Leon Trotsky

The Curve of Capitalist

Development
(A Letter to the Editors in Place of the Promised Article)
(April 1923)
Written: April 21, 1923. The article by Trotsky, reprinted below, originally appeared in Russian in Book 4
of Vestnik Sotsialisticheskoi Akademii [in Russian]
Source: Fourth International, New York, Vol.2 No.4, May 1941, pp.111-114.
Translation: Fourth International.
Transcribed/HTML Markup: Daniel Gaido/David Walters, June 2006
On-Line version: The diagram for the curve of capitalist development was taken from Richard B. Day,
The Theory of the Long Waves: Kondratiev, Trotsky, Mandel, New Left Review, No.99, September-October
1976. Original on-line version: http://newleftreview.org/?view=352. Used here on the Leon Trotsky Internet
Archive with permission from NLR.
In Marxist literature this letter is most closely comparable to Engels famous letters
on historical materialism. Here Trotsky takes the ideas expounded by the founders of
Marxism; applies them to some basic problems of capitalist development; and
thereby opens new paths and perspectives for the extension and use of the dialectical
materialist method.
The article itself grew out of Trotskys preoccupation with the specific political-
economic problems presented to the revolutionary proletarian movement after 1921.
This date marks the beginning of a period of relative stability within the USSR (the
NEP) and in the relations between the young workers state and the capitalist
environment, following the post-war revolutionary upheavals. Simultaneously with
the establishment of the unstable equilibrium between the USSR and the capitalist
world, that same world was shaken by a severe economic crisis. The conjuncture of
these two contrasting events demanded a re-valuation of the possibilities of capitalist
stabilization in connection with the prospects of proletarian revolution.
Trotsky presented his answer to these problems in a report delivered to the Third
Congress of the Communist International on The World Economic Crisis and the
Tasks of the Communist International. In this report Trotsky attacked the reformist
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
1 of 8 12/05/12 14:27
conception that capitalism could automatically reestablish itself on new foundations.
Faith in automatism of development, he wrote, is the most characteristic trait of
opportunism. He also derided the mechanical notion advanced by the then ultra-left
wing of Bolshevism, that capitalism must continue upon its downward trend without
interruption or reversal until its complete collapse. Against these one-sided
appraisals, Trotsky presented the dialectical conception that the historical
degradation of capitalism is characterized by sharp pulsations which conflict at
critical points with the main descending curve of development.
In the Comintern discussions, one group held that further impoverishment of the
masses would generate new revolutionary crises; another, that a new flush of
prosperity was required to invigorate the proletariat. Trotsky asserted that both of
these formulations were one-sided and left out of account the mainspring of
revolution. Neither impoverishment nor prosperity as such can lead to the
revolution, but the shifts of prosperity and impoverishment, crises, mutability,
absence of stability these are the motive factors of revolution. It is the sharp turns
in historical development which produce revolutions in social life and the more
abrupt the turn, the greater the revolutionary consequences.
In his report to the Third World Congress, Trotsky elucidated this idea with
specific reference to the revolutions of 1848, 1905 and the period of 1920-1921. The
present article is a theoretical expansion and deepening of these earlier observations.
It sketches in generalized form the dynamic interrelationships between the
productive foundations of capitalist society and the events occurring in its
superstructure.
The problem Trotsky raised and the solution he indicated had not only great
practical importance for revolutionary strategy in the class struggle but contained the
widest significance for the development of Marxist thought. By 1922-1923 the
epigones of Marxism, under Bukharins direction, had already begun to vulgarize
historical materialism and to convert it from a tool of analysis into a new icon. They
kept repeating old formulas instead of investigating new realities and reshaping the
instruments of thought handed on to them by Marx, Engels and Lenin. Instead of
advancing Marxist theory, these vulgarizers paved the way for its subsequent
perversion at the hands of the Stalinist professors.
In addition to its profound theoretical interest, Trotskys observations on the
motive factors of revolution have the most immediate bearing on the present
situation within the US. The war boom is producing deep dislocations in American
economy and extreme shifts in all the decisive spheres of social life. Such swift and
abrupt transitions from impoverishment to prosperity and back again, from war to
peace and back again, are precisely the kind of social movements which give rise to
crises of revolutionary intensity. Whoever wishes to grasp the innermost significance
of current events should study with utmost care the ideas herewith presented by
Trotsky as they apply to the present developments in the United States and to the
world situation. The EDITORS.
