Late capitalism

Late capitalism is a concept first used in print (in German) by German social scientist Werner Sombart in 1928 to describe the emerging capitalist system at that time. The expression already existed for four decades in continental Europe, before it gained popularity in the English-speaking world via translations of German Critical Theory texts and especially via Ernest Mandel's book Late Capitalism published in English in 1975. For many authors since that time, the historical epoch of late capitalism begins with the outbreak of world war 2 in 1939/1940 and includes the post–World War II economic expansion, the era of neoliberalism and globalization, the Great Financial Crisis and their aftermath in a multipolar world society.

Ernest Mandel's book tried to provide an orthodox Marxist analysis and an empirically-based explanation of the postwar epoch in terms of Marx's theory of the laws of motion of the capitalist mode of production. In part, Mandel's analysis was a critique of Henryk Grossmann's breakdown theory, according to which capitalism would collapse after a series of business cycles. Mandel argued that important qualitative changes occurred in the functioning of the capitalist system during and after World War II. Between the sequence of business cycles and the ultimate collapse of capitalism, Mandel argued, there were epochs of faster and slower economic growth typically lasting 20 to 25 years. In several publications, Mandel analyzed the dynamics and results of the unexpected post-war boom, the long world recession of 1973 to 1982, the third world debt crisis, the 1987 stock crash and the long-term systemic crisis of late capitalism, as basis for his projections about the long-term prospects of world capitalism in the future.

History of the term

The term "late capitalism" (Spätkapitalismus) was first used by Werner Sombart in a 1928 publication after he had completed his three-volume magnum opus Der Moderne Kapitalismus ["Modern Capitalism"], which was published from 1902 through 1927 (only the first volume of Sombart's Modern capitalism has been translated into English so far.). Sombart divided capitalism into different historical stages:

• Proto-capitalist society from the early middle ages up to 1500 AD.
• Early capitalism in 1500–1800.
• The heyday of capitalism (Hochkapitalismus) from 1800 to World War I.
• Late capitalism since then.

Concluding his 1928 Zürich lecture on the transformations of capitalism, Sombart stated:

"Today we stand in a new epoch. It is obvious that [the beginning of] this new epoch will be defined by the [first] World War. What this period is called is to an extent arbitrary, although of course some names will be more appropriate in a given situation than others. I have suggested the term "late capitalism", because I know of no other expression which characterizes this era better. I hope that this term will be well-received; I am aware, of course, of how much aversion there is, particularly among academic colleagues, to accept strange new terminology – as Max Weber once put it: "as if it were a question of using foreign toothbrushes." There is always a possibility that other expressions will prevail. But what is most important is not the name, but the phenomenon itself, the thesis that this is a new era of economic life, and, the issue of the characteristics of this era. If agreement can be reached about that, I would consider my task fullfilled.

Vladimir Lenin famously declared in 1920 that there are no "absolutely hopeless situations" for capitalism; short of an anti-capitalist political revolution, the system could always recover sooner of later. The Communist International declared that with the first World War, a new world epoch of wars and revolutions had opened, and it defined state monopoly capitalism as the highest and final stage of capitalism.

The term "late capitalism" began to be used by socialists in continental Europe in the 1930s and 1940s. At the end of World War II, leading economists believed that the economic problems might become insurmountable. In their book Capitalism since World War II, Philip Armstrong, Andrew Glyn and John Harrison comment that:

"Paul Samuelson, who later wrote the bestselling economics textbook published in the postwar years, raised in 1943 the probability of a 'nightmarish combination of the worst features of inflation and deflation', fearing that 'there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced' (Samuelson, 1943, p. 51). He was speaking, it should be remembered, about the United States, which was relatively unscathed by hostilities. […] Joseph Schumpeter, an eminent economist, summed up the mood of alarm of the early forties: 'The all but general opinion seems to be that capitalist methods will be unequal to the task of reconstruction,' He regarded it as 'not open to doubt that the decay of capitalist society is very far advanced' (Schumpeter, 1943, p, 120)."

The term was used in the 1960s in Germany and Austria, by Western Marxists writing in the tradition of the Frankfurt School and Austromarxism. Leo Michielsen and Andre Gorz popularized the term "neo-capitalism" in France and Belgium, with new analyses of post-war capitalism. Jacques Derrida preferred neo-capitalism to post- or late-capitalism. Theodor Adorno preferred "late capitalism" over "industrial society," which was the theme of the 16th Congress of German Sociologists in 1968. In 1971, Leo Kofler published a book called Technologische Rationalität im Spätkapitalismus (Technological Rationality in Late Capitalism). Claus Offe published his essay "Spätkapitalismus – Versuch einer Begriffsbestimmung" (Late Capitalism—an Attempt at a Conceptual Definition) in 1972. In 1973, Jürgen Habermas published his Legitimationsprobleme im Spätkapitalismus (Legitimacy problems in late capitalism). In 1975, Ernest Mandel published his PhD thesis Late Capitalism in English at New Left Books. Herbert Marcuse also accepted the term.

