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Written by Leon Trotsky (August 18, 1932)
Yep…Trotsky. Don’t let that fool you. Just as the opening of the Communist Manifesto reads as if it was written yesterday, Trotsky’s views on the ‘upturn’ of 1932 reads as if it were written for today.
In the postwar period business cycles no longer constitute the normal mechanism of capitalist development, inasmuch as capitalism as a whole is in a period of decline. However, this does not signify that economic ups and downs are a thing of the past. It is true that, immediately after the War, they lost their cyclical and universal character, at least as far the recovery is concerned. Today, however both these characteristics are being revived, at least up to a certain point.
The War Trotsky speaks of World War I. Big wars seem to have the effect of sweeping the decay of capitalism away (or, at least, in letting capitalism rebuild itself from its own ruins). WW II had the same effect. WW III, should enough survive such a war, could also.
The current crisis has a worldwide character. This means that the world economy, whose functioning was interrupted by the war years, has made its way in spite of all tariff walls and in a painful form has proved its powerful reality. There is every reason to believe that the approaching reversal of the trend in the direction of a business revival – not everywhere and not with equal strength – will also assume a worldwide character. In other words, the cyclical movement of capitalism is restored in the present crisis.
Naturally we cannot expect full-blown cycles in the future. In the decades preceding the war, crises had the character of short and not too profound interruptions, while each new upswing left the peak of the previous one far below. But now we must expect the opposite: profound, long, and painful crises, while the upward movements are weak and short-lived. If the old cycles were the mechanism of a broad upward movement, the new ones can only be the mechanism of capitalist decay.
We’ve been in a downturn series of cycles since the 70’s. What we see now is a result of those downturns. Here in the US, it has meant deindustrialization and a debt basis for the economy. Yes, some have done fabulously during the past 40 years or so. For the bulk of the society, debt has been a way to keep up the appearances of success. The piper, of course, is playing as we write this.
But the influence of cyclical changes on the life of masses of people remains enormous. In a certain sense it is now more far-reaching than ever before.
I’ll let you finish reading the article. Keep in mind that Marx gave us a critique of capitalism and suggestions as to how to overcome its shortcomings. Trotsky is writing from this perspective, and he points out that those shortcomings would continue even if capitalism managed to right itself (which it did as a result of WW II).
Cross posted at All Over the Board.