A New Ideologist of Capitalism

[p011] A New Ideologist of Capitalism: Rostow’s ‘Non-Communist Manifesto’ IT is notorious that, in present-day capitalist society, there is a never-ending quest for a satis- factory ideology to take the place of the dis- credited dogmas of the past and meet the chal- lenge of Marxism. A terrible intellectual void is discernible among those educated managers, administrators, technicians and publicists who have placed their talents in its keeping for a due share of the good things of life, accompanied by chronic anxiety. The void is filled, in one way or another. From their ranks come many a fluent pen and plausible doctrinaire purveying mysticism for the soul-sick and so on through to sheer cynicism for the hard-headed. But some- thing more is needed than fashionable evangelists and story-writers. There is a demand for some solid explanation of economic and social develop- ment which does not challenge the assumptions and values of capitalism. Something compar- able, in fact, to the comforting bourgeois doc- *'W. W.. Rostow, ‘The Stages of Economic Growth’, Cambridge University Press, 21s. trines of ‘progress’ which were blown sky-high ~ in the 20th century. W. W. Rostow, who has already achieved prominence as an economic historian,! now comes forward to provide what purports to be at once a coherent answer to Marxism and a comforting philosophy of history for the adherents of capitalism. Rostow proclaimed, indeed, that he was going to provide ‘an alternative to the Marxist inter- pretation of modern history’ and ‘challenge Marx- ism’. What he said in the lecture halls echoed into the City of London and was given the un- usua! amplification of publication, in advance of appearance in book form, by the widely-read business organ The Economist with the sub-title 1 Especially with the articles and lectures reprinted as ‘The British Economy in the Nineteenth Century’ and ‘The Process of Economic Growth’. He was also responsible for writing up collective works on China- and the Soviet Union in volumes which, while contain-. ing useful material, could be described as products. of the Cold War.

[p012] 46 A Non-Communist Manifesto? It would thus reach an important stratum of the salaried ser- vants of capitalism whose conviction about the necessity of what is would thus be reinforced. At the same time Rostow’s thesis would he thrown out more widely, to be discussed among, and perhaps to influence, those students and in- tellectuals especially concerned with economics and the social sciences. . At first sight, then, it might seem surprising that Rostow is so seriously concerned with the refutation of a doctrine which is hardly likely to have made many inroads into the first category of readers. But it is not really so strange. It was at one time generally assumed by the ortho- dox that The Communist Manifesto had been buried along with all the other economic and historical errors of Marx and Engels. Now, however, much time and energy is devoted to the refutation of Marxism, a testimony to its power and to the failure of its enemies to deal with it intellectually. Once it was enough to pretend that Marxism did not exist; now the challenge can no longer be evaded. but has to be dealt with in deadly earnest. More: other theories, especially theories of history, have to be defined in relation to Marxism, and this is Rostow’s concern. It is not that he is speaking to an audience infected with the virus and is trying to cure them: few could have read much of Marx at first hand. It is simply that Marxism provides a fixed point of reference: it has endured among the changing fads and fashions of the intellectual world and the host of other interpretations which have come and gone. Rostow, by implication, thus pays Marxism an immense tribute. He does not consider any other historical position—there is only his own, and Marx’s. Let us see how he deals with Marx, what his alternative is worth— for The Economist describes it as ‘one of the most stimuJating contributions made to economic and political thought since the war’—and to what practical conclusions it leads. It cannot be said that as a refutor of Marx Rostow adds much to the long list of his nre- decessors in the wav of distortion and bad faith. One suspects that his study of the works of Marx 2 The articles which are the subject of this critique are the author’s -bridgement of the lectures which ap- peared in ‘The Fconomist’ for the 15 and 22 Auoenst, 1959. Judsine from the lecture reprinted in ‘The Economic Historv Review’. for August. 1959. the frill version is more nuanced than the articles. The latter do brine out the essence of his thinkine more sharplv and will clearly exercise the greatest influence. and that justifies them. All auotations, with a few exceptions which are from the ‘Economic Historv Review’ article. are, unless otherwis- stated, from these articles, but page references have not been given. LABOUR REVIEW — June-July, 1960 and Engels has been neither so protracted nor so meticulous. as his confident assertions lead one to believe. In any case, his understanding of their meaning is certainly defective. Whenever possible he identifies Marxism with the parody of it which provides the Soviet rulers with an ideology; and ‘communism’ he takes as the Soviet system of today. This leads to some statements which are quite fantastic in terms of classical Marxism.? Indeed, his own theories, as we shall see, share with Stalinism a determinism which leaves little room for the creative activities of flesh-and-blood men and women. Frequently he merely trades on his ‘reputation’ and simply employs the method of counter-assertion instead of demolishing the Marxist case: enouncing what he believes with- out argument or proof. At other times he copies Marx, i.e., he makes statements which are basic- © ally the same as those which Marx, or Marxists, would make (which may arise from ignorance), or admits ‘broad similarities’ between his system and Marx’s. Indeed, he leaves himself plenty of escape routes: clarity of statement is not one of his virtues, he prefers a certain fuzziness of language and the insertion of an imprecise quali- fication. Marx, he tells us, was ‘a lonely man, profoundly isolated from his fellows’—a_state- ment which was simply not biographically true in any sense. THE STAGES OF ECONOMIC DEVELOP- MENT There is no doubt, however, that as an anti- Marxist advocate Rostow is a difficult customer. He knows when and what to distort. He also knows (although perhaps again it is ignorance) which parts of the Marxist challenge to ignore. But it is in his own positive alternative that he shows, inadvertently, his evasion of the main questions which Marxists pose in the historical field. From the beginning of his exposition Rostow is in fact in retreat, or taking evasive action. Returning to the attempt to delineate ‘stages’ of economic development which had been aban- doned by the empiricists, Rostow anvears to be- lieve that he has found a new criterion which supersedes the Marxist sequence of social formations as found in The Communist Mani- festa, Anti-Duhring and elsewhere. But he does not face up to and provide cogent reasons 3 Thus. ‘communism is a curious form of societv anvrooriate onlv to the suvply side of the growth prob- Tem (7), and likely to wither in the age of high con- sumption? (mv emphasis—T.K.). What will take its place? Capitalism, perhaps?

