Piketty: a Marxist review

May 8, 2014 at 5:39 pm (capitalism, capitalist crisis, economics, Marxism, posted by JD, reblogged)

Reviewed by Hans G. Despain in Marx & Philosophy Review of Books

Thomas Piketty
Capital in the Twenty-First Century
The Belknap Press of Harvard University Press, Cambridge MA, 2014. 696pp., $39.95 / £29.95 hb
ISBN 9780674430006

About the reviewer

Hans G Despain

Hans G Despain is Professor of Economics and Department Chair at Nichols College, Massachusetts. He encourages your correspondence: hans.despain@nichols.edu

More…

Review

Capital in the Twenty-First Century is a most impressive book that deserves great attention. Piketty insists that social scientists generally, and economists in particular, must confront and examine “facts” (574-5). This is what he sets out to do in his momentous nearly 700 page text.

The title suggests the book may be offering homage to Marx’s nineteenth-century Capital. Let us be clear from the beginning it is not. Nonetheless, this book will be appreciated by Marxian political economists, while at the same time a frustratingly theoretical disappointment.

Piketty’s book is nothing short of revolutionary in establishing flows of income over time. He establishes that there is a tendency toward the hyperconcentration of wealth, and the rise of a new “supermanagerial” class (315-21). Piketty leaves no doubt that it is class that matters and structural “class warfare” predominates in twenty-first century capitalism (246). Crucial to Piketty’s studies of capitalism is that there exist no economic laws determining distribution of income and wealth (274, 292-4, 361-4). This is an enormously important point, and a return to classical political economy with a vengeance, especially to Marx whereby distribution is a function of series of institutional power relations, rooted in production relations. These summaries will surely, and should, excite Marxian social theorists. However, Piketty’s definition of capital as a financial measure of physical equipment, money, financial assets, land, and other valuables will discourage Marxian social theorists. I will come back to these crucial points.

The primary problem with the book is an underdeveloped social theory and normative philosophy. Consequently, Piketty’s policy recommendations are impressively anemic and aimed at perpetuating exploitation of the economically vulnerable populations. In the end Piketty wants to take the ‘hyper’ out of hyperexploitation and reestablish good old-fashion exploitation with higher minimum wages, taxes on capital, progressive income tax, and limits on inheritance.

With emphasis, Piketty defends the strengthening of the “social state” or the historical development of public education, healthcare, social security, unemployment compensation, and income support for the poor (471-92). Moreover, he maintains that deficits are not bad in-and-of-themselves, but must be spent wisely and should not be paid for with fiscal “austerity” but by means of central-bank-generated-inflation and/or a tax on capital (540-70). This defense of the “social state” and federal deficit pushs Piketty into the area of (political) philosophy, social ethics, and morality. Piketty is well-aware of this (479-81). He recognizes that the so-called “science of economics” is more accurately political economy that generates enormous normative philosophical implications (574).

This gets well ahead of our story and the details of Piketty’s book. The essence of the book is remarkably straight forward and is intended for a popular audience. Piketty brilliantly succeeds on this account and should be duly praised. The essential argument is that capitalistic economic growth inevitably slows. As the rate of economic growth diminishes, the past accumulated “capital”/wealth gains in importance (233), and indeed allows past wealth “to devour the future” (378). Piketty calls this a “fundamental law of capitalism” (166).

This fundamental law of capitalism means that the “return on capital” (r) is greater than the economic growth (g): r > g. As a prosperous and industrialized capitalist economy begins to stagnate, past wealth becomes more important and powerful and inequality begins to increase rapidly (572). Thus, one of Piketty’s main goals “is to understand the conditions under which such concentrated wealth can emerge, persist, vanish, and perhaps reappear” (262).

According to Piketty, the primary mechanism (25) causing inequality is the fact that the rate of return on capital is 3 to 5 times greater than the rate of growth (233). Thus, the structural tendency of capitalism toward stagnation and 4-5% rate of return on capital means that markets and competition do not reduce inequality (370). It is in this sense that there is a “logic of accumulation,” based on the divergence between the rate of return on capital and economic growth (22-7), that accounts for the very high concentration of wealth throughout capitalist history (377).

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It’s A Wonderful Life: the Fox News version

December 24, 2013 at 12:14 am (Christmas, cinema, economics, fantasy, film, humanism, Jim D, red-baiting, satire, solidarity, United States)

This comes courtesy of Jimmy Kimmel, via Gene at That Place. The entire clip is worth watching (dealing, at first, with the burning question: “is Santa white?”), but the classic film trailer starts at around 2.10:

Below: clip from dangerous leftist subversive Frank Capra’s 1946 ‘It’s A Wonderful Life’ before it became the ideologically acceptable ‘Mr Potter and the Commies of Bedford Falls’ (NB: children and impressionable adults should not be allowed to watch this unsupervised):

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Nuclear power: yes! This deal: no!

October 21, 2013 at 8:40 pm (economics, environment, green, Jim D, nuclear power, science, strange situations, Tory scum)

The environmentalist George Monbiot tweeted today:

Yes, I support #nuclear power, in general. But the economics of the #Hinkley deal are simply bonkers. Appalling value for money.

nuclear power symbol

Monbiot is right on both points: nuclear power must play a part in any serious UK energy plan, taking account of environmental concerns and climate change. But he’s also correct that this deal is “bonkers” – and not just because of the price guarantee/subsidy being gifted to EDF and the two Chinese companies that will deliver the new reactors: it’s simply bizarre that the privatisation-obsessed Tories are, in effect, handing the UK’s nuclear energy industry over to state-owned concerns in France and China.

The Observer‘s Will Hutton adds a further note of concern:

“This is a breathtaking step in an industry where the sensitivities over operating safety, technical efficiency and waste disposal are so acute. Fukushima, Three Mile Island and Chernobyl are remembered around the world. Chinese state-owned companies are a byword, not least in China, for inefficiency, loss-making and politicisation of decision-making. The party has wrestled for a generation with the reality that these companies, designed by Mao to embody the communist dream of uniting economic and social obligations, abolishing worker exploitation and spearheading modernisation, are sclerotic economic duds.”

Nevertheless, the traditional “left” stance against nuclear power (in reality, based upon Stalinist cold war anti-nuclear weapons concerns) is clearly outmoded, and must be dispensed with.

We have, in large part, George Monbiot to thank for forcing at least some in the environmental movement, and on the rational left, to rethink their old prejudices against nuclear power.

Les Hearn, writing for the AWL’s paper Solidarity in 2011, takes a similar position:

Why I support nuclear power as one of a range of alternatives to fossil fuels

Back in the 70s, like many on the left, I was alarmed by what seemed to be the cover-up of the risks of nuclear power in the 50s and 60s. The indiscriminate power of nuclear weapons to kill in large numbers also marked many on the left with a fear of nuclear energy. But, as Maynard Keynes put it, “when the facts change, I change my mind”.

We only have one planet and it is overwhelmingly likely that “we” (or greedy capitalists, if you like) are altering its climate for the worse by returning carbon dioxide to the atmosphere a million times faster than it was originally locked away in fossil fuels. And, despite attempts to reduce carbon emissions, these are actually rising … by over 5% last year, from 29.0 to 30.6 gigatonnes (Gt or billion tonnes).

And, of the 13.7 Gt released by electricity generation, 11.2 Gt is “fixed” for the foreseeable future, since it will come from existing or planned fossil fuel power stations that will be operating in 2020.

The closure or cancellation of nuclear power stations makes this much worse, since these are the main proven alternative source of electricity. Countries which have reacted to recent scares, rather than evidence, include Japan, Germany, Malaysia, Thailand, Italy and Switzerland.

Truthfully, the potential risks of radiation are massively exaggerated by anti-nuclear groups in comparison with the actual risks of the fossil fuel industry to workers and the public. In particular, the environmental risks of radiation are minimal — wildlife is flourishing in the exclusion zone round Chernobyl and, as James Lovelock has pointed out, in the atom bomb test sites in the Pacific.

Furthermore, the difficulties of replacing nuclear power, let alone the whole fossil fuel industry, with renewables are minimised (see my article in Solidarity 203, 11 May).

It is said (by Theo Simon, Letters, Solidarity 204, 18 May —http://bit.ly/k8WOD9) that “nuclear power demands high security and central control”, as if these were necessarily bad.

Central control would anyway be needed to construct tens of thousands of wind turbines, on- and offshore, and the new supergrid of thousands of kilometres which would be needed to get the electricity to the cities. Already, proposals to introduce new systems of pylons have provoked mass protests in Wales, Scotland, Somerset and the West Midlands. And putting cables underground would be ten times more expensive.

Apparently, I fail “to question the projected ‘energy gap’ which is being used to justify nuclear power expansion”. The argument goes that, if the most wide-ranging programme of insulation and energy conservation is undertaken world-wide (the like of which has never been seen), then the electricity generated by nuclear power would not be needed. As the Spartans once said in a different context, if!

