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It is said that a man standing on the edge of cliff does not reason. Today’s global economy is full of cliffs, one of the steepest being the Silicon Valley tech sector, and the men peering over it can be heard chattering nervously about . . . an impending stampede of unicorns. Those uninitiated in the Orwellian parlance of Silicon Valley and its venture capitalist circles could easily mistake such talk for the absurd ravings of a lunatic. But this term has come to describe the primary danger threatening to devastate the tech sector in a cataclysmic repetition of the 1999 dot-com bubble.

Mythical creatures and fictitious capital

The term “unicorn” describes a private-venture-capital–funded startup with an extremely high valuation: over $1 billion—something that only a few years ago was considered to be as rare as crossing paths with one of these mythical creatures. But over the past few years, the number of unicorns has grown exponentially, as venture capitalists, hedge funds, and investment institutions have fallen over each other to throw billions at tech startups in hopes of quickly multiplying their wealth with the least possible effort.

From fewer than ten in 2010, there are now 229 unicorns worldwide, with half based in California alone. Riding the wave of smart technology and the proliferation of app-based services, they include companies like Uber (the largest unicorn—valued at $68 billion), AirBnB, Instacart, Snapchat, Pinterest, Dropbox, etc. The total valuation of these companies stands at a staggering $1.3 trillion.

The breathtaking growth of these companies along with the promise of high returns for investors has been too much to resist for capitalist investors who already have more cash on hand than they could possibly spend in a lifetime. However, since early 2015, several prominent investors and journalists have begun to sound the bubble alarm, after years of avoiding the “b-word” as a taboo.

In a severe distortion of the market mechanism of supply and demand, the rising price of shares (a result of sky-high valuations), rather than curbing demand, has only intensified the frenzy of investors, afraid of missing out on the spoils. This inversion of the demand curve is both a hallmark of speculative bubbles, and, given the profit-driven nature of the market and lack of any rational controls for the overall allocation of investment, a periodically inevitable chaotic dynamic of the system.

“This time it’s different!”

The turbulence in the global markets at the start of 2016 sent a chill down the spines of investors everywhere, not least in California, where a series of high-profile startups had their valuations slashed, bringing back memories of 1999. When the tech bubble burst in 2000 it wiped out $6.2 trillion in household wealth—roughly the same amount of value as was lost in US real estate during the last crisis between 2007 and 2009. Whereas the tech sector was minimally affected by the 2008 crisis, cutting only one percent of its workforce at the time, a number of factors suggest that the tech industry—and its herd of unicorns—won’t fare so well during the next crisis.

For one, the sheer growth of the industry, which has been steady over the past five years, means there are far more jobs at stake now compared to 1999, when the internet was still in its infancy. Five years have now passed since internet-related expenditure and consumption surpassed that of the global agriculture or energy industries. This modern-day gold rush has driven up tech sector employment from 2.2 million at the time of the dot-com bust, to 6.7 million today. It now accounts for a whopping 11.6% of the private sector workforce. Even this figure doesn’t take into account the millions of other non-tech workers whose jobs are at stake—the ones who actually provide the on-demand services, make the home deliveries, maintain the facilities, and otherwise perform the labor that allows these companies to operate beyond the virtual world.

The orgy of speculation has spread to real estate as well. Residents of the San Francisco Bay Area can attest to the relentless rent surge over the past decade, driven in large part by the arrival of thousands of highly paid tech employees on one hand, and a boom in high-priced commercial development on the other. Since the 1960s, San Francisco has zoned half of the city’s land for residential use, but is now in the process of increasing its office space by 15% in order to make room for growing tech companies.

But the next avalanche will not be a mere repetition of 2000 nor 2008. Business Insider’s Dave McClure (himself a unicorn investor) points out that this time, Fortune 500 companies are joining the stampede by hedging their stock, investing in unicorns or acquiring them outright, thereby preparing a “special twist” to the old familiar drama of the last bubble: “The REAL twist won’t be tech founders or investors losing all their money on over-valued unicorns (though indeed, that will happen too) …the REAL twist is thousands of public companies hemorrhaging billions in losses and value over the next ten years, like gigantic, collapsing Manhattan skyscrapers in slow motion… except that it might not be that slow.”

