The Catastrophic Failure of the Theory of “Catastrophism” (Part 4)


Note of the Editorial Board: This chapter contains figures which can only be viewed in the pdf version (download here).



Permanent Collapse? No, there is Collapse and Collapse




The PO is well known for emphasizing the collapse – or rather the “bankruptcy” or “catastrophe” – of capitalism. They have done so since many decades. They openly brag to differentiate themselves from other “Trotskyist” organizations by adhering to their idiosyncratic theory of “catastrophism”.


However, by doing this they transform a historical tendency (towards breakdown) which articulates itself in different periods in different ways into a static picture of a capitalist world system which is about to literally decompose at any given minute. This is like proclaiming an aging person, who indeed is about going to die at some point, as already being dead. Needless to say that such an assessment is pretty useless from a medical as well as any other point of view.


In fact, such literary stagnation is not possible in capitalism as it constitutes a system, where capital exists and can only exist as separate capitals which stand in sharpest competition to each other (by no means excluding temporary alliances, which nevertheless end in clashes just as sharp). Hence, capitalists, and therefore capital as a whole, are compelled constantly to expand and accumulate, as Marx pointed out in Capital.


“ … the development of capitalist production makes it constantly necessary to keep increasing the amount of the capital laid out in a given industrial undertaking, and competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws. 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.” [1]


Such a dialectical understanding of the intrinsic expansionary dynamic of capitalism in no way implies an “optimistic” view of capitalism’s future. This is because the capitalist mode of production — the process of production and reproduction of capital on higher levels — embodies a dynamic yet crisis-ridden, fragile equilibrium. An equilibrium which at certain points breaks down due to its inner contradictions. On the economic level, this expresses itself in recurring recessions, up to and including economic depressions. The same applies to capitalism as a whole — as a totality of economic base and political and ideological superstructure — where the inner contradictions lead to political and social explosions (such as wars, ecological catastrophes, spontaneous uprisings, revolutionary crises, etc.). Nikolai Bukharin, a leading theoretician of the Bolshevik Party at the time of Lenin, generalized these facts in the following manner:


“From this point of view then, the process of capitalist reproduction is not simply a process of expanded reproduction of capitalist production relations: it is at the same time a process of expanded reproduction of the contradictions of capitalism.” [2]


In one article, the PO leaders defend their position by referring the various economic crises which took place in the past three decades: the "Black Monday" (1987), the collapse of the Mexican currency (1994), the Asian crisis (1997); the Russian crisis (1998); the crisis (2000), the Argentine crisis in 2001 and finally the Great Recession in 2008. [3]


As we have outlined above, it is true that world capitalism faces a number of crisis – both of regional as well as of global nature. Not only this, these crises tend to deepen and indeed have reached a new level by 2008.


However, it would be a caricature to present world capitalism as permanently collapsing. This would mean to ignore the existence of business cycles. Leaving aside this, there are different degrees of crisis and collapse. There can be more severe and less severe crisis. In fact, the past crises have differentiated in their severity as the figures and tables above indicate.


For example, as the RCIT has pointed out in past world perspectives documents, the bourgeoisie could avert the worst consequences of the Great Recession in 2008 because China – the emerging imperialist giant – was relatively unaffected by the breakdown which had its center of gravity in the old imperialist economies.


Why is all this so important for Marxists? Because we have the responsibility to give the workers vanguard and all fighters for socialism a correct orientation for the crisis and struggles ahead. It is useless to present capitalism always, over years and decades, as a system that does not possess any reserves. If it has no reserves for 40 years, how do you explain that world capitalism has not decomposed?!




Consequences of “Catastrophism” (I): Confusion on Capitalist Restoration




However, the problem goes far beyond of making wrong prognoses. In fact, wrong prognoses about the severity of the recession of the capitalist world economy are by far not the biggest problem of PO’s “catastrophism”. No, PO’s mistaken theoretical conception of the Marxist theory of capitalist breakdown result directly in gross confusion and complete incomprehension of the main characteristics and dynamic of the world situation.


