MIA: Encyclopedia of Marxism: Glossary of Terms




The factory committees, which came into being in March 1917, immediately after the victory of the February Revolution, were class organisations of the workers. The factory elder’s councils and other elected bodies formed from provisional strike committees in the periods of revolutionary upsurge are considered the forerunners of the factory committees.

The factory committees became very active as soon as they were set up. They formulated the workers’ economic demands and presented them to the factory owners, introduced an eight-hour day by their own decision, exercised control over the employment and discharge of labour power, formed workers’ militia units, combated sabotage on the part of the employers, secured raw materials and fuel for the factories concerned to prevent stoppages, and so on. They took an active part in the October Revolution. In 1918 they were merged with the trade unions and became primary units of the latter.

The First Petrograd Conference of Factory Committees was held from May 30 to June 3, 1917. The 568 delegates attending it represented the factory committees, trade union bureaus, and other workers’ organisations of Petrograd and Vicinity. The Conference discussed the state of industry and the problem of controlling and regulating production in Petrograd, the tasks of the factory committees, their role in the trade union movement, etc.

The Conference became a scene of bitter struggle between the Bolsheviks and Mensheviks over the role and tasks of the factory committees and over workers’ control. The Mensheviks tried to nullify the political and economic role of the factory committees and to substitute state control involving bourgeois parties for workers’ control. The conference carried the Bolshevik motion.

The Conference was very important in that it enabled the factory committees to exchange experience and join forces in the campaign for workers’ control. To this end it elected a standing Central Council of Factory Committees of 25.

Lenin took part in the conference. He drafted the “Resolution on Measure to Cope with Economic Dislocation", which was carried by a vast majority, and analysed the conference resolutions in his articles “The Petty-Bourgeois Stand on Economic Dislocation” and “Economic Dislocation and Proletariat’s Struggle Against It", criticising the Mensheviks stand at the conference and upholding the Bolsheviks’ tactics on workers’ control over production.


Falling Rate of Profit

Marx claimed that there was a tendency for the rate of profit to fall in the course of history, and saw this as one of the sources for an historic crisis of capitalism. He sets out his argument for this tendency in Chapter 13 of Volume III of Capital:

Marx introduced the concepts of constant capital (c), i.e., the value of goods consumed in production, and variable capital (v), i.e., wages, and designated the ratio of constant to variable capital (c/v) the “organic composition of capital”. He showed that improvements in the efficiency of a capitalist enterprise inevitably leads to an increase in this ratio, that is, that any given quantity of “living labour” tends to engage larger and larger quantities of “dead labour” in the process of production.

For a given rate of exploitation of labour, (s/v) (i.e., the ratio of surplus labour, s, to the necessary labour time workers must be paid for their labour power, v), what Marx calls the rate of profit, s/(c + v), must decline.

“If it is further assumed that this gradual change in the composition of capital is not confined only to individual spheres of production, but that it occurs more or less in all, or at least in the key spheres of production, so that it involves changes in the average organic composition of the total capital of a certain society, then the gradual growth of constant capital in relation to variable capital must necessarily lead to a gradual fall of the general rate of profit, so long as the rate of surplus-value, or the intensity of exploitation of labour by capital, remain the same.

“Now we have seen that it is a law of capitalist production that its development is attended by a relative decrease of variable in relation to constant capital, and consequently to the total capital set in motion. This is just another way of saying that owing to the distinctive methods of production developing in the capitalist system the same number of labourers, i.e., the same quantity of labour-power set in motion by a variable capital of a given value, operate, work up and productively consume in the same time span an ever-increasing quantity of means of labour, machinery and fixed capital of all sorts, raw and auxiliary materials-and consequently a constant capital of an ever-increasing value.

“This continual relative decrease of the variable capital vis-ŕ-vis the constant, and consequently the total capital, is identical with the progressively higher organic composition of the social capital in its average. It is likewise just another expression for the progressive development of the social productivity of labour, which is demonstrated precisely by the fact that the same number of labourers, in the same time, i.e., with less labour, convert an ever-increasing quantity of raw and auxiliary materials into products, thanks to the growing application of machinery and fixed capital in general. To this growing quantity of value of the constant capital – although indicating the growth of the real mass of use-values of which the constant capital materially consists only approximately – corresponds a progressive cheapening of products. Every individual product, considered by itself, contains a smaller quantity of labour than it did on a lower level of production, where the capital invested in wages occupies a far greater place compared to the capital invested in means of production. The hypothetical series drawn up at the beginning of this chapter expresses, therefore, the actual tendency of capitalist production. This mode of production produces a progressive relative decrease of the variable capital as compared to the constant capital, and consequently a continuously rising organic composition of the total capital. The immediate result of this is that the rate of surplus-value, at the same, or even a rising, degree of labour exploitation, is represented by a continually falling general rate of profit. (We shall see later [Ch. 14] why this fall does not manifest itself in an absolute form, but rather as a tendency toward a progressive fall.)

