Today is the birthday of Thomas Mann, who was born exactly 150 years ago.

In honor of Mann, I’m posting this essay I wrote, several years back, about him, The Magic Mountain, covid, the Trotskyist Ernest Mandel, and late capitalism. The essay never got published, and I’d forgotten about till I read the notification this morning from Lit Hub, that today is his birthday.

I first read The Magic Mountain in the summer of 1990, a year after I graduated college and just before I was starting graduate school. I was house-sitting in New Haven and studying German. I didn’t know anyone, and back in those days, that kind of pervasive, seemingly permanent, solitude, made me anxious (nowadays, I struggle to get even a few hours of solitude). Reading The Magic Mountain steadied me. I didn’t understand a lot of it, but the daily practice of making my way through its pages gave me a sense of structure and my summer an arc.

I’ve recently begun re-reading The Magic Mountain, and I see now its humor and understand more, especially after covid, the allure of sickness and stillness that it describes. At some point, I’ll report back more on my experience of re-reading it, but in the meantime, here’s the essay I wrote.

***

As soon as covid hit the United States, writers and readers reached for their bookshelves, pulling down titles familiar (The Plague) and forgotten (A Journal of the Plague Year) in the hope of making sense of the disease. One text, however, frequently went overlooked.

Thomas Mann’s The Magic Mountain is set in a tuberculosis sanatorium in the Swiss Alps on the eve of the First World War. The patients remain there for years, often at their family’s expense. Funding their stay is the extraordinary surplus accumulated by Europe’s bourgeoisie over the course of the long nineteenth century. But the ease of their estate is about to end. In the novel’s final pages, war breaks out, unlocking a chain of events that will culminate in the Bolshevik Revolution and the triumph of social democracy. Though these consequences lie beyond the ken of the novel, its author is cognizant of their coming. Mann had begun the novel, he explained in 1953, as a portrait of “a capitalistic economy that was still functioning well and normally.” He concluded it as a “swan song” to a “form of existence” that is no more.[1]

The Magic Mountain reveals a connection between capitalism and care that speaks to our covid or post-covid moment in ways the other great literature of illness does not. Covid exposed vast inequalities in American society, the parlous quality of our social services and public health, and elements of what social scientists call a “failed state.” Telltale signs of a neoliberalism run amuck, the social symptoms of covid could be interpreted as the political economy of the sanatorium was by Mann: piles of wealth give way to pyres of death, portending the end of capitalism as we know it. There’s just one difference. Instead of the deliverance of socialism, we are stuck in an interregnum. Signs of social collapse are everywhere, yet no one can find an exit. We all are in Mann’s sanatorium, waiting for our benefits to run out.

Welcome to late capitalism.

People have been predicting the death of capitalism since the term was born in the nineteenth century.[2] The Global Financial Crisis and Occupy revived those predictions, leaving scholars staid and scruffy to examine how capitalism might end. Even The Atlantic found itself wondering “Why the Phrase ‘Late Capitalism’ Is Suddenly Everywhere.”

Yet late capitalism is an ambiguous term. Lateness may imply death or an ending, as when we speak of my late grandfather or the late afternoon. In its first usage, by the German social theorist Werner Sombart in the early twentieth century, late capitalism did mean the end of capitalism.[3] Late also suggests up-to-date or state-of-the-art, as in the latest iPhone, pointing not to the end of capitalism but to its refinement and advance. Surveying the same developments as Sombart, the Austrian Marxist Rudolf Hilferding claimed that the emerging economy of the twentieth century was simply “the latest phase of capitalist development,” a phrase echoed by Lenin, who took pains to remind his followers that “there is no such thing as an absolutely hopeless situation” for the bourgeoisie.

Despite its popularity among younger people radicalized by Occupy, DSA, and Bernie Sanders, late capitalism is not an idea that lends itself to revolution or a vision of progress. It may express a wish or desire to be rid of capitalism. But mostly it works as a theory of turning points that never turn—or worse.

