Capitalist Diversity and Diversity within Capitalism (Routledge Frontiers of Political Economy)

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Profits would be distributed among the workers of the respective enterprise. The Lange—Lerner model involves public ownership of the means of production and the utilization of a trial-and-error approach to achieving equilibrium prices by a central planning board. The Central Planning Board would be responsible for setting prices through a trial-and-error approach to establish equilibrium prices, effectively acting as the abstract Walrasian auctioneer in Walrasian economics.

The Lange model was expanded upon by the American economist Abba Lerner and became known as the Lange—Lerner theorem, particularly the role of the social dividend. The self-managed economy is a form of socialism where enterprises are owned and managed by their employees, effectively negating the employer-employee or wage labor dynamic of capitalism and emphasizing the opposition to alienation , self-managing and cooperative aspect of socialism. Members of cooperative firms are relatively free to manage their own affairs and work schedules.

Worker self-directed enterprise is a recent proposal advocated by the American Marxian economist Richard D. This model shares many similarities with the model of socialist self-management in that employees own and direct their enterprises, but places a greater role on democratically elected management within a market economy. Democratic planned socialism is a form of decentralized planned economy. Feasible socialism was the name Alec Nove gave his outline for socialism in his work The Economics of Feasible Socialism.

According to Nove, this model of socialism is "feasible" because it can be realized within the lifetime of anyone living today. It involves a combination of publicly owned and centrally directed enterprises for large-scale industries, autonomous publicly owned enterprises, consumer and worker-owned cooperatives for the majority of the economy, and private ownership for small businesses.

It is a market-based mixed economy that includes a substantial role for macroeconomic interventionism and indicative economic planning. The American economist James Yunker detailed a model where social ownership of the means of production is achieved the same way private ownership is achieved in modern capitalism through the shareholder system that separates management functions from ownership.

Yunker posits that social ownership can be achieved by having a public body, designated the Bureau of Public Ownership BPO , owning the shares of publicly listed firms without affecting market-based allocation of capital inputs. Yunker termed this model pragmatic market socialism because it does not require massive changes to society and would leave the existing management system intact, and would be at least as efficient as modern-day capitalism while providing superior social outcomes as public ownership of large and established enterprises would enable profits to be distributed among the entire population in a social dividend rather than going largely to a class of inheriting rentiers.

Participatory economics utilizes participatory decision making as an economic mechanism to guide the production, consumption and allocation of resources in a given society. Proposals for utilizing computer-based coordination and information technology for the coordination and optimization of resource allocation also known as cybernetics within an economy have been outlined by various socialists, economists and computer scientists, including Oskar Lange , the Soviet engineer Viktor Glushkov , and more recently Paul Cockshott and Allin Cottrell.

The "networked information age" has enabled the development and emergence of new forms of organizing the production of value in non-market arrangements that have been termed commons-based peer production along with the negation of ownership and the concept of property in the development of software in the form of open source and open design.

Economist Pat Devine has created a model of coordination called "negotiated coordination", which is based upon social ownership by those affected by the use of the assets involved, with decisions made by those at the most localised level of production. Although a number of economic systems have existed with various socialist attributes, or have been deemed socialist by their proponents, almost all of the economic systems listed below have largely retained elements of capitalism such as wage labor , the accumulation of capital , and commodity production.

Nonetheless, various elements of a socialist economy have been implemented or experimented with in various economies throughout history. Various forms of socialist organizational attributes have existed as minor modes of production within the context of a capitalist economy throughout history—examples of this include cooperative enterprises in a capitalist economy, and the emerging free-software movement based on social peer-to-peer production.

A centrally planned economy combines public ownership of the means of production with centralised state planning. This model is usually associated with the Soviet-style command economy. In a centrally planned economy, decisions regarding the quantity of goods and services to be produced are planned in advance by a planning agency.

Michael Heinrich: Capital & Crisis – Actuality of Marx’s Critique of Political Economy in 21st Cent.

In the early years of Soviet central planning, the planning process was based upon a selected number of physical flows with inputs mobilized to meet explicit production targets measured in natural or technical units. The Soviet economy was brought to balance by the interlocking of three sets of calculation, namely the setting up of a model incorporating balances of production, manpower and finance. The exercise was undertaken annually and involved a process of iteration the "method of successive approximation". The Soviet Union and some of its European satellites aimed for a fully centrally planned economy.

They dispensed almost entirely with private ownership over the means of production. However, workers were still effectively paid a wage for their labour.

