2010-12-02
What is Socialism?
I publish here my introduction on the subject ‘What is socialism’ that was given in Athens during a three day conference of the TANIT-project. It is far from a worked out position. What I hoped to do, was to give a very different approach than the ones that are usually given by the Marxist left. My only “ambition” was to give some elements that we need to clarify and develop further in order to arm the left movement with a radical but –also credible- alternative. So, it is far from a finished ‘product’ and rereading it, I would already put things differently on the basis of the discussions we had in Athens
What is Socialism?
Today, even a child can answer the question ‘What is Socialism?’ If you would ask a twelve year old what socialism is, the child would run to the computer and ‘Google it’. If it were an English child, it would probably panic, not only because of the length and the complicated nature of the definition, but also because of the many different versions of it. A Dutch-speaking child would be in more luck. It would find a very short definition that I here want to translate into English: “Socialism is a society based on equality, social justice en solidarity, or the collective term for a variety of political and ideological currents that strive to that kind of society.” There.
Peer production
Off course, we can argue about this definition, but I do not think the definition of socialism is the main issue we should concentrate on. There is a matter of fact, it would probably be a better idea to discuss Wikipedia and other examples of so-called peer production that are challenging traditional hierarchical capitalist business models. Wikipedia is a profoundly anti-capitalist and even communist way of producing and distributing knowledge. It is based on the principle ‘to each according to need, from each according to ability.’ The contributors or editors are not paid and the users are not charged, which again flies in the face of all capitalist logic. Furthermore, Wikipedia is egalitarian produced on the basis of horizontal reciprocities rather than hierarchical control.
Another famous example of peer-production is Linux. Thanks to the Internet Linux was build by thousands of computer programmers worldwide, most of them working for companies such as Microsoft, IBM and others, who collectively and voluntarily build a new and –according to many better and more stable computer operating system that today is used by major corporations like BMW and in a country like China. Open-source production could (and probably will) revolutionise businesses worldwide, but these developments are hardly discussed by the left. The early defenders of open sources and peer production were – and often still are- branded by the establishment as the “new communists”. In fact, there is a group on Facebook called ‘Telekommunisten’, that I enthusiastically support, although I often hardly understand what they are saying. It has more then 2000 supporters and I strongly recommend you to ‘like it’. They are for instance campaigning against intellectual property rights and are strong defenders of piracy, which of course get them into conflict with capitalist interests.
Of course, as with every new technology, capitalism tries to use these new developments into their advantage. Google started an on-line encyclopaedia that introduces the concept of monetary rewards depending on the amount of visits of the page you made. It remains to be seeing if they will be able to produce a better online encyclopaedia than Wikipedia, but I doubt it. I do not think that the Internet and peer production by themselves will ‘automatically’ create the conditions for a superior system that will destroy or replace capitalism, as some of the theoreticians of peer production argue. But we must consider them as an important bridge to a future “social-ist” society and the demands of the peer movement should be integrated in a socialist programme. These examples teach us important lessons. It shows money and material gains are not the main motivators of scientists, intellectuals and high skilled technicians. Once their material needs are met, they are driven by curiosity, the challenge of solving problems, the joy of working collectively on a project, of contributing to a better world, etc.
Behavioral Economics
By the way, modern psychology, anthropology, behavioural economics and other social and human sciences provide us hundreds of other examples that not only contradict the ruling ideology of the free market, but confirm socialist ideas. For instance, Daniel Kahneman, the Israeli-American psychologist and expert in behavioural economics, who won the Nobel Prize Economics in 2002, did a large Gallup survey on happiness amongst 600.000 Americans. The most interesting result they found, which they absolutely did not expect to find, was the following. They looked how feelings of happiness vary with income. It turned out that below an income of 60.000 dollars a year, people got progressively unhappier the poorer they got. But above that income, extra income did not make any difference for the so-called ‘experiencing self’. But for the ‘remembering self’, there was no limit: the more money you make, the more satisfaction you get.
It would lead me to far to explain the difference between the two selves, but it goes like this: there is a difference between being happy in your life and being happy about your life. People can be very satisfied about their life, without experiencing happiness in their life. The first relates to the remembering self, the second to the experiencing self. This is for instance the reason why for the remembering self (your memory) there is absolutely no difference between a good holiday of two weeks and one of just one week or even a long weekend. The extra week of good times spent do not ad extra happiness in your memory. I think the same rule goes for having a good night out drinking beer. So, above a certain limit, extra money will not make you happier in experiencing your life. That is why rich people who go bust and even go to prison because they committed fraud often find themselves happier afterwards. Sometimes they write a book and become rich again, but this is another story.