Once again, let’s look at the reality of nuclear power. The worst accident of all time, Chernobyl, has killed 43 people. This was due to the criminal negligence of the USSR police state. 28 workers were fatally irradiated while bringing the reactor under control. 15 young people died of thyroid cancer, entirely avoidable had the bureaucrats issued potassium iodide tablets (as was done promptly in Japan recently). Other estimates of potential deaths range from 9,000 to 900,000 but even the lowest of these seems to be way too high. So far, no other deaths have been proved to be due to the Chernobyl disaster.

As Wade Allison (author of Radiation and Reason) states, the ability of living tissue to repair radiation damage has been wildly underestimated. In radiation treatment of cancers, healthy tissues receive up to five times the fatal dose of radiation but spread over several weeks, during which time they efficiently repair the damage.

Many accidents have occurred in nuclear power plants. In those resulting in radiation leaks, there have been … no deaths or even injuries among the public. A few workers have died, usually because they were close to the incident. Otherwise, nuclear workers are healthier than the general population. A 2% increased risk of cancers linked to radiation is dwarfed by a 24% decreased risk of death from other cancers, according to a Canadian study. It also found that nuclear workers lived longer than average. And this under capitalism!

I am accused of listing the objections to nuclear power but not attempting to answer many of them. In particular, in the areas of waste disposal, plant safety and cost, I fail to “see the reality of nuclear power within the context of a global capitalist economy”. Trading content-free accusations, I might accuse others of failing to see the reality of renewable energy within the context etc. etc.

Of course, I did deal with plant safety and waste disposal. A recent Physics World (May 2011) shows that more modern designs would have survived both the Japanese earthquake and tsunami. These include better back-up generators and containment for molten fuel in case of a meltdown, and passive (i.e. not depending on a power supply) emergency cooling operated by gas pressure or gravity. In fact, modifications to the Fukushima model to reduce radiation leaks in case of an accident were proposed by scientists 30 years ago but rejected as too expensive. Meanwhile, other similar power plants survived the earthquake and tsunami undamaged.

On radioactive waste, I said that deep storage in stable strata was perfectly plausible. Reprocessing would reduce the amount and feed back fuel to nuclear plants. The relevance of the “global capitalist economy” to this is not clear, except that they won’t pay for it. In any case, the danger of waste has been greatly overstated. Five metres of concrete would absorb all the radiation from anything. Wade Allison “would be perfectly happy” to have high-level waste buried 100 metres below his house, while James Lovelock has “offered to take the full output of a nuclear power station in my back yard.”

Alternatives to fossil fuels consist of two proven technologies, nuclear and hydroelectric power (HEP), a host of promising but unproven ones, and the mirage (at present) of a vast reduction in energy demand.

All have environmental and/or health implications. HEP requires vast dams flooding arable land and wildlife habitats, disrupting river ecosystems, destroying estuarine fisheries, reducing the fertility of flood plains, and endangering lives in case of collapse.

The Three Gorges dam in China necessitated flooding 1000 towns and villages, and “removing” 1.4 million people. Since completion in 2006, the reservoir has been plagued by pollution and algae. The dam is silting up, while the extra weight of water is causing geological problems. Downstream, the reduction in flow has led to a drought affecting 300,000 people, with drinking water reservoirs containing only “dead water”. Shipping can no longer use large stretches of the river. It is worrying that Switzerland is phasing out the nuclear power that provides 40% of its electricity, replacing it with HEP.

It is also worrying that Germany, the sixth biggest emitter of carbon dioxide, is phasing out nuclear power, increasing carbon emissions by 3%. If it can afford to do without the electricity from its nuclear plants, it should keep them open while closing down an equivalent number of fossil fuel plants, cutting CO2 emissions proportionately.

In Japan, phasing out nuclear power will cause massive shortfalls in energy. The optimistic scenarios of Energy-Rich Japan (ERJ — http://www.energyrichjapan.info) all involve substantial reductions in demand (so far untested), while some involve reductions in population — by up to 20%! Since an increase will be needed in order to care for the ageing population, this seems particularly unrealistic.

In particular, ERJ claims that transport energy can be reduced by 70% with hydrogen-powered vehicles. They don’t mention the following problems. Hydrogen is inefficiently produced from fossil fuels; solar-powered electrolysis of water is even more expensive. Highly flammable hydrogen must be stored in pressurised tanks, no doubt to be released in traffic accidents. A new infra-structure for hydrogen supply would have to be built, “a matter for policy decisions and market forces” (ERJ) (!?). Fuel cells to “burn” the hydrogen use costly platinum catalysts which can be poisoned by impurities in the hydrogen or air, which is also needed; their reliability over long periods is unknown; they would easily freeze in cold weather; they would be a magnet for thieves. Incidentally, ERJ assumes that much of the hydrogen would be imported (from where?).

Other aspects of ERJ’s schemes are equally vague. Much geothermal energy would be needed, though this technology is notoriously unreliable. Curiously, nowhere in 250-plus pages is there a mention of earthquakes or tsunamis!

It is difficult to avoid James Lovelock’s conclusion that “only nuclear power can now [my emphasis] halt global warming” — but this is not to accept nuclear power as it is. The possibility of fail-safe thorium-powered reactors is ignored not only by the (capitalist) industry which will not or cannot afford the research costs but by the Left and environmentalists. Supported by eminent scientists such as Carlo Rubbia of CERN, thorium reactors do not have a chain reaction to go out of control. They rely on a stream of neutrons from a particle accelerator which could be instantly switched off. Using plentiful thorium, they can also “burn” other radioactive materials, including surplus bombs … and high level radioactive waste. Radioactive material decays into stable isotopes, usually lead. Plutonium takes about 100,000 years to reduce to 1/20 of its original amount. Thorium reactors accelerate this process greatly (Accelerated Transmutation of Waste), reducing the volume of waste and the time for which it would have to be kept safe.

A final point: Theo accuses me of ignoring the “proliferation argument”, which he seems to equate with the simple possession of nuclear power. There are many difficult steps to building nuclear weapons and it is clear that these have not proliferated anything like as fast as civil nuclear power. More of a problem is terrorism and here too it is not clear that nuclear power plants are uniquely vulnerable and dangerous targets. More importantly, many conflicts are, and will be increasingly, over resources, particularly as the climate changes. Nuclear bombs won’t be much use in these!

Yet more deaths in the UK fossil fuel industry (four workers killed in a Welsh oil refinery explosion in March; five coal miners killed in Wales and Yorkshire in September) should help put the supposed dangers of nuclear power in perspective. Multiply these figures by at least 1,000 worldwide. According to Environmentalists for Nuclear Energy (www.ecolo.org), environmental opposition to nuclear energy is the “greatest misunderstanding and mistake of the century”. We should be demanding that nuclear power be expanded and improved, rather than phased out.

But let’s demand the safest forms of nuclear power, as well as support for renewable energy research.

Excellent piece by Monbiot: ‘The farce of Hinkley c’

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“It batters down all Chinese walls”

October 17, 2013 at 5:29 am (banks, capitalism, China, economics, grovelling, Human rights, Jim D, London, Tory scum)

“The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e; to become bourgeois themselves. In one word, it creates a world after its own image” – Marx and Engels, Communist Manifesto, 1848.

Chancellor of the Exchequer George Osborne addresses staff and students at Peking University in Beijing.

Listening to George Osborne grovelling to the Chinese ruling class while his Tory sidekick Boris Johnson capered like a jester at the court of an all-powerful monarch, brought to mind Marx’s vivid descriptions of capitalism and the bourgeoisie sweeping aside outmoded social forms and cultural traditions. Just how strong, one wonders, is the Tory commitment to bourgeois democracy?
 
As Osborne and Johnson pleaded for Chinese investment and announced a simplified visa procedure for Chinese tourists, you can be damned sure no mention was made, even behind the scenes, of human rights or political prisoners. Britain must “show some respect” to the Chinese leadership, Osborne told BBC Radio 4, adding “of course we can bring up issues that we have concerns about. But we have to respect the fact that it is a deep and ancient civilisation that is tackling its own problems. We have to show some respect for that.”
 
As for the Dalai Lama: we’ve “no plans to meet him again.”

Nothing must stand in the way of Osborne’s “personal mission” to make London a Chinese offshore banking centre and a global renminbi hub.

The Torygraph‘s Michael Deacon gives a pretty fair account of Osborne’s grovelling:

“Long gone, thankfully,” said George Osborne, “are the days when Western politicians turned up here and simply demanded that China open up its economy to Western economies.”

He’s right. Our politicians no longer demand.

They beg.

The Chancellor’s speech at Peking University, on the first of his five days in China, was almost magnificently obsequious. Lavishly he praised “your great country”, “the depth and sophistication of the Chinese culture”, “the value you place on consistency and stability and on friendship”, and “your Vice Premier Ma Kai, whose reputation for economic reform and diligence impresses all”.

According to his script, available on the Government website, Mr Osborne is delighted that Britain and China have grown more “complimentary”. At first I thought he meant complementary, but on second thoughts I suspect not.

Normally when Mr Osborne encounters something he considers Left-wing – for example, Ed Miliband’s idea to freeze energy bills – he derides it. For some reason however his speech today contained no jokes at the expense of China’s ruling Communist Party. Perhaps he’s saving up those jokes for later in the trip. Although if he does tell them, he may find that the local authorities generously extend his visit. By, say, three or four decades.