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Some believe that according to Marxist theory this should have been a step towards a genuine workers' state. However, some Marxists consider this a misunderstanding of Marx's views of historical materialism and his views of the process of socialization. The planning system in the Soviet Union was introduced under Stalin between and The common features were the nationalization of industry, transport and trade, compulsory procurement in farming but not collectivization and a monopoly on foreign trade. Prices did not therefore incentivize production enterprises whose inputs were instead purposely rationed by the central plan.

This "taut planning" began around in the Soviet Union and was only attenuated after the economic reforms in — when enterprises were encouraged to make profits. The stated purpose of planning according to the communist party was to enable the people through the party and state institutions to undertake activities that would have been frustrated by a market economy for example, the rapid expansion of universal education and health care, urban development with mass good quality housing and industrial development of all regions of the country.

Nevertheless, markets continued to exist in socialist planned economies. Even after the collectivization of agriculture in the Soviet Union in the s, members of the collective farm and anyone with a private garden plot were free to sell their own produce farm workers were often paid in kind. Licensed markets operated in every town and city borough where non-state-owned enterprises such as cooperatives and collective farms were able to offer their products and services. The use of market mechanisms went furthest in Yugoslavia, Czechoslovakia and Hungary.

From Soviet citizens had the right to engage in private handicraft and in collective farmers could raise and sell livestock privately. It should also be noted that households were free to dispose of their income as they chose and incomes were lightly taxed. Various scholars and political economists have criticized the claim that the centrally planned economy, and specifically, the Soviet model of economic development, constitutes a form of socialism. They argue that the Soviet economy was structured upon the accumulation of capital and the extraction of surplus value from the working class by the planning agency in order to reinvest this surplus into the economy—and to distribute to managers and senior officials, indicating the Soviet Union and other Soviet-style economies were state capitalist economies.

On the other side of the argument are those who contend that no surplus value was generated from labour activity or from commodity markets in the socialist planned economies and therefore claim that there was no exploiting class, even if inequalities existed. Wages were set at a level that permitted a decent standard of living and rewarded specialist skills and educational qualifications. The difference between the average value of wages and the value of national output per worker did not imply the existence of surplus value since it was part of a consciously formulated plan for the development of society.

In the USSR communist party members were able to buy scarce goods in special shops and the leadership elite took advantage of state property to live in more spacious accommodation and sometimes luxury. Although they received privileges not commonly available and thus some additional income in kind there was no difference in their official remuneration in comparison to their non-party peers.

Enterprise managers and workers received only the wages and bonuses related to the production targets that had been set by the planning authorities. Outside of the cooperative sector, which enjoyed greater economic freedoms and whose profits were shared among all members of the cooperative, there was no profit-taking class. Other socialist critics point to the lack of socialist social relations in these economies—specifically the lack of self-management , a bureaucratic elite based on hierarchical and centralized powers of authority, and the lack of genuine worker control over the means of production—leading them to conclude that they were not socialist but either bureaucratic collectivism or state capitalism.

This analysis is consistent with Lenin's April Theses , which stated that the goal of the Bolshevik revolution was not the introduction of socialism, which could only be established on a worldwide scale, but was intended to bring production and the state under the control of the Soviets of Workers' Deputies.

Furthermore, these "Communist states" often do not claim to have achieved socialism in their countries; on the contrary, they claim to be building and working toward the establishment of socialism in their countries. For example, the preamble to the Socialist Republic of Vietnam 's constitution states that Vietnam only entered a transition stage between capitalism and socialism after the country was re-unified under the Communist party in , [70] and the Constitution of the Republic of Cuba states that the role of the Communist Party is to "guide the common effort toward the goals and construction of socialism".

This view is challenged by Stalinists and their followers, who claim that socialism was established in the Soviet Union after Joseph Stalin came to power and instituted the system of five year plans. Nevertheless, it was recognized that the stage during which developed socialism would be built would be a lengthy one and would not be achieved by the USSR on its own. According to the official textbooks, the first stage of the transition period from capitalism to socialism had been completed by the s in the European socialist countries except Poland and Yugoslavia , and in Mongolia and Cuba.

The next stage of developed socialism would not be reached until "the economic integration of the socialist states becomes a major factor of their economic progress" and social relations had been reconstructed on "collectivist principles". Socialist planned economies were systems of commodity production but this was directed in a conscious way towards meeting the needs of the people and not left to the "anarchy of the market".

It would provide the foundations for a further stage of perfected socialist society, where an abundance of goods permitted their distribution according to need.

