Letter: The Collapse of Capitalism (1934)

Letter to the Editors from the September 1934 issue of the Socialist Standard

The Collapse of Capitalism

Attitude of the S.P.G.B.

A correspondent (C. L., Victoria, Canada) states that a speaker of the Canadian Co-operative Commonwealth Federation asserts that the attitude now adopted by the S.P.G.B. on the question of the so-called collapse of capitalism is not the attitude adopted before the War. The speaker asks when we changed our view.

First, we ought to explain that the term "collapse of capitalism” is itself used with widely different meanings. Some people have used it as a colourful way of describing the periodical crises into which capitalism falls. So long as it is made clear that nothing more is meant, this use of the phrase is not open to any serious objection. It happened, however, during and after the Great War that the phrase was popularised with a very different meaning. The American writer, Herman Cahn, in his “The Collapse of Capitalism” and “Capital To-day,” revived and elaborated the theory that capitalism, through the development of its own contradictions, would reach a stage of final, devastating physical collapse. The particular feature Cahn seized upon was the growth of the cheque system, and the war-time currency inflation which he saw going on in various countries. He not only forecast the collapse of capitalism but was rash enough to give it a date.

Writing apparently in or about the year 1917, he said: —

Its. (i.e., capitalism’s) downfall, root and branch, will be positively assured by a continuation of the war for, say, another year. That downfall will then be like an act of nature, and not dependent on the mental and moral preparation of the peoples of the world for a new form of society which must, perforce, be completely social. (Page 38, “Collapse of Capitalism.”)

He did not, however, tie himself down to the continuance of the War, but added (page 118) that, war or peace, the “days of the rule of gold are numbered,” and with it the days of capitalism also. If war went on, capitalism’s downfall would be early and sudden. If war ended, there would be a “lingering death struggle.”

The broad idea that capitalism in one of its periodical crises might come to a point of collapse in the sense of chaos or a complete stoppage of production, is a very old one. Its principal danger (apart from its misreading of crises and the ability of the capitalists to muddle through) is brought out strikingly in the point which Cahn strongly emphasised. Throughout his writings, and in the writings of leading Communists in the early post-war years, the point is constantly made that the early and inevitable collapse had made Socialist propaganda and the conversion of the majority, to Socialism unnecessary and useless. The catastrophe, they said, was already about to break over us. There was no time for educating the workers. All that we could do was to! seize the “psychological moment” when it came, and lead the blind masses to Socialism with or without their knowledge and consent. In the cant phrase of 'the time the revolution was (and still is) just round the corner.

With that preliminary explanation we can now answer the questions about the S.P.G.B.’s attitude. On the major question, the impossibility of achieving Socialism without first convincing a majority of the population, the S.P.G.B. has never at any time held any view but the one it holds now. Right from the first issue of The Socialist Standard, that, more than almost any other point, divided the'S.P.G.B. from the other parties calling themselves Socialist. Never at any time did the S.P.G.B; accept the notion that Socialism could be forced on a non-Socialist population by leaders taking advantage of discontent during a crisis. See, for example, the answer given in The Socialist Standard in August, 1905, to a correspondent who had said that the S.P.G.B.’s attitude could be summed up as, “Preach economic considerations as the sole factor in social development, and wait until the crash comes.” The reply given to him was that this was “decidedly not the policy of the S.P.G.B. . . . It is inevitable that economic development will bring things to a crisis, but whether from out of this crisis will arise the Socialist Commonwealth depends upon whether sufficient of the working class have been made Socialists, and have been class-consciously organised.”

Whether or not the phrase ”collapse of capitalism” was used by writers in The Socialist Standard in the pre-war years, we are unable to say. If it was used it would always be against the background of the above contention that there could be no Socialism without an organised Socialist working-class; for that point was always being made and it is certain that no writer could have held any other view. What is possible is that some members of the S.P.G.B. in the early years had never had occasion to consider closely the question whether or not a crisis of capitalism could properly be called a “collapse,” in the sense used by Cahn and the Communists later on. That being so, there may be expressions used in early articles, which reflect the writer’s lack of definiteness on the point. We have, however, not been able, so far, to find any. It must be remembered in this connection that the S.P.G.B. does not claim that, with the formulation of its Declaration of Principles in 1904, it had reached definite and final conclusions on all the aspects of capitalism and Socialism. All that was aimed at was the indispensable minimum which would constitute a sufficient basis for a Socialist Party. Nothing has occurred to warrant departing from the Declaration of Principles, but the members of the Party, in the course of years, have been able to clarify and extend their knowledge over a much wider range of subjects, for they have had the advantage of the knowledge of the men who formed the Party, and have been able to study many phases of capitalism (e,g., a world war) which had not occurred within the lifetime of the founders. 

It was not until the end of the War that the idea of a catastrophic collapse had its rebirth and popularity, and it is therefore only natural that the present member of the S.P.G.B. knows more of these theories and is better informed and more definite as to their fallacies than was the average member before the War. If, however, the question had been raised before the War in its post-war form, there is no doubt whatever what the answer would have been.

ED. COMM.

Blogger's Notes:

I'll take an educated guess that "C. L., Victoria, Canada" was Chris Luff. If it was him, he was still politically active well into his 90s. He's mentioned in a report of two SPGBers visiting comrades in North America, which appeared in the March 1977 issue of the Socialist Standard.

At first glance there's not a lot of information about Herman Cahn on the internet. No wiki page, no material over at the Marxist Internet Archive. However, I did find the following brief biographical sketch about him over at Libcom:

"Not much is known about the forgotten Marxist theorist Herman Cahn. He probably lived somewhere between 1850–1930. He migrated from Germany to the United States as a young adult. He was a founding member of the Socialist Party in 1901. His daughter Anita C. Block (1882–1967) helped found the socialist New York Call. He was on the leftwing during the war (i.e. not a pacifist). Cahn's book Capital to-day; a study of recent economic development (1918) was called by Mary Marcy 'the most momentous contribution to an analysis of capitalist society since Marx' . . . 

. . .  It is like an American version of Hilferding's Finance capital; a study of the latest phase of capitalist development. He further wrote The collapse of capitalism (1919). His theory of money was clearly inspired by Hilferding's (which was a revision of Marx's)."