The Democratic Party has once again bewitched much of the U.S. Left.

A little over a year after last summer’s social protest movement, the biggest in U.S. history, the masses have largely left the streets. The energy of that struggle was funneled into electing a Democrat president. The DSA has largely given up on any real break from the Democratic Party.

One way the Democrats accomplished this was by promising major spending programs — concessions to working-class and oppressed people on healthcare, education, and childcare, and new investments in the country’s bridges and roads.

This is perfectly reflected in Dan Kotz’s argument in the DSA journal Catalyst. Kotz argues that Biden could start a fundamental shift toward a “green social democracy” — meaning the Left should stand shoulder to shoulder with the Democrats to help make that happen. In Jacobin, others grumble that Biden’s economic policies have been too small. But they still hope that the Democrats could be pushed so far left that they’d institute new, lasting policies and programs on the way to a robust social democracy.

Even if Biden’s spending packages weren’t being massively cut down, the Democrats’ spending plans would face radical economic limits. The Democrats’ plans — even the ones coming from the “progressives” like Bernie Sanders and others — are almost certainly far too weak to overcome those limits.

The solution is not allying with the Democrats. It’s building the power of working and oppressed people to overthrow the ruling class and centralize and rationalize production under worker control. That will take independent, revolutionary organizing of the working class and oppressed people — nothing less.

What Is “Bidenomics”?

For months, capitalist news outlets, and the two capitalist parties, have been debating “Bidenomics.” The term is a loose one, but it usually means the set of economic policies and proposals from the Biden administration — tools to help shore up the U.S. system of exploitation.

Quick on the heels of Trump’s stimulus, Biden championed his own $1.9 trillion stimulus package — the “American Rescue Plan.” Congress approved that plan in March. It extended federal unemployment benefits, sent $1,400 direct payments to people as a means of weathering the pandemic, and expanded the child tax credit, among other things. Then in November of this year, Congress approved a roughly $1 trillion infrastructure package aiming to repair crumbling roads and bridges; improve airports and railways; establish national internet access; and help build a national network of charging stations for electric vehicles.

The third package is still hung up in Congress. In early talks it added up to $3.5 trillion, to support what Biden calls “human infrastructure”: funding universal pre-K, childcare for children under six, paid family leave, and more. Now it’s been slashed in half but still hasn’t been approved by Congress.

Why are the Democrats offering this kind of spending in the first place, after decades of neoliberalism and austerity?

“Bidenomics” is born of ruling-class fear. That fear comes from the economic crisis last year, when the economy was shut down during the pandemic. And it was intensified by the huge swell of mass struggle in the anti-cop uprising, and then the Far Right’s storming of the Capitol on January 6, 2021. The spending packages — with their limited concessions to working-class and oppressed people — aim to help shore up the ruling class’s rule at home. But inseparable from this is a struggle to shore up the U.S. ruling class’s imperialist power.

The position of the U.S. ruling class in the world is slipping. The decline of its international power was on full display in the catastrophic withdrawal from Afghanistan — yet another lost war. In other words, the U.S. finds itself in increasing danger of being crowded out of zones of investment and profit-making across the globe. Trying to jump-start the U.S. economy would help the U.S. ruling class to better compete with China. In the words of Biden himself, either the U.S. increases its spending on infrastructure or China will “eat our lunch.”

Above all, the spending packages aim to address these issues through raising the productivity of U.S. capitalism. A surge in productivity, Biden’s administration seems to think, would mean more political stability at home. A jump-started economy would lend more credibility to the capitalist system and its institutions as a whole. Taxes on additional profits could make possible more concessions to the workers and oppressed who might otherwise revolt. All this would cut off some of the oxygen to the more radical sectors of the Right (guided by Trump) as well as of the Left. And the hope seems to be that a more rapidly expanding U.S. economy would make U.S. capitalists more competitive on the world stage for profits.

The Democrats and Their Economic Limits

But “Bidenomics” faces major limits. And the limits facing Biden also face the more “ambitious” economic and social ideas from so-called progressive Democrats like Bernie Sanders — meaning they, too, would have a slim chance of success even if they could get passed.

First, even if Biden’s bills had passed as originally promised, their impact would already have been limited. The first infrastructure bill, for example, was always slated to roll out over the course of almost a decade, greatly limiting its economic effect. And a substantial chunk of the package aimed only to keep up existing infrastructure.

This reality is reflected in the mainstream press. The Wall Street Journal predicts a muted impact for Biden’s infrastructure plan. The International Monetary Fund predicts a steep slowdown of GDP growth in coming years, to just 1.7 percent by 2026. In other words, bourgeois economists themselves are saying the U.S. economy will return to its anemic economic growth of the era after the 2008 crisis.

But the Democrats face more fundamental limits, too.