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Only then could the world socialist system progress towards the higher phase of communism. It involved joint planning activity, the establishment of international economic, scientific and technical bodies and methods of cooperation between state agencies and enterprises, including joint ventures and projects.

The main tasks of the CMEA were plan coordination, production specialization and regional trade. In Nikita Khrushchev, the Soviet leader, put forward proposals for establishing an integrated, centrally planned socialist commonwealth in which each geographic region would specialize production in line with its set of natural and human resources. The resulting document, the "Basic Principles of the International Socialist Division of Labour" was adopted at the end of , despite objections from Romania on certain aspects.

The "Basic Principles" were never implemented fully and were replaced in by the adoption of the "Comprehensive Programme for Further Extension and Improvement of Cooperation and Development of Socialist Economic Integration". As a result, many specialization agreements were made between CMEA member states for investment programmes and projects. The importing country pledged to rely on the exporting country for its consumption of the product in question.

Production specialization occurred in engineering, automotive, chemicals, computers and automation, telecommunications and biotechnology. Scientific and technical cooperation between CMEA member states was facilitated by the establishment in of the International Centre for Scientific and Technical Information in Moscow. Trade between CMEA member states was divided into "hard goods" and "soft goods". The former could be sold on world markets and the latter could not. Commodities such as food, energy products and raw materials tended to be hard goods and were traded within the CMEA area at world market prices.

Manufactures tended to be soft goods and their prices were negotiable and often adjusted to make bilateral payment flows balance. The Soviet Union also provided substantial economic aid and technical assistance to developing countries including Egypt, India, Iraq, Iran, Somalia and Turkey. In the officially sanctioned textbooks describing the socialist planned economies as they existed in the s it was claimed that:.

On housing the main problem was over-crowding rather than homelessness in the socialist planned economies. In the USSR the area of residential accommodation was Unemployment did not exist officially in the socialist planned economies, though there were people between jobs and a fraction of unemployable people as a result of illness, disability or other problems, such as alcoholism. The proportion of people changing jobs was between 6 and 13 percent of the labour force a year according to employment data during the s and s in Central and Eastern Europe and the USSR.

Labour exchanges were established in the USSR in to help enterprises re-allocate workers and provide information on job vacancies. Compulsory unemployment insurance schemes operated in Bulgaria, Eastern Germany and Hungary but the numbers claiming support as a result of losing their job through no fault of their own numbered a few hundred a year. From the s onwards, CMEA countries, beginning with East Germany, attempted "intensive" growth strategies, aiming to raise the productivity of labour and capital. However, in practice this meant that investment was shifted towards new branches of industry, including the electronics, computing, automotive and nuclear power sectors, leaving the traditional heavy industries dependent upon older technologies.

Despite the rhetoric about modernization, innovation remained weak as enterprise managers preferred routine production that was easier to plan and brought them predictable bonuses. Embargoes on high technology exports organized through the US-supported CoCom arrangement hampered technology transfer.

Enterprise managers also ignored inducements to introduce labour-saving measures as they wished to retain a reserve of personnel to be available to meet their production target by working at top speed when supplies were delayed. Under conditions of "taut planning", the economy was expected to produce a volume of output higher than the reported capacity of enterprises and there was no "slack" in the system.

Enterprises faced a resource constraint and hoarded labour and other inputs and avoided sub-contracting intermediate production activities, preferring to retain the work in-house. Enterprises in socialist planned economies operated within a "soft" budget constraint, unlike enterprises in capitalist market economies which are demand-constrained and operate within "hard" budget constraints, as they face bankruptcy if their costs exceed their sales. As all producers were working in a resource-constrained economy they were perpetually in short supply and the shortages could never be eliminated, leading to chronic disruption of production schedules.

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The effect of this was to preserve a high level of employment. As the supply of consumer goods failed to match rising incomes because workers still received their pay even if they were not fully productive , household savings accumulated, indicating, in the official terminology, "postponed demand". Western economists called this " monetary overhang " or "repressed inflation". Prices on the black market were several times higher than in the official price-controlled outlets, reflecting the scarcity and possible illegality of the sale of these items.

Therefore, although consumer welfare was reduced by shortages, the prices households paid for their regular consumption were lower than would have been the case had prices been set at market-clearing levels.

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Over the course of the s it became clear that the CMEA area was "in crisis", although it remained viable economically and was not expected to collapse. The decline in growth rates reflected a combination of diminishing returns to capital accumulation and low innovation as well as micro-economic inefficiencies, which a high rate of saving and investment was unable to counter.