[p013] NEW for rejecting the Marxist division. He is content to admit that ‘there are some broad similarities between ine Marxist sequence and the stages of growth analysis —the description he applies to his own patteru. This pattern is devised independ- ently of social reiations, in terms of the level uf growth, output per liead, i.e., a purely quantita- tive measure. In the course of his discussior ..wever, it 1s soon evident that the ‘broad siu:laz:..2s’, where they exist, merely smuggie “ack into the picture the key role of the social relations governing pro- duction. His own div:sion is as follows : The traditional society; the transitional society; the ‘take off’; the maturing society; tne society of high consumption. These are the stages through which all societies are supposed to pass. The advanced countries are at present in the fifth stage, the rest of the world in the four previous stages, but most of it already out, or on its way out, of the first. What is this ‘traditional society’ with low pro- ductivity and a slow rate of growth? It is evi- dently what Marxists know as ‘feudalism’. Ros- tow himself describes it as a society with ‘a hier- archical social structure with little scope for vertical mobility—with wealth and power concen- trated in the hands of those who controlled land rents’, namely the feudal nobility. This was, in fact, the key to this stage. Such a society, indeed, already marked a considerable advance in pro- ductivity over more primitive societies. It had a settled agriculture, a complex social structure and a social division of labour which permitted, besides the existence of a luxury-loving ruling hierarchy, a considerable flowering of human cul- ture—all at the expense of the dependent culti- vators from whom a surplus was extracted with the help of what Marx called ‘extra-economic coercion’. In discussing the Marxist view of human development Engels pointed out that ‘A surplus of the product of labour over and above the costs of maintenance of the labour, and the formation and enlargement out of this surplus, of social pro- duction and a reserve fund, was, and is, the basis of all social, political and intellectual progress. In history, up to the present, this fund has been in the possession of a privileged class, on which also devolved, along with this possession, political supremacy and intellectual leadership’. This is _ 4Engels, F. ‘Anti-Diihring’, page 268. This book is, of course, one of the most valuable sources for the understanding of the materialist conception of history. IDEOLOGIST OF CAPITALISM ie 47 a useful point of reference, not only for dissecting “the traditional society’, or feudalism, but for test- ing Kostow’s subsequent stages of growth. Not just tne level of production, oi even the rate of growth, but how the surplus was produced and who secured it—these were the fundamental ques- tions, upon which, in the last analysis, the rate of growi and the level of productivity depended. what Kostow does is to define his stages in terms of the dependent variations—output and consump- uon—and not the determinants, to confuse “hanges in quantity with changes in quality. When seeking the main reason for the slow growth of the traditional society Rostow has to admit that the barrier to change was the feudal ruling class itself. Only when the nobility was displaced by what Rostow, to avoid that embar- rassing term ‘class’, chooses to call ‘a new lead- ing éute’, were the barriers to change overcome.’ ‘ihe teudal nobility, in effect, scooped up the sur- pius and put it to non-productive purposes. Only aS part ot this surplus was acquired by the bour- geoisie did new relations of production, which were eventually to disintegrate the old society, take form. It was the members of this class who directed income into ‘roads and railways, schools and factories, rather than country houses and ser- vants, personal ornaments and temples’. Yes, here were the rational utilitarians who valued men ‘for their individual ability to perform specialised functions’ and were able to enlist science in the widening and transformation of the environment and the methods of production. The driving force of this class was the rationai pursuit of acquisition carried on in particular cir- cumstances in which ‘competition makes the im- manent laws of capitalist production to be felt by each individual capitalist, as external coercive laws’. Capitalist relations introduced a new 5 Rostow speaks, for example, of the need for ‘trans- ferring surplus income from those who would waste it in prodigal living to those who will invest it and regularly plough back the profits’. Other people— unidentified—‘must be prepared to lend their money on long-term’, and so on. Bourgeois ideologists have always been able to criticise the prodigality of the nobility! But where did this money come from? Where did the ‘surplus income’ originate? The classi- cal economists said ‘abstinence’. Weber said from the abstemiousness produced by the protestant ethic. Marx pointed to the process of ‘primitive accumula- tion’. Rostow just leaves a gap. Later, ‘for growth to become self-sustained, all that is necessary is a rise in the rate of investment and the stock of capital per head’. ‘All that is necessary . . .’ but this does not explain the source or the process of accumulation. . 6 Marx, K. ‘Capital’, Vol. I, page 603. ‘It compels him to keep constantly extending his capital, in order to preserve it, but extend it he cannot, except by means of progressive accumulation.’

