REMARKABLY enough, Marx and Engels did not use the term capitalism in the Manifesto. They preferred expressions like “bourgeois society”, “our epoch, the epoch of the bourgeoisie” and presented the whole discussion in terms of class struggle between the basic classes of this era: the bourgeoisie and the proletariat, depicting in the process the essential features and tendencies of capitalism.

They saw these features and tendencies as inseparable parts of a composite whole, but different people with different class viewpoints have tended to pay one-sided attention to this or that element, missing the wood for her/his favourable tree. Thus the World Bank in its 1996 World Development Report and Thomas Friedman in the 1999 bestseller The Lexus and the Olive Tree quoted select passages from the Manifesto on globalisation, with great appreciation, to describe the present world economy. What they chose not to look at was the discussion on inevitability of crises under capitalism.

The 1848 document brilliantly captures the motion of capitalism in the dialectical unity of its two opposite tendencies: towards global supremacy propelled by the most rapid and continuous development of productive forces on one hand, and on the other, recurrent, ever deeper crises brought about by the conflict of the expanding productive forces with the constricted relations of production.

And sure enough, this analytical framework has proved to be eminently useful for understanding bourgeois societies in the 19th, 20th, and 21st centuries. Let us consider the two sides of the same historical process one by one.

A corollary of the rapid growth of productive forces, the Manifesto observes, is a striving towards centralisation and concentration of economic and political power: “giant, modern industry” in place of manufacture, “the industrial millionaires” in place of “the industrial middle class”, “centralised means of production, and... concentrated property in a few hands”, “political centralisation” as a “necessary consequence” of this, and so on. This trend continued to grow and, as Lenin demonstrated about 70 years later in Imperialism, the Highest Stage of Capitalism, culminated in a global system of imperialism or monopoly capitalism – a qualitatively new and so far the highest stage of capitalism. Today, another hundred years on, we see a new phase of the imperialist stage of capitalism – neoliberalThe prefix ‘neo’ alludes to the emphatic return to liberal capitalism freed from the government interference imposed during the quarter-century of post-war welfare statism and social democracy. The latter represented a compromise thrust upon old-style laissez-faire capitalism by advancing waves of mass movements and the growing appeal of socialism. A whole range of measures were adopted, such as free/subsidised education, employment guarantee and unemployment benefits, vital services like transportation, communications etc. provided through a non-profit public sector, a considerable degree of state control on economic affairs, and so on. All these together provided capitalism – ailing if not moribund – with a new lease of life, as it were. The inevitability of periodic crises was, of course, still a law of capitalism and when it struck in the 1970s, the most powerful sections of the bourgeoisie ventured upon a rollback of welfare statist/social democratic measures and restoration of a new, more aggressive version of liberalism or market fundamentalism. globalisation.

Whereas in Marx and Engels’ time the principal vehicle of the globalising thrust was old-style colonialism, in our century the latter has been replaced by modern imperialism and neo-colonialism. The change from crude direct rule to more and more sophisticated indirect rule has been associated with a shift of emphasis from merchandise export to export of capital and the emergence of monopolies in all sectors of the economy and particularly the rise of an all-powerful financial oligarchy.

The change was succinctly described by Lenin mid-way through the period which separates us from the Manifesto: “It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital, is separated from the entrepreneur.... Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The predominance of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy”, and of “a small number of financially powerful states”. (Imperialism)

This “separation” of “money capital... from industrial capital” has by now grown much deeper, with international finance almost freed from its moorings in production and thriving on speculation in share, commodity and currency markets, investment banking and insurance, real estate, etc.

Similarly, while Marx and Engels point out that the expansion of the bourgeois order from the West to the East makes the latter dependent on the former, in our century this dependence has been perpetuated and perfected as “development of underdevelopment”. Through devices such as unequal exchange, selective discriminatory protectionism and the lure of debt trap, the larger part of “the East” – or the Third World in today’s terminology – has been systematically developed into a vast region of retarded, deformed, half-baked capitalism catering to the interests of the metropolitan centres.