The CMEA was supposed to ensure coordination of national plans but it failed even to develop a common methodology for planning which could be adopted by its member states.

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There were very few joint ventures and therefore little intra-enterprise technology transfer and trade, which in the capitalist world was often undertaken by trans-national corporations. After the dissolution of the Soviet Union and the Eastern bloc, many of the remaining socialist states presiding over centrally planned economies began introducing reforms that shifted their economies away from centralized planning. In Central and Eastern Europe and the USSR the transition from a planned economy to a market economy was accompanied by the transformation of the socialist mode of production to a capitalist mode of production.

In Asia China, Laos, North Korea and Vietnam and in Cuba market mechanisms were introduced by the ruling communist parties and the planning system was reformed without systemic transformation. Vietnam adopted an economic model it formally titled the socialist-oriented market economy. This economic system is a form of mixed-economy consisting of state, private, co-operative and individual enterprises coordinated by the market mechanism. This system is intended to be transitional stage in the development of socialism. The transformation of an economic system from a socialist planned economy to a capitalist market economy in Central and Eastern Europe, the former Soviet Union and Mongolia in the s involved a series of institutional changes.

China embraced a socialist planned economy after the Communist victory in its Civil War. Private property and private ownership of capital were abolished, and various forms of wealth made subject to state control or to workers' councils. The Chinese economy broadly adopted a similar system of production quotas and full employment by fiat to the Russian model.

The Great Leap Forward saw a remarkably large-scale experiment with rapid collectivisation of agriculture, and other ambitious goals. Results were less than expected, e. In recent decades China has opened its economy to foreign investment and to market-based trade, and has continued to experience strong economic growth. It has carefully managed the transition from a socialist planned economy to a market economy, officially referred to as the socialist commodity market economy , which has been likened to capitalism by some outside observers.

Some western observers note that the private sector is likely underestimated by state officials in calculation of GDP due to its propensity to ignore small private enterprises that are not registered. The free-market is the arbitrator for most economic activity, which is left to the management of both state and private firms. A significant amount of privately owned firms exist, especially in the consumer service sector. The state sector is concentrated in the 'commanding heights' of the economy with a growing private sector engaged primarily in commodity production and light industry.

Centralized directive planning based on mandatory output requirements and production quotas has been superseded by the free-market mechanism for most of the economy and directive planning is utilized in some large state industries. This type of economic system is defended from a Marxist perspective which states that a socialist planned economy can only be possible after first establishing the necessary comprehensive commodity market economy, letting it fully develop until it exhausts its historical stage and gradually transforms itself into a planned economy.

The Socialist Republic of Vietnam has pursued similar economic reforms to China, though less extensively, resulting in a socialist-oriented market economy , a mixed economy in which the state plays a dominant role intended to be a transitional phase in establishment of a socialist economy. The Republic of Cuba , under the leadership of Raul Castro , began from to encourage co-operatives, worker-ownership and self-employment in a move to reduce the central role of state enterprise and state management within the economy, with the goal of building a "deeper" or more co-operative form of socialism.

Many of the industrialized, open countries of Western Europe experimented with one form of social democratic mixed economies or another during the 20th century. These include Britain mixed economy and welfare state from to , France state capitalism and indicative planning from to under dirigisme, Sweden social democratic welfare state and Norway state social democratic mixed economy to the present. They can be regarded as social democratic experiments, because they universally retained a wage-based economy and private ownership and control of the decisive means of production. Nevertheless, these western European countries tried to restructure their economies away from a purely private capitalist model.

Variations range from social democratic welfare states , such as in Sweden, to mixed economies where a major percentage of GDP comes from the state sector, such as in Norway, which ranks among the highest countries in quality of life and equality of opportunity for its citizens. They are typically characterized by:. Various state capitalist economies, which consist of large commercial state enterprises that operate according to the laws of capitalism and pursue profits, have evolved in countries that have been influenced by various elected socialist political parties and their economic reforms.

While these policies and reforms did not change the fundamental aspect of capitalism, and non-socialist elements within these countries supported or often implemented many of these reforms themselves, the result has been a set of economic institutions that were at least partly influenced by socialist ideology. Singapore pursued a state-led model of economic development under the People's Action Party , which initially adopted a Leninist approach to politics and a broad socialist model of economic development.

Managers of the holding are rewarded according to profits with the explicit intention to cultivate an ownership mind-set. The state also provides substantial public housing, free education, health and recreational services, as well as comprehensive public transportation. After gaining independence from Britain, India adopted a broadly socialist-inspired approach to economic growth. Like other countries with a democratic transition to a mixed economy , it did not abolish private property in capital.

