Although much has changed in the more than six decades since Trotsky wrote this essay it retains its full relevance on the fundamental issues confronting workers and young people today. In this short, very readable pamphlet Trotsky succeeds in combining skilful propaganda and economic theory in what is still one of the best expositions of Marxism on the nature of capitalism and the socialist alternative.

What stands out in Trotsky's "Marxism in Our Time" is not the outdated statistics, which are still of some interest, but the freshness of its analysis and the devastating critique of a system rotten to the core. The thousands today involved in the anti-capitalist and anti-war movements would benefit greatly from reading this work, which more than 60 years before Seattle and Genoa provided compelling arguments against the exploitation, greed and corruption of capitalism.

Trotsky begins with an outline of Marx's economic analysis of capitalism, briefly summarizing the labor theory of value, which Trotsky described as "the basic regulator of capitalist economy." This, as Trotsky explains, forms the basis of an understanding of the whole edifice of capitalism. It was not a case though of Marx discovering some supra-historical, eternal laws, but studying the specific laws of capitalism.

Trotsky lucidly explains what can sometimes be difficult concepts, clearly revealing how workers are exploited and how the ruling class get rich from the labor of the working class. The capitalists themselves do not fully understand the workings of their system and react empirically enough to attempt to obscure the realities of their system based on greed and exploitation.

Trotsky points out that the class struggle is in essence a struggle for the surplus product produced by the unpaid labor of the working class; that is a struggle between wager for workers and profits for the bosses. This observation remains valid today as low paid public-sector workers in Britain strike for better pay, after witnessing the fat cats wallow in the massive transfer of wealth to the rich during the 1990s boom. Trotsky provides a neat précis of class society when he states: "He who owns the surplus product is master of the situation - owns wealth, owns the state, has the key to the church, to the courts, to the sciences and to the arts."

Until recently economists and politicians were claiming a new paradigm; a capitalist economy where the boom-bust cycle had been abolished as a result of new technology. These "new" theories merely echoed the false notions espoused before the 1929 Wall Street crash, when, as Trotsky points out, Marx's critics claimed trusts, syndicates and cartels "presaged the final triumph over crisis."

Trotsky makes the bold statement that "official political economy is dead." What Trotsky meant was that bourgeois economists are incapable of explaining or resolving the capitalist crisis. Trotsky explains, "real knowledge of capitalist society can be obtained only through Marx's Capital", which he brilliantly encapsulates in this essay.

Decades before Fukuyama's discredited "end of history" theory, Trotsky explained that the basic error of classical economics was its view of capitalism as humanity's normal existence for all time, instead of just one historical stage in the development of society. Following the method of Marx, Trotsky exposes the contradictions of capitalism and demonstrates why and how it will be replaced with socialism.

In recent years reality has obliged some economists to acknowledge Marx's economic analysis. Even the right-wing tabloid, the Sun, felt compelled to declare that, "Marx was right". Time magazine commented that Marx "no doubt would have felt vindicated" by developments in the US economy. Of course, the ruling class tremble at the thought that Marx's political conclusions will also be vindicated.

Part of Trotsky's essay is given over to answering critics of Marxism and responding to the claim that Marx's teachings had become obsolete. Trotsky gave an emphatic rebuttal: "if the theory correctly estimates the course of development and foresees the future better than other theories, it remains the most advanced theory of our time, be it even scores of years old."

In particular Trotsky attends to the claim that capitalism no longer results in increasing misery for the mass of the population. Trotsky points out that usually in the prosperous periods of capitalist development "the rise in the standard of living of certain strata of toilers, which at times was rather extensive, hid from superficial eyes the decrease of the proletariat's share in the national income." Of course in periods of economic recession the relative decline is replaced by an absolute decline. But in the 1990s boom, not only did the share of national wealth going to workers in the US decrease; the bottom 20 percent actually earned $100 a year less than the early 1980s. Across the globe two-thirds of the world's population are expected to survive on less than $2 a day, while a third barely exist on less than $1 a day. This desperate situation is now being compounded by the onset of world recession.