Britain, gushed the Chancellor, would be only too delighted to welcome lots of lovely Chinese investment. We couldn’t get enough of the stuff. Not like those rotten Europeans, who “find all sorts of ways of making clear that Chinese investment is not welcome” – heavens, no, don’t invest in their snooty little countries! Invest in Britain! Do come in, sirs! May we take your coats, sirs? And may we recommend a bottle of the Chateau Margaux? On the house, sirs, of course!

His audience was largely made up of students. It was, he gurgled, “an honour” to be among them, “the students who are going to shape the future of the world”. Students who would make advances in technology, build new businesses, create jobs around the world – but more than that. “You,” said Mr Osborne, almost sighing with admiration, “are the students of today who will write the poems of tomorrow.”

And with any luck, they’ll come and open a vast new poem factory in Britain, employing thousands of British youths to mass-produce state-of-the-art villanelles at competitive prices…

Or, to put it another way:

“All that is solid melts into air, all that is holy is profaned, and man is at least compelled to face with sober senses, his real conditions of life, and his relations with his kind.”

Above: from the Financial Times

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The treachery of Mandelsnake

September 26, 2013 at 10:08 am (capitalism, economics, Jim D, labour party, profiteers, reformism, Tony Blair)

“As a result of the speech, I believe that perceptions of Labour policy are in danger of being taken backwards.  At the business department I tried to move on from the conventional choice in industrial policy between state control and laissez-faire. The industrial activism I developed showed that intervention in the economy – government doing some of the pump priming of important markets, sectors and technologies – was a sensible approach” – Peter Mandelson

Above: puppet of big business

It was, of course, inevitable that Ed Miliband’s modest proposal to freeze energy prices for 20 months would induce howls of outrage from the big six energy profiteers and their mouthpieces – one of whom performed exactly the same service for the banks not so long ago.

Scare stories  about the lights going out, and thinly-veiled threats of an investment strike, were entirely predictable from the energy giants, the City, the right-wing media and the Tories.

But doesn’t poor Miliband have the right to expect at least a discreet silence from people who – on paper at least – are in the Labour Party? Obviously not. Loathsome Lord Mandelsnake has emerged from the woodwork to denounce the plan and accuse Miliband of going “backwards” – by which the Snake presumably means being slightly less craven towards big business than he and his boss Mr Blair were when they were in government.

Actually, Miliband’s proposals are pretty weak: what he aught to be promising (especially now in the face of the blackout and investment strike blackmail) is simply to renationalise all power generation and distribution.

And Miliband needs to understand that there is a group of unreconstructed Blairites like Mandelsnake, organised by the ‘Progress‘ outfit, who are absolutely determined to thwart even the slightest suggestion of a leftward shift in Labour policy and don’t give a damn if the Party loses the next election.

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The Kilburn Manifesto

June 25, 2013 at 7:45 am (capitalism, capitalist crisis, democracy, economics, intellectuals, Jim D, left, socialism)

Valuable contribution to an essential debate…or the latest posturing from a discredited old ‘New Left’?

From ‘Soundings’:

After Neoliberalism?  The Kilburn Manifesto

Edited by Stuart Hall, Doreen Massey and Michael Rustin

Although the neoliberal economic settlement is unravelling, its  political underpinning remains largely unchallenged. Our manifesto calls into  question the neoliberal order itself, and argues that we need radical alternatives to its foundational assumptions.

After Neoliberalism: The Kilburn Manifesto

The manifesto will be published (free) in online instalments over the next 12 months.
Chapter 1 Framing statement After  neoliberalism: analysing the present Stuart Hall, Doreen Massey,  Michael Rustin

Chapter 2:      Vocabularies of the Economy Doreen Massey

Comment on the Kilburn manifesto
Next instalments Michael Rustin Relational welfare (June) Stuart Hall and Alan O’Shea Neoliberal common sense (July) Beatrix Campbell Feminism and the new patriarchy (August) Ben Little Generational politics (September)

************************************************************************************************

Further comment introduced by Doreen Massey over at Open Democracy / Our Kingdom

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14 November: European workers to strike together

November 1, 2012 at 1:22 am (capitalist crisis, economics, Europe, internationalism, Johnny Lewis, solidarity, unions, workers)

Instead of the Tories’ little-Englandism and Miliband’s shameful opportunism, let’s have a working class response to the present European crisis:

14 November: European unions to strike together (adapted from Workers Liberty)

By Ruben Lomas

Trade union federations in Greece, Spain, Portugal, Malta, and Cyprus have called general strikes for Wednesday 14 November.

Unions in France and Italy are also said to be considering calling mass strikes.

The Spanish union federation CCOO aid: “Unemployment, cuts, the impoverishment of the majority and deterioration of public services justify a general strike.”

UNIONS

The CCOO and UGT, Spain’s two main union federations, held a “social summit” with working-class community organisations, students’ unions and smaller trade unions to launch the strike call. Unemployment in Spain has reached 25%.

The European TUC has called for a “day of action and solidarity on 14 November, including strikes, demonstrations, rallies and other actions.”

The 14 November will be the 21st day of general strike action in Geece since 2009. Most general strikes have been for a single day, although some have lasted 24 hours.

This  strike call is important. The European-wide natue of the crisis and the capitalists’ austerity agenda cannot be effectively answered by national action . A European workers’ response is necessary.

A day of coordinated strike action will help shift the struggle away from national movements trying to find solutions to “their” national economic crises, and towards a European working class response to a European bosses’ offensive.

14 November wil not be a magic bullet. As the Greek experience shows, even a series of general strikes do not necessarily topple governments or force them to change course. What they can be is a focal point and a platform for coordinating resistance.

In each European country, scialists must organise for the maximum possible rank-and-file control over the strikes. The direction of the action must be decided by the requirements of workers themselves, not some schema of the union bureacrats. Anti-EU posturing, letting national ruling classes off the hook (a favourite activity of Stalinist and nationalist anti-EU fanatics), must be avoided at all costs.

A European general strike as a one day spectacular, an excercise in letting off steam, will be a futile and counter-productive excercise.

In Britain, socialists and serious trade unionists should fight for our unions to be involved. Where possible, existing disputes should schedule action for 14 November.

DIRECT ACTION

If it’s not logistically possible, or doesn’t make industrial sense, to strike on that day, other actions should be organised.

Stewards should call workplace (or after work) meetings to discuss potential disputes and, in the public sector, a fightback against the pay freeze.

Lobbying the TUC to call a general strike on 14 November is unrealistic and counter-productive. All serious militants know that even a freak “general strike” call from the TUC would not, presently, get a response from the rank and file.

Instead, 14 November should be the focus for action that can be achieved around existing disputes, with socialists emphasing the European-wide nature of the crisis that we all face.

Calls for withdrawal from the EU can only be a nationalist distraction from what we need to say and do within the working class and society as a whole at the moment.

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Chávez: what would Trotsky say?

October 15, 2012 at 7:46 pm (AWL, capitalism, censorship, democracy, economics, history, imperialism, James P. Cannon, Jim D, Marxism, stalinism, trotskyism)

The Chávez victory in Venezuela’s presidential election last week, has been greeted with unbridled enthusiasm by some on the Stalinist-influenced left, and by a quiet gnashing of teeth and subdued wailing on the right. Others have taken a more nuanced view. There can be no denying that Chávez’s social programmes have brought real benefits to the poor. But the endemic corruption amongst the Chávista ruling elite, the lack of anything remotely resembling workers’ control of industry, Chávez’s unpleasant (but all too common amongst Stalinoid populists) penchant for antisemitism and some truly foul international alliances, mean that the regime cannot be considered ‘socialist’ except in the most debased and meaningless sense of the word. It is, perhaps, social democracy sui generis. The Chávez regime is also, quite clearly, what educated Marxists call ‘Bonapartist‘ (to be precise, in the case of Chávez, “petty-bourgeois-democratic Bonapartism“).

Some Trots are very keen on Chávez, others slightly less so. Some are very critical indeed. But what would the Old Man himself have had to say? Well, we don ‘t need to speculate. Between Januay 1937 and his assassination at the hands of a Stalinist agent in August 1940, Trotsky lived in Mexico under the government of Lazaro Cárdenas - a regime very similar to that of Chávez’s. To pre-empt one obvious question about Trotsky’s generally charitable assessment of the Cárdenas regime: yes, of course, Trotsky was dependent upon the Mexican government for his survival and wasn’t about to do or say anything to piss them off. But Trotsky’s undertaking to Cárdenas not to “intervene in the domestic or foreign politics of this country” also meant that he was under no obligation to praise the regime: he could simply have stayed schtum.

As it was, Trotsky ventured some praise for the Cárdenas regime – and also some friendly criticism. But the crucial point is that he never recognises or describes the regime as ‘socialist.’ On the contrary, he writes:“it is not our state and we must be independent of the state. In this sense we are not opposed to state capitalism in Mexico; but the first thing we demand is our own representation of workers before this state. We cannot permit the leaders of the trade unions to become functionaries of the state. To attempt to conquer the state in this way is absolute idiocy. It is not possible in this manner peacefully to conquer power. It is a petty bourgeois dream…”

The article below is adapted and modified by Jim Denham, from an unattributed piece on the Workers Liberty website:

Above: Trotsky thanking the Cárdenas government (accompanied by cockerels)

Trotsky had been expelled from the USSR by Stalin in 1929, and spent the rest of his life trying to find a country which would let him live in exile. He arrived in Mexico on 9 January 1937.