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  5. India proceeded by nationalizing various large privately run firms, creating state-owned enterprises and redistributing income through progressive taxation in a manner similar to social democratic Western European nations than to planned economies such as the Soviet Union or China. Today, India is often characterized as having a free-market economy that combines economic planning with the free-market.

    It did however adopt a very firm focus on national planning with a series of broad Five-Year Plans. The Paris Commune was considered to be a prototype mode of economic and political organization for a future socialist society by Karl Marx. Private property in the means of production was abolished so that individuals and co-operative associations of producers owned productive property and introduced democratic measures where elected officials received no more in compensation than the average worker and could be recalled at any time. Various forms of socialist organization based on co-operative decision making, workplace democracy and in some cases, production directly for use , have existed within the broader context of the capitalist mode of production since the Paris Commune.

    New forms of socialist institutional arrangements began to take form at the end of the 20th century with the advancement and proliferation of the internet and other tools that allow for collaborative decision-making. Michel Bauwens identifies the emergence of the open software movement and peer-to-peer production as an emergent alternative mode of production to the capitalist economy that is based on collaborative self-management, common ownership of resources, and the direct production of use-values through the free cooperation of producers who have access to distributed capital.

    Commons-based peer production generally involves developers who produce goods and services with no aim to profit directly, but freely contribute to a project relying upon an open common pool of resources and software code. In both cases, production is carried out directly for use—software is produced solely for their use-value.

    Wikipedia , being based on collaboration and cooperation and a freely associated individuals , has been cited as a template for how socialism might operate. The Socialist Federal Republic of Yugoslavia pursued a socialist economy based on autogestion or worker self-management. Rather than implementing a centrally planned economy, Yugoslavia developed a market socialist system where enterprises and firms were socially owned rather than publicly owned by the state. In these organizations, the management was elected directly by the workers in each firm, and were later organized according to Edvard Kardelj 's theory of associated labor.

    The Mondragon Corporation , a federation of cooperatives in the Basque region of Spain, organizes itself as an employee-owned, employee-managed enterprise. Similar styles of decentralized management, which embrace cooperation and collaboration in place of traditional hierarchical management structures, have been adopted by various private corporations such as Cisco Systems , inc.

    More fundamentally, employee-owned, self-managed enterprises still operate within the broader context of capitalism and are subject to the accumulation of capital and profit-loss mechanism. But in , the CNT changed its policy and anarchist votes helped bring the popular front back to power. Months later, the former ruling class responded with an attempted coup causing the Spanish Civil War — The events known as the Spanish Revolution was a workers' social revolution that began during the outbreak of the Spanish Civil War in and resulted in the widespread implementation of anarchist and more broadly libertarian socialist organizational principles throughout various portions of the country for two to three years, primarily Catalonia , Aragon, Andalusia , and parts of the Levante.

    Factories were run through worker committees, agrarian areas became collectivised and run as libertarian communes. Anarchist historian Sam Dolgoff estimated that about eight million people participated directly or at least indirectly in the Spanish Revolution, [] which he claimed "came closer to realizing the ideal of the free stateless society on a vast scale than any other revolution in history.

    Criticism of socialist economics comes from market economists, including the classicals, neoclassicals and Austrians, as well as from some anarchist economists. Besides this, some socialist economic theories are criticized by other socialists. Libertarian socialist, mutualist, and market socialist economists, for example, criticize centralized economic planning and propose participatory economics and decentralized socialism.

    Market economists generally criticise socialism for eliminating the free market and its price signals , which they consider necessary for rational economic calculation. They also consider that it causes lack of incentive. They believe that these problems lead to a slower rate of technological advance and a slower rate of growth of GDP. Austrian school economists, such as Friedrich Hayek and Ludwig Von Mises , have argued that the elimination of private ownership of the means of production would inevitably create worse economic conditions for the general populace than those that would be found in market economies.

    They argue that without the price signals of the market, it is impossible to calculate rationally how to allocate resources. Mises called this the economic calculation problem. Polish economist Oskar Lange and Abba Lerner responded to Mises' argument by developing the Lange Model during the economic calculation debate. The Lange model argues that an economy in which all production is performed by the state, where there is a functioning price mechanism, has similar properties to a market economy under perfect competition, in that it achieves Pareto efficiency.