McClure holds out hope that despite the bubble, the up-and-coming startups will “disrupt” the market of the “senile” and “uninnovative” Fortune 500 companies, enriching the lucky investors who picked the right horse. Whether the process involves the loss of 2.2 million jobs as in 2000, or 8.7 million jobs as in 2008, doesn’t enter his calculations.

The “everything bubble”

Unicorn companiesNoting that any number of sparks could set the field ablaze, Bloomberg’s Noah Smith is among those warning the capitalist class that they should be worried: “The danger isn’t that we’re in a unicorn bubble. The danger isn’t even that we’re in a tech bubble. The danger is that we’re in an Everything Bubble—that valuations across the board are simply too high . . . So what happens when China’s housing and stock bubbles finally crash, as both are probably in the process of doing? What happens when the Federal Reserve raises interest rates?”

Whereas capitalist investors holding a stake in a particular industry, such as tech unicorns, are at pains to understand the process unfolding in Silicon Valley, Marxists approach the question in the context of the overall crisis of global capitalism in order to understand its implications for the class struggle. Compared to the relatively minor recessions of the early 1990s and 2000s, the global crisis that was unleashed in 2008 marked a new epoch in the organic crisis of capitalism. The inability of the ruling class to resolve any of the internal contradictions of the system or its political repercussions has prepared the way for an even more severe conflagration in the next period.

The capitalists and their governments around the world have done everything in their power to stimulate growth since 2008, to no avail. Despite their policies of austerity, quantitative easing, buying securities, and keeping interests at or near zero, the volume of world trade fell 0.8% during the second quarter of 2016, after stagnating for the first quarter. The New York Times reported that “The total value of American imports and exports fell by more than $200 billion last year. Through the first nine months of 2016, trade fell by an additional $470 billion . . . It is the first time since World War II that trade with other nations has declined during a period of economic growth.”

Which is the real “creative class”?

Shrouded in the self-delusion of “changing the world” with its cutting-edge innovation and “revolutionary” technology, Silicon Valley exists in a bubble in more ways than one. The celebrity entrepreneurs who today ride triumphantly on their unicorns are held up as the “creative class,” but as veteran investor Bill Gurley, a partner at the multibillion-dollar Benchmark Capital investment firm observed, “half of the entrepreneurs today, or maybe more—60% or 70%—weren't around in '99, so they have no muscle memory whatsoever.”

In other words, not having lived through the last tech bubble themselves, the recent generation of entrepreneurs who are currently enjoying the novelty of the nouveau riche lifestyle will be blindsided when their stampede goes over the cliff.

Most of the venture capital firms and large-scale investors, however, were around in 2000 and learned to set up deals that would ensure that they will be first to get their returns if a company goes under. But as Nick Bilton wrote in Vanity Fair: “This doesn’t protect the hundreds of thousands of people who now rely on a paycheck from the errand-running start-ups or taxi disrupters. Nor does it help the mom-and-pop businesses that have bought into the hype of Zynga, Yelp, or Twitter, and invested their savings, which continue to plummet.”

The seeds of ingenuity coming out of Silicon Valley will mature fully only when the irrational chaos of the market is replaced by conscious planning by the working class on an international scale. The fields of web-based smart technology and social networks, based on the linking up of millions of people around the globe, are in reality a glimpse of socialist technology and will play a central role in the democratic coordination of humanity’s resources in the future. When the working class moves to sweep away the anachronistic private ownership rights of what is the most social technology in history, the creativity and potential of all of humanity will be unleashed.

Top image by Yosuke Muroya on Flickr, CC-by-2.0

Educate Yourself

  • Educate Yourself
  • The Fundamentals of Marxism
  • Dialectical Materialism and Science
  • Historical Materialism
  • Marxist Economics
  • The State
  • Russia, Lenin, Trotsky and Stalinism
  • Anarchism
  • Feminism
  • Fascism
  • The National Question
  • Imperialism and War
  • Revolutionary Strategy
  • Revolutionary History

Socialist Appeal are proud to publish this basic guide to help focus your studies of Marxist theory and practice. Visit the various tabs to find links to introductory articles, classic texts, and audio talks for different topics. We also invite our readers to become acquainted with the more basic ideas of Marxism by starting with the recommended short reading list, going through the FAQ section, reading this article that combats the myths about Marxism, and listening to the following audios:

Why Marx Was Right - Alan Woods

What is Marxism? - Alan Woods

What Will Socialism Look Like? - Fred Weston

What is Capitalism? What is Socialism? - Fred Weston

We will be expanding and developing this section over time. Please contact us if you have any questions, or if you'd like any suggestions on what to read next.

