Late capitalism

The concept of late capitalism (in German: Spätkapitalismus, sometimes also translated as "late-stage capitalism"), was first used in 1925 by the German social scientist Werner Sombart (1863–1941) in an article about capitalism to describe the new capitalist order emerging at that time. Sombart claimed that it was the beginning of a new stage in the history of capitalism.

As a young man, Sombart was a socialist who associated with Marxist intellectuals and the German social-democratic party. As a mature academic who became well known for his own sociological writings, Sombart had a sympathetically critical attitude to the ideas of Karl Marx — seeking to criticize, modify and elaborate Marx's insights. This prompted a critique from the Critical Theorist Friedrich Pollock, a founder of the Institute for Social Research. Sombart's clearly written texts and lectures helped to make "capitalism" a household word in Europe, as the name of a socioeconomic system with a specific structure and dynamic, a history, a mentality, a dominant morality and a culture.

The use of the term "late capitalism" to describe the nature of the modern epoch existed for four decades in continental Europe, before it began to be used by academics and journalists in the English-speaking world — via English translations of German-language Critical Theory texts, and especially via Ernest Mandel's 1972 book Late Capitalism, published in English in 1975.

For many Western Marxist scholars since that time, the historical epoch of late capitalism starts with the outbreak (or the end) of World War II (1939–1945), and includes the post–World War II economic expansion, the era of neoliberalism and globalization, the 2008 financial crisis and the aftermath in a multipolar world society. Particularly in the 1970s and 1980s, many economic and political analyses of late capitalism were published. From the 1990s onward, the analyses focused more on the culture, sociology and psychology of late capitalism.

Different labels and interpretations

The idea of "late capitalism" was never accepted by the majority of social scientists and historians, because it was considered that the expression was tinged with political biases about capitalism, and because it is unknowable or uncertain whether capitalism is "on its last legs", or "if and when it will end".

Furthermore, the theory of "late capitalism" failed to explain the long economic boom of 1947 to 1973, and the global resurgence of competitive market capitalism since 1980 (the era of neoliberalism, globalization, the Asian Tigers, the Brics as well as the collapse of state socialism in the Soviet Union and Eastern Europe in 1989–90 and the rapid growth of state capitalism in the People's Republic of China).

According to the critics who were skeptical about the "late capitalism" idea, there was no real evidence of (1) long-term economic stagnation or prolonged negative economic growth in the advanced capitalist countries, (2) pervasive social decay and persistent cultural degeneration, or (3) pervasive and persistent rejection of capitalism and business culture by the majority of the population.

The Russian revolutionary Vladimir Lenin famously declared in 1920 that there are no "absolutely hopeless situations" for capitalism; short of an anti-capitalist political revolution overthrowing the rule of the bourgeoisie, the system could always recover sooner or later. Lenin considered that the fate of capitalism was essentially a political issue: it depended on the outcome of class struggles. The leaders of the Communist International (founded in 1919) believed that with the First World War, a new world epoch of wars and revolutions had begun — the epoch of capitalist decline. The Comintern programme defined imperialism as the highest and final stage of capitalism. According to Lenin,

The term "late capitalism" was generally not used by Marxist-Leninists. They used the concept of state monopoly capitalism (originally formulated by Lenin) to denote the highest developmental stage of capitalism. Many non-Marxist historians and sociologists, however, have preferred more neutral terms, such as the "late modern era" or "post-modern era". Some Continental and Anglo-Saxon historians refer to late bourgeois society, in contrast to early bourgeois society in the 17th and 18th century and classical bourgeois society in the 19th and early 20th century.

According to Google Books Ngram Viewer, the frequency of mentions per year of the term "late capitalism" in publications has increased steadily since the 1960s. In 2017, an article in The Atlantic highlighted that the term "late capitalism" was again in vogue in America, as an ironic term for modern business culture. In contemporary academic or journalistic usage, late capitalism often refers to a new mix of (1) high-tech advances, (2) the concentration of (speculative) financial capital, (3) post-Fordism (transition of mass production in huge factories, as pioneered by Henry Ford, towards specialized markets based on networks of smaller and more flexible manufacturing units), and (4) growing income inequality.