    The neoclassical view is that there is a lack of incentive, not a lack of information in a planned economy. They argue that within a socialist planned economy there is a lack of incentive to act on information. Therefore, the crucial missing element is not so much information as the Austrian school argued, as it is the motivation to act on information. From Wikipedia, the free encyclopedia. Economic philosophy, theory and practices. History of socialism Socialist calculation debate Socialist economics.

    Decentralized planning Participatory economics. Market socialism Lange model Mutualism. Socialist market economy Socialist-oriented market. History by country. First International International Workingmen's Association. Third International Comintern. World Federation of Democratic Youth. International Union of Socialist Youth.

    International Committee of the Fourth International. Related topics. By ideology. By coordination. By regional model. Common ownership Private Public Voluntary. Property types. Collective ownership Commons Private property State ownership Social ownership. Other types. Main article: History of socialism. Main article: Utopian socialism. Main article: Das Kapital. Main article: Anarchist economics.

    See also: Socialist mode of production. Main article: Economic planning. See also: Socialist critique of capitalism. See also: Types of socialism. Main article: Economy of the Soviet Union. See also: Transition economy. Main article: Economy of the People's Republic of China. Main article: Social democracy. Main article: Economy of Singapore. Main article: Economy of India. Main article: Paris Commune. See also: Cooperative. Main article: Spanish Revolution of See also: Anarcho-syndicalism. Main article: Criticism of socialism.

    Anarchist economics Anarcho-communism Basic income Collectivist anarchism Communism Complexity economics Collectivism Economic calculation debate Economic democracy Economic planning Evolutionary economics Fair trade Feminist economics Gandhian economics History of economic thought Indicative planning Job guarantee Labour economics List of socialist economists Market socialism Marxian economics Mutualism economic theory Mixed economy Cooperative stock market Nationalization Participatory economics Planned economy Post-capitalism Production for use Public banking Ricardian socialism Syndicalism Social dividend Socialist market economy Socialist mode of production Socialization economics Welfare economics.

    Socialism, you see, is a bird with two wings. The definition is 'social ownership and democratic control of the instruments and means of production. For that reason, activities linked to arms acquire a privileged position in national economies. That causes a permanent warmongering atmosphere, since it is functional for monopolies linked to the war industry to have external enemies, whether real or illusory, to justify military purchases. In reality, the concepts of imperialism and globalisation are not compatible. Although several Marxist authors started to use them as a way of explaining contemporary capitalism, both concepts cannot be adopted at the same time, since the idea of globalisation suppresses a series of questions related to the historical development of the relations of exploitation within the capitalist system, and the role of imperialism as a theoretical and historical reference Sakellaropoulos The view of various Marxist authors that the international system is characterised by stability seems to find support in certain passages of the Manifesto of the Communist Party, by Marx and Engels In this understanding, conflicts are caused almost exclusively by the division between the bourgeoisie and proletarians at the international level.

    Since international capital has attained unprecedented power, there is little room for protest movements that could undermine the system. This view underestimates the importance of the state and other forms of struggle, such as the struggle of nations oppressed by imperialism. However, even in the Manifesto, the nation-state problem is already raised when the authors call for the national liberation of Poland Marx and Engels These are countries where the oppression of women is a structural problem — although not necessarily connected to multinational corporations — and any deeper gender-related change favouring women can cause great instability, since the region plays an important role in the geopolitical interests of imperialist countries.

    The notion that multinational companies have an extraordinary capacity for co-ordination that facilitates international exploitation is also more or less explicit in the writings of the authors referred to in the previous section. However, this is a questionable theoretical assumption in the context of Marxism. The tendency towards the centralisation and concentration of capital inherent in the movement of capital does not eliminate competition, but rather brings it to another level, as pointed out by Lenin, following in the footsteps of Marx. This is because it is competition that forces the capitalist to accumulate uncontrollably.

    Capital produces without considering its limits, because it is an intrinsic expansionist force; hence the crises that occur from time to time when such limits are exceeded. For the capitalist, there is no other way but to continue seeking a continuous expansion. In fact, the upsurge of capital internationalisation after the Cold War and the image of companies producing simultaneously in several countries — although this is nothing new — create the perception that these companies are no longer related to their states, as Robinson mistakenly suggests.

    The first is about the law of uneven development. Consequently, the contradictions among the powers making up the imperialist chain would escalate Lenin [] The law of uneven development is central to explaining relations among the countries in the imperialist chain, providing an economic basis for military conflicts. The second question is about the weakest link in the imperialist chain. Uneven development creates the possibility of revolutions in the relatively weaker links of the chain, and not in those states in which the productive forces are more advanced, as Marx initially predicted.