Let us give two important examples of such confusion. The PO and the CRFI (of which PO has always been the main force) have traditionally made the concept of “catastrophism” a cornerstone of their political outlook. This becomes already clear in the foundation document of the CRFI, adopted in 2004. [4]


One of the consequences of the “bankruptcy of capitalism” a la PO is that, according to their view, the productive forces literally can not develop anywhere in anyway. Hence, PO and CRFI completely underestimated (and still underestimate as we will see below) the possibility of capitalist restoration in the former Stalinist-ruled degenerated workers states. [5] In this document, i.e. in the year 2004, the authors stated that “the restoration of capitalism (…) is in its initial stages”. So, 15 years after the collapse of the Berlin Wall and the Stalinist bureaucratic rule in 1989, the restoration of capitalism and the creation of a capitalist class was still “is in its initial stages”?! What an absurd and bizarre nonsense! Were Eastern Europe, Russia, China etc. not dominated since 1989-92 by governments which advanced the restoration of capitalism?! Were these economies not soon to be governed by the capitalist law of value?! Were these economies not already long before 2004 dominated by a private capitalist sector?! It seems that the PO/CRFI leaders were living in another world!


Unfortunately, such sterile dogmatism of PO did not stop in 2004. In a recently published article on China the PO leadership effectively still denies – in the year 2017! – that China has become a capitalist state. [6] Pablo Heller, a leading PO theoretician, still speaks about “the process of transition towards capitalism”. (“The transition to capitalism in China enters a more violent period.”) As if this transition would have not already taken place many years ago.


Unbelievable, in its latest extensive international statement, the PO leadership even claims that capitalism could not be established in the future in Russia and China “on a peaceful road”: A “peaceful” transition to capitalism, on behalf of regimes that expropriated capital through social revolutions, is unviable.” [7] We have seen those pseudo-orthodox Trotskyists who predicted in 1989 that it would be impossible to restore capitalism in the former workers states without civil wars. Already at that time, we criticised such doctrinarism. However, PO easily beats all those doctrinaires at that time as it still upholds such nonsense three decades after the collapse of Stalinism and the restoration of capitalism!


“Armed” with the same doctrinaire logic, PO and their international affiliates also claim that Russia and China are still not integrated into the capitalist world economy: “The integration of the former nationalized economies into the world capitalist economy cannot proceed by 'peaceful' means. [8] Clearly the PO leaders have never heard about China as a leading foreign investor as well as creditor in all continents, about the “Belt and Road Initiative” – an international investment program designed to expand Beijing’s global economic and political influence [9], or as the world’s largest trading power (see Figure 10)! How can one deny that China is fully integrated in the capitalist world economy?!




Figure 10. Share of the US and China in World Trade, 2001-2016 [10]





Consequences of “Catastrophism” (II): Confusion on China and Russia as Capitalist Powers



As we explained in other documents, this is pursuing a “Trotskyite” repetition of the Stalinist defense of China as a “socialist country”. As a matter of fact, as we have demonstrated in detail, “it is absurd to claim that China is still a post-capitalist workers state when the majority of China’s industrial output is produced by the private sector, as is attested to by figures published by the World Bank and the Chinese Development Research Center of the State Council. Both of these institutions attribute 70% of the country’s GDP and employment to non-state sectors. The state sector’s share in the total number of industrial enterprises (with annual sales over 5mn RMB) fell precipitously from 39.2% in 1998 to 4.5% in 2010. During the same period, the share of State Owned Enterprises in total industrial assets dropped from 68.8% to 42.4%, while their share in employment declined from 60.5% to 19.4%. We do not deny that the state sector continues to play a central role in China’s economy. But this is not a “socialist” but a state-capitalist sector![11]


Based on the same wrong conception, Heller only speaks in his article about the “Chinese bureaucracy” and never mentions the Chinese capitalist class! This is particularly absurd as China is home of one of the most powerful national bourgeoisie in the world!


Let us reproduce the most recently published figures which we have already used in our documents. In Table 5 we demonstrate that China has become home of the second-biggest number of world’s largest corporations – in front of Japan and all European powers and only behind the U.S.