Traditionally, the socialist left has believed that capitalism is prone to crises—not simply the ups and downs of the business cycle but increasingly wrenching dislocations that cannot be resolved within the constraints of capitalism. With time, these crises must come to an end, “either in a revolutionary constitution of society at large,” goes the canonical formulation, “or in the common ruin of the contending classes.” Though hardly a deterministic vision of the future—that “common ruin of the contending classes” is a serious possibility—the theory of revolution depends on a theory of crisis.

According to Sombart, late capitalism has eliminated this crisis tendency. Government regulation of the market and the firm; the growth of management bureaucracies; the rise of labor unions, social insurance, and labor legislation; corporate concentration and coordination—all of these developments attenuate “the cyclical oscillations of the economic system.” Without a hint of revolution or ruin, late capitalism turns capitalism into a “disappearing or retreating economic system.”[4] Capitalism will end, in other words, just not with a bang.

The Marxist philosopher Theodor Adorno never takes this last step that Sombart took—toward the end of capitalism—but he does retrace virtually all of Sombart’s previous moves. In an influential 1968 address, Adorno noted that late capitalism “has discovered resources within itself” that the first generation of Marxists did not imagine capitalism had—improvements in the living standards of the masses, the absorption of the working class into the middle class, the managed growth of industrial economies, and the end of those crises that once traumatized workers and owners alike. Through these measures, late capitalism postpones the end of capitalism “ad kalendas Graecus,” that is, forever. Capitalism will never end.

Ernest Mandel’s Late Capitalism, which was published in German in 1972 and translated into English in 1975, is the most serious and sustained reflection on the topic. It begins from the premise that the state-managed growth and redistribution of the postwar era—Les Trentes Glorieuses or the Golden Age—that Sombart and Adorno took for granted is about to end. Mandel’s late capitalism is what comes after Sombart’s and Adorno’s late capitalism. Far from overturning the operating principle of capitalism—the competitive quest for ever-higher rates of profit through the production of commodities and exploitation of labor—late capitalism is the “most extreme expression” of capitalism. Instead of massaging antagonism and pacifying workers, late capitalism is the moment when conflict “assumes an explosive form” and leads “to a spreading crisis.” It’s the 1970s, and “the mass revolutionary movement of the international working class” is “approaching.”[5] How does Mandel know?

Economic growth and increases in the profit rate are never slow, steady, or assured, says Mandel. But neither are they random. They come in “long waves” of four to five decades: from 1793 to 1847, 1848 to 1893, and 1894 to 1939.[6] Prior to the onset of the wave, a vast pool of capital lies idly at sea, waiting for channels of profit and investment to open. Then, suddenly, and for different reasons—labor gets cheaper because of war, unemployment, or migration; raw materials are found and seized through imperial conquest; new markets are created in untapped continents or spheres of social life like the household—profit becomes possible.[7] The wave is set in motion.

As the wave builds, profit and growth come faster and faster; booms grow long, busts get short.[8] Capital invests in and spearheads transformative technological innovations, not simply machines that reduce the need for human labor but, more important, machines that build the “motive machines” (the steam engine, the combustion engine, the computer) that drive and direct production on a mass scale.[9] The more labor is saved by these machines, the more profit there is to be had.

Then, as the wave crests, the profits and growth come slower and slower; now it is the booms that are brief, the busts that are long. Some of the causes of deceleration are contingent—decreases in international trade or new competitors offering cheaper prices—but the most persistent cause is the very thing that once made investment profitable: the machine production of motive machines. The productivity that can be extracted from workers is unpredictable. It is a function of the capitalist’s power, the workers’ consent, and the presence or absence of other workers more desperate than they (what Marxists call “the industrial reserve army”). What machines can do, by contrast, is fixed by the design of the machine itself. The more dependent the capitalist is on the machine, the less variable his profit will be. When enough competitors have those machines, there’s less extra profit to be extracted from them. When profits stagnate, investors flee. The wave crashes and recedes.[10]