“The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour.

“This does not mean to say that the rate of profit may not fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, it is thereby proved logical necessity that in its development the general average rate of surplus-value must express itself in a falling general rate of profit.

“Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it, i.e., to the productively consumed means of production, it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus-value to the value of the invested total capital forms the rate of profit, this rate must constantly fall.” [Capital, Volume III, Chapter 13]

Marx refers to this process as a tendency rather than a law, because his demonstration only leads to the rate of profit falling if the rate of exploitation of labour, measured as the rate of surplus value, increases by a lesser amount than the organic composition of capital.

In Chapter 14 of Volume III, Marx claims that the falling rate of profit was empirically demonstrated, but went on to enumerate the various possible countervailing tendencies: (a) increasing rate of surplus value (rate of exploitation of labour), (b) depression of real wages, (c) cheapening of elements of constant capital, (e) Relative over-population, (f) Foreign trade.

It should be further noted that the ratio that Marx calls the rate of profit, reflects the proportion of profit to capital invested in a given cycle of reproduction; but rate of profit in the conventional meaning of the word, would require that this ratio be multiplied by the per annum rate of circulation of capital. Marx devotes a lot of effort in Volume II of Capital (see Chapter 5 in particular) looking at the circulation of capital, but it still seems that this proof of a tendency of the falling rate of profit is an open question.

If the workers manage to sufficiently maintain their share of the total social product and resist the pressure to work longer and longer hours of surplus labour time, and/or the capitalists are unable to shorten the cycle of reproduction and realise their output from their investment in a shorter time, then the tendency of the rate of profit to fall eventuates.

Some have challenged Marx’s claim that the organic composition of capital must increase, claiming instead that computerisation and the growth of the services sector means that on average the same quantity of wage labour may be employed with smaller not larger quantities of constant capital.

The tendency of the rate of profit to fall is not directly a source of crisis, since it could simply mean a slower rate of enrichment of the big bourgeoisie. It becomes a source of crisis because profit is the source of regeneration of the forces of production, which operate on a larger and larger scale, requiring investment on an ever increasing scale. Profit is also the source of income for the burgeoning classes of hangers on, and combined with the overproduction of capital as a result of the credit system, a falling rate of profit generates intense crisis in the ranks of the capitalists themselves. The falling rate of profit also intensifies the class struggle as capitalists try to resolve their problem by pushing wages below the poverty line or speeding up production to untenable levels.

The falling rate of profit also manifests itself as a crisis of realisation. That is, having produced a mass of commodities (and paid off the banker, tax collector, landlord and so on) the capitalists find it difficult to get people to pay the asking price of the goods and allow the capitalist to complete the cycle of reproduction: M → C → M' [Money→ Commodity→ More Money]. So long as the mass of the population live in poverty it remains impossible to avoid a crisis of realisation: as Henry Ford said: “Robots don’t buy Fords”. But high wages lead to reductions in the rate of exploitation of labour and increases in the costs of production.

After the long boom after World War Two, it would seem that capital did indeed come up against a crisis in the falling rate of profit and overproduction of capital, leading to the crisis of the late 1960s and the opening up of a period of “stagflation” in the 1970s.

The main things that the bourgeoisie have to do to stave off the falling rate of profit are getting people to work longer and longer hours, producing the basic needs of the working class as cheaply as possible and getting people to pay far above the actual costs of production for things, using advertising and so on. Splitting the working class between a core layer of skilled workers, while being able to super-exploit the rest is also effective. So the use of “enterprise zones” in far-away countries and dividing people into ghettos are part of the necessary strategies.


False Consciousness

“False Consciousness” refers to ideology dominating the consciousness of exploited groups and classes which at the same time justifies and perpetuates their exploitation.

The phrase was never used by Marx, and was used only once by Engels in a private letter to Franz Mehring in 1893. The context in which Engels used the term was to explain how Marx and Engels had not given sufficient emphasis in their writing to the role played by thought in determining social action, having spent their main effort in explaining how social life determines how people think. “False Consciousness” is meant in contrast to an understanding which a subject is in a position to have, but through lack of reflection or sufficient information, has not attained.