I want to tell you just one more story that I found inspiring. Dan Ariely, another famous expert in behavioural economics, did an experiment with some students of the Massachusetts Institute of Technology. He gave them a bunch of games that involved creativity, motor skills and concentration. The students got three levels of rewards: a small reward, a medium reward and a large reward. The better the performance, the larger the reward. What happened? As long as the tasks involved only mechanical skills, bonuses worked as expected: the higher the pay, the better the performance. Think of Stakhanovism. But once the task called for even rudimentary cognitive skills, a larger reward led to poorer performance. Then they said, okay, perhaps there is a cultural reason behind all this. So they went to Madurai in India and did the same test. After all, a modest reward according to American standards can be substantial there. What happened? This time, people offered the medium reward did no better than people offered the small rewards. But people offered the highest rewards, did the worst of all. In 8 of the 9 tasks they examined across three experiments, higher incentives led to worse performance.
Behind this study was not a socialist conspiracy. Economy professors from the IMT, Carnegie Mellon University of Pittsburgh and the University of Chicago carried it out. And the Federal Reserve Bank of the United States sponsored it. The London School of Economics, alma mater of 11 Nobel laureates in economics, looked at 51 studies of pay-for-performance plans inside of companies. They came to the conclusion that financial incentives can result in a negative impact on overall performance. A lot of other examples can be given, not in the least the negative impact of big bonuses to bankers and CEO’s of multinational corporations. There is an enormous mismatch between what science knows and what capitalist businesses do. And they do it because of ideological reasons, and, off course, greed.
By the way, when I talk about the wiki model and behavioural economics, I talk about a layer in society of high skilled workers, intellectual professionals, scientists, etc. that we should and can win over to the ideas of socialism. I totally agree with the comments made by Harry Rattner on this issue. To me it is obvious we need the active support of these professionals in building the new society. And again, many other examples within modern capitalism can be given. Take the IT-people. The majority is not organised, although most of them – as many others that do not belong to the traditional industrial working class- are wage earners. There is a matter of fact, and these are old figures from 1990, 80% of the population in Europe and 90% of the population in the United States are wage earners. If you add to this figure the self-employed whose income depends often exclusively on the work they do for the big corporations, plus small business owners, the actual capitalist class is a very tiny, even insignificant proportion of the population.
On the other hand, the traditional industrial working class in the West has been declining over the last decades, although it is still a substantial minority. But on a world scale the traditional working class is still growing. What we see developing in Western Europe, North America, Australia and many parts of Asia, is the so called knowledge society, where cognitive and creative skills are becoming more and more important and where the old methods of the stick and the carrot do not work anymore. On the other hand, more and more work in the service sector becomes also routine-based and is ‘exported’ to the countries of the underdeveloped world: certain kinds of accountancy, computer programming, etc.
A Very Heterogeneous Working Class
That brings me to another point: the composition of the working class in advanced capitalist societies. In Marx’ time, the working class was mainly male, industrial and homogeneous, although there were also huge differences between for instance the work of a coal miner, a steel worker, a seafarer and a mechanic. These differences were not much greater than those between a worker in a modern factory and a white-collar worker in the service sector. It was the experience of social conflicts and common struggle over many years that caused the traditional working class to feel itself as a united whole, and to place its common interests above narrow professional distinctions. In a sense, I think it will be necessary to rebuild the labour movement in the same way as more then a hundred years ago. The modern ‘proletariat’ will have to go through similar experiences, taking into account that is far more heterogeneous then in the old days: half are women, you have the immigrants, part time workers, households with mixed social compositions, etc.
However, what is lacking more than ever is a coherent socialist programme that unites this modern, heterogeneous army of wage earners and that scares the hell out of the capitalist class. And here is the main contradiction of our time. Neo-liberalism is collapsing before or eyes, yet the working class feels totally impotent because it lacks an ideology, a clear programme and a credible alternative. These fundamental weaknesses do not stop the class struggle, as we see on a mass scale in Greece, Spain, Portugal and France. But the working class needs desperately a project to fight for, and that is impossible without at least a vision and a prospect for a better alternative to capitalism. Let us not forget that capitalism is not popular. In Liege, a group of young people protested, carrying placards with titles: “More money for the rich!”, “Africa, pay your debt!”, “More cuts in the health system!” And so on. Some people that did not understand that it was a fake demonstration by left students were horrified. If you make the programme of the right parties concrete, many who vote for them won’t agree. But without the weapon of a socialist alternative, we are completely unarmed against the attacks of the ruling class.