Writing in 2008, Michael Löwy gave a lively picture of the advanced stage globalisation has now reached:

“In fact, capital has never succeeded as it has in the 21st century in exerting a power so complete, absolute, integral, universal and unlimited over the entire world. Never in the past was it able, as today, to impose its rules, its policies, its dogmas and its interests on all the nations of the globe. International financial capital and multinational companies have never so much escaped the control of the states and peoples concerned. Never before has there been such a dense network of international institutions – like the International Monetary Fund, the World Bank, the World Trade Organisation – devoted to controlling, governing and administering the life of humanity according to the strict rules of the capitalist free market and of capitalist free profit. Finally, never at any time prior to today, have all spheres of human life – social relations, culture, art, politics, sexuality, health, education, sport, entertainment – been so completely subjected to capital and so profoundly plunged into the “icy water of egotistical calculation”. (The Communist Manifesto 160 Years Later)

But this full-spectrum domination of capital has been accompanied by an unprecedentedly universal spread of the crisis (during the last comparable crisis in the 1930s, the Soviet Union remained outside its pale).For a relatively detailed discussion of the latest outbreak of capitalist crisis, see our trilogy Capital in Crisis: Causes Implications and Proletarian Response (2009); Crisis of Neoliberalism and challenges before Popular Movements (2013) and India in the Grip of Deep Economic Crisis: Causes and Quests for Solution (2014). The twofold contradictory tendencies of capitalism noted above are thus most conspicuous today.

Closely related to this there is another and perhaps even more important tendency inherent in this mode of production. The very methods on which capital relies for overcoming recurrent crisis, the Manifesto tells us, are precisely the ones that pave the way for more destructive crisis and reduce the means available for preventing them in future. This is also proving to be truer than ever.

The two basic methods capital resorts to are: “conquest of new markets” and “more thorough exploitation of the old ones” (Section I). But capitalism is now a universal system in economic terms, so there is no further scope for external expansion by old methods like colonising new regions or prising the markets of (erstwhile) socialist countries. The only way traditionally available to global capital was unprecedentedly more intensive exploitation of old markets by various means such as enhanced market penetration into personal and social life with commodities like mobile phones and other electronic gadgets, various lifestyle products, social net-working services, etc. However, such expansion of commodities and services catering to expanding human needs is not enough to satisfy capital’s growing hunger for profit. So new techniques had to be adopted, both in the global North and the global South.

In the former, the principal instruments were financialisation and speculative activities as major sources of profit and easy credit as a means to promote effective demand even as wage levels are kept low. In the South, especially the so-called “emerging economies” including our country, the foremost weapon was LPG (Liberalisation-Privatisation-Globalisation) which ensured for big capital, indigenous and foreign, hefty profits and asset accumulation by dispossessing the people and the nation.

But in both the North and the South, the temporary boost to GDP growth provided by these measures were more than offset by dangerous ‘side-effects’ like rising inequality, growing disconnect between the swelling financial sector and the stagnating real economy and so on, eventually leading to the crisis that began to spread around the world from ‘the most successful’ capitalist economy in 2007-08.

This latest round of periodic crisis is evidently proving to be exceptionally prolonged and deeply structural, reminding us of the Manifesto’s observation that crises “by their periodical return put on trial, each time more threateningly, the existence of the entire bourgeois society” (Section I). In such hopeless circumstances the highest and leading echelons of the bourgeoisie, while doggedly continuing with the strategy of financialisation, are now relying more and more on redistribution of incomes and wealth – inter-class (from producers of surplus value to its appropriators, more generally, from the poor to the rich and the upwardly mobile middle classes), intra-class (from lower to higher to the highest strata of the bourgeoisie by way of centralisation/monopolisation as well as a slew of other measures), from peripheries of the global economy to the centre (from underdeveloped nations to metropolitan countries).

But this is manifestly furthering recessionary trends in rich as well as poor countries. In fact the triad of the bourgeois order today – North America, Western Europe and Japan – is in the grip of what John Bellamy Foster and Robert W. McChesney have called the stagnation- financialisation trap (See “The Endless Crisis”, Monthly Review Press). Early this year (2014) Christine Lagarde, managing director of IMF, even went to the extent of ringing the alarm bell about the threat of deflation – the dreaded ogre that wrought havoc in the US in the early 1930s.

So much for globalisation and the crisis of capital. In these vital respects, capitalism has no doubt changed a lot, but mainly in the direction indicated in the Manifesto.