Thanks to the efforts of  Mexican Trotskyists, such as the renowned artist Diego Rivera, the Cárdenas government granted Trotsky asylum on the condition that he would not interfere in Mexico’s domestic affairs. Trotsky accepted this condition, in a statement on his arrival, promising “complete and absolute non-intervention in Mexican politics and no less complete abstention from actions that might prejudice the relations between Mexico and other countries”. (Writings 1936-37 p.86)

Trotsky was forced to break with the Mexican “Trotskyist” organisation, the LCI, after six months in the country, when the Mexican Trots (the LCI) issued a manifesto calling for “direct action” against the high cost of living, implying that workers should attack shops. Coming at the time of the Moscow trials and the attacks on Trotsky by the Stalinists in Mexico, this call by the LCI was particularly stupid. After Trotsky’s intervention, the LCI dissolved itself for the remainder of 1937.

Trotsky publicly supported Cárdenas’ expropriation of the oil industry. On 23 April 1938 he wrote to the Daily Herald in Britain, pointing to the hypocrisy of the British government and defending the nationalisation of oil of the grounds of national economic development and independence. He argued that the Labour Party should set up a commission to investigate how much of the “living sap of Mexico” had been “plundered” by British capital. (Writings 1937-38 p.324)

He also criticised some of his Mexican supporters. On 15 April 1938 Trotsky wrote to his closest collaborator, the US Trotskyist leader James P. Cannon: “Galicia, in the name of the revived League [LCI], published a manifesto in which he attacked Cárdenas for his policy of compensating the expropriated capitalists, and posted this manifesto principally on the walls of the Casa del Pueblo. This is the ‘policy’ of these people.” (Writings 1937-38 p.314)

Trotsky  characterised the oil expropriation as a matter of self-determination. He wrote: “Semi-colonial Mexico is fighting for its national independence, political and economic. This is the basic meaning of the Mexican revolution at this stage… expropriation is the only effective means of safeguarding national independence and the elementary conditions of democracy.” (Writings 1937-38 p.359)

He compared “this courageous and progressive measure of the Mexican government” to the work of George Washington and Abraham Lincoln in the United States, adding that, “if Mexico should find itself forced to sell liquid gold to fascist countries, the responsibility for this act would fall fully and completely upon the governments of the imperialist ‘democracies’.” (ibid p.360)

He summed up his attitude thus: “Without succumbing to illusions and without fear of slander, the advanced workers will completely support the Mexican people in their struggle against the imperialists. The expropriation of oil is neither socialism nor communism. But it is a highly progressive measure of national self-defence.”

He reiterated his support, without losing sight of the character of the Mexican government: “The international proletariat has no reason to identify its programme with the programme of the Mexican government. Revolutionists have no need of changing colour, adapting themselves, and rendering flattery in the manner of the GPU school of courtiers, who in a moment of danger will sell out and betray the weaker side. Without giving up its own identity, every honest working class organisation of the entire world, and first of all in Great Britain, is duty-bound—to take an irreconcilable position against the imperialist robbers, their diplomacy, their press, and their fascist hirelings.” (Writings 1937-38 p.361)

A particularly important article of Trotsky’s, in the light of the current situation, is one on freedom of the press, which he published in the first issue of Clave magazine (October 1938).

In the summer of 1938 a Stalinist agent within the Cárdenas regime, Lombardo Toledano, began a campaign against the reactionary press in Mexico, intent on placing it under “democratic censorship” or banning it altogether. Trotsky was unequivocal in opposing this drive. He wrote: “Both theory and historical experience testify that any restriction of democracy in bourgeois society is, in the final analysis, invariably directed against the proletariat… Consequently, any working class ‘leader’ who arms the bourgeois state with special means for controlling public opinion in general and the press in particular is, precisely, a traitor.” (Writings 1937-38 p.417)

“Even though Mexico is a semi-colonial country, it is also a bourgeois state, and in no way a workers’ state. However, even from the standpoint of the interests of the dictatorship of the proletariat, banning bourgeois newspapers or censoring them does not in the least constitute a ‘programme’, or a ‘principle’ or an ideal set up. Measures of this kind can only be a temporary, unavoidable evil…

“It is essential to wage a relentless struggle against the reactionary press. But workers cannot let the repressive fist of the bourgeois state substitute for the struggle that they must wage through their own organisations and their own press… The most effective way to combat the bourgeois press is to expand the working class press… The Mexican proletariat has to have an honest newspaper to express its needs, defend its interests, broaden its horizon, and prepare the way for the socialist revolution in Mexico.” (ibid pp.418, 419-420)

Trotsky began to write about developments in the unions in mid-1938. Before a Stalinist-organised “Pan-American Trade Union Congress” in Mexico City in September 1938, which set up the Confederation of Latin American Workers (CTAL), he wrote (in the name of Diego Rivera) to denounce Toledano’s links with Stalin. He wrote that Toledano was “a ‘pure’ politician, foreign to the working class, and pursuing his own aims”. His ambition was “to climb to the Mexican presidency on the backs of the workers” and in pursuit if that aim had “closely intertwined his fate with the fate of the Kremlin oligarchy”. (Writings 1937-38 p.426)

His attitude seems to have hardened after the CTAL conference, when Trotskyists were excluded for their politics. He was also prompted by the increased attacks on him by the Stalinist bureaucrats in the unions. After Lombardo Toledano presented a dossier to the (Stalinist) Mexican trade union congress (CTM) in 1938, it voted “unanimously” for the expulsion of Trotsky from Mexico.

Then the August 1938 issue of the CTM magazine Futuro carried an attack on him by Lombardo, accusing him of organising a general strike against Cárdenas during the oil expropriations.

Trotsky distinguished between leaders and the unions: “Toledano of course will repeat that we are ‘attacking’ the CTM. No reasonable worker will believe this rubbish. The CTM, as a mass organisation, as a mass organisation, has every right to our respect and support. But just as the democratic state is not identical with its minister at any given time, so a trade union organisation is not identical with its secretary.” (Writings 1938-9, p.22)

Other attacks followed. The Mexican Communist Party (PCM) leader Hernan Laborde accused Trotsky of having links with General Cedillo (who had led an abortive coup against the government). The Stalinist agent Lombardo also claimed that Trotsky had met with fascists during a summer holiday trip. Trotsky’s response was to offer to participate in a public investigation into Lombardo’s charges.

Trotsky also sought to galvanise an opposition to the Stalinists, drafting a statement intended for publication. It stated: “[In Mexico] the unions, unfortunately, are directly dependent on the state” and “posts in the union bureaucracy are frequently filled from the ranks of the bourgeois intelligentsia, attorneys, engineers etc”.

He described the way these bureaucrats gave themselves a left cover by becoming “friends of the USSR”. He described how they kept control of the unions: “they ferociously trample on workers’ democracy and stifle any voice of criticism, acting as outright gangsters towards organisations that fight for the revolutionary independence of the proletariat from the bourgeois state and from foreign imperialism.” (Writings 1938-39 p.83)

Trotsky went further in November 1938, arguing that the trade unions in Mexico were “constitutionally statified”. He told his closest collaborators that, “they incorporate the workers, the trade unions, which are already stratified. They incorporate them in the management of the railroad, the oil industry, and so on, in order to transform the trade union leadership into government representatives… In that sense, when we say ‘the control of production by the workers’, it cannot mean control of production by the stratified bureaucrats of the trade unions, but control by the workers of their own bureaucracy and to fight for the independence of the trade unions from the state.” (Writings supplement 1934-40, p.791)

In Mexico, more than anywhere, the struggle against the bourgeoisie and the government consists above all in freeing the trade unions from dependence on the government… the class struggle in Mexico must be directed towards winning the independence of the trade unions from the bourgeois state.”

He made it clear that revolutionaries would continue to work in the unions, even though they were partially integrated into the Mexican state. (Writings 1938-39 p.146)

He criticised the Cárdenas government’s second six-year plan in March 1939 for a participation proposal which “threatens to incorporate a bureaucratic hierarchy of the unions etc, without precise delimitation, into the bureaucratic hierarchy of the state”. He went as far as to characterise the unions as “totalitarian”. (Writings 1938-39 p.222, p.227)

This advocacy of intervention in even the most reactionary unions remained in all Trotsky’s articles until the end of his life. For example Clave carried articles in 1940 on the first congress of the STERM teachers’ union and on the 7th national council of the CTM, both characterised by little democracy.

Trotsky made few remarks on the nature of the Mexican regime in the first eighteen months of his asylum, and when he did, these were brief allusions. For example in the article on the freedom of the press in August 1938 he described Mexico’s democracy as “anaemic”.