Table 5. National Composition of the World’s 2000 Largest Corporations, 2003 and 2017 (Forbes Global 2000 List) [12]


                         2003                                                                       2017


                 Number                 Share                                     Number                 Share


USA                                                       776                         38.8%                                    565                         28.2%


China                                                    13                           0.6%                                       263                         13.1%


Japan                                                     331                         16.5%                                    229                         11.4%


United Kingdom                               132                         6.6%                                       91                           4.5%


France                                                   67                           3.3%                                       59                           2.9%


Canada                                                 50                           2.5%                                       58                           2.9%


Germany                                              64                           3.2%                                       51                           2.5%


South Korea                                        55                           2.7%                                       64                           3.2%


India                                                      20                           1.0%                                       58                           2.9%




Furthermore, China is home to the largest number of billionaires, or the second largest – according to which list you take – in the world. According to the 2017 issue of the Hurun Global Rich List, 609 billionaires are Chinese and 552 are US citizens. Together they account for half of the billionaires worldwide. [13] The Forbes Billionaire List, which is US-based while Hurun is China-based, sees the U.S. still ahead. However, the trend is the same: the weight of China’s monopoly capitalists is increasing. According to Forbes: “The U.S. continues to have more billionaires than any other nation, with a record 565, up from 540 a year ago. China is catching up with 319. (Hong Kong has another 67, and Macau 1.) Germany has the third most with 114 and India, with 101, the first time it has had more than 100, is fourth.“ [14]


If we look to the development of income distribution in China we can observe a significant process of accumulation amongst the wealthy elite. This has been demonstrated in a major study on inequality which has been published recently by Thomas Piketty, Gabriel Zucman and others. In this World Inequality Report 2018 the authors show how massively the capitalist class in China grew during the advance of the restoration process. They report that by 1978 the share of national income going to the top 10% of the population was 27%, equal to the share going to the bottom 50%. This radically changed in the following decades. The income share of the bottom half of the population in 2015 was just below 15%, a 12% fall since 1978. In the same period, the share of the top 10% had increased to 41%! [15] (See also Figure 11)




Figure 11. Income Share in China, 1978-2015 [16]




The PO leaders basically maintain the same position for Russia. This becomes evident from another article which it published some weeks ago. In it, the PO leadership claims: Neither in Russia nor China has a bourgeoisie emerged as a class, since in both cases it is mediated by the State, which continues to hold on to large part of its “pre-capitalist” bureaucratic structure.[17]


So, again, we are faced with a monstrous absurdity which even most Stalinists don’t dare to uphold! The state machinery in Russia is supposed to be a 'pre-capitalist' bureaucratic structure when in fact it is acting since nearly three decades as a capitalist servant for the oligarchs – both domestically and abroad! [18]


As we have demonstrated in our studies on Russian imperialism, its economy is dominated by powerful monopolies. The thirty-two largest of these monopolies – also called “financial-industrial groups” (FIG) in Russia – control almost 51% in Russia’s GDP. (See Figure 12)




Figure 12. Russia's GDP by Contributor (in US$ Billions and as a Share) [19]









According to a 2013 report of Credit Suisse, a small group of 110 billionaires owns 35% of all the wealth in Russia. [20] If we look again to the World Inequality Report 2018, we can observe a similar trend like in China, albeit even more drastically. In Figure 13 we see that the income share of the top 10% was relatively low when Russia was still post-capitalist. However, this radically changed from 1989 onwards. The share of income of the top 10% grew from 22% to 41% (2015)! During the same period did the share of the bottom half of the population collapse from about 30% of national income to only 17%!




Figure 13. Income Share in Russia, 1905-2015 [21]






Only the most ignorant observer could deny that this process of radical distribution of national income from the popular masses to the elite in a period of capitalist restoration reflects the creation of a powerful bourgeois class.