Reading the classics of Marxism is the best way to understand these ideas. At first it may seem difficult, but every worker and young person knows that things worth having are worth working hard for!  Patient and persistent study, discussion, and ultimately, the day to day application of these ideas over a lifetime are the key.

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Marxist theory is the basis upon which our analysis, perspectives, program, and participation in the movement are based. It is our "guide to action." This why Socialist Appeal and IMT place so much emphasis on political education. To this end, we have created an extensive Education Plan to assist comrades in their political development. This is an important resource.

However, it's length and scope may seem daunting to new comrades. With this in mind, Socialist Appeal has compiled a shorter list of classic works and other important writings we think will serve to lay a strong foundation in the ideas and methods of Marxism. We would like to encourage all our supporters and those interested in learning more about Marxism to read (or re-read!) through the works on this list.

This selection of writings is an excellent introduction to many of the fundamentals of Marxist theory. There are many other writings that could be added, but this selection provides a strong basis for those wishing to equip themselves with the necessary ideas for the daily work of fighting for socialism.

Many of these are smaller books or pamphlets; some are more lengthy books; and others are just short articles. This list should therefore be more digestible than the full Education Plan, particularly those with busy work or school schedules. All of them are available to

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Dialectical Materialism is the philosophy or methodology of Marxism. Every political movement, party, or even statement of any kind bases itself, consciously or unconsciously, on some sort of philosophy or world outlook. Marxism is concerned with effecting a radical change in society, and therefore requires an exceptionally clear, thoroughgoing, and systemic set of philosophical principles.

The ideas of Dialectical Materialism, based on the best traditions of philosophical thought, are not a fixed dogma but a system of tools and general principles for analysing the world materialistically and scientifically.

If we are to understand society in order to change it, this cannot be done arbitrarily, since the human will is not master of nature; rather, our ideas and thoughts are reflections of necessary material laws. Instead, we must seek to understand the laws of how human society changes. By following our education plan for Dialectical Materialism, the reader will familiarise themselves with this way of looking at the world so that they too can begin to apply Marxist ideas.

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Historical Materialism is the result of Dialectical Materialism applied to human society and history. It encompasses the general theory of how and why society develops in the way it does. A deeper, more concrete understanding of these principles in combination with a study of real, living history of class struggles enables us to come to a general understanding of where capitalist society is headed and what political strategy is required to successfully influence the course of events.

The basic principles of Historical Materialism are that human society has inherent laws guiding it - its developments are by no means arbitrary or accidental, nor the mere subject of the will of great men and ideas. Human individuals can and do influence society according to their ideas, but only ever within definite material constraints and conditions. Above all, the law determining historical development is that of the development of the means of production - meaning economically productive technology, science, technique etc. The extent of the development of the productive forces determines the social relations of production - i.e. the structure of society, class relations etc. Each social system has its inherent laws of motion. If we want to overthrow capitalist society, we must understand how capitalism works.

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Marxist economics is the study of the laws of motion of capitalist society. Why does capitalism perpetually go into crisis? Why does mass unemployment exist? Are commodity production, the domination of the market, and rich and poor natural, immutable states of being for humanity? Or are they merely the products of this specific mode of production - capitalism? If so, is there any way capitalism can exist without these problems, or by minimising them?

Marxist economics is a “holistic” way of analysing capitalist economy. It starts out by placing it in its real historical context (rather than dreaming up abstract idealisations of capitalism to justify it, as bourgeois economics does), studying all its interconnections and contradictions, rather than artificially isolating one aspect of it. In doing so, Marxist economics lays bare the functioning of capitalism; the exploitation and injustice inherent within it. Those who want to get to the essence of why, in the 21st Century, despite having a more advanced understanding of the world than ever before, humanity seems plunged into perpetual crisis it cannot get to grips with, should look no further than Marxist economics, beginning with the writings of Marx himself.