He argued that “a semi-democratic, semi-Bonapartist state… now exists in every country in Latin America, with inclinations towards the masses”, adding that, “in these semi-Bonapartistic-democratic governments the state needs the support of the peasants and through the weight of the peasants disciplines the workers. That is more or less the situation in Mexico”. (Writings supplement 1934-40, pp.784-785)

What did Trotsky mean by Bonapartism? He had employed the concept to understand the regime in Germany before Hitler and to describe the situation in France in the mid-1930s. He summed it up succinctly in March 1935: “By Bonapartism we mean a regime in which the economically dominant class, having the qualities necessary for democratic methods of government, finds itself compelled to tolerate – in order to preserve its possessions – the uncontrolled command of a military and police apparatus over it, of a crowned ‘saviour’. This kind of situation is created in periods when the class contradictions have become particularly acute; the aim of Bonapartism is to prevent explosions.” (Writings 1934-35 pp.206-07)

In his discussion with comrades in November 1938, he explained: “We see in Mexico and the other Latin American countries that they skipped over most stages of development. It began in Mexico directly by incorporating the trade unions in the state. In Mexico we have a double domination. That is, foreign capital and the national bourgeoisie, or as Diego Rivera formulated it, a ‘sub-bourgeoisie’ – a stratum which is controlled by foreign capital and at the same time opposed to the workers; in Mexico a semi-Bonapartist regime between foreign capital and national capital, foreign capital and the workers… They create a state capitalism which has nothing to do with socialism. It is the purest form of state capitalism.” (Writings supplement 1934-40, pp.790-791)

Discussing the ruling party’s second six year plan in March 1939 (which had been endorsed by the CTM) Trotsky described how “the government defends the vital resources of the country, but at the same time it can grant industrial concessions, above all in the form of mixed corporations, i.e. enterprises in which the government participates (holding 10%, 25%, 51% of the stock, according to the circumstances) and writes into the contracts the option of buying out the rest after a certain period of time”.

Summing up he wrote: “The authors of the programme [i.e. the plan] wish to completely construct state capitalism within a period of six years. But nationalisation of existing enterprises is one thing; creating new ones is another… The country we repeat is poor. Under such conditions it would be almost suicidal to close the doors to foreign capital. To construct state capitalism, capital is necessary.” (Writings 1938-39 pp.226-227)

Trotsky never equivocated on the nature of the ruling party, including the character of the PRM (the “Mexican Revolutionary Party” created by Cárdenas). In his discussion with comrades in November 1938 he argued: “The Guomindang in China, the PRM in Mexico, and the APRA in Peru are very similar organisations. It is a people’s front in the form of a party… our organisation does not participate in the APRA, Guomindang, or PRM, that it preserves absolute freedom of action and criticism.” (Writings supplement 1934-40, p.785)

At the beginning of 1939, prospective candidates in the PRM resigned their posts and began to campaign for the presidency, which would take place in July 1940.

At the outset the candidates were Francisco Mujica on the “left”, Manuel Ávila Camacho in the centre and Juan Andreu Almazán on the right. The PCM and Lombardo threw their support behind Ávila Camacho, calling for “unity behind the only candidate that can defeat reaction”.

Trotsky condemned the support for Ávila Camacho offered by the CGT, and wrote: “At the present time there is no workers party, no trade union that is in the process of developing independent class politics and that is able to launch an independent candidate. Under these conditions, our only possible course of action is to limit ourselves to Marxist propaganda and to the preparation of a future independent party of the Mexican proletariat.” (Writings 1938-39 p.176)

Later he registered his attitude toward Diego Rivera, who had broken with the (Trotskyist) Fourth International and briefly supported Mujica. Trotsky wrote: “You can imagine how astonished I was when Van accidentally met the painter [Rivera], in company with Hidalgo, leaving the building of the Pro-Mujica Committee carrying bundles of pro-Mujica leaflets which they were loading into the painter’s station wagon. I believe that was the first we learned of the new turn, or the passing of the painter from ‘third period anarchism’ to ‘people’s front politics’. The poor Casa del Pueblo followed him on all these steps.” (Writings 1938-39 p.293).

Despite Mexico’s relative economic backwardness in the 1930s, Trotsky did not rule out the possibility that its workers might seize power – even before their counterparts in the US. (Writings supplement 1934-40, p.785) However he was concerned about a mechanical interpretation of permanent revolution as applied to Mexico by some of the LCI.

The Fourth International will defend… [Mexico] against imperialist intervention… But as the Mexican section of the Fourth International, it is not our state and we must be independent of the state. In this sense we are not opposed to state capitalism in Mexico; but the first thing we demand is our own representation of workers before this state. We cannot permit the leaders of the trade unions to become functionaries of the state. To attempt to conquer the state in this way is absolute idiocy. It is not possible in this manner peacefully to conquer power. It is a petty bourgeois dream…

I believe we must fight with the greatest energy this idea that the state can be seized by stealing bits of the power. It is the history of the Guomindang. In Mexico the power is in the hands of the national bourgeoisie, and we can conquer power only by conquering the majority of the workers and a great part of the peasantry, and then overthrowing the bourgeoisie. There is no other possibility.” (Writings supplement 1934-40, p.792, p.793).

Trotsky’s evaluation of developments in Mexico went through a series of stages and modifications, as the battle between the state and the working class was played out. In the last eighteen months of his life, in discussions with Mexican socialists, he further clarified his views on the nature of the regime and the ruling party, its relationship to the unions and on workers’ administration.

The first collaboration of note was with Francisco Zamora, a member of the editorial board of Clave who had also sat on the Dewey Commission. He was a professor of economics at the National University of Mexico and a member of the first committee of the CTM. Between October 1938 and May 1939 Zamora published a series of articles in the magazine Hoy, which contain some ideas influenced by Trotsky.

Zamora criticised the CTM and CGT leaders and pointed to how their bourgeois politics had accommodated with the Mexican state. He argued that the Mexican revolution, particularly in its agrarian relations, was unfinished. However he predicted that Ávila Camacho would not continue the work of Cárdenas, but rather destroy it.

Zamora also discussed the way the state represented the interests of the dominant class, although during periods of stalemate allowed the state “a certain momentary independence” – alluding to the idea of Bonapartism.

Around the same time Trotsky held discussions with the Mexican Marxist Octavio Fernández on the nature of the Mexican revolution. Between February and April 1939, Fernández published three articles in Clave with a wealth of statistical material dealing concretely with the Mexican social formation and in particular with the peasantry and the working class.

Fernández distinguished between the military-police form of Bonapartism of the Calles period and the “petty-bourgeois-democratic Bonapartism” of Cárdenas. He also argued that the expropriation of the oil industry was made possible by the international crisis of relations between the imperialist powers. He believed that further expropriations were unlikely as long as a bourgeois government was in power in Mexico. He nevertheless urged workers to push the nationalisations as far as possible, to press the government not to pay compensation, to set up control committees in factories and for price control committees. (León Trotsky, Escritos Latinamericanos 1999 pp.233-234)

In a later article in Clave, ‘Qué ha sido y adónde va la revolución mexicana’ (November-December 1939), Fernández warned that in Mexico, everyone was a “revolutionary” and for “the revolution”. This was because the Mexican revolution (1910-20) was “aborted”, in the sense of an unfinished bourgeois revolution – but in a country where the working class was increasingly becoming an independent factor.

Probably Trotsky’s most important discussion took place with Rodrigo García Treviño, an official at the CTM. Following the exchange, Trotsky wrote a paper on whether revolutionaries should participate in the workers’ administration established in the nationalised rail and oil industries (reprinted here). The key passage is this:

“The nationalization of railways and oil fields in Mexico has of course nothing in common with socialism. It is a measure of state capitalism in a backward country which in this way seeks to defend itself on the one hand against foreign imperialism and on the other against its own proletariat. The management of railways, oil fields, etcetera, through labor organizations has nothing in common with workers’ control over industry, for in the essence of the matter the management is effected through the labor bureaucracy which is independent of the workers, but in return, completely dependent on the bourgeois state. This measure on the part of the ruling class pursues the aim of disciplining the working class, making it more industrious in the service of the common interests of the state, which appear on the surface to merge with the interests of the working class itself. As a matter of fact, the whole task of the bourgeoisie consists in liquidating the trade unions as organs of the class struggle and substituting in their place the trade union bureaucracy as the organ of the leadership over the workers by the bourgeois state. In these conditions, the task of the revolutionary vanguard is to conduct a struggle for the complete independence of the trade unions and for the introduction of actual workers’ control over the present union bureaucracy, which has been turned into the administration of railways, oil enterprises and so on.”

García Treviño wrote an article quoting (anonymously) passages from Trotsky’s document – including on Bonapartism sui generis and the concluding emphasis on the need for a revolutionary party. He praised the workers’ administration as just as efficient as under the previous management — for example by centralising production — and rejecting the hostility of the Stalinists towards it.

But he pointed out that in the rail industry, workers had also been saddled with the old debts of the company. He criticised the form of control because it could not break out of the laws of the bourgeois economy, the firm was bankrupt and because compensation was paid. He said that although workers had a bigger say in the industries, the state remained in control and pointed out that cooperatives could be a “cruel and merciless” form of exploitation of the working class.

Trotsky was unable to add much over the next year. The world was sucked into another global war and as hostilities began, a huge faction fight took place in the Trotskyist organisation in the United States, the SWP. On top of that, the Stalinists in Mexico stepped up their attacks on Trotsky’s asylum and prepared the ground for the GPU assassins to do their work.