In fact, if we compare the distribution of national income in Russia and China with other imperialist countries we see strong similarities. The same report tells us that “the share of total national income accounted for by just that nation’s top 10% earners (top 10% income share) was 37% in Europe, 41% in China, 46% in Russia, 47% in US-Canada, and around 55% in sub-Saharan Africa, Brazil, and India. In the Middle East, the world’s most unequal region according to our estimates, the top 10% capture 61% of national income. [22]


So, we ask the PO comrades: who are these top 10% in Russia who have the same share of national income like the top 10% in North America?! Are these not the capitalists and the upper middle class?! Does PO honestly believe that this is some kind of bureaucracy?! No, as a matter of fact, the process of capitalist restoration has resulted in the creation of a capitalist class. Today, it is the bourgeoisie which dominates all these countries – the U.S., Europe as well as China and Russia. PO’s claim that no capitalist class exists in Russia and China is a total absurdity which reflects its political aloofness from the reality of global capitalism!


However, we admit that the position of the PO contains a certain inner logic. If capitalism is about to decompose since decades it hardly has the reserves to create a capitalist class in Russia and China. However, such a “consistency” is nothing but the doctrinarism of dogmatic pigheads who remain undisturbed by dialectical materialism. The PO leaders would do well to take into account Engels advice: "Communism is not a doctrine, but a movement. It proceeds not from principles but from facts.” [23]


It is only logically that, if the PO leaders are incapable of recognizing the capitalist character of China and Russia, they are even less able to notice the fact that these two states have already become imperialist powers. In a recently adopted statement, they proclaim that Russia and China have not become imperialist and can not become such. They state that these countries only have the alternative to either become colonies of Western imperialism or socialist states. From this, they draw the inevitable conclusion that Russia and China have to be defended today against the U.S., EU and Japan.


An imperialist capital has not been created in Russia or China, and the likelihood of an exclusively state-based imperialism is a flimsy hypothesis. These regimes of transition to capitalism face, on the one hand, imperialist colonization (and wars) and, on the other, proletarian revolution. Given a hypothesis of imperialist war against Russia and / or China, to carry out a capitalist restoration of a colonial nature, revolutionary socialists will fight for the complete defeat of imperialism and will take advantage of this struggle to promote the resurgence of the soviets, as the independent political power of the working class; to expropriate the oligarchy and the bureaucracy and develop a socialist revolution, defending the free self-determination of the peoples, in the perspective of the reconstruction of the Union of Soviet Socialist Republics [inspired] in the revolutionary and internationalist origin of the October revolution. [24]


The pseudo-socialist rhetoric can not disguise the social-imperialist position contained in this statement. If Russia and China are not imperialist (in fact, according to the PO leadership, they are not even fully capitalist) and if the Western Great Powers are imperialist, than the formulation “revolutionary socialists will fight for the complete defeat of imperialism” can have only one meaning: that PO is siding with Russia and China against the old imperialist powers.


Admittedly, such a position is consistent in itself – but in reality it is consistently social-imperialist and reactionary! Probably, the comrades are not aware of this but there is a long history of “socialists” who denied the imperialist character of their state because it was a latecomer in the epoch of monopoly capitalism. In Italy Mussolini and other ex-socialists spoke at the time of World War I about the “proletarian nations” (like Italy) which had to be supported against the “decadent”, “plutocratic” old imperialist powers. In Japan, there emerged a similar current in the 1920s of which the most important proponent was the ex-Marxist Takahashi Kamekichi. This academic developed a theory that Japan has become a "petty imperialism". Takahashi noted that, given Japan’s backwardness in the areas of financial capital and capital export, Japanese capitalism "had not yet attained the stage of imperialism," to use Lenin's terms. From this he concluded that Japanese socialists should not see the main enemy as being the domestic bourgeoisie, but rather the Western powers.


Following a similar logic like the PO leaders today, Takahashi compared the relatively weak Japanese capitalists to the petty-bourgeoisie which has to be supported against the big bourgeoisie. Takahashi went on to assert that there was considerable evidence that Japan too “is in the position of a country subject to imperialism. (…) Consequently, [Japan's] international class role, rather than coinciding with that of imperialist countries like Britain and the United States, coincides far more with that of China, India, and other countries subject to imperialism.[25]


We repeat what we have said many times in the past years: recognizing the imperialist character of the emerging Great Powers Russia and China is one of the most important issues in the current historic period! Without a correct analysis of the different and rivaling imperialist powers, it is impossible to follow a revolutionary line in world politics!