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Like money, the state is something we are all very familiar with and take for granted, but its real essence tends to elude us. The ideologists of capitalism have tried, in various ways, to justify the capitalist state as supremely rational; a neutral arbiter for society, and the embodiment of justice. For Marxists, the state is not at all neutral, nor just. It is certainly anything but rational. We must strip the vale of mysticism away and reveal the state’s real basis. To do that, we have to treat the state historically - taking in its origins, rise, and eventual fall.

The state has not always existed. It is inseparable from class society. Ultimately, it is the instrument for the ruling class to oppress and hold down the masses, guaranteeing the status quo and the sanctity of property. Although the modern state performs many other functions, these are secondary to its real basis - the protection of a set of property relations. To do this, it needs “armed bodies of men” and a monopoly on the use of violence. To establish socialism, it will not be possible for the working class to use the state as it currently exists - that is, with the same network of judges, heads of police and army etc. All the key texts explaining how exactly we relate to the state, and the

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The Russian Revolution is the greatest event in world history for Marxists. For the first time, the working class successfully took and held power. The slaves fought back and won. For these reasons, the name of Lenin and Trotsky, and the entire 1917 episode, has been deliberately dragged through the mud by the bourgeoisie ever since.

Naturally they are aided in this task by the degeneration of the revolution and by the existence of Stalin’s monstrous dictatorship. However, Stalinism represents the opposite of Bolshevism’s real traditions, which readers can read about in this section, as well as the Marxist explanation for why Stalinism took place and what this means for our movement.

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Radicalised youth, seeking to understand how to change modern society, naturally tend to look to both Marxism and Anarchism in equal measure. The question as to which philosophy, or which combination of the two, has the best answers, has long been at the forefront of the minds of revolutionaries.

Anarchism is naturally attractive to all those correctly alienated by bureaucracy in the revolutionary movement. Anarchists are certainly correct to reject Stalinism and careerism. However, it is not sufficient simply to reject these phenomena. We need to understand why bureaucracy and oppression exist and what role they play, in order to understand how to avoid them. We believe that, for all its opposition, Anarchism has little to say about the alternative to bureaucracy. Instead, it is Marxism’s historical materialist method that allows us to understand these problems. In this section the reader will find a series of articles dealing with anarchism and the issues that anarchism raises.

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The discrimination and oppression of women is integral to class society, such that Engels even referred to it as the “first class oppression”. Along with the class system itself, the oppression of women often takes on the appearance of being natural, immutable and eternal, since it has been with us for so long.

But Marxism is a historical science, concerned with understanding the fundamental changes that society goes through. It cannot be satisfied with comfortable prejudices. A study of the origins of human society, as Engels famously conducted in his book The Origins of the Family, Private Property and the State, reveals that the oppression of women is by no means natural and was not even known for much of our history. As Engels explains, the oppression of women arose with the emergence of class society and private property; it will fall with it.

Marxists are fully in solidarity with feminists: we are irreconcilably opposed to the oppression of women and fully support the struggle for their emancipation. We believe this will be achieved through the class struggle, since that is the basic locomotive of history in a class society such as ours. However, Marxism represents a distinct set of ideas from feminism, which is a more eclectic and varied set of ideas. We believe that in this section, readers will find the tools Marxism

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Fascism is something of a bogeyman in modern British society, and has an almost mythical character in bourgeois public opinion. But despite constant talk of it, very little is said about why it happened and how it may or may not happen again.

Fascism is really the death agony of capitalism and the “distilled essence of imperialism”. The fascists in Germany, Italy, Spain and other countries were only able to come to power on the back of defeats of the working class. Ultimately, the madness of fascism expresses the historic crisis and dead-end of capitalism that had arrived by the early 20th Century, alongside the inability of the working class to take power and replace capitalism with a workers’ state, due to the corruption of their leadership, in the form of both reformism and Stalinism. Fascism could and should have easily been avoided had the working class possessed a militant and united leadership prepared to take power.

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The question of nationalities - that is, the oppression of nations and national minorities, which has characterised capitalism from its birth till the present time - has always occupied a central position in Marxist theory. Once again, the historical materialist approach of Marxism dissolves the apparent “natural” role of the nation as a necessary expression of human society. Nations have by no means always existed, nor will they always exist in the future.