[p014] 48 dynamic factor into the economy: the pressure to accumulate in order to ‘invest tor the purpose of increasing the scale ot production and reaucing unit cosis. in order to retain and increase their share of the social surplus the bourgeoisie revolu- tiomized the productive torces, thus fuifilling its “historical mission’, succinctly described by Marx as ‘the ruthless development iu geometrical pro- gression, of the productivity of numan tabour’.’ ‘The continued working out ol this process right down to tne period where the ability of the bour- geoisie to fulfill this mission reaches Limits inhereat in the system itseift, and which sees it swept aside in a significant area of the globe, spans the re- mainder of Rostow’s stages. ‘The ‘transitional society’ is none other than the passage irom feudalism to capitalism. The re- maining stages are, at the most, only one way of dividing up the subsequent history of capitalism. When Rostow speaks of the requirement for growth being a ‘rise in the rate of investment and the stock of capital per head’, he has, in fact, made the whole process a mechanistic one by ab- stracting from the social relations in which it oc- curred. In fact, the process of accumulation involved the extraction of surplus value from a property- less class of wage-earners and its realisation on the market, as it still does in capitalist society. But this takes place in a changing and complex social Setting; in Capital, to give precision to his econo- mic concepts and formulations Marx frequently abstracts from these surrounding conditions. But he makes it plain that he is abstracting and does not confuse reality with his theoretical model (which is more than can be said of many econo- mists today). He was quite explicit that theoreti- cal conclusions had to be tested by close investiga- tion and by practice. The pure capitalist relation between wage labourers and the owners of the means of production has to be inserted in a society which, for example, would contain carry-overs from other systems, remnants of the classes which went with them (the landlords could adapt them- selves very well to capitalism). The system also provokes a self-defensive response on the part of the workers which modifies the operation of the laws of the system.? Marx stated quite plainly, 7 Marx, K. ‘Capital’, Vol. III, page 308. ‘The effort to reduce the cost price to its minimum becomes the strongest lever for the raising of the social productivity of labour, which, however, appears under these condi- tions as a continual increase of the productive power of capital.’ Also Vol. Til, page 1027. - 8There are plenty of references scattered through- out ‘Capital’. See also the rich analyses of contempor- ary developments in ‘The Eighteenth Brumaire’, ‘Class Struggles in France’ and ‘Revolution and Counter- LABOUR REVIEW — June-July, 1960 too, that the same ‘economic base’ may show ‘in- unite variations and gradations in its appearance, even though its primcipal conditions are every- where tne same. this is due to innumerable out-. side circumstances, natural environment, race peculiarities, outside historical influences and so forin, au of which must be ascertained by careful analysis. ? MARXISM AND DETERMINISM {f the economic base could show ‘infinite varia- uons’ ali the more so could the ‘superstructure’. To present the Marxist interpretation as a simple economic determinism, as Rostow does, in which the base directly determined the nature of the superstructure or in which men are assumed to toulow .their own self-interest single-mindedly is simply an inexcusable distortion. Perhaps there are a few formulations which could be taken out of context to support such a view for polemical purposes. it appears that Rostow knows quite weit that these did not represent Marx’s view of historical materialism. It is with patronising dis- honesty that he permits himself the statement ‘there are a few passages in Marx—and more in Engels—which reveal a perception that human behaviour is affected by motives and objectives which need not be related to or converge with economic self-interest’.!° This is presumably a reference to some of the passages in later works and correspondence in which Marx and Engels developed and refined certain of their concepts and dissociated them- selves from some of the over-simplifications of their disciples. But nowhere did they assume, except within the terms of abstract economic- model-making, that real human behaviour could be understood as the pursuit of individual self- interest. A fair-minded perusal of Marx's writings should be sufficient to expose any such revolution in Germany’ (more than one modern his- torian has burrowed into these and made use of the insights of Marx and Engels with scant or no acknow- ledgment). For an historical study there is Engels: ‘Peasant War in Germany’, recently republished in English (Foreign Languages Publishing House, Mos- cow). Where, in these works, is it assumed that ‘capi- talist societies’ made ‘all their major decisions simply in terms of the free market mechanism and private ad- vantage’ or that ‘political, social (or) economic power neatly followed the fact that property was privately owned’ (a somewhat amgibuous statement—T.K.) as Rostow asserts? 9 Marx, K. ‘Capital’, Vol. III, page 919. My emphasis—T.K. 10From the article in ‘Economic History Review’, August, 1959.