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
2 of 8 12/05/12 14:27
* * *
In his introduction to Marxs Class Struggles in France, Engels wrote:
If events and series of events are judged by current history, it will never be possible to go back to
the ultimateeconomic causes. Even today, when the specialized press provides such rich material,
it still remains impossible even in England to follow day by day the movement of industry and
trade on the world market and the changes which take place in the methods of production in such
a way as to be able to draw a general conclusion for any point in time from these manifold,
complicated and ever-changing, factors, the most important of which, into the bargain, generally
operate a long time in realms unknown before they suddenly make themselves forcefully felt on
the surface. A clear overall view of the economic history of a given period can never be obtained
contemporaneously, but only subsequently, after the material has been collected and sifted.
Statistics are a necessary auxiliary aid here, and they always lag behind. For this reason, it is only
too often necessary in current history to treat this, the most decisive, factor as constant, and the
economic situation existing at the beginning of the period concerned as given and unalterable for
the whole period, or else to take notice of only such changes in this situation as arise out of the
patently manifest events themselves, and are, therefore, likewise patently manifest. So here the
materialist method has quite often to limit itself to tracing political conflicts back to the struggles
between the interests of the existing social classes and fractions of classes caused by economic
development, and to demonstrate that the particular political parties are the more or less adequate
political expression of these same classes and fractions of classes.
It is self-evident that this unavoidable neglect of contemporaneous changes in the economic
situation, the very basis of all the processes to be examined, must be a source of error.
These ideas which Engels formulated shortly before his death were not further developed by
anyone after him. To my recollection they are rarely even quoted much more rarely than they
should be. Still more, their meaning seems to have escaped many Marxists. The explanation for
this fact is once again to be found in the causes indicated by Engels, which operate against any
kind of finished economic interpretation of currenthistory.
It is a very difficult task, impossible to solve in its full scope, to determine those subterranean
impulses which economics transmits to the politics of today; and yet the explanation of political
phenomena cannot be postponed, because the struggle cannot wait. From this flows the
necessity of resorting in daily political activity to explanations which are so general that through
long usage they become transformed into truisms.
As long as politics keeps flowing in the same forms, within the same banks, and at about the
same speed, i.e. as long as the accumulation of economic quantity has not passed into a change
of political quality, this type of clarifying abstraction (the interests of the bourgeoisie,
imperialism, fascism) still more or less serves its task: not to interpret a political fact in all
its concreteness, but to reduce it to a familiar social type, which is, of course, intrinsically of
inestimable importance.
But when a serious change occurs in the situation, all the more so a sharp turn, such general
explanations reveal their complete inadequacy, and become wholly transformed into empty
truisms. In such cases it is invariably necessary to probe analytically much more deeply in order
to determine the qualitative aspect, and if possible also to measure quantitatively the impulses of
economics upon politics. These impulses represent the dialectical form of the tasks that
originate in the dynamic foundation and are submitted for solution in the sphere of the
superstructure.
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
3 of 8 12/05/12 14:27
Oscillations of the economic conjuncture (boom-depression-crisis) already signify in and of
themselves periodic impulses that give rise now to quantitative, now to qualitative changes, and
to new formations in the field of politics. The revenues of possessing classes, the state budget,
wages, unemployment, proportions of foreign trade, etc., are intimately bound up with the
economic conjuncture, and in their turn exert the most direct influence on politics. This alone is
enough to make one understand how important and fruitful it is to follow step by step the history
of political parties, state institutions, etc., in relation to the cycles of capitalist development.
By this we do not at all mean to say that these cycles explain everything: this is excluded, if
only for the reason that cycles themselves are not fundamental but derivative economic
phenomena. They unfold on the basis of the development of productive forces through the
medium of market relations. But cycles explain a great deal, forming as they do through
automatic pulsation an indispensable dialectical spring in the mechanism of capitalist society.
The breaking point of the trade-industrial conjuncture bring us into a greater proximity with the
critical knots in the web of the development of political tendencies, legislation, and all forms of
ideology.