Continental and Anglo-saxon historians sometimes refer to late bourgeois society in contrast to early bourgeois society in the 17th and 18th century, or classical bourgeois society in the 19th and early 20th century.

Immanuel Wallerstein believed that capitalism was in the process of being replaced by another world system. The American literary critic and cultural theorist Frederic Jameson thought Rudolf Hilferding's term the latest stage of capitalism (jüngster Kapitalismus) perhaps more prudent and less prophetic-sounding but Jameson often used "late capitalism" in his writings. Hegel's theme of "the end of history" was rekindled by Kojève in his Introduction to the Reading of Hegel. In modern usage, late capitalism often refers to a new mix of high-tech advances, the concentration of (speculative) financial capital, post-Fordism (transition of mass production in huge factories, as pioneered by Henry Ford, towards specialized markets based on small flexible manufacturing units), and a growing income inequality.

Ernest Mandel

According to the Marxist economist Ernest Mandel, who popularised the term with his 1972 PhD dissertation, late-stage capitalism will be dominated by the machinations—or perhaps better, fluidities—of financial capital; and also by the increasing commodification and industrialisation of ever more inclusive sectors of human life. Mandel believed that "[f]ar from representing a 'post-industrial society', late capitalism [...] constitutes generalized universal industrialization for the first time in history".

Up to the mid-1960s, Mandel preferred to use the term "neo-capitalism", which was most often used by intellectuals in Belgium and France around that time. This term drew attention to new characteristics of capitalism, but at the time ultra-leftist Marxists objected to it, because, according to them, it might suggest that capitalism was no longer capitalism, and it might lead to reformist errors rather than the overthrow of capitalism.

In his work Late Capitalism, Mandel distinguished three periods in the development of the capitalist mode of production.

• Freely competitive capitalist production, roughly from 1700 to 1870, through the growth of industrial capital in domestic markets.
• The phase of monopoly capitalism, roughly from 1870 to 1940, is characterized by the imperialist competition for international markets, and the exploitation of colonial territories.
• The epoch of late capitalism emerging out of the Second World War, which has as its dominant features the multinational corporation, globalized markets and labor, mass consumption, and the space of liquid multinational flows of capital.

In the tradition of the orthodox Marxists, Mandel tried to characterize the nature of the modern epoch as a whole, with reference to the main laws of motion of capitalism specified by Marx. Mandel's aim was to explain the unexpected revival of capitalism after World War II, contrary to leftist prognostications, and the long economic boom which showed the fastest economic growth ever seen in human history. His work has produced a new interest in the theory of long waves in economic development.

Fredric Jameson

Main article: Fredric Jameson

Fredric Jameson borrowed Mandel's vision as a basis for his widely cited Postmodernism, or, the Cultural Logic of Late Capitalism. Jameson's postmodernity involves a new mode of cultural production (developments in literature, film, fine art, video, social theory, etc.) which differs markedly from the preceding era of Modernism, particularly in its treatment of subject position, temporality and narrative.

In the modernist era, the dominant ideology was that society could be re-engineered on the basis of scientific and technical knowledge, and on the basis of a popular consensus about the meaning of progress. From the second half of the 20th century, however, modernism was gradually eclipsed by postmodernism, which is skeptical about social engineering and features a lack of consensus about the meaning of progress. In the wake of rapid technological and social change, all the old certainties have broken down. This begins to destabilize every part of life, making almost everything malleable, changeable, transient and impermanent.

Jameson argues that "every position on postmodernism today—whether apologia or stigmatization—is also...necessarily an implicitly or explicitly political stance on the nature of multinational capitalism today". A section of Jameson's analysis has been reproduced on the Marxists Internet Archive. Jameson regards the late capitalist stage as a new and previously unparalleled development with a global reach—whether defined as a multinational or informational capitalism. At the same time, late capitalism diverges from Marx's prognosis for the final stage of capitalism.

Modern usage of the phrase and further evolution

According to a 2017 article in The Atlantic, the term "late capitalism" was then again in vogue to describe modern business culture.

See also

• Advanced capitalism
• Crisis theory
• Criticism of capitalism
• Late modernity
• Periodizations of capitalism
• Post-capitalism
• Post-industrial society

Further reading

• Jacques Derrida, Specters of Marx (1994)
• Chris Harman : Mandel’s Late Capitalism (July 1978)
• Fredric Jameson, "Culture and Finance Capitalism" Critical Inquiry 24 (1997) pp. 246–65
• Kotsko, Adam (2018). Neoliberalism's Demons: On the Political Theology of Late Capital. Stanford University Press. ISBN 978-1503607125.
• Paul Mattick : Ernest Mandel’s Late Capitalism (1972)
• Immanuel Wallerstein. The Essential Wallerstein (New York: The New Press, 2000), World-Systems Analysis: An Introduction (Durham: Duke University Press, 2004).

External links

• Youtube late capitalism FAQ video by The Atlantic