Intellectual history of the concept

Sombart's legacy

The term "late capitalism" was first referred to by the German social scientist Werner Sombart in a 1925 article about capitalism and in the third volume of Der Moderne Kapitalismus (completed in 1926, published in 1927). It also occurs in a 1928 publication of Sombart's text for a lecture on transformations in capitalism. Only the first volume of Sombart's Modern capitalism - a very influential work in its time - has been translated into English so far. Sombart divided the history of capitalism into four main stages of development:

• Pre-capitalist economy (vorkapitalistische Wirtschaft) from the early Middle Ages up to 1500 AD, the subject of the first volume of Modern capitalism (in two parts, published in 1902/1903, with four revised editions in 1913-1941).
• Early capitalism (Frühkapitalismus) from the 1500s to 1760s, dealt with in the second volume (in two parts, published in 1906/1907, with revised editions in 1913 and 1928).
• Advanced capitalism (Hochkapitalismus) from 1760s to the beginning of World War I in 1914, the subject of the third volume (in two parts, published in 1927, with revised editions in 1932 and 1941).
• Late capitalism (Spätkapitalismus) since then, referred to in the third volume and discussed in a few lectures and articles.

In the introduction to the third volume of Modern capitalism, Sombart remarks that he considered it one of his (modest) achievements, that his concepts of “early capitalism, high capitalism, late capitalism” had become “common knowledge" in scientific circles, and were accepted in ordinary language. In the last parts of the third volume of Modern Capitalism, Sombart did consider recent new developments in different sectors of the capitalist economy (which Marx apparently had not foreseen), and he speculated about economic life in the future. But he remained cautious, and was reluctant to venture bold predictions (in each new edition of the volumes of Modern capitalism, he introduced revisions and alterations). Broadly speaking, he viewed late capitalism as an epoch of relative economic stagnation, characterized by bureaucratic regulation, some nationalized industries, and indicative macroeconomic planning.

For Sombart, the visible signs of the end of high capitalism in the last years before 1914 included the end of the "purely naturalistic mode of existence of capitalism with normative ideas"; the dethronement of the pursuit of profit as the sole determining factor of economic behavior; the decline of economic dynamism and risktaking in economic development; the shift from free competition to industrial cartels; and the statutory corporatization of enterprises.

In his approach, Sombart emphasized, it is always the “capitalist spirit” that shapes the historical epoch, including the economic era. A new epoch begins, when the capitalist spirit has undergone a transformation. In its heyday, Sombart explained, capitalism brought the merchant spirit to its "greatest bloom". The constant search for the best sales opportunities, the quick adaptation to daily changes in the markets, the titillating competition for customers - all these were essential traits of Hochkapitalismus. The system of economic organization in advanced capitalism was a “fluid” one. By contrast, late capitalism is a "bureaucratized capitalism", in which the spirit of commerce has vanished. The demise of the commercial spirit is not the cause of the bureaucratization of capitalism, but rather its expression; it could only eventuate when conditions had become so stable, that buying and selling occurred without much real marketing effort. At that stage, a "rigid system" already existed, and this was “typical” of late capitalism.

In Modern Capitalism, Sombart did not present anything like a full-fledged, systematic synthesis of the emerging new capitalist order. That work still remained to be done. Concluding his 1928 Zürich lecture on the transformations of capitalism, Sombart stated:

Other than a few articles and lectures, Sombart did not publish any comprehensive treatise on late capitalism. His thinking about the topic was disrupted in 1933 by the new Nazi government, when he was 70 years old (he died in 1941, when he was 78). Like many other German intellectuals, he hoped that Hitler's leadership would revive Germany from almost two decades of war, economic woes, social decay and human misery; he regarded national socialism as a type of socialism, and he supported the Nazi Party (while retaining much of his intellectual independence, as a septuagenarian and respected scholar). Because of this fact and because of his sociological portrayals of Jews and Judaism in some of his writings, he was often regarded as a "Nazi intellectual" and as antisemitic. It meant that after World War II, his writings and ideas largely vanished from university curricula. Only since the late 1980s and 1990s did significant scholarly interest in Sombart's intellectual legacy begin to revive, with new appraisals and studies of particular aspects of his oeuvre.

Interwar years and World War II

Ever since the famous theoretical controversy between orthodox Marxists and revisionists in the 1890s, socialists have been discussing the decline, breakdown and collapse of bourgeois society. There were many attempts at theoretical and mathematical proofs of the downfall of capitalism. There were also attempts to create a perspective on the nature of the epoch and the future of society, to guide political action.

In the post–World War I reconstruction era, many of the wartime regulations in Europe continued, and the state played the leading role in repairing, rebuilding and reorganizing society. According to historian Edward H. Carr, "In Europe after 1919, the planned economy... became the practice, if not the theory, of almost every state."

Addressing the Kiel congress of the German Social-Democratic Party in 1927, Rudolf Hilferding claimed that:

The term "late capitalism" began to be used by socialists in continental Europe in the 1930s and 1940s, in the context of the Great Depression. At the time, this was not an especially radical turn of phrase, because many people of different political persuasions really believed that the existing social order was doomed, or was at least ripe for renewal and transformation. The European economy became highly regulated, and that reached a peak during the years of war economy in 1939–45.

