The reciprocal relation between boom and crisis in economy and the development of revolution is of great interest to us not only from the point of theory but above all practically.
Many of you will recall that Marx and Engels wrote in 1851 – when the boom was at its peak – that it was necessary at that time to recognize that the Revolution of 1848 had terminated, or, at any rate, had been interrupted until the next crisis.
Engels wrote that while the crisis of 1847 was the mother of revolution, the boom of 1849-51 was the mother of triumphant counter-revolution.
It would, however, be very one-sided and utterly false to interpret these judgments in the sense that a crisis invariably engenders revolutionary action while a boom, on the contrary, pacifies the working class.
The Revolution of 1848 was not born out of the crisis. The latter merely provided the last impetus. Essentially the revolution grew out of the contradictions between the needs of capitalist development and the fetters of the semi-feudal social and state system. The irresolute and half-way Revolution of 1848 did, however, sweep away the remnants of the regime of guilds and serfdom and thereby extended the framework of capitalist development. Under these conditions and these conditions alone, the boom of 1851 marked the beginning of an entire epoch of capitalist prosperity which lasted till 1873.
In citing Engels it is very dangerous to overlook these basic facts. For it was precisely after 1850, when Marx and Engels made their observations, that there set in not a normal or regular situation, but an era of capitalist Sturm und Drang (storm and stress) for which the soil had been cleared by the Revolution of 1848. This is of decisive importance here.
This storm-and-stress era, during which prosperity and the favorable conjuncture were very strong, while the crisis was merely superficial and short-lived – it was precisely this period that ended with revolution. At issue here is not whether an improvement in the conjuncture is possible, but whether the fluctuations of the conjuncture are proceeding along an ascending or descending curve. This is the most important aspect of the whole question.
Can we expect the same effects to follow the economic upswing of 1919-20? Under no circumstances. The extension of the framework of capitalist development was not even involved here. Does this mean that a new commercial-industrial upswing is excluded in the future, and even in the more or less near future? Not at all!
I have already said that so long as capitalism remains alive it continues to inhale and exhale. But in the epoch which we have entered – the epoch of retribution for the drain and destruction of wartime, the epoch of leveling out in reverse – upswings can be only of a superficial and primarily speculatory character, while the crises become more and more prolonged and deeper-going.
Historical development has not led to the victorious proletarian dictatorship in Central and Western Europe. But it is the most brazen and at the same time the most stupid lie to attempt to conclude from this, as do the reformists, that the economic equilibrium of the capitalist world has been surreptitiously restored...
On the basis of this economic depression the bourgeoisie will be compelled to exert stronger and stronger pressure upon the working class. This is already to be seen in the cutting of wages which has started in the full-blooded capitalist countries: in America and in England, and then throughout all of Europe. This leads to great struggles over wages. Our task is to extend these struggles, by basing ourselves on a clear understanding of the economic situation. This is quite obvious.
It might be asked whether the great struggles over wages, a classic example of which is the miners’ strike in England, will lead automatically to the world revolution, to the final civil war and the struggle for the conquest of political power. However, it is not Marxist to pose the question in such a way. We have no automatic guarantees of development.
But when the crisis is replaced by a transitory favorable conjuncture, what will this signify for our development? Many comrades say that if an improvement takes place in this epoch it would be fatal for our revolution. No, under no circumstances. In general, there is no automatic dependence of the proletarian revolutionary movement upon a crisis. There is only a dialectical interaction. It is essential to understand this.
Let us look at the relations in Russia. The 1905 revolution was defeated. The workers bore great sacrifices. In 1906 and 1907 the last revolutionary flare-ups occurred and by the autumn of 1907 a great world crisis broke out. The signal for it was given by Wall Street’s Black Friday. Throughout 1907 and 1908 and 1909 the most terrible crisis reigned in Russia too. It killed the movement completely, because the workers had suffered so greatly during the struggle that this depression could act only to dishearten them. There were many disputes among us over what would lead to the revolution: a crisis or a favorable conjuncture?
At that time many of us defended the viewpoint that the Russian revolutionary movement could be regenerated only by a favorable economic conjuncture. And that is what took place.
In 1910, 1911 and 1912, there was an improvement in our economic situation and a favorable conjuncture which acted to reassemble the demoralized and devitalized workers who had lost their courage. They realized again how important they were in production; and they passed over to an offensive, first in the economic field and later in the political field as well. On the eve of the war the working class had become so consolidated, thanks to this period of prosperity, that it was able to pass to a direct assault.
And should we today, in the period of the greatest exhaustion of the working class resulting from the crisis and the continual struggle, fail to gain victory, which is possible, then a change in the conjuncture and a rise in living standards would not have a harmful effect upon the revolution, but would be on the contrary highly propitious.
Such a change could prove harmful only in the event that the favorable conjuncture marked the beginning of a long epoch of prosperity. But a long period of prosperity would signify that an expansion of the market had been attained, which is absolutely excluded. For after all, capitalist economy already embraces the terrestrial globe. Europe’s impoverishment and America’s sumptuous renascence on the huge war market corroborate the conclusion that this prosperity cannot be restored through the capitalist development of China, Siberia, South America and other countries, where American capitalism is of course seeking and creating outlet markets but on a scale in no way commensurate to Europe. It follows that we are on the eve of a period of depression; and this is incontestable.
With such a perspective, a mitigation of the crisis would not signify a mortal blow to the revolution but would only enable the working class to gain a breathing spell during which it could undertake to reorganize its ranks in order subsequently to pass over to attack on a firmer basis. This is one of the possibilities.
The content of the other possibility is this: that the crisis may turn from acute into chronic, become intensified and endure for many years. All this is not excluded. The possibility remains open in such a situation that the working class would gather its last forces and, having learned from experience, conquer state power in the most important capitalist countries. The only thing excluded is the automatic restoration of capitalist equilibrium on a new foundation and a capitalist upswing in the next few years. This is absolutely impossible under the conditions of modern economic stagnation.
Here we approach the question of social equilibrium. After all, it is frequently said... that capitalism is being automatically restored on a new foundation. Faith in automatic evolution is the most important and the most characteristic trait of opportunism.
If we grant – and let us grant it for the moment – that the working class fails to rise in revolutionary struggle, but allows the bourgeoisie the opportunity to rule the world’s destiny for a long number of years, say; two or three decades, then assuredly some sort of new equilibrium will be established. Europe will be thrown violently into reverse gear. Millions of European workers will die from unemployment and malnutrition. The United States will be compelled to reorient itself on the world market, reconvert its industry, and suffer curtailment for a considerable period.
Afterwards, after a new world division of labor is thus established in agony for 15 or 20 or 25 years, a new epoch of capitalist upswing might perhaps ensue...
In short, speaking theoretically and abstractly, the restoration of capitalist equilibrium is possible. But it does not take place in a social and political vacuum – it can take place only through the classes. Every step, no matter how tiny, toward the restoration of equilibrium in economic life is a blow to the unstable social equilibrium upon which the Messrs. Capitalists still continue to maintain themselves. And this is the most important thing.
From "Report on the World Economic Crisis and the New Tasks of the Communist International" at the Third Congress of the Comintern, June 1921