For example PCM leader Laborde accused Trotsky of involvement in a rail crash in its paper La Voz de Mexico in April 1939. Lombardo’s press, including Futuro magazine and the daily paper El Popular slandered him during the early months on 1940. Trotsky again proposed a public commission of investigation of the charges.

On 24 May 1940 a serious attempt was made to murder Trotsky, with the Stalinist painter David Siqueiros leading an armed assault on his house at night.

Accused of slandering the Stalinists, Trotsky offered to take the matter to court. He identified the role of the GPU, which had begun making plans to kill him from April 1939. These plans were stepped up by Vittorio Cordovilla, a Stalinist agent who arrived in Mexico in late 1939 and organised a purge of the party (including its leaders Laborde and Campa) for not prosecuting the anti-Trotsky campaign hard enough. Within months of this intervention, Trotsky’s life was ended by a Stalinist ice axe to the head.

On Trotsky’s desk at the time of his death was an unfinished manuscript from April 1940 on the trade unions, with a valuable assessment of the relationship between the state and the working class in Mexico and similar countries. Entitled Trade Unions in the Epoch of Imperialist Decay, it once more characterised the Cárdenas regime as Bonapartist.

Trotsky also distinguished between different forms of Bonapartism, with some leaning “in a democratic direction, seeking support among workers and peasants”, while others “install a form close to military-police dictatorship”.

He criticised the nationalisation of the railways and oil fields as aimed simultaneously at foreign capital and the workers – and registered that these industries were run by the union bureaucracy for the bourgeois state.

Trotsky also repeated his assessment that the Mexican trade unions had been transformed into semi-state institutions – but maintained that Marxists still had the possibility of working inside them. But he emphasised the need for workers’ organisations to assert their own independent politics, from the state and the labour bureaucracy, and to fight for trade union democracy.

One thing is clear from comparing Mexico in the late 1930s with the situation today (especially in Venezuela), and that is that Mexico’s history anticipated present political issues of strategy and tactics in almost every case — the nationalisations, workers’ participation, coup attempts, union splits, the press, the creation of a ruling party etc, — as part of the creation of a Bonapartist regime. And in almost every case, Trotsky set out a clear position for how Marxists would navigate in these circumstances.

Of course, we cannot read off mechanically from the past what to say and do in the present. For one thing, Venezuela and Mexico today are much more industrially developed than in Trotsky’s time, and the form of domination by the US is different today than it was in the 1930s. And the Venezuelan UNT trade union federation is not today incorporated in the state but is an independent movement with some militant and longstanding rank and file forces.

But our tradition is an anchor – it demands a critical stance. Other Marxists, including Trotskyists in Mexico and elsewhere in Latin America, have used Trotsky’s comments to develop their analysis of the Mexican regime in terms of Bonapartism – and applied to to other cases, such as Peron in Argentina and Velasco in Peru. Events in Venezuela under Chávez should be assessed on their own terms: but much can be learned from the attitude that Trotsky took to comparable developments.

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Anatomy of the new Stalinism

August 28, 2012 at 4:29 pm (AWL, capitalism, capitalist crisis, democracy, economics, Europe, internationalism, Jim D, labour party, liberation, Marxism, revolution, socialism, stalinism, trotskyism, workers)

Regular readers will know that a recurring leitmotif at Shiraz is that of the new Stalinism to be found in all sorts of guises throughout the supposed left (and liberal-left) in the UK, Europe and US. The “new” Stalinism differs from the “old” in one crucial respect: The old Stalinists believed that the Soviet Union and its satellites in Eastern Europe were (to some degree or another) “actual existing socialism.” However foolish and misguided, they honestly believed that they were fighting against capitalism (ie: the political system based upon generalised commodity production) for something better: democratically planned economies run for human need not profit.

The new Stalinists do not believe in the abolition of generalised commodity production – or, at least, do not believe it’s possible. In fact they explicitly accept and celebrate the capitalist mode of production, so long as it’s not “western” (aka “neo-liberal”) capitalism. Hence their enthusiam for state-capitalist China, the so-called BRIC economies, and  “Asian” capitalism . Accompanying this enthusiasm for certain forms of capitalism/state-capitalism is an almost complete disregard for workers’ rights and contempt for any recognisable form of democracy. 

In fact, they don’t believe in anything much at all: their’s tends to be a negative creed that simply opposes the “west” (aka “imperialism”/”neo-liberalism, etc) even if that means supporting anti -“western” ruling classes, thoroughly reactionary theocratic and/or nationalist movements, and denying/excusing genocides (as in Bosnia). It also means that they will refuse support to some national liberation movements (eg Libya, Syria) if they feel that the “west” is giving them any degree of support, or might benefit in terms of the ‘global balance of forces’ should they succeeed.

I wrote about this in a 2008 open letter to those who were supporting China’s oppression of Tibet. I have been meaning to develop the main themes of that piece ever since, and have touched upon the issues in various articles here about such new Stalinists as the Graun‘s Seumas Milne, ‘Stop The War”s Andrew Murray, the ex-SWP ‘Counterfire’ group, the ‘Socialist Unity’ blog and people like Galloway, Tariq Ali and Jeremy Corbyn MP. These organisations and individuals are not ideologically identical, but all share the same essentially anti-democratic and anti-working class characteristics.

So far, I haven’t got round to writing my magnum opus , but in the meanwhile I see that one Mícheál MacEoin, writing in the present issue of the AWL’s Solidarity paper (and the Workers Liberty website) has taken up the essentially Fabian nature of the new Stalinism’s domestic economic approach in the UK: “…a toxic mix of reformism and Stalinism which explains the complete absence of democracy from this “alternative” and the patent lack of radicalism inherent in its state-capitalist Keynesianism.”

MacEoin’s article takes the form of a critique of the small and not very significant ex-Trotskyist group Socialist Action, but in fact his analysis is applicable to the entire ‘new Stalinist’ mileu. It’s an important piece that repays close reading:

A United front with the Financial Times?

The tiny group Socialist Action (still formally Trotskyist but in practice highly Stalinist) has recently published an article, ‘Two classes, two responses to the crisis’ which purports to offer a working-class alternative to austerity. It does no such thing.

After decades of “entryism” into the Labour Party so deep that it has become indistinguishable from careerism, Socialist Action have long dropped any attachment to revolutionary socialism. What they offer here is a sort of reheated national-Keynesianism with a working-class gloss. It contains nothing in the way of working-class struggle, democracy or international socialism.

The article begins by offering a summary of recent Keynesian critiques of British Government economic policy from the chief economics commentator of the Financial Times Martin Wolf, the director of the National Institute of Economic and Social Research Jonathan Portes, and the Noble-prize winning economist Paul Krugman. All argue that the Government is intensifying the crisis by cutting its investment during the current recession.

Socialist Action correctly point out that certain sections of capital are also clamouring for an increase in infrastructural investment, citing the “multiplier effect” that this would have on economic activity (adding extra demand by creating jobs in capital projects). However, the bosses’ lobby-group the Confederation for British Industry (CBI) and the Institute of Directors (IoD) are, according to Socialist Action, advocating “a broadening of the reactionary agenda, not a retreat from it.” This is evidenced by calls for greater financial deregulation, further cuts to social expenditure and the bonfire of employment rights contained in the Government’s own Beecroft Report.

This is all true but Socialist Action’s criticism that capital’s plan for the crisis “is not ‘investment, not cuts’, which summarises the necessary strategic response to the crisis [but] ‘investment plus more cuts’” draws a false dividing line which only serves to obscure an alternative working-class policy.

For Socialist Action, the “class” dividing line is “investment not cuts” versus “cuts not investment”. If this is the case, only by churlish arbitrariness can Socialist Action exclude Wolf and Portes from the “proletarian” side, even though Wolf is a keen supporter of German-style “flexible” labour markets (ie. limiting workers’ rights, mini-jobs etc) and even Krugman has no ideological objection to austerity measures besides their obvious economic inefficacy. In short, the watchword “investment, not cuts” does nothing to distinguish a working-class socialist policy from the left-wing of capital.

Another false dividing line drawn by Socialist Action concerns the question of the state.

The problem with capital’s solution to the crisis, we are told, is that despite their arguments in favour of investment, the CBI, the IoD and others “remain utterly opposed to the state itself leading that investment.”

The second dividing line is thus “state-led investment” versus “state inducement towards private investment.” The solution of the “working class and its allies” (who? Martin Wolf? the Chinese Government?) is “state-led investment, taking sectors of the economy out of the hands of the capitalists in order to provide what is socially and economically necessary, large scale investment in key sectors such as housing, transport, infrastructure and education.”

It is clear that Socialist Action means state-capitalist investment by the capitalist state. Clearly this would be preferable to austerity in the sense that capitalist growth can give better conditions to workers than capitalist slump but it has nothing necessarily in common with socialism.

As Marx wrote in Chapter 25 of Capital of the increased demand for labour power which accompanies the accumulation of capital: “just as little as better clothing, food, and treatment do away with the exploitation of the slave, so little do they set aside that of the wage worker. A rise in the price of labour, as a consequence of accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage worker has already forged for himself, allow of a relaxation of the tension of it.”