The other most important characteristic of the bourgeoisie/the bourgeois order lies in its revolutionary role. We are used to viewing this generally in the historical fact of replacement of the outmoded feudal order by a relatively advanced socio-economic system; for Marx and Engels this role lay also, and above all, in the creation of both the material and cultural foundations for communism and the class force capable of realising this great transformation. The Manifesto gives us a fairly detailed analysis of the process involved.

The bourgeoisie cannot exist without constantly revolutionising, the Manifesto states, (a) “the instruments of production” (machines, skills and technologies); (b) “and thereby the relations of production” (basic relations among all economically active men and women, e.g., capitalists and workers, which together constitute the economic structure of a particular society); (c) “and with them the whole relations of society” (familial, cultural, political). For instance, the rule of money and “egotistical calculations” turn love, dignity, family ties and knowledge into objects to be bought and sold, while “exploitation, veiled by religious and political illusions”, is substituted by “naked, shameless, direct, brutal exploitation”. More important, these are not one-time changes. Constant flux in all realms is a basic, inalienable feature of the bourgeois epoch (Section I).In this dynamism, we could add in the light of post-Manifesto experience, lie the basic strength of capitalism, as also the source of many a new contradiction.

But how about the reactionary side of the bourgeoisie? Two things are notable here. First, the Manifesto, never intended to be a comprehensive critique of the emerging bourgeois order, does not go into all its imperfections, deviations and distortions. Thus, cheap commodities are singled out as “the heavy artillery” with which the East was won, but there is only a veiled hint – “expeditions” – at the physical torture and real guns widely used for the same purpose. There is, again, no mention of the physical violence and cultural coercion involved in the metropolitan bourgeois project of “create[ing] a world after its own image”.

Some of such omissions might be due to lack of information and the compulsion to keep the text short, but mainly they seem to be deliberate. The intention probably was to hammer home the principal aspect: the transformational role of the bourgeoisie, which has made the world ripe for another, and more fundamental, transformation.

Second, while the authors were well aware of the lack of capitalist development in much of the West (cf. Engels, The Civil War in Switzerland (1847), Collected Works of Marx and Engels, Vol. VI) the real reactionary/conservative/counterrevolutionary role of the bourgeoisie came into full view only during and after the revolutions of 1848, i.e., after the Manifesto was written. Marx was quick to take note of this in The Bourgeoisie and the Counter-revolution (Selected Works of Marx and Engels, Vol. I). Written in the same year (December 1848) in almost the same style, it contains a very strong indictment of the bourgeoisie that could well be read as an epilogue or afterword to the Manifesto:

“The Prussian bourgeoisie reached the political summit, not by means of a peaceful deal with the Crown, as it had desired, but as the result of a revolution. It was to defend, not its own interests, but those of the people – for a popular movement had prepared the way for the bourgeoisie – against the Crown, in other words, against itself. …

“The March revolution in Prussia should not be confused either with the English revolution of 1648 or with the French one of 1789.

“In 1648 the bourgeoisie was allied with the modern aristocracy against the monarchy, the feudal aristocracy and the established church.

“In 1789 the bourgeoisie was allied with the people against the monarchy, the aristocracy and the established church. …

“In both revolutions the bourgeoisie was the class that really headed the movement. …

“The revolutions of 1648 and 1789 were not English and French revolutions, they were revolutions in the European fashion. They did not represent the victory of a particular social class over the old political system; they proclaimed the political system of the new European society. The bourgeoisie was victorious in these revolutions, but the victory of the bourgeoisie was at that time the victory of a new social order, the victory of bourgeois ownership over feudal ownership, of nationality over provincialism, of competition over the guild, of partitioning [of the land] over primogeniture, of the rule of the landowner over the domination of the owner by the land, of enlightenment over superstition, of the family over the family name, of industry over heroic idleness, of bourgeois law over medieval privileges. The revolution of 1648 was the victory of the seventeenth century over the sixteenth century; the revolution of 1789 was the victory of the eighteenth century over the seventeenth. These revolutions reflected the needs of the world at that time rather than the needs of those parts of the world where they occurred, that is, England and France.

“There has been nothing of this in the Prussian March revolution.

“...Far from being a European revolution it was merely a weak repercussion of a European revolution in a backward country. Instead of being ahead of its century, it was over half a century behind its time. ...It was not a question of establishing a new society, but of resurrecting in Berlin a society that had expired in Paris. ...”From Marx/Engels Internet Archive, accessed on 30th March, 2014.