Over the last few decades, bourgeois economics has noted an ongoing, grinding crisis of productivity growth. The latter is important for both individual capitalists and for the capitalist economy as a whole. Increasing productivity means workers can produce more per hour worked — and so, potentially, generate more profit for a company’s bosses. As Kim Moody points out, this is exactly what happened in the wake of World War II: the postwar growth of productivity allowed bosses to offer combative unions and oppressed people concessions as a way of coping with mass struggle.¹Kim Moody, An Injury to All: The Decline of American Unionism (Brooklyn: Verso, 1988), chap. 2. On the national scale, growing productivity and greater profits could make it easier for the ruling class to offer concessions to the workers and oppressed people, especially in periods of heightened mass struggle.

The boom years after World War II were driven in important part by a surge in working-class productivity. From 1948 to 1970, output per hour almost tripled.²Robert Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (Princeton: Princeton University Press, 2017), 635, table 18-3. But by the 1970s, productivity growth began slowing sharply. The period from 1970 to 1994 saw the growth of labor productivity slow to a factor of 1.54. There was a brief uptick in productivity growth from 1994 to 2004 — not reaching the levels of the post-World War II boom — before grinding to a near halt in the years after 2004.

From 2004 to 2015, productivity basically stopped growing. As Robert Gordon notes, the period after 2004 has had the lowest growth rate of productivity of any time in U.S. history. The U.S. is hardly alone. From 1996 to 2016, the rate of productivity growth in Europe was half that of the United States.³Gordon, Rise and Fall, 562. Erber, Fritsche, and Harms’ study of 25 industrialized countries shows the same trend.

This crisis of productivity can’t be understood apart from an intertwined, structural limit facing the ruling class today: a declining average rate of profit (ARP).

Marx’s Capital shows that all profits come from the exploitation of human labor. But capitalists tend to replace labor with labor-saving machinery and techniques, ramping up productivity in their quest to increase profits. This trend, though, catches on; labor-saving devices and techniques tend to become widespread.

And that leads to a basic tendency in capitalism: a shrinking ratio of profit-producing labor compared to more and more machinery — and so, a shrinking ARP. This is what Marx formulated as the law of the tendential fall of the rate of profit (LTFRP). It’s a “tendency” because it is always combated by strategies from the ruling class. By ramping up the exploitation of workers, for example, bosses try to squeeze more profits from them, like by introducing new forms of technology to make their capitals more productive, etc.

So productivity and profitability are linked in a contradictory relationship. New, more productive technologies can make leaps in profitability possible. But they also tend to decrease average profitability over time. And this is precisely what we have seen in the last few decades: a fall not only in productivity growth but also in the ARP for U.S. capitalism and — with some differences — globally. In 1950 the rate of profit in the U.S. peaked at 23 percent.⁴Guglielmo Carchedi, “The Old is Dying but the New Cannot be Born: On the Exhaustion of Western Capitalism,” in Carchedi and Michael Roberts, eds., World in Crisis: A Global Analysis of Marx’s Law of Profitability (Chicago: Haymarket, 2018), 37. Since then it has been in long-term decline through a series of smaller boom-and-bust cycles. By the 1970s economic growth had slowed substantially, which expressed itself in the U.S. crisis called “stagflation,” or low growth with surging prices.

The U.S. ruling class responded in the 1970s and 1980s with a set of policies — today called neoliberalism — to ramp up its profits: dismantle unions, ramp up worker exploitation, accelerate the outsourcing of labor to cheaper, nonunion workforces in the U.S. South and abroad, and so on. One main element of this ruling-class response was the restoration of capitalism — rushing into the void left by the fall of the USSR in particular. Such restoration opened up new markets for privatization and new, huge segments of the global workforce to be exploited.

And these measures worked — to a degree. Average profitability rose 18 percent during the 1980s and 1990s,⁵ Carchedi and Roberts, World in Crisis, p. 14. although the average rate of profit did not reach the levels it had in the boom years after World War II.

In other words, it looks like the neoliberal project has exhausted its ability to respond to the decline of profitability. By the late 1990s the ARP began, once more, to fall.

The lack of profitable targets for investing mean the ruling class artificially inflates its profits through maneuvers like stock buybacks. But more importantly when the ruling class sees few places it can invest for a substantial profit, it turns to financial speculation. These moves all further reduce the productive investments in new technologies. 

The ruling class’s increasing turn to financial speculation lay the groundwork for the 2008 financial crisis. After the bubble of fictitious capital popped in 2008, the U.S. and global capitalism never really recovered. The years that followed have been marked above all by anemic GDP growth and low ARP. It’s this context — grinding, multidecade, fundamental economic limits — that the Democrats mean to change with a few trillion dollars’ worth of spending. The odds are long.

Long Odds

The Democrats are fighting these twin forces: the global crisis of productivity and the anemic GDP growth and profits that capitalists face today. What chances do they have to succeed? And what chance do progressives or socialists have in winning major reforms through the Democrats on that basis?

To answer these questions, we first have to understand what made it possible for the last major upsurge of profits and productivity to happen after World War II.

First, that upsurge resulted from the sheer economic devastation of the Great Depression. Such destruction devalues or destroys capitals altogether, clearing the rubble of less profitable firms and technologies and making it easier for capitalists to invest in new, labor-saving machinery that can ramp up productivity and profitability on the global scale.⁶See, e.g., Guglielmo Carchedi and Michael Roberts, “The Long Roots of the Present Crisis: Keynesians, Austerians, and Marx’s Law,” in Carchedi and Roberts, World in Crisis, 17–18.