[p015] NEW IDEOLOGIST OF CAPITALISM 49 interpretation.!! Of course Marx’s prime inten- i100 Was not to investigate motives. In Rostow’s account we lind an inconsistent assemblage of various theories and assumptions about human behaviour. He wants to dissociate himself from what he wrongly assumes is Marxism by his stress on the fact that capitalists are not only out to make money, but are also inspired by ‘power, adventure, challenge and prestige’. At the same time, the main lines of his theory of development are the outcome of a quasi-automatic process, ‘compound interest’, which hardly appears to re- quire human intervention. Even his sponsors of Lhe Economist cannot refrain from the remark that ‘he may seem to claim tc have invented a diabolical law of perpetual historical motion, and embodied it in a steam-roller’.!? How can Rostow explain that ‘economic change has social and political effects’, without analysing the material conditions and social and class relations in which men live? He draws rigid lines between the ‘economic’ and the ‘non- economic’. He swamps all references to that central theme of The Communist Manifesto, the class struggle, in his newly-branded ‘stages cf growth’. Yet, to take a simple example, the behaviour of businessmen in the 20th ‘century has an historical, social root and could only be- come acceptable after a long period of bourgeois dominance. It is quite different from that of a feudal lord or a Chinese mandarin, because the material environment is different, and because of the specific class relations of capitalist society. The very motives other than the search for profits of which Rostow speaks are also the product --{ bourgeois dominance, and take their special form from the social environment. ‘I paint the capitalist and the landlord in no couleur de rose’, wrote Marx in the Preface to Cap*al, ‘here individuals are dealt with only in so far as they are the personifications of economic categories. . . . My standpoint can less than any other make the individual responsible for rela- tions of production whose creature he socially remains.”!3 The self-expansion of capital, accu- {1 Historical materialism seeks to grasp the historical process in its many-sided dialectical totality as the pro- duct of flesh and blood men. Instead of assuming some rough equality between so-called ‘factors’-—which are no more than abstract concepts—it sought the ultimate determining forces and did not take men at their own valuation. As Rostow says, ‘The life of most human beings since the beginning of time has been mainly taken up. with gaining food, shelter and clothing’: and that is precisely where Marxists begin—though not. end —their analyses. 12 An editorial in ‘The Economist’, 22 August, 1959. 13 ‘Capital’, Vol. I. mulation for accumulation’s sake, is part of the system; as he personifies Capital, a particular set ot production relations, the capitalist, as long as he remains such, has to accord with its demands. ‘riow’, Rostow asks, as though he had discovered sometning profoundly important, ‘how can one explain te ardent striving of men (he means capitalists—T.K.) long after they have made more money than they or their children could conceivably use?’!4 Yes, instinctively, when he asks what they have done he first answers in terms of making money. But his own reply to the question, given in advance, was that ‘the game of expansion and money-making was re- warding in terms of the full range of human motives’. Precisely the same thing might be said of the gambler or even of the criminal. In fact, the capitalists who go on piling up money do so, on the one hand, because they have come to personify capital as a result of their place in the relations of production; as long as the system is in a phase of expansion and they are in a good line they can do no other. On the other hand, the explanations can run from the none-too- pleasing assumptions of some psychologists (money = excrement) to... Rostow’s own. But, without the laws of capitalism these explanations have no interest because it would be impossible to go on piling up money, anyway! Of course Marxists do not deny that business- men are other things besides personifications of the capitalist process of accumulation and ex- ploitation, that they seek all manner of gratifica- tions, create favourable images of themselves and genuinely believe them. Nor do they assume that the only active moulders of history were those directly owning the means of production and operating them in the bourgeois epoch. The bourgeoisie is, and always was, a structured class, not one composed entirely of capitalists. It was bound to ally with others when it gathered strength within the womb of feudalism. It con- tained, besides industrialists, merchants and financiers, the officials (although not always), the professional men, the literary and scientific intelli- gentsia, part of the clergy as well as landowners and farmers (some of them). What gave this class its common measure was that it derived its income from the surplus value of those having nothing but their labour power to sell; and with that went, though not automatically, a conscious- ness of common interests as men of property, of ‘standing’ and ‘respectability’. However, some members of this class were, at the same time, able to attain to a certain autonomy in relation to the economic system and to influence it in one 14‘Economic: History Review’, August, 1959.