    But this is a relative position: each country in the imperialist chain is weaker or stronger than the other links in the chain Poulantzas Indeed, the international scenario that has emerged at the beginning of the 21st century does not seem to confirm the idea that the capitalist system tends towards stability. They began with the Mexican crisis , which had serious repercussions, since Mexico used to be regarded as a model to be followed due to neoliberal reforms implemented since the late s. Later on, the crises in East Asia , Russia and Brazil exposed the fragility of the international financial architecture that emerged in the s.

    The turn of the century was the stage for new economic turmoil, as in Turkey and Argentina in Afterwards, the international economy went through a period of relative calm that lasted for about five years, but this was soon followed by the US subprimecrisis in , triggering the greatest global economic crisis since the Great Depression of the s. The crisis began in the USA, the centre of capitalism, and affected a major part of Europe as well as other world regions. Despite the intense debate that followed about the reforms needed to prevent a crisis of such magnitude from happening again, few proposals have been implemented, mainly because of the contradictory interests inside the imperialist chain.

    Added to this, low levels of economic growth in the wake of the crisis have tended to make the environment even less conducive to fresh understandings, stirring up contradictions instead. Given this, it cannot be concluded that the international economic system is more stable, despite the enormous capacity of intervention of central banks, the US Federal Bank in particular, as evidenced in the worst moments of the financial crisis of Likewise, it cannot be concluded that competition among states no longer exists, and that the problem remains only in the economic sphere.

    Countries continue to use uneven structures of power to maintain and conquer new spaces of accumulation, according to the interests of their capitalists. During the s, when the USA expanded economically at an unprecedented rate, it managed to maintain its hegemony over other powers, preventing the emergence of autonomous regional strategies with relative success. This did not make the US state more friendly, as Fiori , Gowan , and Sakellaropoulos and Sotiris demonstrate. However, as the law of uneven development prevails, new poles of power are emerging.

    Cooperation among states has become more problematic due to the growing multipolarisation of the international system, as can be seen in the formation of the BRICS alliance and the Union of South American Nations USAN , for example, and the relative decrease of US power Fernandes Since then, the USA has fomented conflict in several parts of the world, ignoring the sovereignty of countries like Afghanistan and Iraq Libya and Syria were also targets of US interventions in conjunction with France, Britain and a group of Middle Eastern countries with diverse interests in the region Bandeira Following the bombing of Libya in , the regime of Muammar al-Gaddafi was overthrown.

    The same modus operandi was used in Syria. More recently, the intervention in Ukraine has created strong instability in the region, leading to a referendum on the reincorporation of Crimea into Russia. Finally, it should be noted that, despite the persistent global economic crisis, many countries — including numerous European countries — continue to spend a lot of money on arms Marshall This was the first increase since But before that, expenditure grew steadily for 13 years between and Perlo-Freeman et al As shown by Slijper , the military spending of countries such as Spain, Greece and Italy, which were at the epicentre of the crisis in the euro area and have struggled to implement economic austerity programmes at great social cost, remains impressively high.

    This clearly contradicts the Kautskyan perspective, which predicted a reduction in military spending as a primary result of ultra-imperialism. In this study, I have sought to show that the notion that capitalism could achieve higher levels of organisation comes from the classic Marxist writers on imperialism. Hilferding predicted the emergence of a world cartel aimed at the efficient control of production, thereby stabilising the capitalist system. Bukharin examined that national capitalist economies could stabilise under the control of a cartel, while they would continue to compete in the international sphere.

    Kautsky argued that stability would be achieved by an agreement between the great powers to a point where wars would no longer be necessary. Numerous contemporary scholars have examined the stability of the capitalist system. Hardt and Negri go even further by suggesting that the world has entered a phase in which there is no remaining room for national sovereignty, and wars will be only police actions. Authors such as Sakellaropoulos, Sotiris and Marshall have been able to develop more satisfactory understandings of the international system, based on the Leninist theory of imperialism.

    Imperialism is a system of economic and political relations that grants unparalleled dynamism to capital while aggravating the economic contradictions of capitalism and the antagonisms among states. Several world regions are becoming more politically and economically unstable. The repercussions of the crisis of are still being felt in Europe, and the reforms proposed for improving global economic governance are not moving forward. This situation is very different from the notion of globalisation. The global leadership of the USA is being questioned, and there is growing discomfort with its unilateral policy initiatives in the military and macroeconomic spheres.