Admittedly, the PO leaders are hardly alone in such ignorance. As we demonstrated in a recent pamphlet, a number of “Trotskyite” organizations fail to recognize the fundamental changes in world politics in the past decade which has been strongly characterized by the emergence of Chinese and Russian imperialism and the accelerating rivalry between the Western and Eastern Great Powers. [26]


The comrades of PTS/FT unfortunately share the PO’s view of China and Russia to a considerable degree. As we demonstrated in our recently published pamphlet, the PTS/FT leaders also claims that neither Russia nor China have created an “independent capitalist class”. Hence it talks, in the case of China, not about the “ruling class” but about the “ruling bureaucracy”. This becomes clear from the following quote, taken from the central political document adopted at their recently held international conference:


In the past years, the imperialist features of China have deepened. (…) Briefly, China can not challenge today the global supremacy of the U.S. which will remain the most important imperialist power in the next years. The GDP per capita of China is much to low (...), the differences in the military field are still huge, and the same holds true in the technological sector. Furthermore, neither in China nor in Russia could an independent capitalist class consolidate itself given the peculiarities of capitalist restoration. Hence, the role of the state is still dominant. (....) There exists a double challenge: China wants to get out of the limitations which the imperialist world economy imposes on it and at the same time the U.S. tries to break China. (...) This demonstrates that there is no possibility of a “peaceful road” towards an imperialist development of China.” [27]


We conclude this chapter by drawing attention to the important relationship of a correct analysis of the inter-imperialist rivalry and the resulting tactical platform. We have summarized this relationship in our 6 POINTS document:


It is only possible to understand the driving dynamic of the present period of capitalist crisis and to take a correct position if one recognizes the imperialist character not only of the US, EU and Japan but also of the new emerging powers, Russia and China. Only on such a basis is it possible to arrive at the only correct, anti-imperialist program on this issue – proletarian internationalism and revolutionary defeatism, i.e., the perspective of consistent struggle of the working class independent of and against all imperialist powers. This means that revolutionaries refuse to lend support to any Great Power in inter-imperialist conflicts under the slogan ‘The main enemy is at home!’ (…) Those who fail to recognize the reactionary and imperialist character of these Great Powers will inevitable fail to take a consistent anti-imperialist, i.e. Marxist, line and will end up, consciously or unconsciously, supporting one or the other imperialist camp as a ‘lesser evil’”. [28]


Unfortunately, the PO leadership and their international allies are far away from such a Marxist line!


[1] Karl Marx: Capital. A Critique of Political Economy, Volume I, in: MECW Vol. 35, p. 588

[2] Nikolai Bukharin: Ökonomik der Transformationsperiode (1920), p. 148, (Economics of the Transition Period; our translation). Bukharin, before his degeneration as an ally of Stalin and a theoretician of right-wing centrism in the later 1920s, was a leading theoretician of the Bolshevik Party at the time of Lenin. While his writings always contained certain defects of schematism (some more, others less), he was an interesting and thoughtful theoretician who made, before his degeneration, important contributions to Marxism. Lenin, in his “testament”, summarized the contradictory nature of his comrade: “Bukharin is not only a most valuable and major theorist of the Party; he is also rightly considered the favourite of the whole Party, but his theoretical views can be classified as fully Marxist only with great reserve, for there is something scholastic about him (he has never made a study of the dialectics, and, I think, never fully understood it).” (V. I. Lenin: "Last Testament". Letter to the Congress (1922), in: LCW Vol. 36, p. 595).

[3] Pablo Heller: La izquierda frente a la crisis mundial

[4] Draft of programmatic thesis for the Congress for the Refoundation of the IV International, 2004,

[5] We have analysed the restoration of capitalism in various places. See e.g. Michael Pröbsting: Cuba’s Revolution Sold Out? The Road from Revolution to the Restoration of Capitalism, August 2013, RCIT Books,; see also chapter VI (dealing with capitalist restoration in North Korea) in the above mention book Michael Pröbsting: World Perspectives 2018: A World Pregnant with Wars and Popular Uprisings; concerning capitalist restoration in China we refer to Michael Pröbsting: The Great Robbery of the South (Chapter X).