According to Mandel, the fourth wave of capitalism began in 1940, crested in 1966, and is now crashing across the globe. During the first half of the wave, capital found its opportunities in the rearmament of the Second World War and the Cold War; the introduction of industrial methods throughout all spheres of the economy and across the globe; increasing automation from the digital revolution; and the cheap labor created by the suppression of wages under fascism and the Second World War.[11]

By the 1960s, however, the combination of trade unions and actually existing socialism had raised the price of labor in the capitalist world and shut off the rest of the world to capitalist investment. Global industrialization of the production of capital and consumption goods (and not simply, as in the nineteenth century, the extraction of raw materials) meant that productivity levels and profit rates were converging across regions, nations, and industries.[12] The main place to find that extra bit of profit was in the “technological rents” embedded in a firm’s legal monopoly over its technological innovations or the lengthy start-up time (and resources) it would take competitors to develop those innovations.[13] This was late capitalism: large multinational corporations, operating throughout a genuinely global and competitive economy, chasing technological rents across the world.[14]

Mandel clearly hoped that capitalism had reached the end of the line. Amid the global strike wave and increasing inflation of the late 1960s and early 1970s, it seemed that late capital, unlike its nineteenth-century forebear, had nowhere to go. All the usual fixes—state intervention, monopoly control, easy credit—no longer worked. A decline in the profit rate was inevitable. The longed-for crisis, and resultant revolution, were at hand.[15]

There was, however, one other possibility. Why, if there was no more profit to be found in the machine, could employers not get more labor from their workers without paying them more? Labor may have gotten accustomed to the steadily increasing wages and higher standard of living of the postwar era, but that was no law of nature. What if capital could persuade, or force, labor to take a lower wage and settle for a lower standard of living? Unless it was able to “break the resistance of wage-earners” and raise its profit rate, capital would never be spared the long stagnation that was coming. Mandel reassured himself with the thought that declaring war on workers was “unthinkable” without a massive unraveling and reversal of the postwar settlement. Only the fascists had ever been able to break the workers’ movement like that. Born and bred in Keynesian comfort, the working class would never stand for it.[16]

As it happens, they did, and retrenchment is what they got: not a revolution of the workers but the counterrevolution of Paul Volcker and Ronald Reagan, along with the introduction of a vast industrial reserve army of poor workers in Asia and elsewhere. The stagnation was long and the fall in real wages longer. That was the late capitalism that Mandel glimpsed, in the stray passages of his sentences, and that we have all come to live with and see.

“Capitalism will not die a natural death,” wrote the philosopher and critic Walter Benjamin.[17] At moments of deceleration or defeat, many on the left have hoped otherwise, envisioning capitalism’s collapse as a natural or necessary consequence of its operation. At the end of the nineteenth century, Karl Kautsky, one of German socialism’s foremost theoreticians, declared that “irresistible economic forces lead with the certainty of doom to the shipwreck of capitalist production.”[18] In the early decades of the twenty-first, Kautsky’s far more jaded successor, Wolfgang Streeck, still claims that “capitalism is facing its Götterdämmerung”—simply because of its tendency to self-destruction.[19] Utopianism has never been the fatal flaw of the left. What truly undermines its capacity for political realism is this belief in the saving power of catastrophe.

On the contemporary left, there is hope that climate change may finally bring capitalism to heel. That, too, is an old fantasy. At the end of The Protestant Ethic and the Spirit of Capitalism, which came out in 1905, the German sociologist Max Weber plaintively wonders how long the iron cage of capitalism will hold. The only hope of release lies in the finitude of fossil fuels: Capitalism will dominate its denizens “until the last ton of fossilized coal is burnt.”[20] This, according to Sombart, was a line Weber liked to repeat in private conversation. Sombart was unimpressed. Not only was there hydraulic and tidal power; there was also solar power, which had been used, as early as 1902, on an ostrich farm near Los Angeles. The only question for capitalism was whether that use could be turned to profit. Evidence from Egypt, Peru, Chile, and South Africa suggested it could.[21] There are no hopeless situations for the bourgeoisie.

