In the closing paragraphs of the first section of the Manifesto of the Communist Party, Marx and Engels advance two distinct arguments why the rule of the bourgeoisie will come to an end.footnote On the one hand, the bourgeoisie ‘is unfit to rule because it is incompetent to assure an existence to its slave within its slavery, because it cannot help letting him sink into such a state that it has to feed him, instead of being fed by him. Society cannot live under this bourgeoisie; in other words, its existence is no longer compatible with society.’ On the other hand: ‘The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by their revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, is its own gravediggers. Its fall and the victory of the proletariat are equally inevitable.’footnote1 It will be my thesis here that these two predictions represent both the strength and the weakness of the Marxian legacy. They represent its strength because they have been validated in many crucial respects by fundamental trends of the capitalist world-economy in the subsequent 140 years. And they represent its weakness because the two scenarios are in partial contradiction with each other and—what is more—the contradiction has lived on unresolved in the theories and practices of Marx’s followers.

The contradiction, as I see it, is the following. The first scenario is of proletarian helplessness. Competition prevents the proletariat from sharing the benefits of industrial progress, and drives it into such a state of poverty that, instead of a productive force, it becomes a dead weight on society. The second scenario, in contrast, is of proletarian power. The advance of industry replaces competition with association among proletarians so that the ability of the bourgeoisie to appropriate the benefits of industrial progress are undermined.

For Marx, of course, there was no actual contradiction. The tendency towards the weakening of the proletariat concerned the Industrial Reserve Army and undermined the legitimacy of bourgeois rule. The tendency towards the strengthening of the proletariat concerned the Active Industrial Army and undermined the capacity of the bourgeoisie to appropriate surplus. Moreover, these two tendencies were not conceived as being independent of each other. To the extent that the capacity of the bourgeoisie to appropriate surplus is undermined, two effects concerning the Industrial Reserve Army follow. The means available to the bourgeoisie to ‘feed’, that is, to reproduce the Reserve Army are reduced, while the incentive to employ proletarian labour as a means to augment capital also decreases and, ceteris paribus, the Reserve Army increases. Hence, any increase in the power of the Active Industrial Army to resist exploitation is translated more or less automatically into a loss of legitimacy of the bourgeois order.

At the same time, any loss of legitimacy due to inability to assure the livelihood of the Reserve Army is translated more or less automatically into a greater (and qualitatively superior) power of the Active Army. For in Marx’s view the Active and the Reserve Armies consisted of the same human material which was assumed to circulate more or less continuously from the one to the other. The same individuals would be part of the Active Army today and of the Reserve Army tomorrow, depending on the continuous ups and downs of enterprises, lines and locales of production. The bourgeois order would thus lose legitimacy among the members of the Reserve and Active Armies alike, thereby enhancing the tendency of whoever happened to be in the Active Army to turn their association in the productive process from an instrument of exploitation by the bourgeoisie into an instrument of struggle against the bourgeoisie.

The power of this model lies in its simplicity. It is based on three postulates. First, as Marx was to state in Volume 3 of Capital, the limit of capital is capital itself. That is to say, the evolution and the eventual demise of capital are written in its ‘genes’. The dynamic element is ‘the advancement of industry’, without which capitalist accumulation cannot proceed. But the advancement of industry replaces competition among the workers, on which accumulation rests, with their association. Sooner or later, capitalist accumulation becomes self-defeating.