So long as one does not make too much of this term, it does no great harm. However, the term is problematic and it is for good reason that Marx and Engels did not make “false consciousness” a category of their analysis of capitalism. It could be taken as implicit that if you describe someone as having “false consciousness,” then they do not know what is in their own best interest,– but you do. This standpoint presumes that social interest can be determined “objectively,” from outside the whole system of social life of which social interests are a part. Further, it seems to presume that it is rational only to pursue one’s “own” interests; so any form of self-sacrifice or action determined by ethical considerations would seem to be deemed “false consciousness;” and who other than the subject itself can determine the aim of its activity? Thus, the idea of “false consciousness,” so understood, combines the standpoint of political economy, in which economic agents all pursue self-interest, and the view described in Theses on Feuerbach as “dividing society into two parts, one of which is superior to society,” – a bureaucratic or sectarian view of socialism and the working class.

In 1920, Lukács introduced the notion of “false consciousness” as a necessary concept in order to understand how it is that all working class people are not ipso facto, socialist revolutionaries. He defined “false consciousness” in contrast to an “imputed consciousness,” a juridical term meaning what people themselves would think if they were to have sufficient information and time to reflect, what they “ought to know,” so to speak. In his famous essay on Class Consciousness, Georg Lukács commented as follows:

“It might look as though ... we were denying consciousness any decisive role in the process of history. It is true that the conscious reflexes of the different stages of economic growth remain historical facts of great importance; it is true that while dialectical materialism is itself the product of this process, it does not deny that men perform their historical deeds themselves and that they do so consciously. But as Engels emphasises in a letter to Mehring, this consciousness is false. However, the dialectical method does not permit us simply to proclaim the ‘falseness’ of this consciousness and to persist in an inflexible confrontation of true and false. On the contrary, it requires us to investigate this ‘false consciousness’ concretely as an aspect of the historical totality and as a stage in the historical process.”

and Lukács continued always to use the inverted commas whenever he used the term ‘false consciousness’.

It was Herbert Marcuse who revived the use of the term ‘false consciousness’ in the early 1960s, as part of his analysis of the stability of capitalism after the post-WW2 settlement.

“To the degree to which they correspond to the given reality, thought and behavior express a false consciousness, responding to and contributing to the preservation of a false order of facts. And this false consciousness has become embodied in the prevailing technical apparatus which in turn reproduces it.” [One-Dimensional Man, Chapter 6].

Writers such as C. Wright Mills and Ernest Mandel still frequently used inverted commas around the phrase.


Far Eastern Republic

The Far Eastern Republic was set up in April 1920 and included the Trans-Baikal, Amur, Maritime and Kamchatka regions and Northern Sakhalin. Formally a bourgeois-democratic state, it, actually pursued a Soviet polity. Its formation was in keeping with the interests of Soviet Russia, which needed a prolonged respite from war in the Far East and wanted to stave off war with Japan. At the same time, however, its creation was a step the Soviet Government had been compelled to take by the pressure of circumstances. After the interventionists and whiteguards were driven out, of the Soviet Far East (except Northern Sakhalin), the People’s Assembly of the Republic voted for entry into the R.S.F.S.R.on November 14, 1922.



Fascism is right-wing, fiercely nationalist, subjectivist in philosophy, and totalitarian in practice. It is an extreme reactionary form of capitalist government. Fascism began in Italy (1922-43), Germany (1933-45), Spain (1939-75), and various other nations, starting generally in the time between the first and second world war. The origin of the term comes from the Italian word fascismo, derived from the Latin fasces (a bundle of elm or birch rods containing an ax: once a symbol of authority in ancient Rome). Benito Mussolini adopted the symbol as the emblem of the Italian Fascist movement in 1919.

The social composition of Fascist movements have historically been small capitalists, low-level bureaucrats of all stripes (see petty bourgeoisie), with great success in rural areas, especially among farmers, peasants, and in the city, lumpen proletariat. Meanwhile, fascist leadership invariably comes to power through the sponsorship and funding of big capital. These capitalists along with the top-tier leaders they create become fascism's ruling aristocracy.

Fascism has many different forms: the Italian fascism of Mussolini was often against Hitler’s Fascism, calling it “one hundred percent racism: Against everything and everyone: Yesterday against Christian civilization, today against Latin civilization, tomorrow, who knows, against the civilization of the whole world.” When Hitler began achieving impressive military conquests, which Mussolini had started in Ethiopia in 1935, the two formed an axis of power in June of 1940. The birth of fascism in Germany was aided by Western governments, who for two decades viewed it as the ideology that would successfully crush the Soviet Union. Not until Germany’s tanks were on the borders of England and France did those governments ‘switch’ sides: now it was their imperialist domination being threatened.