[p016] 50 way or another.!> Some tried to reduce its in- humanity. Others contrived to speed up its development or to guide it into one direction rather than another. Marxists do not overlook this phenomenon and those responsible for it, but they do trace the social roots of what such men do and the impact of their actions. They see them in relation to the position of the whole class and, particularly, of the class struggle; of the nature of the State; of the role of ideology. This is not the place for a systematic exposi- tion of historical materialism, but sufficient has perhaps been said to expose Rostow’s parody of it. As for his alternative ‘interpretation’, despite his display of specialist virtuosity and his ambi- tious claims for it, he fails to provide adequate criteria for the distinguishing of his stages— smudging over significant changes and creating distinctions of no more than secondary import- ance. To substantiate this judgment in detail would inevitably take up as much space as the original articles so that all that can be offered here is a selection of points. Thus if we return to his second stage, ‘the transitional stage’, we find that, despite himself, he has to mention the changes which the Marxist would highlight, though he buries them in a discussion of results rather than causes. He has to indicate that this is.a period in which capital is being accumulated and concentrated in the hands of the bourgeoisie (though he does not use the term), but he does not dwell on the ac- companying dispossession and proletarianisation of the direct producers.'6 As Marxists see it, this is the central feature of what is, in fact, the early process of capitalist penetration into indus- try and agriculture. In the course of this, labour-power itself becomes a commodity in one sector after another, though largely without any technological revolution in the instruments of production; this is the phase of capitalist-organ- ized manufacture.'’7 There is, as Rostow says, ‘much variety in the sectors which have played the key role in the take-off process’. By this he means that in one place cotton, in another iron, in another timber took the lead in industrializa- 15 This is clearly possible also for members of former ruling classes and for State officials attached, not to the bourgeoisie, but to the dynastic or ‘bonapartist’ State. {6 Like a true inverted Stalinist he passes over the human costs of economic development with only a pass- ing reference: it is only when real wages are rising that ‘workers’ come into the picture. 17 Analysed as a preparatory period for industrializa- tion by Marx in relation to England and Lenin for Russia. cf. ‘The Development of Capitalism in Russia’ (in English, F.L.P.H., Moscow). LABOUR REVIEW — June-July, 1960 tion.'8 The decisive point, which has to be ig- nored to fit in with his scheme, is that those sectors willch took the lead and grew rapidly did sO primarily because they had become subject to a new dynamic: the laws of capitalist pro- duction. {INDUSTRIAL CAPITAL AND THE NATION-STATE Capitalism was already well-established before what Rostow designates as the ‘take off, the early period of industrialization, after which ‘economic growth becomes more or less auto- matic’, could take place. The essential force benind the upsurge of industry was quite simply the massive extension to it of capitalist relations. This acceleration of growth was associated with new and more productive techniques developed in response to the incentives provided by expand- ing markets and rising profits and the existence ot a proietariat. While Rostow keeps this in the background he readily ranges over a wide fieid to illustrate what might, be summed up as the point that no two ‘take offs’ were alike. This is neither surprising nor original. For Marxists, differences in the timing and tempo of capitalist development on a world his- torical scale are interpreted not by formal com- parison but dialectically. The. international nature of capitalism is important to stress, especi- ally because Rostow tends to neglect the neces- sary links which bound the various capitalist States to the world market.!9 Already the burgeoning of capitalism in Western Europe would not have been possible without the widen- ing horizons of the known world brought about by the opening up of new routes to other con- tinents. The pioneer industrialization of England was closely bound up with the strategic position of English trade and shipping in overseas markets, including the seizure of colonies. The 18 But, of course, considered on a world scale there had first to be cheap iron, a new source of power (steam) and machines made by machines. The sup- posed ‘variety’ is spurious unless seen in this perspec- tive. !9Rostow makes a miracle out of countries like ‘Switzerland, Israel and Hong Kong, which have per- formed a kind of economic rope trick, climbing into industrialization with virtually no means of support’ Since he mentions the world market in the previous sentence there was no reason to marvel at this. The economic development of England, Germany, Russia and America were also inseparably connected with the world market, though in different forms. England virtually dragged a world market into existence as a complement to her industrialization; Japan made use of it.

[p017] NEW slave trade and the plunder of India considerably furthered the accumulation of capital, part of which flowed into the new capitalist factories and mills. Certainly the formation of English in- dustrial capitalism was a world process which had its repercussions from Virginia to Calcutta, from China to Peru. English capitalists virtu- ally dragged a world market into being, ground out ‘primitive accumulation’ from the slave trade and the toil of African slaves; they uprooted peasants from the English counties, and sub- jected: the market to their own needs for an en- tire epoch. Indeed, without the subjection of an expanding world market to its requirements, economic growth in England could not have gone on at a cumulative rate. There is, in fact, nothing automatic about compound interest: it has to come from somewhere; for England at this time her world trade and colonial monopoly had not a little to do with it. Moreover, once industry was established in one part of the world, other countries were affected by it and could, under certain conditions, take it over and assimilate it into their own economic structures. Consequently no subsequent indus- trializing process repeated exactly that of the pioneer country where it had taken place, so to speak, organically. Not only were features of the most advanced technology and organization grafted on to societies which were otherwise ‘backward’, but these countries stood in an en- tirely different relationship to the world market to that of England at a corresponding stage 2f development. Not only did the existence of this world market