This alternative is today much more important than in the time of Marx and Lenin, because not only in the minds of the ex Stalinist and reformist leaders of the labour movement, but also in the consciousness of broad layers of workers, the possibility of an alternative to the free market system no longer exists. The collapse of Stalinism did not clear the decks for Trotskyism, but pushed the revolutionary left into a deep crisis, showing the bankruptcy of their political and organizational methods.
Need for a Clear Alternative
The Communist Manifesto written 162 years ago was not only a venomous attack on capitalism, but it breathed confidence and optimism about the future. Marx thought that capitalism was doomed because of its inherent contradictions. The workers would take power and create a socialist society based on egalitarian and democratic principles. Marx did not have a blueprint of this future society, nor did he thought that this was necessary, hence his attacks against the utopian socialists and anarchists. He relied on the capability of workers to run the future socialist society by themselves. You could argue that Marx had a determinist view of capitalism, and a voluntaristic view on the working class and its organisations.
To a large extent the same can be said about the Bolsheviks. They did not have a clear idea how society would look like after taking power. The establishment of Soviets was not a part of their original programme. But when the Soviets were formed, the Bolsheviks recognized the dual power developing in Russia and were creative enough to call for ‘all power to the Soviets’. It is also worthwhile to mention that the masses did not follow the party of Lenin on the basis of ideology or a clear vision on the future society. They supported the Bolsheviks because they were promised peace, land and bread.
After taking power in 1917, given the circumstances of Civil War and the defeat of the revolution in the West, the Bolsheviks needed to improvise. They did not follow a roadmap to a preconceived plan for a socialist society. They in fact relied on revolution in the West and tried to cling to power. However, The Russian Revolution has been used always as a ‘model’ for the revolutionary left, and you couldn’t say anything bad about the Bolsheviks before Lenin’s death in 1924. This way of thinking is typical for a cult and has nothing to do with scientific socialism. It is not because you support the Russian Revolution and consider it as a major victory of the working class in that time, that you need to present and defend it as the perfect example or the only road to socialism.
We can give all the reasons in the world why the Russian Revolution led finally to a Stalinist dictatorship, but the fact of the matter is that by the early nineties, it ended in the conscious break-up of the USSR by the bureaucracy and in capitalist restoration. However, the existence of an alternative to capitalism in the USSR throughout a whole historical period, and the formation of similar states after the Second World War in Eastern Europe, China, Cuba and other underdeveloped countries, had profound effects on the balance of class forces on a world scale. The fear of ‘communism’ helped the workers in the West to obtain huge concessions from the capitalists in the form of the welfare state. This provided an objective basis for the ideas and position of reformism. By the way, I think that the difference between the traditional reformists and the present day leadership of social democracy is that the former really did believe in changing society. Today, as the Russian Marxist Boris Kagarlitsky (whose books I consider as an important source of inspiration) points out, Bernstein would appear as a radical from the left.
Splits of 'Revolutionary Left Cults
The fall of communism in Eastern Europe and Russia, and the unprecedented economic successes as a consequence of the market reforms in China, which are perceived by the masses as successes of capitalism, have a huge impact on the moral of the left all over the world. Again, with the bankruptcy of both Stalinism and reformism, you would expect that the revolutionary left would finally experience a break-through, but exactly the opposite happened. The CWI, the IMT, the Fourth International and other cultic organisations also entered a period of crises, probably more serious than the one they experienced in the early nineties.
By the way, I do not think it is a coincidence that the first split of the CWI happened after Stalinism collapsed, and that the IMT went into a similar, if not even more serious crisis in the aftermath of the collapse of the international financial system. And the reason of these crises is because they offer no real alternative that workers can believe in. They brag about the correctness of their analysis, depict a catastrophic perspective for capitalism and put forward some slogans about socialism. The concrete question: what will you do if you take power, remains unanswered. And -off course- they do not have a democratic organisational structure necessary to adapt to new challenges. They are led by guru-type leaders who consider every doubt or criticism as an attack against their political ability and authority. And just like the reformists, they are stuck in the past, trying to mechanically apply old formulas to present day society.
