The Return of the Reserve Army

After the Second World War and the period of recovery, there followed a twenty-year phase of expansion unparalleled in capitalist history. As the boom established itself in the fifties, the claim that the old problems of capitalism had at last been superseded gained ground steadily; though today, as the world economy settles into its deepest recession since the thirties, it is clear that their disappearance was only temporary. But for more than twenty-five years after the War nobody seriously challenged the view that Keynes’ General Theory, published in 1936, had unravelled the intricacies of the capitalist economy in a way that provided governments with a blueprint for successful economic management. The maintenance of full employment and sustained economic growth only confirmed the Keynesian view of political economy, that the capitalist economy can be controlled by a combination of monetary and fiscal policies, and the interpretation of modern history that gives Keynesianism the credit for the boom. In the face of this triumph, revolutionary criticism was reduced to radical opposition, as it accepted the main tenets of Keynesianism and explained how capitalism had changed, and how the class struggle between labour and capital had been replaced by a conflict between the developed and underdeveloped countries that cut across the old class boundaries. Now, after five years of recession with few signs of full recovery in sight, the Keynesian final solution seems less permanent than it did a decade ago, and ideas that were almost unthinkable during the hey-day of the boom now demand serious attention.