Trotsky also provides much statistical evidence on the concentration of wealth in the 1920s and 1930s, at a time when workers were pushed into greater deprivation. Today this concentration of wealth is even more obscene. Trotsky tells how two percent of the US population in 1929 owned three-fifths of the entire national wealth. Today the richest 0.5% own as much as the bottom 90%. The richest one percent has seen their wealth increase by a staggering 157% in real terms since 1979.

In 1929, 200 of the 3,000,000 corporations in America controlled 49.2 percent of the assets of all corporations. Today the combined sales of the world's top 200 companies are higher than the combined gross domestic product of all but ten countries on the whole planet.

In a comment that resonates today, Trotsky points out that the then sixty richest families in America "dominate not only the market but all the levers of government. They are the real government, 'the government of money in a dollar democracy'". Today the heads of the US administration continue to be intimately linked to the big corporations. Vice-President Dick Cheney, for example, was chief executive officer of Halliburton Industries; an oil services company that has business deals with repressive governments, including Iraq.

In writing this essay Trotsky not only gave a brilliant summary of Marx's economic theory, but also updated its application. While Marx based his analysis on the data of 19th century Britain, then the dominant world power, Trotsky used statistical information about America, by then the foremost capitalist power on the globe. The 1930s internationally was a period of capitalism in deep economic, social and political crisis. The economy was in the vice of the deepest and most devastating slump ever experienced by capitalism. This was a period of revolution and counter-revolution, of heroic workers struggles and bankrupt leadership, a time when the cost of revolutionary failure was the iron heel of fascism and world war around the corner.

At the beginning of the new millennium the US remains the only superpower, following the collapse of the Soviet Union at the beginning of the 1990s. And, as in Trotsky's time, economic, social and political turmoil stalks the planet, with terror and war a permanent feature of capitalism. Of course there are also differences with the 1930s. Then fascism was triumphant in Germany, Italy and Spain, following a series of defeats of the working class; and the USSR existed as an alternative social system.

Today, while an ever-present danger to the workers' movement, fascism at this stage is not challenging for power. Where neo-fascist and far right groups have won elections it has been on the basis of abandoning openly fascist ideas and adopting right-wing populism. Encouraged by government reactionary policies on asylum, these groups whip up racism by blaming asylum seekers and immigrants for inadequate public services and poor housing.

In many countries since World War Two the ruling class, where the capitalist system has been under threat, has preferred to rely on their military kindred rather than turn to small fascist groups. Noting also the millions who came out onto the streets of Paris in opposition to Le Pen after the first round of the French presidential elections, they fear the development of a mass anti-racist movement.

In Trotsky's time only the Soviet Union had abolished capitalism, yet within a decade following the second world war a third of the world's population were living outside the orbit of capitalism, as China and countries in Eastern Europe followed the Stalinist model of the then Soviet Union. But by the beginning of the 1990s Stalinism had collapsed, first in Eastern Europe and then in Russia. China too is a long way down the road to capitalist restoration, which in Russia has wrought economic havoc and catastrophic falls in living standards.

These countries, however, were not socialist. Although capitalism had been overthrown and the market economy replaced with a planned economy, there was no democracy. The state was run by a bureaucratic elite who used vicious repression against opponents of the regime. In Russia 1917 a workers' revolution led by the Bolsheviks had ushered in the first steps towards a democratic workers' state. However, Trotsky had explained that it was not possible to build socialism in one country. Civil war, imperialist invasion and the isolation of the revolution in an economically and culturally backward country resulted in workers losing political power and the establishment of a dictatorial regime. The states set up in China and Eastern Europe after World War Two were modeled on the Soviet Union of 1945, not 1917.

For a period following World War Two it appeared that Marxism had been confounded. The post-war economic upswing, which endured until the early 1970s, seemed to make even the very idea of revolutionary change in the advanced capitalist countries redundant. During this period the Socialist Party's predecessors correctly argued that capitalism would inevitably go into crisis and workers would again move into struggle against the system. The war itself had brought the 1930s economic depression to a bloody and horrific end, and revolutionary movements did unfold in its aftermath. Over a period of time colonies in Asia and Africa gained political independence. Some turned towards Stalinism, while others continued to find themselves economically enslaved to the giant capitalist corporations and imperialism.