While Mussolini had once been a member of the Socialist party (banished from the party for his rampant support of World War I), Hitler fought leftists from the first. Thus it is not without irony, that in the name for his party Hitler used “socialist,” (Nazi = National Socialist) conceding to the engrained consciousness the German masses had for leftist ideals. It should be noted that fascism supported the community ideal, but not the grass-roots power of direct community democracy as Socialism demands, but the unity and obedience of the community to vanguard of the Nation. Further, orthodox fascism constantly parrots the Communist lexicon of working class struggle, etc., for reasons of populism. Neo-fascism is authoritarian but disdains any trace of Socialist/Communist terminology in their labels, and instead appeals to new populist roots: the modern aspirations of many workers to be wealthly, to be stronger than others, etc.

Fascism championed corporate economics, which operated on an anarcho-syndicalist model in reverse: associations of bosses in particular industries determine working conditions, prices, etc. In this form of corporatism, bosses dictate everything from working hours to minimum wages, without government interference. The fascist corporate model differs from the more moderate corporatist model by eradicating all forms of regulatory control that protect workers (so-called "consumers"), the environment, price fixing, insider trading, and destroying all independent workers' organisations. In fascism, the corporate parliament either replaces the representative bodies of government or reduces them to a sham and the state freely intervenes in the activity of companies, either by bestowing favouritism, or handing them over to the control of rivals.

“to believe, to obey, to combat”

There are several fundamental characteristics of fascism, among them are:

1. Right Wing: Fascists are fervently against: Marxism, Socialism, Anarchism, Communism, Environmentalism; etc – in essence, they are against the progressive left in total, including moderate lefts (social democrats, etc). Fascism is an extreme right wing ideology, though it can be opportunistic.
2. Nationalism: Fascism places a very strong emphasis on patriotism and nationalism. Criticism of the nation's main ideals, especially war, is lambasted as unpatriotic at best, and treason at worst. State propaganda consistently broadcasts threats of attack, while justifying pre-emptive war. Fascism invariably seeks to instill in its people the warrior mentality: to always be vigilant, wary of strangers and suspicous of foreigners.
3. Hierarchy: Fascist society is ruled by a righteous leader, who is supported by an elite secret vanguard of capitalists. Hierarchy is prevalent throughout all aspects of fascist society – every street, every workplace, every school, will have its local Hitler, part police-informer, part bureaucrat – and society is prepared for war at all times. The absolute power of the social hierarchy prevails over everything, and thus a totalitarian society is formed. Representative government is acceptable only if it can be controlled and regulated, direct democracy (e.g. Communism) is the greatest of all crimes. Any who oppose the social hierarchy of fascism will be imprisoned or executed.
4. Anti-equality: Fascism loathes the principles of economic equality and disdains equality between immigrant and citizen. Some forms of fascism extend the fight against equality into other areas: gender, sexual, minority or religious rights, for example.
5. Religious: Fascism contains a strong amount of reactionary religious beliefs, harking back to times when religion was strict, potent, and pure. Most but not all Fascist societies are Christian, and are supported by Catholic and Protestant churches.
6. Capitalist: Fascism does not require revolution to exist in captialist society: fascists can be elected into office (though their disdain for elections usually means manipulation of the electoral system). They view parliamentary and congressional systems of government to be inefficent and weak, and will do their best to minimize its power over their policy agenda. Fascism exhibits the worst kind of capitalism where corporate power is absolute, and all vestiges of workers' rights are destroyed.
7. War: Fascism is capitalism at the stage of impotent imperialism. War can create markets that would not otherwise exist by wreaking massive devastation on a society, which then requires reconstruction! Fascism can thus "liberate" the survivors, provide huge loans to that society so fascist corporations can begin the process of rebuilding.
8. Voluntarist Ideology: Fascism adopts a certain kind of “voluntarism;” they believe that an act of will, if sufficiently powerful, can make something true. Thus all sorts of ideas about racial inferiority, historical destiny, even physical science, are supported by means of violence, in the belief that they can be made true. It is this sense that Fascism is subjectivist.
9. Anti-Modern: Fascism loathes all kinds of modernism, especially creativity in the arts, whether acting as a mirror for life (where it does not conform to the Fascist ideal), or expressing deviant or innovative points of view. Fascism invariably burns books and victimises artists, and artists which do not promote the fascists ideals are seen as “decadent.” Fascism is hostile to broad learning and interest in other cultures, since such pursuits threaten the dominance of fascist myths. The peddling of conspiracy theories is usually substituted for the objective study of history.

Further Reading: Fascism Subject Archive, Fascism, What is and how to fight it by Leon Trotsky; What is Fascism? by Benito Mussolini.