Such counterrevolutionary traits continued to grow, and after the Paris Commune and the Russian revolution they became the predominant feature of the bourgeoisie. To save itself from the sporadic but mighty advances of the working people, the bourgeoisie recoiled completely from its revolutionary disposition and joined hands with the reactionary forces and trends like feudalism, religious fanaticism, racism etc. On a world scale, imperialism under the rule of finance capital became the vehicle of decadence and reaction. In countries like India and China comprador capitalism emerged in close alliance with feudalism and colonialism. Europe witnessed fascism – first as a campaign and then in power. Later the so-called “Asian tigers” and some other countries like India saw the emergence (and crisis) of crony capitalism. In recent decades, the official secular religion of neoliberalism spread – from the West across the world – in covert connivance with ultra rightist trends like neo-fascism, communalism and the like.

We are thus living in a world where spectacular progress in production, communications and all branches of science and technology go hand in hand with arch-reactionary trends in economics, politics and culture and alarming ecological degradation. While there can be no two opinions about such achievements of the bourgeois epoch as the internationalisation of intellectual-cultural creations of different nations, a certain erosion of national narrow-mindedness among the people etc. (as mentioned in Section I), we cannot therefore ditto the Manifesto where it speaks of vanishing national antagonisms and things like that. In the age of imperialism, probably no less important, if not the main trend, is the non-fulfilment of many of the lofty promises of the dawn of the bourgeois epoch – in fact a certain regression from its initial achievements.

Now for another characteristic feature of this social order, as observed by the authors of the Manifesto: “society as a whole is more and more splitting up into two great hostile camps – the bourgeoisie and the proletariat.” In this sense, they held, this era “has simplified the class antagonisms.” How far do these observations correspond with the present-day reality?

The Manifesto defines “the proletariat, the modern working class” as “a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.” Engels’ Principles of Communism (1847) also defines it as “that class of society which procures its means of livelihood entirely and solely from the sale of its labour and not from the profit derived from some capital.”

Apart from substituting for sale of “labour” the more correct expression “labour power”, Marx and Engels never changed this definition. And it clearly covers ordinary employees (excluding the top state functionaries, corporate executives etc. who earn enough to become capitalists and whose incomes usually include large dividends from shares, interests from other investments etc), including computer-operators in offices, banks etc., who live by selling their (intellectual) labour power. When these sections, including workers in the huge informal sector – agriculture and allied sectors in our country, for example – are counted, their numbers are growing, certainly in absolute numbers and probably also as percentage of the population in many countries. Our country for instance has witnessed in recent decades a great expansion of the rural proletariat including, but not limited to, agrarian labourers. Many Latin American countries are experiencing a noticeable growth in the number of rural proletariat thanks to the spread of commercial agriculture under the auspices of foreign corporations. Moreover, primitive (according to some scholars, a more correct word for the German original would be primary) accumulation of capital – a spreading menace across the third world today – is leading to fresh additions to the ranks of proletariat, mainly the industrial reserve army, from various categories of petty producers/self-sustaining poor people such as the adivasis in our country.

To be brief, in the broad sense of buyers and sellers of labour power, this process of polarisation has generally (with some exceptions, that is) and in a somewhat modified form continued since the nineteenth century, gaining in the 21st a new political expression in the slogan “ the 99% against the 1%”.

Still, the Manifesto’s observation needs to be qualified on at least three counts. First, in all countries we find a very large number of self-employed persons – from small traders to street vendors and hawkers, and from small/middle peasants to various professionals. Secondly, stratification within the camp of wage and salary earners has grown appreciably. The conditions of work and life styles of workers differ widely across various sectors even in the same country: for example in rural and urban occupations, in sunset and sunrise industries, in blue collar and white collar jobs, in formal and informal sectors.

Thirdly, non-class identities like gender, race, nationality, caste etc. have emerged as important bases for various kinds of mobilisations against dominant social forces. This relates in some cases to the nature of capitalism itself (its historic and continuing reliance on patriarchy and racialised imperialism for example), and in others to its uneven development and the various specific historical alliances between capitalism and pre-capitalist and retrograde forces. Marxists therefore now have to engage with and wherever possible contribute to these movements for social justice, demonstrating how these forms of oppression are related to capitalism, alongside and as part of their basic task of promoting and guiding class struggle.