lead to the subjugation of some countries to those of the colonising powers, but those nations newly industrialising took advant- age of the possibilities of participation in the world division of labour which it offered.2° Capi- talism in one country could not exist, and com- petition in the world market was an inevitable extension to the global scene of what happened between capitalists inside each country. It may be noted here, too, that the countries which industrialized after England frequently did so as part of a more or less corscious effort with assistance from the State. In its time, the State had been closely associated with the rise of capitalism in Britain, but the actual industrializa- tion which began in the second half of the 18th century was carried through primarily by indivi- dual entrepreneurs responding to the laws of the market. In Prussia, Russia, Japan and other countries State officials played a prominent or even decisive role in promoting industrialization. Without the model of England and the existence 20 cf. previous note, IDEOLOGIST OF CAPITALISM 31 of the world market their efforts, like those of forerunners in the 18th century, would have been doomed to failure. In the 19th century: it was different: the State could, and did, play an active role.2!_ But what it did, even in Japan, was to give an artificial boost to capitalist development, not to create a new and distinct form of economy. This was done in a variety of ways, by sweeping away restrictions on enterprise, granting tariffs and subsidies, encouraging invention, raising capital, even setting up and running key indus- tries—in short, by providing favourable condi- tions for the development of capitalism. Rostow talks about the State as though it were always an independent force over and above the social and class structure. Indeed, he goes to extremes in the autonomous role which he grants to political and ideclogical forces in economic development. He states that ‘As a matter of historical fact, xenophobic nationalism has been the most important force in the transi- tion from traditional to modern society—vastly more important than. the profit motive.2? “The 21 Many factors contributed to this. To be noted are the further decay of the old feudal structures through the penetr.tion of commodity dealings and the exten- sion of the market—as, e.g., in the decline of serfdom —the corresponding growth of the bourgeoisie and the application of what might be called ‘bourgeois’ tech- niques to government. 22 His examples are not happily chosen. Thus he claims that ‘In Germany it was certainly a nationalism based 07 past humiliation and future hope—the Junkers and the men of the East, more than the men of trade and the liberals of the West—that did the job’ (ie., brought a modern society into existence). The case of Germany was interesting and complicated, but this snap judgment is certainly wide of the mark. Marx and Engels followed events in Germany closely and the latter left an unfinished work with the title ‘Force and Ec nomics in the Establishment of the New German Empir.’ (in French in ‘Le role de Ja violence dans Vhistcire’, Editions Sociales, 1947) which shed a lot of light on the subject and, indeed, fits in with more recent writines. Far from being protagonists of Ger- man nationalism or industrialization the Junkers, as a caste. sought to conserve its privileges in mutual co- operation with the Prussian ruling house. Their revenues fell short of their rising expenditures, despite their transformation into rural capitalists in the 18th century. They were constantly on the edge of an abyss from which they were held back only with State aid (members of the caste dominated the bureaucracy). which made it a ‘proletarian nobility’, ‘parasitic’ and ‘doomed to disappear’, in Engels words. The material means for German industrialization came from the coal, iron and potash deposits developed with English techniques and foreign capital to begin with and with State aid playing a part. The bour- geoisie was certainly the carrier of the national idea against the Junkers. Their defeat in 1848 and subse- auent political impotence left the way clear for 4 different solution: a revolution ‘from above’ effected by means of a civil war. The lecding role was taken

[p018] 52 historical fact’ is no more than the interpreta- tion of some selected facts by Rostow; the con- fident assertion is not backed up by sustained argument. There is, indeed, some retreat, when he states that ‘xenophobic nationalism has not, of course, been the only force at work’. It is typical of his method that he never gets down to assessing its precise role. Like the State, xeno- phobic nationalism seems to hang in the air, to be ‘disembodied’ (to use one of his own terms). Historically nationalism inheres in particular social groups for specific reasons: it does not descend from the skies to refute the materialist conception of history. Nationalism and_ the nation-state arose in close association with emerging capitalism; their special historical achievement was to create the political form within which the capitalist mode of production became dominant. It is true that there was not always and invariably such an association, nor would it be argued that nationalism was only the expression of the political interests of the bourgeoisie. State-building, especially in its earlier stages, was undertaken by dynastic mon- archs in struggle against feudal prerogatives and decentralising elements. Where they failed to link up with a progressive bourgeoisie (e.g., Frederick the Great and Joseph II in the 18th century) the ‘traditional society’ of Rostow’s terminology remained in being. Capitalists have not invariably been nationalist in their profes- sion; at times they have leaned towards an ostens- ible cosmopolitanism, as in the Free Trade move- ment in England in the mid-19th century. Even in the latter case the following of the movement by a Junker, it is true, but he owed his success to his ability to act in the sense of the material needs of German industry—safeguarding his class, but not with its active support, except as officers in the army. When Bismarck completed the task of providing the political and legal basis for German capitalism, in deference to the Junkers many feudal vestiges remained, but these held back, rather than promoted economic growth. The German bourgeoisie was nationalist because its material interests demanded a unified national market. But nationalism, in Germany as elsewhere, attained a certain ‘autonomy’, removed from calculations of direct material interest, let alone individual self-seeking, when it gripped large masses of people. That it continued to be a powerful force, however, can be understood only against the background of the imperialist rival- ries which dom-nated world history from the last 19th century. Germany’s late arrival in the world market, like that of Japan, gave