But capitalism is not characterized solely by the periodic recurrence of cycles otherwise what
would occur would be a complex repetition and not dynamic development. Trade-industrial
cycles are of different character in different periods. The chief difference between them is
determined by quantitative interrelations between the crisis and the boom period within each
given cycle. If the boom restores with a surplus the destruction or constriction during the
preceding crisis, then capitalist development moves upward. If the crisis, which signals
destruction, or at all events contraction of productive forces, surpasses in its intensity the
corresponding boom, then we get as a result a decline in economy. Finally, if the crisis and
boom approximate each others force, then we get a temporary and stagnating equilibrium in
economy. This is the schema in the rough.
We observe in history that homogeneous cycles are grouped in a series. Entire epochs of
capitalist development exist when a number of cycles is characterized by sharply delineated
booms and weak, short-lived crises. As a result we have a sharply rising movement of the basic
curve of capitalist development. There are epochs of stagnation when this curve, while passing
through partial cyclical oscillations, remains on approximately the same level for decades. And
finally, during certain historical periods the basic curve, while passing as always through
cyclical oscillations, dips downward as a whole, signaling the decline of productive forces.
It is already possible to postulate a priori that epochs of energetic capitalist development must
possess features in politics, in law, in philosophy, in poetry sharply different from those in
the epochs of stagnation or economic decline. Still more, a transition from one epoch of this
kind to a different one must naturally produce the greatest convulsions in the relationships
between classes and between states. At the Third World Congress of the Comintern we had to
stress this point in the struggle against the purely mechanistic conception of capitalist
disintegration now in progress. If periodic replacements of normal booms by normal crises
find their reflection in all spheres of social life, then a transition from an entire boom epoch to
one of decline, or vice versa, engenders the greatest historical disturbances; and it is not hard to
show that in many cases revolutions and wars straddle the borderline between two different
epochs of economic development, i.e., the junction of two different segments of the capitalist
curve. To analyze all of modern history from this standpoint is truly one of the most gratifying
tasks of dialectical materialism.
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
4 of 8 12/05/12 14:27
Following the Third World Congress of the Comintern, Professor Kondratiev approached this
problem as usual, painstakingly evading the formulation of the question adopted by the
congress itself and attempted to set up alongside of the minor cycle, covering a period of ten
years, the concept of a major cycle, embracing approximately fifty years. According to this
symmetrically stylized construction, a major economic cycle consists of some five minor cycles,
and furthermore, half of them have the character of boom, and the other half that of crisis, with
all the necessary transitional stages. The statistical determinations of major cycles compiled by
Kondratiev should be subjected to careful and not over-credulous verification in respect both to
individual countries and to the world market as a whole. It is already possible to refute in
advance Professor Kondratievs attempt to invest epochs labeled by him as major cycles with
the same rigidly lawful rhythm that is observable in minor cycles; it is an obviously false
generalization from a formal analogy. The periodic recurrence of minor cycles is conditioned by
the internal dynamics of capitalist forces and manifests itself always and everywhere once the
market comes into existence.
As regards the large segments of the capitalist curve of development (fifty years) which
Professor Kondratiev incautiously proposes to designate also as cycles, their character and
duration are determined not by the internal interplay of capitalist forces but by those external
conditions through whose channel capitalist development flows. The acquisition by capitalism
of new countries and continents, the discovery of new natural resources, and, in the wake of
these, such major facts of superstructural order as wars and revolutions, determine the
character and the replacement of ascending, stagnating or declining epochs of capitalist
development. Along what path then should investigation proceed? To establish the curve of
capitalist development in its non-periodic (basic) and periodic (secondary) phases and to
breaking points in respect to individual countries of interest to us and in respect to the entire
world market that is the first part of the task. Once we have the fixed curve (the method of
fixing it is, of course, a special question in itself and by no means a simple one, but it pertains to
the field of economic-statistical technique), we can break it down into periods, depending upon
the angle of rise and decline in reference to the axis of abscissas (see the graph). In this way we
obtain a pictorial scheme of economic development, i.e., the characterization of the very basis
of all the proceedings subject to examination (Engels).