In other words, while better than austerity, state-capitalist investment is not a working-class alternative to capitalism.

Although the statification of particular sectors of the economy would take certain industries from the hands of particular capitalists, nationalisation itself is not anti-capitalist and does not necessarily challenge the rule of capital in general.

This was the case in Britain after the Second World War when the Labour Government of Clement Attlee nationalised gas, coal, electricity and the Bank of England. Industries functioned in more or less the same way, often with the same managers, and the Government was no more strike-friendly than any other, using the army to break strikes on the docks in 1948 and 1949.

A second problem with calling merely for state-led investment and nationalisation is that is that there is no necessary role for democracy, let alone a socialist revolution to overthrow capitalism and create a workers’ state.

As James Connolly wrote in a polemic against Fabianism, “state ownership and control is not necessarily Socialism — if it were, then the Army, the Navy, the Police, the Judges, the Gaolers, the Informers, and the Hangmen, all would all be Socialist functionaries, as they are State officials — but the ownership by the State of all the land and materials for labour, combined with the co-operative control by the workers of such land and materials, would be Socialism… To the cry of the middle class reformers, ‘make this or that the property of the government,’ we reply, ‘yes, in proportion as the workers are ready to make the government their property.’

The means by which workers “make the government their property” is through working-class democracy at every level of society.

As the American “third camp” socialist Hal Draper explained, against the idea that the USSR was a “workers’ state” on account of having state-owned property but applicable here too: “The working-class is not by its nature, and never can be, an owning class like previous ruling classes. It can ‘take over’ the economy in only one way: collectively, through its own institutions. It can exercise economic power only through its political power. The expression of this proletarian political power can be given in two words: workers’ democracy.”

Being charitable, it could be said that Socialist Action missed this point having imbibed much Fabianism after years of swimming amongst the currents of the Labour Party bureaucracy. This would be tenable if it were not for the group’s favourable opinion of the viciously anti-working class state-capitalist dictatorship in China and the group’s description of the fall of the USSR and the Eastern Bloc police states as “the greatest defeats suffered by the working class since World War Two and overturn the post-war world order.”

It is indicative of a deeper problem with Socialist Action’s politics. Socialist Action represent a toxic mix of reformism and Stalinism which explains the complete absence of democracy from this “alternative” and the patent lack of radicalism inherent in its state-capitalist Keynesianism.

There is a historical precedent. In many ways Socialist Action are reminiscent of those in the British labour movement such as Sidney and Beatrice Webb and George Bernard Shaw who lauded the Stalinist USSR for its anti-capitalist and “rational” organisation of society whilst opposing more left-wing revolutionary forces at home — “socialism in one country; just not this one.”

In a critique of Shaw’s conception of socialism written in the 1920s for the Independent Labour Party’s newspaper The New Leader, the socialist journalist H N Brailsford explained that the difference between reformist Fabianism and working-class socialism amounts to democracy. If, as Shaw held, “‘Socialism means equality of income, and nothing else”, it has no necessary democratic component. If income equality was the essence of the system, argued Brailsford, “it might be set up and administered by a benevolent despot.” However, “if it is concerned primarily with the question of power, it cannot have a non-committal attitude to the issues of democracy. Aiming at a transfer of power to the workers (and, therefore, eventually to the whole community), democracy must be its foundation.”

As well as not challenging capitalism, Socialist Action’s “alternative” is national in scope and does not challenge the myopic failure of European social democracy to look beyond its own national frontiers. The only criticism of the Labour leadership is that it is not Keynesian enough, that its plans would not stimulate enough demand.

The crisis of capitalism we face is global in scope and the crisis of the Eurozone is particularly sharp and immediate. In narrow bourgeois terms, stimulating British household demand in the name of classless categories such as “the economy as a whole” (the reproduction of capitalist accumulation on an extended scale?) would indeed improve one problem.

As Larry Elliott has commented, “a breakdown of GDP from the Office for Budget Responsibility showed that weak private consumption shaved 0.5 points off growth and lower government consumption a further 0.3 points” in 2011, and that declining overall output was only saved by an increase in net trade. However, the British economy is not isolated and we must take into consideration the performance of the overall world economy. As of May 2012, UK trade with the EU fell to 45%, its lowest level since 1988, and a stronger pound vis-a-vis the euro will depress British exports.

Even if British capitalism could save itself in isolation from the world economy, socialists should not advocate that it does so.

The interests of the working-class are in breaking down national barriers to create larger units in order to increase the general level of the productive forces and unite the working-class across borders; we have no interests in tariff barriers, sharpened national competition, internal devaluation through crude cost-cutting and repressed wages, and the drive to war stimulated by inter-imperialist rivalry.

The working-class solution to the present crisis is to fight at home for a workers’ government and at the same time to unite the struggles of the working-class across Europe for a democratic, republican and socialist United States of Europe. We must fight for the levelling up of pay, conditions, workers’ rights and pensions, and for the taking of high finance across Europe under workers’ control.

This can only be done if we break from the national-Keynesian perspective of the social democratic bureaucracy and advocate working-class transitional demands combined with a revolutionary programme to overthrow capitalism at home and across Europe.

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Greece: fight the blackmail!

June 8, 2012 at 1:15 pm (AWL, capitalist crisis, Cross-post, economics, elections, Europe, Greece, socialism, workers)

By Theodora Polenta (cross-posted from Workers Liberty)

In the run-up to Greece’s election on 17 June, the left-wing coalition Syriza and the conservative New Democracy are still neck-and-neck in the polls. But the EU leaders are trying to blackmail the Greek people into voting for the pro-cuts parties.

A barrage of blackmailing has been directed against Greece from representatives of the capitalist class, both national and international, both elected and unelected.

From the social democrats comes soft blackmailing — “comply, and we can sort out some concessions; but defy, and that means disaster”.

That is the soft-cop accompaniment to the hard blackmailing and threats of immediate expulsion of Greece from the eurozone by the mujahedeen of neoliberalism.

Recently Daniel Cohn-Bendit, who was “Danny the Red” in France’s May 1968 movement and is now a sort of pink-Green, added himself to the list of those blackmailing the Greek people.

Cohn-Bendit had previously been “pro-Greek”, and he switched when a left political alternative in Greece became a possibility. Now he says, as brutally as German finance minister Schäuble or more so, that the eurozone and EU will stop cooperating with Greece — i.e. stop bailing out Greece and push Greece into bankruptcy — if Syriza sticks with its promises to cancel the memorandum and reinstating people’s wages to the 2009 level.

French president Francois Hollande refused to meet Syriza leader Alexis Tsipras when Tsipras visited France, stating as an excuse that Tsipras is not an elected prime minister. However, Hollande did meet Pasok leader Evangelos Venizelos — who came third in the 6 May elections — in a desperate attempt to give life to the dead body of Pasok.

From the social democrats, the magic words are Eurobonds for development projects. But even if these come, the major developments proposed are in areas of “low employment intensity”:

1. Energy (which will involved further privatisation of the Greek energy sector, more redundancies, and a looting of our collective wealth and infrastructure)

2. Transportation and “big projects” in motorways. Many such projects remain unfinished; now they will be financed by European bonds and presumably handed to German and French companies

3. Oil pipelines (subject to the resolution of the conflicts and decisions on which pipelines will pass via Greece).

The projects will have a nil impact on improving the majority of the Greek population’s living standards and working conditions, as they are not in areas such as industry, agriculture, clothing, food, etc.

“GREEK EXIT” AND AUSTERITY

With the social-democratic carrot comes the stick from the mujahedeen of austerity: Schäuble, Merkel, Barroso, Draghi, Provopoulos, Lagarde.

They equate Syriza getting elected with inevitable Greek exit from the eurozone, with Greek bankruptcy, and with further deterioration of the Greek people living standards and working conditions.

They terrorise the Greek people by pretending that they are fully prepared, with a plethora of plan Bs, Cs and Zs in the event of a Greek euro exit.

Reuters has “revealed” that the eurozone finance ministers are preparing plans for a Greek exit. Lagarde and other IMF representatives have stated that IMF is prepared for a Greek exit from the eurozone. Schäuble has stated that both ECB and Bundesbank are drawing up a contingency plan, and claimed that Greece exit would not have a major impact on Germany and the losses will be manageable.

German Chancellor Angela Merkel has proposed a five-point shock therapy, similar to the one applied to East Germany, as her version of growth and development for Greece. It includes:

1. More privatisation and selling-off of Greek assets

2. Elimination of remaining business regulations, abolition of remaining trade-union rights, and “labour market reforms” to make it easier to fire workers

3. Lower corporate taxes (than the rates already reduced to 22%)

4. Setting up of special economic zones, where employers are exempted from those taxes and social laws that remain

5. Creation of privatisation agencies and abolition of labour-protection laws

George Provopoulos, Governor of the Bank of Greece, has offered a string of suspiciously precise statistics on the effects of Greek’s exit from the eurozone: 65% devaluation of any additional currency issued by the Greek government (restored Greek drachma or “Greek Euro”); 55% further reduction in wages; 22% negative growth; 32% inflation; 37% interest rates; 12% deficit; 373% increase in the Greek debt.