But the U.S. ruling class has been refusing to allow exactly that kind of destruction for fear of the economic chaos it would unleash. In 2008 the government rescued firms that were on the brink of disaster but “too big to fail.” Since then, the Federal Reserve policy has been setting hyperlow interest rates and buying up bonds and securities — pumping money into the economy and ensuring debt-driven growth for financial institutions and corporations. One result has been a sizable number of indebted “zombie” firms that can barely survive — but continuing limping on.

And the economic takeoff during and after World War II was driven by massive, barbaric physical destruction: the savagery of global imperialist war. The literal destruction of lives, infrastructure, and economies across the world opened up a pathway for U.S. economic domination in the decades to come.

More than this, the U.S. war economy called for huge levels of state investment in economic infrastructure to advance its imperialist aims in and after World War. From 1940 to 1945, the amount of additional productive equipment that the government purchased amounted to half of all the stock of equipment that existed in the entire country before 1941.⁷Gordon, Rise and Fall, 564 That meant that the productive machinery that was being installed in factories was the newest and most productive kind, replacing older, less productive technologies — machinery then privately owned and run for profit. Even the Democrats’ most “ambitious” spending plans look pale in comparison to those levels of destruction and federal spending.

But the problem is not just that the Democrats seem to be spitting in the wind. It’s also — crucially — that “Bidenomics” is facing a conjunction of other volatile contradictions.

For example, the Democrats face the real possibility of another financial crisis. The loose money policies of the Federal Reserve, paired with low profitability, have meant that the ruling class is still turning to the stock market and speculation to pad its profits, driving the potential for another crash. This comes at a time when many corporations have high levels of debt, meaning that a financial crash could have long-lasting and deep economic impacts.

And any economic recovery requires stability in capital’s global supply chains. But as Esteban Mercantante points out, those supply chains have been made increasingly brittle over the last several decades as part of the development of “just in time” production in the 20th century — a key feature of the neoliberal era.

That is now a major liability for contemporary capitalism as it faces violent climate catastrophes, driven by its own destruction of the ecosphere. A single tanker, wedged in a single waterway — the Suez Canal — snarled global supply lines and cost the ruling class $9.6 billion per day. A climate disaster at such “choke points” is hardly unlikely. It would have a far heavier, far longer-lasting toll. And such supply issues would only drive up the already-high rates of inflation.

The threat of debt looms too. Federal debt now far outstrips U.S. GDP, meaning that a sharp increase in interest rates or a major financial disruption could upset the U.S. ability to pay its debtors, potentially leading to further rounds of austerity and further economic turmoil. But perhaps more pressing are the problems of increasing corporate debt, on the one hand, and local and state debt on the other. Unlike the federal government, municipalities and states in the U.S. are forbidden from running a deficit. The collapse of major firms, affecting the income of states, towns, and cities, would make those lower levels of state rule “ground zero” for the implementation of austerity and the fomenting of social unrest.

All of this is to say: the odds are very good that the Democrats can’t overcome these contradictions. We face the real possibility that the U.S. will return to the anemic economic growth of the post-2008 era — all while it sits atop a powder keg of contradictions.

The Answer Is Clear

While the capitalist parties debate “Bidenomics,” capitalism’s contradictions continue to rage. The pandemic is still sweeping the globe. Five million are dead and counting. In the U.S. alone, that number is just over 770,000. Capitalism’s leaders are making sure economies stay open — on the backs of the global working class — so profits can keep flowing. Meanwhile, inflation is spiking, cutting into the ability of workers and oppressed people to buy food and gas. Wages have barely moved, but the ruling class is celebrating a bonanza of profits. And beneath all this, the ecological system is convulsing in catastrophic storms and fires.

Our task today is not to help the Democratic Party try to restore faith in capitalism with half measures that in all probability won’t succeed. It’s to secure the existence and needs of working-class and oppressed people themselves — and the survival of the ecosystem.

Winning those demands calls for fundamentally dismantling the capitalist economy as a whole, away from the ecocidal quest for profit and for satisfying human need. These are the tasks that the capitalist system of private property has so utterly failed at — the system the Democrats want to restore faith in.

And all of this means that the only real, the only practical solution is organizing for the revolution to overthrow the people in charge. And the contradictions racking capitalism are helping generate some of the sparks of revolt needed to overthrow that system. In just the last few years, we have seen some of those sparks in the mass struggle of the 2020 anti-cop uprising in the United States, in the general strike in Malaysia, and in the radical struggle that shook Chile. But only conscious, revolutionary organizing, in revolutionary parties independent of the ruling class, can succeed.

Striking deals with Democrats discredits the Left, wastes our energy, and helps prop up a system that can’t solve the problems we must solve. The obvious solution is organizing for the revolutionary expropriation of the rulers, so workers and oppressed people can rule in their own name.