But hidden in those Marxist canons of crisis and collapse is a lesson for the left. The rate of profit, Marx wrote, “is only settled by the continuous struggle between capital and labour, the capitalist  constantly tending to reduce wages to their physical minimum, and to extend the working day to its physical maximum, while the working man constantly presses in the opposite direction. The matter resolves itself into a question of the respective powers of the combatants.” More than a dictate of economics, profit is a question of power. Unlike a machine, the power of workers, concerted, cannot be determined in advance. Likewise, profit. How much power the workers can exercise—and how much profit the capitalist can extract—is an open question, answered only in the struggle itself.

In the early days of late capitalism, capital learned that lesson. Whether we are in the last or merely the latest days of capitalism will be determined by whether and how labor learns it, too.

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[1] Thomas Mann, “The Making of ‘The Magic Mountain,’” The Atlantic Monthly (January 1953), 41-45, reprinted in Mann, The Magic Mountain (New York: Vintage, 1969), 719.

[2] Wolfgang Streeck, How Will Capitalism End? Essays on a Failing System (New York: Verso, 2016), 3; Francesco Boldizzoni, Foretelling the End of Capitalism: Intellectual Misadventures Since Karl Marx (Cambridge: Harvard University Press, 2020), 25; R. M. Hartwell and Stanley L. Engerman, “Capitalism,” in The Oxford Encyclopedia of Economic History, Vol. I (New York: Oxford University Press, 2003), 319-325.

[3] Werner Sombart, “Capitalism,” in Encyclopedia of the Social Sciences, Volume 3, ed. Alvin Johnson and Edwin Seligman (New York: Macmillan, 1930), 206-208.

[4] Werner Sombart, “Capitalism,” in Encyclopedia of the Social Sciences, Volume 3, ed. Alvin Johnson and Edwin Seligman (New York: Macmillan, 1930), 206-208; Werner Sombart, “The Economic Life of the Future,” in Economic Life in the Modern Age, ed. Nico Stehr and Reiner Grundman (NY: Routledge, 2017), 256.

[5] Ernest Mandel, Late Capitalism (New York: Verso, 1975), 9, 27, 562, 589.

[6] Mandel, 108-109, 120-121, 130-132.

[7] Mandel, 39.

[8] Mandel, 126-127.

[9] Mandel, 117-118.

[10] Mandel, 40, 130-132, 147-149, 158, 161-162, 178-180, 210, 439.

[11] Mandel, 64, 170, 178-179, 188-191, 442.

[12] Mandel, 64, 170, 178-179, 191, 312, 352-353.

[13] Mandel, 8, 192-193.

[14] Mandel, 316-17, 321, 323-326.

[15] Mandel, 192, 258, 472-473, 526-527, 531, 538-539, 550-556, 571, 585-586, 589.

[16] Mandel, 180, 341.

[17] Peter Osborne, The Postconceptual Condition: Critical Essays (New York: Verso, 2018), 6.

[18] Francesco Boldizzoni, Foretelling the End of Capitalism: Intellectual Misadventures Since Karl Marx (Cambridge: Harvard University Press, 2020), 46.

[19] Wolfgang Streeck, How Will Capitalism End? Essays on a Failing System (New York: Verso, 2016), 57.

[20] Max Weber, The Protestant Ethic and the Spirit of Capitalism, trans. Talcott Parsons (New York: Routledge, 1930, 1992), 123.

[21] Werner Sombart, “The Economic Life of the Future,” in Economic Life in the Modern Age, ed. Nico Stehr and Reiner Grundman (NY: Routledge, 2017), 249-251.