Depending upon the concreteness and, detail of our investigation, we may require a number
of such schema: one relating to agriculture, another to heavy industry, and so on. With this
schema as our starting point, we must next synchronize it with political events (in the widest
sense of the term) and we can then look not only for correspondence or to put it more
cautiously, interrelationship between definitely delineated epochs of social life and the sharply
expressed segments of the curve of capitalist development but also for those direct
subterranean impulses which unleash events. Along this road it is naturally not at all difficult to
fall into the most vulgar schematization and, above all, to ignore the tenacious internal
conditioning and succession of ideological processes to become oblivious of the fact that
economics is decisive only in the last analysis. There has been no lack of caricature conclusions
drawn from the Marxist method! But to renounce on this account the above indicated
formulation of the question (it smells of economism) is to demonstrate complete inability to
understand the essence of Marxism, which looks for the causes of changes in social
superstructure in the changes of the economic foundations and not anywhere else.
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
5 of 8 12/05/12 14:27
At the risk of incurring the theoretical ire of opponents of economism (and partly with the
intention of provoking their indignation) we present here a schematic chart which depicts
arbitrarily a curve of capitalist development for a period of ninety years along the above
mentioned lines. The general direction of the basic curve is determined by the character of the
partial conjunctural curves of which it is composed. In our schema three periods are sharply
demarcated: twenty years of very gradual capitalist development (segment A-B); forty years of
energetic upswing (segment B-C); and thirty years of protracted crisis and decline (segment
C-D). If we introduce into this diagram the most important historical events for the
corresponding period, then the pictorial juxtaposition of major political events with the
variations of the curve is alone sufficient to provide the idea of the invaluable starting points for
historical materialist investigations. The parallelism of political events and economic changes is
of course very relative. As a general rule, the superstructure registers and reflects new
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
6 of 8 12/05/12 14:27
formations in the economic sphere only after considerable delay. But this law must be laid bare
through a concrete investigation of those complex interrelationships of which we here present a
pictorial hint.
In the report to the Third World Congress, we illustrated our idea with certain historical
examples drawn from the epoch of the revolution of 1848, the epoch of the first Russian
revolution (1905), and the period through which we are now passing (1920-1). We refer the
reader to these examples (see the New Course). They do not supply anything finished, but they
do characterize adequately enough the extraordinary importance of the approach advanced by
us, above all for understanding the most critical leaps in history: wars and revolutions. If in this
letter we utilize a purely arbitrary pictorial scheme, without attempting to take any actual period
in history as a basis, we do so for the simple reason that any attempt of this sort would resemble
far too much an incautious anticipation of those results flowing from a complex and painstaking
investigation which has yet to be made.
At the present time, it is of course still impossible to foresee to any precise degree just what
sections of the field of history will be illuminated and just how much light will be cast by a
materialist investigation which would proceed from a more concrete study of the capitalist curve
and the interrelationship between the latter and all the aspects of social life. Conquests that may
be attained on this road can be determined only as the result of such an investigation itself,
which must be more systematic, more orderly than those historical materialist excursions
hitherto undertaken. In any case, such an approach to modern history promises to enrich the
theory of historical materialism with conquests far more precious than the extremely dubious
speculative juggling with the concepts and terms of the materialist method that has, under the
pens of some of our Marxists, transplanted the methods of formalism into the domain of the
materialist dialectic, and has led to reducing the task to rendering definitions and classifications
more precise and to splitting empty abstractions into four equally empty parts; it has, in short,
adulterated Marxism by means of the indecently elegant mannerisms of Kantian epigones. It is a
silly thing indeed endlessly to sharpen and resharpen an instrument to chip away Marxist steel,
when the task is to apply the instrument in working over the raw material!
In our opinion this theme could provide the subject matter for the most fruitful work of our
Marxist seminars on historical materialism. Independent investigations undertaken in this sphere
would undoubtedly shed new light or at least throw more light on isolated historical events and
entire epochs. Finally, the very habit of thinking in terms of the foregoing categories would
greatly facilitate political orientation in the present epoch, which is an epoch that reveals more
openly than ever before the connection between capitalist economics, which has attained the
peak of saturation, and capitalist politics, which has become completely unbridled.
I promised long ago to develop this theme for Vestnik Sotsialisticheskoi Akademii. Up to
now I have been prevented by circumstances from keeping this promise. I am not sure that I
shall be able to fulfill it in the near future. For this reason I confine myself in the meantime to
this letter.
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
7 of 8 12/05/12 14:27
Last updated on: 7.1.2007
Leon Trotsky: The Curve of Capitalist Development (1923) http://www.marxists.org/archive/trotsky/1923/04/capdeve...
8 of 8 12/05/12 14:27