The nation as we know it today is a product of the development of capitalism and its need to unify peoples into units of a certain size (depending on the level of the system’s development – e.g. more recently formed nations tend to be much bigger) to consolidate the market. The contradictions and tensions between nations are a result of capitalism’s “combined and uneven” development. The contradictions of the capitalist mode of production itself force each ruling class to expand outwards, developing a global market and imperialism in the process.

The violent tensions that this process breeds in turn give rise to nationalism, racism and wars. There is no way a successful world revolution, abolishing the global capitalist system, can take place without a careful and nuanced understanding of the national question, with all the sensitivities and complexity it brings. Therefore this section is of the utmost importance for revolutionaries.

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War is a constant feature of life under capitalism, especially in the epoch of imperialism. There has not been a single day of peace since the end of WWII, despite the appearance of WWII (and all previous wars) of being the “war to end all wars”. Capitalism is inherently unstable, competitive and violent. Moreover, there can be no final peace between the classes, since this system is based on the exploitation of the working class by the rich. 

However, there are wars of different kinds under capitalism. The question of war is the hardest equation of all to judge, so careful study is essential so that revolutionaries are not blown off course by the complexities involved. For example, some “socialists” called for support for the war in Iraq, as it had the appearance of establishing “democracy” over dictatorship. Equally, the failure to understand the true meaning of WWI and its implications was the direct cause of the death of the Second International.

Wars, like revolutions, represent the sharp extreme of capitalism’s crisis. Under capitalism, there will be many wars in the future. The more revolutionaries study and understand capitalism’s previous wars, the better equipped we will be to fight against future wars and the capitalist system itself.

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Socialist Appeal is the British section of the International Marxist Tendency, which is active in around 40 countries. Our aim is to spread the ideas of Marxism, in an organised fashion, in the labour and youth movement. Only the British working class has the ability to change British society, because of the central role they play in production and their shared interest in establishing socialism.

However, we must carefully study the history and traditions of the British working class in order for Marxist ideas to connect with them. There are all too many groups who simply declare themselves the vanguard of the British working class, and have a dismissive attitude to the class’ real traditions.

In this section readers will find a series of articles explaining our position on the class struggle in Britain, the key points in the history of the British working class and the lessons to be learnt from them, and the strategy of the Marxists in relation to the movements of the masses.

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The ideas of Marxism and the need for a revolutionary party are not the result simply of a single individual, but arise from the study of history - the history of class struggle. In this respect, the revolutionary party is often referred to as being the memory of the working class, and our task is to learn the lessons from history in order to prepare for the revolutionary events taking place today and in the future.

In this section we present a series of articles and audios covering the key revolutionary struggles in history - from the early class struggles in Rome to the tremendous movements of the working class in the 20th Century. By reading and listening to these, our readers should gain a good overview of the history of the revolutionary movement and the main lessons to be learnt from these.

For analysis of 21st Century revolutionary movements, check out the News and Analysis sections of the website!

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Marxist theory

In Defence of the Russian Revolution - part two In Defence of the Russian Revolution - part two
Duration: 00:21:16
Date: 17 Feb 2017
In Defence of the Russian Revolution -  part one In Defence of the Russian Revolution - part one
Duration: 00:22:04
Date: 1 Feb 2017
Materialism and Dialectics in Ancient Greece Materialism and Dialectics in Ancient Greece
Duration: 00:48:58
Date: 27 Jan 2017
Imperialism in the 21st century Imperialism in the 21st century
Duration: 00:57:35
Date: 13 Dec 2016
Fascism: What it is and how to fight it Fascism: What it is and how to fight it
Duration: 00:36:44
Date: 12 Dec 2016
Dialectics, science, and nature Dialectics, science, and nature
Duration: 00:48:55
Date: 9 Dec 2016
Fidel Castro and the Cuban Revolution Fidel Castro and the Cuban Revolution
Duration: 00:42:54
Date: 30 Nov 2016
Marxism, Imperialism, and War Marxism, Imperialism, and War
Duration: 00:50:16
Date: 25 Nov 2016
The Hungarian Revolution: 60 years on The Hungarian Revolution: 60 years on
Duration: 00:47:10
Date: 1 Nov 2016
The Origins of Marxist Economics The Origins of Marxist Economics
Duration: 00:45:46
Date: 2 Aug 2016
Keynesianism and the Post War Boom Keynesianism and the Post War Boom
Duration: 00:44:28
Date: 3 Jun 2016