[6] Pablo Heller: China: El otro bonapartismo, March 9, 2017, Prensa Obrera # 1449

[7] Partido Obrero’s contribution to the international conference debate (adopted by the National Committee of Partido Obrero), 21.3.2018,

[8] Partido Obrero, PT (Uruguay), DIP (Turkey), EEK (Greece): Declaration of the International Conference, 13 de abril de 2018,

[9] The RCIT has dealt with China’s BRI imitative in various documents. See e.g. our pamphlet Michael Pröbsting: The China-India Conflict: Its Causes and Consequences. What are the background and the nature of the tensions between China and India in the Sikkim border region? What should be the tactical conclusions for Socialists and Activists of the Liberation Movements? 18 August 2017, Revolutionary Communism No. 71,

[10] Hong Kong Trade Development Council: Changing Global Production Landscape and Asia’s Flourishing Supply Chain, 3 October 2017, p.4

[11] Michael Pröbsting: World Perspectives 2018, p. 59 (Footnote 99)

[13] Hurun Global Rich List 2017,; see also Zhu Wenqian: Beijing listed as billionaire capital of world once again, China Daily, 2017-03-08,; Michael Pröbsting: China’s “Socialist“ Billionaires, 16.11.2015,

[15] Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, Gabriel Zucman: World Inequality Report 2018, pp. 107-108

[16] World Inequality Report 2018, p. 108

[17] Partido Obrero’s contribution to the international conference debate (adopted by the National Committee of Partido Obrero), 21.3.2018,; see also Pablo Heller: A dónde va China. Entre la guerra comercial y la restauración capitalista, 26 de abril de 2018,

[18] On the RCIT’s analysis of Russia as an imperialist power see the literature mentioned in the special sub-section on our website: In particular we refer readers to Michael Pröbsting: Lenin’s Theory of Imperialism and the Rise of Russia as a Great Power. On the Understanding and Misunderstanding of Today’s Inter-Imperialist Rivalry in the Light of Lenin’s Theory of Imperialism, August 2014,; Michael Pröbsting: Russia as a Great Imperialist Power. The formation of Russian Monopoly Capital and its Empire – A Reply to our Critics, 18 March 2014, Special Issue of Revolutionary Communism No. 21 (March 2014),

[19] Who Owns Russia: 32 Largest Business Groups Make 51% of GDP, Emerging Markets Venue, July 12, 2010,

[20] Credit Suisse: Global Wealth Report 2013, p. 53

[21] World Inequality Report 2018, p. 120

[22] World Inequality Report 2018, p. 9

[23] Friedrich Engels: The Communists and Karl Heinzen (1847), in: MECW, Vol. 6, p. 303

[24] Partido Obrero, PT (Uruguay), DIP (Turkey), EEK (Greece): Declaration of the International Conference, 13 de abril de 2018

[25] The quote is taken from Germaine A. Hoston: Marxism and Japanese Expansionism: Takahashi Kamekichi and the Theory of "Petty Imperialism"; in: Journal of Japanese Studies, Vol. 10, No. 1 (1984), pp. 13-14.

[26] See Michael Pröbsting: Syria and Great Power Rivalry: The Failure of the „Left“. The bleeding Syrian Revolution and the recent Escalation of Inter-Imperialist Rivalry between the US and Russia – A Marxist Critique of Social Democracy, Stalinism and Centrism, 21 April 2018, in: Revolutionary Communism, New Series No. 6 (May 2018),

[27] As we could not find an English-language translation of this document, we have translated this quote ourselves from the Spanish-language respectively the German-language version. (XI CONFERENCIA DE LA FT: Tensiones económicas e inestabilidad política. Documento sobre situación internacional discutido en la XI Conferencia de la FT, 22.3.2018, 2018,; FT: Die Welt im Jahr 2018 (Teil 1): Wirtschaftliche Spannungen und politische Instabilität,

[28] RCIT: Six Points for a Platform of Revolutionary Unity Today, February 2018,