A crisis occurs sometimes lasting for decades. This exceptional duration means that incurable structural contradictions have revealed themselves and that despite this the political forces which are struggling to conserve and defend the existing structure itself are making every effort to cure them within certain limits and to overcome them. These incessant and persistent efforts (since no social formation will concede that it has been superseded) form the terrain of the conjunctural, and it is upon this terrain that the opposition organizes.
Antonio Gramsci, Prison Notebooks
What is the historical significance of the implosion of neo-liberalism, coming less than twenty years after the collapse of the Soviet Union? A disconcerting thought experiment suggests itself. The ussr, it might be recalled, had reached the summit of its power in the 70s, shortly before stumbling downward into a spiral of retrenchment, drift and collapse. Could a comparable reversal of fortune now be in store for the superpower of the West, one of those old-fashioned ‘ironies of history’? After all, a certain unity of opposites can be traced between an unbridled late capitalism and the centrally planned rust belts of the former Comecon—and precisely in the economic sphere, where they were diametrically counterposed. During the heyday of Reaganism, official Western opinion had rallied to the view that the bureaucratic administration of things was doomed to stagnation and decline because it lacked the ratio of market forces, coordinating transactions through the discipline of competition. Yet it was not too long after the final years of what was once called socialism that an increasingly debt- and speculation-driven capitalism began to go down the path of accounting and allocating wealth in reckless disregard of any notionally objective measure of value. The balance sheets of the world’s greatest banks are an imposing testimony to the breakdown of standards by which the wealth of nations was once judged.
In their own ways, both bureaucratic socialism and its vastly more affluent neo-liberal conqueror concealed their failures with increasingly arbitrary tableaux économiques. By the 80s the gdr’s reported national income was revealed to be a statistical artifact that grossly inflated its cramped standards of living. But in the same decade, an emerging circuit of global imbalances was beginning to generate considerable problems for the measurement of capitalist wealth. The coming depression may reveal that the national economic statistics of the period of bubble economics were fictions, not wholly unlike those operative in the old Soviet system.
Of course, the recurring crises of capitalism are supposed to be different from the terminal stages of non-capitalist civilizations and modes of production. Such social orders seem to have lacked capitalism’s distinctive capacity for creative destruction, for periodic renewal through downturns that liquidate inefficient conditions of production and life forms, opening up frontiers for the next round of expansion. In accordance with this pattern, nearly all commentators on today’s economic meltdown have assumed that this Schumpeterian tale of crisis and renovation will repeat itself in one form or another. But is it, in fact, inevitable that new phases of accumulation will emerge from the aftermath of what now promises to be an enormous and protracted shake-out? I would like to propose that this scenario of capitalist renewal is distinctly less likely than a long-term drift towards what the classical political economists used to call ‘the stationary state’ of civilization.
From Adam Smith to John Stuart Mill, early theorists of the wealth of nations were pessimistic about their societies’ long-term prospects for growth, and assumed that the productivity gains from specialization and the division of labour would be thwarted after a certain point by the exhaustion of the soil and population increase. The historian E. A. Wrigley writes:
For reasons cogently argued by Smith and his successors, the momentum of growth was expected to peter out after a time, arrested by changes endogenous to the growth process itself, and giving rise in due course to the supervention of the stationary state. Moreover, the classical economists were unambiguous in doubting whether even the then prevailing level of real wages could be sustained indefinitely. Future falls were more probable than future rises. A steady and substantial improvement in real wages for the mass of the population was a utopian pipe-dream, not a possibility that a rational and well-informed man could plausibly entertain, however much he might wish to see it occur.footnote1
The passage suggests why Adam Smith and his contemporaries might have thought that a stagnant 18th-century China was in some sense ahead of contemporary Western Europe. Having exhausted the sources of further productivity growth, China had entered, inevitably, onto the path of secular involution: de te fabula narratur. Of course, this pessimistic verdict on civilization’s longue durée was overturned by subsequent great waves of capitalist expansion. Marx’s later critique of political economy was, in part, an attempt to reconceptualize this tradition’s classical, pre-industrial pessimism regarding the external, natural limits to economic growth, transforming it into an account of an ever more difficult to surmount socio-economic impasse of accumulation.footnote2