During World War II, even leading American economists believed that the economic problems might eventually become insurmountable. In their book Capitalism since World War II, Philip Armstrong, Andrew Glyn and John Harrison commented that:

In his book Capitalism, socialism and democracy (1943), Schumpeter also stated:

Post–World War II era

In Russia, the Marxist-Leninist doctrine of the "general crisis of capitalism" in the imperialist epoch and the theory of state monopoly capitalism defined the official government perspective for the postwar era. The historian Paolo Spriano describes how this caused the dismissal of one of Russia's top economists, after he dared to suggest that there would not be a deep capitalist crisis after the end of World War II:

In the West, there had been similar expectations (across the whole political spectrum) that a severe systemic crisis would very likely occur after the war. When that did not happen, it was a surprise and a relief. However, what exactly could explain this turn of events is open to debate. Different theories about the success of the postwar reconstruction effort have been proposed.

One of the big geopolitical changes during and after World War 2 was the decolonization of many former colonies, often spearheaded by national liberation movements. To many observers, this trend signalled the end of the "classical" era of capitalist imperialism, and the start of a new global epoch, or at least a qualitative change in the global balance of power and the global states system. The socialist bloc of countries led by the Soviet Union and the People's Republic of China seemed to be gaining ground, suggesting that on a world scale, capitalism was in decline.

The capitalism emerging from post-war reconstruction appeared to many analysts as a new type of capitalism, even although some of its traditional characteristics remained the same. This raised the question, "if capitalism had changed, how much did it change, and what was different or new about it? What are the political implications?". Particularly after the death of Joseph Stalin and the "thaw" of the official communist movement, this issue became a hot topic of debate at many leftwing conferences and in many books. The controversy continued in numerous journals, including Monthly Review and New Left Review.

The concept of "late capitalism" was used in the 1960s in Germany and Austria, by Western Marxists writing in the tradition of the Frankfurt School and Austromarxism. Some examples can be mentioned to illustrate their concerns:

• In 1965, Fritz Vilmar published Rüstung und Abrüstung im Spätkapitalismus ["Armament and Disarmament in Late Capitalism"].
• Leo Michielsen and Andre Gorz popularized the term "neo-capitalism" in France and Belgium, with new analyses of postwar capitalism.
• In 1968, Rudi Dutschke, a leading spokesman of the German student revolt, published a pamphlet entitled "The contradictions of late capitalism, the anti-authoritarian students and their relationship to the third world."
• Theodor Adorno preferred "late capitalism" over "industrial society," which was the theme of the 16th Congress of German Sociologists in 1968.
• In 1971, Leo Kofler published a book called Technologische Rationalität im Spätkapitalismus ("Technological Rationality in Late Capitalism").
• Claus Offe published his essay "Spätkapitalismus – Versuch einer Begriffsbestimmung" ("Late Capitalism—an Attempt at a Conceptual Definition") in 1972.
• In 1972, Alfred Sohn-Rethel published Die ökonomische Doppelnatur des Spätkapitalismus.
• In 1973, Jürgen Habermas published his Legitimationsprobleme im Spätkapitalismus (Legitimacy problems in late capitalism).
• In 1975, Ernest Mandel published his 1972 PhD thesis Late Capitalism in English at New Left Books.
• In 1979, Volker Ronge published Bankpolitik im Spätkapitalismus: politische Selbstverwaltung des Kapitals?, a study of banking in late capitalism.
• In 1980, Herbert Marcuse also accepted the term in his reflections about the future of capitalism and socialism.
• In 1981, Winfried Wolf and Michel Capron extended Mandel's analysis of the long recession in Spätkapitalismus in den achtziger Jahren.
• Jacques Derrida preferred neo-capitalism to post- or late-capitalism.

Ernest Mandel's analysis

When Ernest Mandel adopted the term “late capitalism”, he had in mind the perspectives of Lenin, Trotsky and the Communist International about the 20th century. The theoretical framework was, that the world-historical epoch of capitalist decline began with World War 1 (or even earlier, with the uprising in St Petersburg in 1905). Mandel regarded late capitalism as a new historical stage in the epoch of capitalist imperialism. He did not abandon Lenin’s analysis of imperialism, but modified it, in the light of the experience of the post-World War 2 reconstruction era.

