Late capitalism
후기자본주의
A Marxist concept that treats capitalism after the Second World War as a new stage. The German sociologist Werner Sombart first used it in 1925, and from the 1930s to the 1970s European socialists and the Frankfurt School used it for post-war state-regulated capitalism. In Late Capitalism (1972) Ernest Mandel theorised it as a new phase within the epoch of imperialism, marked by the multinational corporation, the third technological revolution, permanent inflation and the growing economic role of the state. Mandel's "late" meant something like belated renewal rather than imminent death.
In depth
After the free-competition capitalism of the nineteenth century analysed by Marx and Engels, and the monopoly capitalism and imperialism of the early twentieth century analysed by Lenin, what changed again in capitalism after the Second World War? "Late capitalism" is a name for the answer. The first to use it was the German social scientist Werner Sombart, who in 1925 applied it to the new social order emerging after the First World War, which he saw as a new stage in the history of capitalism. Beyond brief comments and outlines, however, Sombart never provided a systematic theory.
From the 1930s to the 1970s European socialists used the term for a new form of state-regulated capitalism, with a meaning similar but not identical to the Marxist-Leninist theory of state monopoly capitalism. The Frankfurt School used it too. Theodor Adorno preferred "late capitalism" to "industrial society", the theme of the 1968 congress of German sociologists, and Jürgen Habermas published Legitimation Problems in Late Capitalism in 1973. For Habermas, state intervention to fill the gaps in the market's functioning had become the key political question of late capitalism.
The Belgian Trotskyist economist Ernest Mandel made the concept a comprehensive Marxist economic theory. He published his 1972 doctoral thesis for the Free University of Berlin as Der Spätkapitalismus, and the English edition of 1975 spread the term in the English-speaking world. The French edition was titled The Third Age of Capitalism. In his introduction Mandel wrote that one of the book's central purposes was "to provide a Marxist explanation of the causes of the long post-war wave of rapid growth in the international capitalist economy, which took both non-Marxist and Marxist economists by surprise", and at the same time to establish the inherent limits of that period, which ensured it would be followed by a long wave of social and economic crisis with a far lower rate of growth.
Mandel divided the history of the capitalist mode of production into three stages: freely competitive capitalism, roughly 1700–1870; monopoly capitalism, roughly 1870–1940, marked by imperialist competition for international markets, the export of capital and colonial exploitation; and late capitalism, which emerged from the Second World War. Its dominant features are the multinational corporation, globalisation, consumerism, decolonisation and increasingly internationalised financial markets, along with corporate self-financing, a great expansion of foreign direct investment and global systems regulating credit, currencies, commodities and capital assets. Mandel did not abandon Lenin's analysis of imperialism but modified it in the light of post-war reconstruction, decolonisation and the political impact of Stalinism. For him "late" meant that, contrary to interwar expectations, the labour movement had suffered heavy defeats and world capitalism had unexpectedly and belatedly gained a new lease of life.
Mandel explained the mechanisms of the period in turn. Its point of departure was the radical improvement in the conditions for the valorisation of capital that followed the historic defeats of the working class by fascism and war. On that basis came the "third technological revolution", typified by atomic energy, electronics and automation; the life cycle of fixed capital shortened and technical innovation accelerated, so that rents from innovation became the main form of monopolistic surplus profit. Late capitalism's new "solutions" to the problem of realisation were permanent inflation and a new trade cycle combining the classical industrial cycle with a "counter-cycle" of credit expansion and contraction. Mandel wrote that "far from representing a 'post-industrial society', late capitalism [...] constitutes generalized universal industrialization for the first time in history", turning even human services into industrial commodities. At the same time the role of the state in the economy and society kept growing.
In the book's last chapter Mandel defined late capitalism as "the epoch in history of the development of the capitalist mode of production in which the contradiction between the growth of the forces of production and the survival of the capitalist relations of production assumes an explosive form". The system, he argued, could no longer use a substantial part of its productive capacity under "normal" conditions of stable gold values, that is, without permanent inflation of credit and money. He expected the end of the long wave of post-war expansion and the intensified struggle over the rate of surplus value from the late 1960s to bring a worldwide sharpening of class conflict. The analysis is the companion of his long-wave theory. In the same book Mandel criticised Henryk Grossmann's breakdown theory and the methods of Hilferding, Luxemburg, Bukharin, Bauer, Kalecki and Bettelheim, each of whom, he argued, reduced the problem to a single factor.
Mandel's influence spread beyond economics. The American literary critic Fredric Jameson, partly inspired by Mandel, interpreted postmodernism in Postmodernism, or, the Cultural Logic of Late Capitalism as a new mode of cultural production in the age of multinational capitalism. In the twenty-first century the term came back into vogue in English-language popular culture; as The Atlantic noted in 2017, it is now often an ironic term for the absurdities of modern business culture, a meaning quite different from Mandel's economic theory.