What is on offer from the pro-memorandum parties, Pasok and ND, despite their promises to renegotiate the memorandum, is more of the same: austerity measures and attacks on people’s living standards and working conditions.

The economic programme of ND leader Antonis Samaras could be summarised as “memorandum, memorandum and more memorandum”. He is very fuzzy and vague about the “social measures” and “social relief that ND is intended to implement and very precise on the anti-working class measures that “need to be implemented”.

Pasok and ND can promise the following:

1. Cuts have already been agreed and planned, worth 11.5 billion, from pensions, welfare benefits, closings of schools and hospitals.

2. Salary reductions and the dismantling of labour relations.

3. Increases in electricity bills.

4. Dismissal of 150,000 public sector workers and privatisation of 50 billion euros’ worth of public assets (infrastructure, water, energy, natural resources).

5. Creation of a special fund abroad where the country’s revenues will be directed to cover obligations to bondholders. Only if anything is left over will our diminishing wages, pensions and social services be paid.

They offer ideological terrorism and a bludgeon of fear to get people to accept the memorandum Greece of:

• over one million unemployed

• over 50% unemployment for under 25s

• one third of the people living below the poverty line

• being (according to Unicef) 21st out of 29 old-industrialised countries for child poverty

• shut-down hospitals and shortages of vital medications

• over 25,000 people homeless in Athens

• an alarming increase in suicide rates

• 350,000 of small shops shut

• almost a third shrinkage of Greece’s GDP since 2008.

Despite the deficiencies, the hesitancies, and the reformist character of the programme which Syriza has presented for 17 June, it should be applauded when it says clearly that Syriza will scrap the memorandum, restore trade union rights, etc.

Syriza’s commitment that not even a single penny should be given to the creditors if the people’s needs of decent wages, pensions, welfare state provisions have not been met should be applauded.

Despite the pressure put on Syriza to water down their defiance against the memorandum and come to terms with a renegotiation, it has not surrendered. It has maintained its links with the people and movements that have been actively supporting it.

IMMEDIATELY

Syriza leader Alexis Tsipras has pledged to immediately remove the Cabinet Act which reduced the minimum wage by 22% (32% for under-25s).

He has also pledged to to restore unemployment benefits to previous levels and extend their duration, to restore and extend sickness and maternity, to restore the power of collective bargaining agreements, to cancel the debt of heavily indebted households, to repeal the regressive property tax for the poor working classes.

These policies need the support of each worker, each trade union and neighbouring community movement activist, each unemployed person, each worker in precarious or part-time flexible employment.

Syriza’s program can be summarized into three main points:

• people before Greek bond holders and market forces — cancellation of the memorandum;

• write off of most of the debt and freeze interest rates and debt payments for the remaining renegotiated debt

• expansion of democracy and safeguarding of Greece’s threatened sovereignty – Troika out of Greece.

The programme has triggered a wave of criticism from different sections of the left.

The criticism varies. Xekinima presents comradely criticism. It advocates a vote for Syriza and support for the formation of a Syriza-led left government, but criticises Syriza for not adopting a full socialist program.

KKE and Antarsya reject Syriza’s program as a limited reformist effort far behind the needs of the Greek working class. They declare that Syriza’s promise to cancel the memorandum is a hoax and allege that really Syriza is proposing a soft renegotiation of the memorandum.

They say that Syriza’s political role is to be a new Pasok to replace the centre-left vacuum and provide a left face for the memorandum politics. They denounce Syriza for its pro-EU stance.

They claim that the left should advocate the cancellation of the debt tied up with an exit from the eurozone, and EU, which should be “anti-capitalist” (for Antarsya) or “under popular power and control” (for KKE).

The problem with these attitudes is not that we can trust Syriza’s leaders and be sure they won’t buckle under increased pressure (they may), or that we can be sure that Syriza’s tactic of calling the bluff of the EU leaders will work (it probably won’t).

The trouble is that, under cover of left rhetoric, KKE and Antarsya are declaring defeat in advance. They are giving up on the battle to hold Syriza to its promises, and they are helping the EU and ECB leaders by sparing them the political firestorm they will have to ride through in order to expel Greece from the eurozone.

REVOLUTIONARIES AND SYRIZA

Syriza has a serious reformist programme which, if implemented, would bring gains for the Greek and European working class.

The “Euro-Keynesian” programme for Greece is limited, and naive about the realities of class struggle, but it is not utopian in the sense of being unworkable even in principle. The resources of the eurozone are large enough that the eurozone governments could concede important relief to Greece if pushed to do so by strong enough mobilisations.

The cost to the eurozone governments of a Greek exit, let alone of a eurozone break-up, would be much greater than the costs of a real “bail-out” for Greece.

The “Euro-Keynesian” programme is reformist not because it proposes something impossible but because it is limited and naive about the ferocities of class struggle.

Revolutionary Marxists should point that out. But there is no sense in demanding that Syriza adopt a socialist programme. Syriza is what it is. Demanding it adopt a socialist programme cannot transform it into a revolutionary party. All it can do is, to some degree or another, encourage illusions among workers that a “socialist programme” is no more than the Syriza policy pushed a bit more to the left by pressure.

On the other hand, Antarsya and KKE are abstaining from the class struggle, which at this point has been transferred from the industrial sphere to the political stage. They do this by distancing themselves from Syriza and the prospect of a government of the left — in fact, a version of what the Communist International in its revolutionary period termed an illusory workers’ government which could nevertheless become a starting point for a battle to create a real workers’ government.

Tsipras says he doesn’t want to scrap the bail-out fund. All Syriza’s spokesmen claim that they will renegotiate the payment of the debt (writing off most of it). but they will carry on receiving the instalments of the second bailout fund.

Syriza’s claim is fragile as the bailout funds from the Troika have as precondition the implementation of the second memorandum.

92% of the memorandum money only passes via Greece on its way to the pockets of the Greek bond holders. Europe is “bailing out” Greece, but the money is coming straight back to the Troika and its friends in the form of interest and repayments on bonds. But Troika says it will cut off the funds.

CALLING EU LEADERS’ BLUFF

Syriza’s programme is based on calling the bluff of the eurozone.

They say the memorandum not only attacks workers, etc., but doesn’t even work for the eurozone. Syriza’s line of defence to the national and international blackmail is that the memorandum policies have been leading Greece to negative growth and stagnation and are accelerating the probability of the Greece’s exit from the eurozone.

A lot of respectable economists are implicitly backing Syriza’s stance. Nobel prize winning economist Paul Krugman put it succinctly the other day when he told Radio Four that “it is deeply destructive to pursue austerity in a depression”. Another economist has stated that the worst choice that Greece could follow is the continuation of the memorandum policies, even with an addition of some anaemic growth measures.

A further ten years of austerity would lead the Greek economy into deep stagnation and negative growth and thus inevitably to a Greek bankruptcy, exit from the euro, and possibly the destruction of democracy by a military coup.

Syriza claims that the cost of a potential eurozone breakdown outweighs the cost to EU governments of bailing out Greece and scrapping the memorandum. There is a real basis for this attempt to call the EU leaders’ bluff.

The eurozone is ill-placed to resist further disintegration if Greece falls out, and the cost of a euro break-up would be huge (between 10% and 13% of GDP according to the Financial Times, 17/05/12).

Estimates of the effect of a Greek exit on the eurozone differ, but, with Spain and Portugal in a bad way already the effect would be large. The contagion of the debt crisis and the potential of a euro-disintegration is gaining momentum with talk of Portugal and Ireland having to go for a second bailout funds.

Cyprus is on the brink of joining the “memorandum” club. Spain, the fourth-biggest eurozone economy, has to pay sky-high 7% rates to borrow and is experiencing a massive bank run and outflow of capital.

The third-biggest eurozone economy, Italy, is also in trouble.

In principle the ECB has the resources to offset the disruptive effect. The chance of it moving fast enough to do that seems small.

A Greek euro-exit and bankruptcy would compromise the whole concept of the eurozone and would further devalue Spanish and Italian bonds. A domino effect, leading to the end of the eurozone, would become likely.

There is also a real basis for the EU leaders’ attempts to blackmail Greek voters. A Greece expelled from the eurozone would suffer economic chaos even if led by a workers’ government.

The eurozone political leaders cannot be trusted to act in an objective or rational way. They could decide to force Greece out of the eurozone, driven that way by the desire to set and example and punish Greece for misbehaving and not sticking to the memorandum. Or they could stumble into it.

It is the political responsibility of Syriza and the revolutionary left to alert and politically prepare the Greek working class for the effects of Greece being forced out of the eurozone.

The key issues then will be the development of European working-class solidarity; comprehensive workers’ control in Greece, including over the distribution of food and other essentials; and the development of workers’ self-defence groups to deal with the threat of the Golden Dawn fascists and of a possible future military coup.

Model motion on Greek solidarity here.

Open letter: Do you really want the EU to break up? here

Theodora Polenta will speak on ‘Greece: Is workers’ revolution on the agenda?’ on Thursday 21 June, 7pm, The Lucas Arms, Grays Inn Road, London WC1X 8QZ; further details: 07796 690874

P.S: Comrade Dave’s in Greece and  talking to lefties, including Antarsya,  here.

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