Mandel aimed to explain the unexpected revival of capitalism after World War II, and the long economic boom during 1947–73, which showed the fastest economic growth ever seen in human history. His analyses stimulated new interest in the theory of long waves in economic development. The chapters for his book Late capitalism were put together quite rapidly, using earlier draft texts and reading notes as well as lecture notes written when Mandel was visiting lecturer in Berlin in 1970/71. Obtaining a Phd degree was crucial for Mandel (in his late 40s) to get a permanent academic position.

According Ernest Mandel, late capitalism involves the commodification and industrialisation of more and more parts of the economy and society, where human services are turned into commercial products. Mandel believed that "[f]ar from representing a 'post-industrial society', late capitalism [...] constitutes generalized universal industrialization for the first time in history". At the same time, the role of the state in the economy and society kept growing. During and after World War II, the size of enterprises, ownership concentration and the scale of mass production increased, the activities of multinational corporations expanded, and there were more and more attempts at coordinated economic planning (or "economic programming").

Until the late 1960s, Mandel preferred to use the term "neo-capitalism", which was most often used by leftwing intellectuals in Belgium and France at that time. This idea drew attention to the fact that new characteristics of capitalism had emerged in its postwar recovery. At the time, however, ultraleftist Marxists objected to the term "neo-capitalism", because, according to them, it might suggest that capitalism was no longer capitalism, and this would lead to reformist deviations rather than to the total overthrow of capitalism. The proof of this seemed to be that Mandel argued—at the zenith of the capitalist postwar boom—for "anti-capitalist structural reforms".

Mandel distinguished three main historical stages in the development of the capitalist mode of production:

• Freely competitive capitalist production, roughly from 1700 to 1870, through the growth of industrial capital in national (domestic) markets (especially in Western Europe and North America).
• The phase of monopoly capitalism, roughly from 1870 to 1940, is characterized by the imperialist competition for international markets, and the exploitation of colonial territories.
• The epoch of late capitalism emerging out of the Second World War, which has as its dominant features the multinational corporation, globalization, consumerism, and increasingly internationalized financial markets.

The French edition of Mandel's Late Capitalism was titled The third age of capitalism.

In part, Mandel's analysis was a critique of Henryk Grossmann's breakdown theory, according to which capitalism would collapse after a series of business cycles, because of insufficient surplus value production. But Mandel also criticized the methodological approach of Rudolf Hilferding, Rosa Luxemburg, Nikolai Bukharin, Otto Bauer, Michal Kalecki, and Charles Bettelheim. Mandel's aim was also to revive and re-evaluate the classical controversies in Marxian economics in a new historical setting. He argued that important qualitative changes occurred in the functioning of the capitalist system during and after World War II. Intermediate between the periodization of business cycles across two centuries and the postulated ultimate collapse of capitalism, Mandel argued, there were epochs of faster and slower economic growth. Mandel's analysis was fifty years ahead of its time in its breadth and scope, and the meaning of his endeavour was therefore largely unnoticed, forgotten, ridiculed or suppressed.

In the history of capitalist mode of production since the 1820s, "long waves" of economic growth could be observed in time series data on economic activity. These waves typically lasted about 20 to 25 years, from peak to trough or from trough to the next peak. During the ascending phase, cyclical upturns were typically stronger and downturns were weaker, while during the receding phase, the downturns were typically deeper and the upturns were weaker. However, Mandel did not accept the hypothesis of Nikolai Kondratiev that there existed endogenously predetermined "long cycles" in the history of capitalism. In particular, there existed no enduring economic mechanism which "automatically" created an economic recovery after a severe economic depression; much depended on state policy decisions, and on the outcome of political battles between warring social classes (the rise and fall of mass unemployment was not simply an automatic "mechanism" of the capitalist "engine", but influenced by political factors, labour disputes and specific business conditions). The political significance of the economic long waves was that they shape the life-experiences of different generations, the lessons drawn from those experiences, and the patterns of workers' struggles - nationally and globally.

In a series of publications, Mandel analyzed the dynamics and results of the unexpected postwar boom, the long world recession of 1974 to 1982, the debt crisis of developing countries, the 1987 stock crash and the long-term systemic crisis of late capitalism, as basis for his projections about the long-term prospects of world capitalism in the future.

In the tradition of the orthodox Marxists, Mandel tried to characterize the nature of the modern epoch as a whole, with reference to the main long-run laws of motion of capitalism specified by Marx. These laws of motion were: 1. The capitalist compulsion to accumulate and invest for profit, under the pressure of business competition. 2. The tendency towards constant technological revolutions, which increase productivity. 3. The constant attempt to increase absolute and relative surplus value. 4. The tendency toward increasing concentration and centralization of capital. 5. The tendency for the organic composition of capital to increase. 6. The tendency of the average profit rate on capital invested in industries to decrease, in the long term. 7. The inevitability of class struggle (or class conflicts) under capitalism. 8. The tendency of the working class to grow in size and social polarization to increase. 9. The tendency towards growing objective socialization of labour. 10. The inevitability of recurrent economic crises in capitalist society.

