, they have been swept away. In many countries the national liberation movements have assumed a distinctly anticapitalist character. The intensification of capitalist economic instability, which also marks the third stage of the general crisis, is not the result of a world war. Its causes lie in the monopoly domination of new technology, as well as in the unparalleled peacetime development of state-monopoly capitalism and militarism, which are producing a further intensification of the contradictions of all the social and economic relations of capitalism.

Even the most advanced capitalist states are not immune to serious economic dislocations. For example, in 1969–71 the USA experienced an economic crisis. A severe crisis in the international financial and currency system of capitalism began in the 1960’s, and in the 1970’s the capitalist world has been confronted by a serious energy crisis. A number of countries are suffering from recessions (declining production), rising inflation, and growing unemployment.