her nationalism a strident, and then (with Nazism) a pathological quality. The fact that it was also all-pervading—witness the pro-war stand of the Social Democratic Party in 1914—does not mean that it was not nurtured by objective, material forces. The links between ‘base’ and ‘superstructure’ are never direct and straightforward; but when their dialectical interplay is studied the material roots can be exposed. LABOUR REVIEW -— June-July, 1960 was attracted by material interests, especially the possibility of getting access to foreign markets. From an abstract ‘rational’ standpoint the material gains from a more effective utilisation of the international division of labour through co-operation would have been greater than the actual contest for the market between States. But capitalism, the bourgeoisie, needed the national State in its struggle against feudalism. As the States-system of the modern world evolved, frontiers, boundaries, customs barriers, national tax, wage and price differences became relevant economic facts. Material interests and nationalism remained closely intertwined, and as capitalism developed its history was marked by wars for the creation of national States and wars between States. Did these wars have economic roots? What of the Marxist-Leninist theory of imperialism? When Rostow considers these questions we can forecast his response. Wars are the result of faulty ‘choice’, a preference for unproductive political over productive economic objectives. There was, in his estimation, no economic basis for imperialism, which he identifies with political annexations in which the flag followed trade,—- unnecessarily and irrationally—for reasons of prestige and the pursuit of power. Thus he asserts that: ‘Nothing justified much ado about colonies on strict economic grounds from (say) 1873 to 1914; but the competition went on be- cause colonies were accepted symbols of status’. Colonies were not acquired only because of an actual or supposed economic value: that is ob- vious enough from a cursory survey of history. What was characteristic of this period, however, was that powerful forces inside the main capital- ist countries were seeking wider and more certain markets, assured supplies of raw materials, new investment fields, as well as strategic positions whose value, if they had any, derived from the international nature of the contest. The theory of imperialism assumes that capi- talism was embodied in nation-states, that a con- tradiction arose between the development of the productive forces within each State and the extent of its market and resources, and that the drive for colonies represented the search for an escape from this dilemma. That the active par- ticipants in and proponents of imperialist expan- sion responded to other immediate stimuli and that these economic drives were cloaked in the ideological trappings of political nationalism, racialism and the ‘white man’s burden’ was oniy to be expected. Rostow’s assertion assumes that economic forces as powerful as those generated by modern industry were somehow tamed and kept in tow by the flag-waving and platform

[p019] NEW IDEOLOGIST OF CAPITALISM 53 rhetoric of politicians and propagandists. CAPITALISM OF A NEW TYPE? Marxists see the struggles of rival imperialist powers in a shrinking world as the source of the world wars of our century. Rostow finds that ‘as far as they have an economic base . . . it lies in the contours of the Eurasian arena of power and particularly in the temptations and fears presented to new mature powers by the transitional societies in Eastern Europe and China’. With such high-sounding phrases and vulgarised geo-politics Rostow brushes the prob- lem aside. For him, ‘ambitious nationalism’, ‘the temptations of power’ (to which Germany ‘succumbed’ in 1914), the existence of ‘soft spots’ or the ‘choice’ by ‘mature societies’ of military expansion rather than other alternatives suffice as explanations. Today, it is happily assumed that the United States, Britain and Western Europe have renounced these temptations and policies. while the Russian leadets still maintain their drive for world hegemony. This division of the world underlies Rostow’s political thinking and we may say that the ‘new’ interoretation of history turns out to be a more sovhisticated apology for the policies of the State Denattment as well as an ideological tustification for cavitalism. While he has heen arguing not with genuine Marxism, but with the rigidly deter- ministic derivation from it which. under Stalin, became the ideology of the Russian leadershin. so his own system shares manv of the short- comines of the system which he is opposing. ‘This is evident not only in his method—the ir- reversible ‘steam-rolline process’ going on with- out human intervention—but also in his view of the world. Just as for Stalin-Khrushchev the world is divided between ‘neace-loving’ and war- like powers. so for Rostow the same division exists, with the signs reversed. America and her allies seek neace, Russia and her’s are bent on world domination. Both for Rostow and his Soviet counterparts any initiative or independ- ence by people outside and against the power systems is just unthinkable. ‘His ‘international policy for the atomic age derives from. his simplified basic assumptions. We mav use the summary which The Econo- mist makes for him because it brings out quite -starklv its true nature. The West, i.e., the capi- talist States. ‘must try to make the choice of at- tempted world domination so unattractive to the ‘Russians as to be unattainable: it must maintain -and reinforce a network of alliances which denies the Russians all the routes to a military break co-exist with other more vrescient remarks. through by military adventures with which they still toy. On the. other hand, and here current summit-climbing comes in, the West must make the choice of a high-consumption society . . . as easy, as natural and as face-saving for Mr. Khrushchev as it can’.23 . It is assumed that in some way, namely by the use of nuclear deterrents, the Russians—i.e., the Khrushchev leadershin—can be made to choose ‘hich mass consumption’ instead of militarv ex- nansion. He speculates about social trends in Russia which make such a shift conceivable.