Mandel thought that six basic variables were most important for the long-term global growth pattern of the capitalist mode of production and its average profitability: (i) the evolution of the general and sectoral organic compositions of capital; (ii) the division of constant capital between circulating and fixed capital; (iii) the evolution of the rate of surplus value; (iv) the development of the rate of accumulation, and more specifically the reinvestment of surplus value in production; (v) the development of the turnover of capital (speed, volume and type); and (vi) the interactions between the producer goods sector ("Department I") and the consumer goods sector ("Department II"). These variables could to an extent fluctuate semi-independently of each other.

Fredric Jameson's interpretation

In his book Postmodernism, or, the Cultural Logic of Late Capitalism. Fredric Jameson was partly inspired by Mandel's theory of late capitalism. Jameson's theory of postmodernity portrays a new mode of cultural production (developments in literature, film, fine art, video, social theory, etc.) which differs markedly from the preceding era of Modernism.

In the modernist era, the dominant ideology was that society could be re-engineered on the basis of objective scientific and technical knowledge, and on the basis of a broad consensus about the meaning of progress. In the second half of the 20th century, however, modernism was gradually eclipsed by postmodernist culture, which is skeptical about social engineering and lacks consensus about the meaning of human progress. In the wake of rapid technological and social change, all the old certainties broke down. This begins to destabilize every part of life, making almost everything malleable, changeable, transient and impermanent.

Jameson argues that "every position on postmodernism today — whether apologia or stigmatization — is also...necessarily an implicitly or explicitly political stance on the nature of multinational capitalism today". A section of Jameson's analysis has been reproduced on the Marxists Internet Archive. Jameson regards the late capitalist stage as a new and previously unparalleled development with a global reach—whether defined as a multinational or informational capitalism. At the same time, late capitalism diverges from Marx's prognosis for the final stage of capitalism.

Corey Robin's argument

In a paywalled blog article published in June 2025 by New Left Review on its website, the New York politicial scientist Corey Robin directly comments on this Wikipedia article on late capitalism (although he does not acknowledge his source, and does not quote from it directly). Robin is currently working on a political theory of capitalism titled King Capital, and he tries to develop the wiki content into a narrative with greater eloquence, erudition and depth, from his own perspective. In 2025-26, he will be a Fellow at the Institute for Advanced Study at Princeton.

He argues that late capitalism is “an ambiguous term”, because it could imply “the demise of something” but also “its refinement and advance”. However, he claims that “late capitalism is not an idea that lends itself to revolution or a vision of progress. It may express a wish to be rid of capitalism. But mostly it works as a theory of turning points that never turn – or worse.” In Robin’s view, almost all of the theorists of late capitalism got it wrong (except perhaps that some hedged their bets sufficiently to save their own argument). Robin concludes: Template:Quote Analogous to Marcel van der Linden, Corey Robin feels that workers still have things to learn, to be able to assume their role in changing the course of history. However, Robin has nothing to say about the parasitism of late capitalism, and the role of the academic class in exploiting, discriminating and parasitizing the workers. Robin’s approach to social power contrasts with Marx’s interpretation of historical processes and with Mandel’s parametric determinism (or "the dialectic of objective and subjective factors"). According to Marx, people do make their own history with their actions, but not in a void, not simply under self-selected social and material circumstances, but under given conditions inherited from the past. According to Marx, "the educators have to be educated themselves", i.e. become learners in order to understand properly what they are talking about.

Other analyses of the epoch

Immanuel Wallerstein believed that capitalism was in the process of being replaced by another world system. The American literary critic and cultural theorist Frederic Jameson thought Rudolf Hilferding's term the latest stage of capitalism (jüngster Kapitalismus) perhaps more prudent and less prophetic-sounding but Jameson often used "late capitalism" in his writings. Hegel's theme of "the end of history" was rekindled by Kojève in his Introduction to the Reading of Hegel.

Further reading

• Jacques Derrida, Specters of Marx (1994)
• Fredric Jameson, "Culture and Finance Capitalism" Critical Inquiry 24 (1997) pp. 246–65
• Immanuel Wallerstein. The Essential Wallerstein (New York: The New Press, 2000), World-Systems Analysis: An Introduction (Durham: Duke University Press, 2004).

External links

• Youtube late capitalism FAQ video by The Atlantic
• Video: What Is Late Stage Capitalism?