    Therefore, war remains a concrete possibility, as recent events demonstrate. Finally, the concept of imperialism not only remains valid but is still the best way of describing relations of exploitation, property, class struggle, and revolutionary transition which rule out any possibility of a stable international capitalist system.

    Several authors have developed a broader discussion about the order and stability of the international system in the 21st century in the area of International Political Economy, beyond the frontiers of Marxist thought on imperialism. However, in this article I will only deal with Marxist thought, as this is already a broad as well as controversial topic, and because I believe that the Marxist analysis of imperialism provides a relevant perspective on the current international order.

    The author is very grateful for the comments, corrections and suggestions made by the anonymous reviewers of Contexto Internacional. Of course the remaining errors are entirely responsibility of the author. However, Hilferding did not expect planning to reach this limit, or that international cartel competition could be eliminated.

    According to Kuhn 71 , numerous scholars believe this reflects the notion of a progressive and conceivably peaceful aspect of imperialism. Hilferding also saw a similar possibility when he explained why economic rivalries among states do not lead to a violent solution.

    Thus, tendencies towards solidarity of international capitalist interests arise. As Milios and Sotiropoulos 60 pointed out, the idea of ultra-imperialism was already present in a text written by Kautsky, The Class Struggle [Erfurt Program] of The concept of Empire arises from a long tradition of references to the old Roman Empire Hardt and Negri This criticism is aimed at Lenin, and specifically his work Imperialism, the Highest Stage of Capitalism.

    Also see Lorimer There are several examples of human rights violations without any military intervention from the central powers, simply because imperialist interests were not at risk Sakellaropoulos and Sotiris Bringing chaos to certain states seems to be a tactic of imperialism today Losurdo In the case of zombie states, it is precisely external interventions that turn them into ungovernable territories. Bandeira, Luiz Alberto Moniz. Beech, Eric. Reuters [online], 30 April. Bottomore, Tom. Brewer, Anthony. London and New York: Routledge. Brunhoff, Suzanne.

    Bukharin, Nicolai. Os Economistas. Callinicos, Alex. Imperialism and Global Political Economy. Cambridge: Polity Press. Fernandes, Luis. Fiori, Luis. Rio de Janeiro: Record, pp. London: Pluto Press, pp. Gowan, Peter. Critical Asian Studies 36 1 : Historical Materialism 9 1 : Halliday, Fred.

    London: Routledge, pp. Hardt, Michael and Antonio Negri. Rio de Janeiro: Record. Harman, Chris. Harris, Jerry. International Critical Thought 2 1 : Harvey, David. O novo imperialismo. Hobson, John Atkinson. Imperialism: a Study. New York: Cosimo Classics. A History of Marxian Economics. I, Princeton: Princeton University Press. Hilferding, Rudolf. O Capital Financeiro. Hobsbawn, Eric. Rio de Janeiro: Paz e Terra. Johnson, Charles. Kautsky, Karl. Kuhn, Rick. Le Monde Diplomatique [online], 30 June. Lenin, Vladimir Ilitch. In Obras Escogidas. Tomo: 1. Moscow: Editorial Progreso. Moscow: Progress Publishers, pp.

    Lorimer, Doug. Sydney: Resistance Books, pp. Losurdo, Domenico. Luxemburg, Rosa. Rio de Janeiro: Zahar. Marx, Karl and Friedrich Engels. Manifesto do partido comunista. Michalet, Charles-Albert.

    Books for Review | Historical Materialism

    O capitalismo mundial. Milios, John and Dimitris Sotiropoulos. Houndmills: Palgrave Macmillan. Marshall, Alexander. Monthly Review. Panitch, Leo and San Gindin. London: Verso. New Left Review Trends in world military expenditure, Petras, James and Henry Veltmeyer. Poulantzas, Nicos. O Estado em Crise. Robinson, William. Societies Without Borders 2 1 : Robinson, William and Jerry Harris. Rowthorn, Bob. London: Penguin, pp.

    Ruccio, David. Rethinking Marxism 15 1 : Sakellaropoulos, Spyros. Critical Sociology 35 1 : Sakellaropoulos, Spyros and Panagiotis Sotiris. Rethinking Marxism 27 1 : Sjilper, Frank. Transnational Institute, 14 April. Vianna, Eduardo. Portal Forum, 10 March. This is an open-access article distributed under the terms of the Creative Commons Attribution License.

    Services on Demand Journal. Articles Imperialism and the Question of System Stability.