In post-war Western Europe workers also wanted to change. This was reflected in Britain for example in the election of a Labour government. In contrast to Blair's New Labour today, which is enthralled by capitalism and wedded to big business, the Labour Party of 1945, under pressure from workers, in words aimed for socialism. While its leaders sought to remain within the confines of capitalism, workers saw Labour as their party were active in determining policy. This was reflected in the radical manifesto of 1945, the nationalization of basic industries and the establishment of the welfare state. Now workers have no influence over policy. New Labour's pro-big business agenda of privatization and attacks on the welfare state has alienated and disenfranchised millions of workers, requiring the formation of a new mass party of the working class.

Trotsky's prognosis that post-war reconstruction would take place on a socialist basis was not borne out. In the immediate post-war period the forces of genuine Marxism were too weak to influence the new period opening up. The ruling classes of Europe, through the agency of Social Democracy, were able to carry through a democratic counter-revolution that laid the political basis for the prolonged post-war economic upswing and the granting of reforms for workers.

That period has come to an end and its specific features will not be repeated. In the depressionary period of today economic booms fail to alleviate the plight of millions, while financial crisis and recession result in increased impoverishment and destitution.

Marxism shuns attempts at astrological predictions. Trotsky was no soothsayer. He explained that a political prognosis "suffices if it gives a correct indication of the general line of development and helps to orientate oneself in the actual course of events, in which the basic line is inevitably shifted to the right or to the left".

Trotsky explained that the Communist Manifesto of Marx and Engels also contained some errors of timing and analysis. But the task of Marxists is to make corrections to a prognosis, in the light of new developments and in accord with the method of Marxism itself, in order to provide a guide to action and an effective orientation in the class struggle.

Today Stalinism no longer exists as an alternative system, its collapse, the subsequent ideological offensive of the bourgeois and the further shift to the right of the Social Democratic parties in Europe, including New Labour, set back socialist consciousness amongst broad layers of workers and youth in the 1990s. The Socialist Party, and the international organization to which it is affiliated, the Committee for a Workers' International (CWI), using the method of Marxism, examined the new complexities of the situation and formulated an analysis and orientation to take our movement forward.

Trotsky finishes "Marxism in Our Time" by making an unassailable case for a planned world economy, a socialist society where the world's resources can be used to benefit the whole of humanity rather than profit a greedy elite. Trotsky makes clear this will require a revolution: "Partial reforms are no good."

In "Marxism in Our Time" Trotsky refers to the inevitability of socialism and the socialist revolution and comments that Marx saw socialism as a historical necessity. It is true that historically capitalism can no longer progress society and just means the misery for billions. Only the democratic planning of the world's resources can end the horrors of starvation, destitution, terror and war. Today the choice between barbarism, environmental destruction and nuclear annihilation on the one hand and abundance, progress and peace on the other has never been posed more starkly.

But Trotsky made clear that only the direct intervention of the masses can sweep away the system, abolishing private ownership of the means of production as the first prerequisite to a planned economy. In Italy and Spain millions have participated in strikes and demonstrations. In Latin America revolutionary movements have rocked the continent. In Britain public sector workers have moved into action.

But Trotsky above all understood the need for and strived towards the building of a revolutionary party: a party that understands the nature of capitalism and strives to arm the working class with a perspective and program to change society.

To all those who attempt to justify the brutal terror of capitalism and all its attendant horrors, Trotsky more than 60 years ago retorted: "Conservatives consider it sensible politics to defend a social order which has descended to such destructive madness and they condemn the fight against such madness as destructive Utopianism." Trotsky prophetically added that "Aging capitalism... is losing its last vestiges of reason."

How these words resonate today as even some bourgeois commentators are compelled to state "The orthodox response to the crisis of American capitalism is to reform the system, but reform is useless when the system itself has failed. Enron was a scandal but also the product of a pathological mutation in capitalism." (International Herald Tribune, September 9th, 2002)

This pathological mutation extends to the body politic of the system, as world capitalism, led by war-mongering Bush and his accomplice Blair, sets a course towards economic and social turmoil and the horrors of war and terror. The struggle for socialism has never been more urgent. Trotsky's essay of 1939, his last affirmation of Marxist economic theory before his murder by a Stalinist agent in 1940, is an indispensable aid to developing the forces that will achieve socialism in our time.

Jim Horton
October 24th, 2002