- In fact, however, since Rostow sees in Russia the predominance of the political over the economic; and . new techniaue of nower—as well as a for- midable example for backward countries seek: ino to. indnstrialise—the main stress, as The Foonomist rightly points out, is on military: alli- ances and weanons, which can bring about some alteration in Russian policy. . ~ Rostow does not consider the internal effects of such nolicies in the Western countries. but- he does sive some indication of what he thinks are the unnermost tendencies in modern canitalist economies. To consider these it. is necessarv fo refer ance again to his stages. After industrial- isation has got under wav. the economy passes thronch the stage of maturitv, when, he admits. ‘it behaves in the most Marxist wav’.24 As srowth continues, development is assured into the stase of ‘high consumption’. which asain is arbi- trarilv defined in terms of outont per head.. The use of this desienation makes it nossible to con- ceal the actual vast ineaualities in consumptioa levels within these societies. Consumption is seen throuch the suburban living of the Ameri- can middle class. which sets the vace for the world. Some peonle, of course, lag behind - be- cause of their own fault. There is. for example, the Furonean worker who, between the wars. ‘took only slowlv to the idea that gadgets, travel and other services a mature economy can -afford were reallv for him’. Such fatvous comments do He does not disguise the fact, for examoule, that.in the 1930s the American economy after its ‘pre- ceding surse forward, ‘appeared almost to have stabilised itself at a lower level, when World War TT, like a sort of deus ex machina, restored 23°The Economist’, editorial article, 22 August, 1959. 24 This is a euvhemistic wav of referring to the heavv social costs of capitalist industrialization. During “this nhese of ‘maturity’ societv even becomes ‘a bit bored with the miracle of industrialization’ (what a character- izatinn'!—T.K.) and throws un a crop of déviant ‘per- sonalities. including, inevitablv. our. friend Karl: Marx. Strange that his influence should have. grown,, nat waned. , net:

[p020] 54 full employment’. In fact it has only been kept on an even keel since by further shots in the arm, notably those associated with the spending of the State on armaments. Even Rostow is worried. ‘Unless consumption levels press outwards’, he says, “capacity in consumers’ goods industries and those supplying them will be underused and the impulse to invest will be weak’. In other words, - industry must have markets in which goods can be sold at a profit, otherwise the system will come to a halt. The point at which it does so is not determined by the satisfaction of the all-round needs of the masses, even in the advanced coun- tries—and these needs are not to be identified with ‘gadgetry’.’ Pre-war American consumption levels were lower than those of today, but a . Slump came nevertheless; it was not incapacity to consume but inability to pay which provided the barrier. Of course, consumption under capitalism has risen: there has been a ‘sharing’, though in un- equal proportions-——determined by the social rela- tions of productions—of increased productive capacity. What capitalism cannot do is to plan the rational use of resources for optimum con- sumption: it cannot regulate labour time equit- ably between its members or provide leisure and facilities for the full development of their capaci- ties. It cannot control the effects of a social division of labour in which some men are obiects for attaining the ends of others. It is locked in its own categories and subiects men to them whether thev will or not. Rostow makes a fan- tastic identification between ‘high consumption’. US. style. and the ‘commmnism’ about which Marx wrote. Accordine to one of his statements. ‘the societies of the West have .. . made their wav to the brink of communism without succumbine to Marx’s vroenosis’.25 This is a narodv of Marx which Rostow has nroduced bv falling dupe to his own interpretation: if consnmpfion goes on srowin?. won’t ‘commmnism’ in the sense of abundance. become a realitv? But the con- cern which Ro-tow feels about the limits to mass consumption. his satisfaction that there exist backlogs of neslect in imnortant investment fields or about the ‘extraordinary and unexnected decision of Americans to have more babies*-6 shows that the real nroblem i. whether capital- ism. as Marxists would sav. can go on extractines and realising surolus valne on an exnandineg scale. Since the "thirties this has been nossible because one deus ex machina after another has 25 ‘Economic History Review’. August, 1959. 26 One wonders whether this was a gift of Providence er was the result of the emphasis on sex in American ife. LABOUR REVIEW — June-July, 1960 ensured that markets existed for expanding out- put. Rising consumption was incidental to this and only on a superfical view can define this period of capitalist development. Rostow puts in the foreground the level of out- nut (identified with consumption) which is per- haps the most important feature distinguishing capitalism today from that which Marx knew and analysed. Otherwise, capitalism is still capital- ism and if Rostow had spent any time in examin- ing the relations of production he would have been bound to conclude that in qualitative terms his last three ‘stages’ are indistinguishable. Be- fore he can consume, the worker has to sell his labour power, to work for a boss. While he is at work he is at the boss’s disposal. At the end of the week or month he draws his pay cheque —and if he wishes to draw the next one he has to be at the boss’s disposal at the due time and nlace at the beginning of the next week or month. As his wace makes up the whole of his means of existence he has no other alternative; or rather, those alternatives are open to only a few workers, say. by trvine to secure ‘indenendence’ by open- ine a small shoo or by turnines to crime. What the worker produces is not his own—nor can he decide the tempo or conditions under which he works. Even the union can only modifv these within the limits which the maintenance of the system imposes. For most workers. their labour has been largely severed from interests or a sense of fulfilment. Work has become sepa- tated from life and yet deeply involved with it. What counts is what happens when work ends: the night out. the TV show, the annual holiday, though even here ‘work’ accompanies the worker everywhere and he cannot shake off its shadow. But it is here, in ‘leisure’, that ‘real life’ begins: which is in large part nothing more than the necessarv rest, recuneration and repose of nerves and bodilv tissues without which work would be impossible. If he gets more of it than his father or erandfather this is partly because modern work is more intense. more grinding for bodv and nervous system. And, even so, it has had to he wrested from the purchasers of labour-nower in struegle and not eranted through the inexor- able processes of ‘high consumption society’. Real life begins .. . but ‘real life’ is often far from living up to men’s exvectations: and per- hans for women the problem is worse. And so refuge is taken in the various media of escane purveved as part of the commodity production cf capitalism. Output per head includes, of course. the activities of advertising men, the trade in narcotics of the mind and body, the unwanted and useless gadgets bought under the pressure of the latest sales techniques. The system pours (Continued on page 63)

[p021] Marder by Planning