So the most important question we need to answer is this: what would we, and by “we” I mean the left, do if we came to power? This is, what Shakespeare said, the question. After 150 years of experiences, we cannot just say: leave it to the workers. But we also have to realise that a lot of the work is already done, outside this group. Today, there are hundreds of books analysing the capitalist crisis, explaining the evils of the free market and neo-liberalism and arguing for an alternative society. But a lot of them are written by academics who often do not have real links with the organised labour movement. Most of them write in a wooden language not understood by ordinary people and then they wonder why their books don’t sell, although there are popular authors criticizing the capitalist system like Naomi Klein, Noam Chomsky, Michael Moore and others. They are excellent in criticising capitalism, but also lack a clear alternative. It is always fighting against, never fighting for.
"Nuts to Crack"
So we need a clear alternative. In order to do draw up this socialist programme, I think we have to go back to the basics of Marxism. To me, the main questions that need to be resolved are the following:
Public ownership of the means of production, posing the question of the right of ownership
The state and the question of democracy
The relationship towards inter-state and international organisations such as the UN, the IMF, the World Bank, the Nafta, the EU…
The market: to which extent will the market play a role in a socialist society.
It is obvious that they are all interlinked and I do not have a worked out proposal, and even if I would, I would not have the time to deal with them here. So will limit myself to some general remarks concerning those four main issues.
Private Ownership of Means of Production
Let’s start with the private ownership of the means of production. This means that the owners can sell and buy the means of production and that they are entitled to their surplus. In a modern advanced economy however, ruled by very large transnational corporations, there is already a division between the ownership, the shareholders whose interests are supposed to be defended by the board of “independent” directors, and the control by professional managers led by a CEO. The owners seldom run their own companies, except in old, traditional family owned corporations such as IBM. Furthermore, depending on the corporation, a substantial part of the shares is owned directly or indirectly by small shareholders, even workers through the medium of pension funds.
Multinationals are large, highly bureaucratic organisations. They are ruled from offices in Washington, New York, London or Moscow, and suffer from the same illnesses as the centralized economy in the former Soviet Union. When trade union delegations negotiate with the local management of a company belonging to a multinational, they find sometimes a sympathetic ear. But then they complain that the real bosses in America do not understand them. Furthermore, these institutions are using the national states and international organisations to defend their interests. So the impotence of the state that we are thought nearly everyday is very relative.
The State
That leads us to the second point: the question of the state. In the time of Marx, the state was mainly an instrument of coercion and oppression: the police, the courts, the army, and the state officials. Hence the need was raised to ‘smash’ the state. But in a modern economy, the state stands also for education, culture, health insurance, public transport and other public services, in brief, the welfare state. These are elements of the new society within the old. When the neo-liberals talk about the need of cutting the state sector, they do not talk about the army, the police, the courts, the prisons, etc. In fact, the repressive elements of the state are strengthen because the break-up of the welfare state creates more inequality, more violence and more crime.
So we need to consider the state as a hybrid, and not only defend the social or socialist elements, but we also need to develop a programme for the democratisation of the state and the public sector. We should acknowledge the fact that the present state institutions are run in a very bureaucratic, hierarchic and often inefficient manner. Without a programme of the necessary transformation of the state sector, we leave the reform of it in the hands of the right.
You see, I think that the left in general lives far too much in the past. Society screams for radical solutions, but the left is seen as the defenders of the status quo because it lacks an alternative. The vicious demagogues of the so-called populist and extreme right parties and movements such as the Tea Party in the US are filling the gap. As for the other sectors in society: revolution is ‘le mot du jour’: they speak about the technical revolution, the digital revolution, the bio-technical revolution, the scientific revolution, or talk about the need for a revolution in education, in business models, etc. There is a matter of fact, the only people who don’t speak about revolution, is the revolutionary left. I can give lots of examples. Workers understand that you won’t solve the budget crisis, the debt crisis, the migration crisis, mass unemployment, etc. with a tax on wealth or the establishment of a public bank. They know that radical measures are needed. In Belgium, the idea of splitting the country is winning more and more support. The nationalists are saying sure, in the short run, a split will lead to economic difficulties and we will become poorer. But keeping Belgium as it is and the status quo will be worse. So, they are proposing a radical solution that will off course solve nothing and make matters much worse, but the party that put forward this idea is the main party in Flanders, with 30 percent of the vote.
So, I think we need to develop an offensive programme defending the need to expand public services instead of cutting them. We should explain that this is necessary to solve the ecological crisis, the environmental crisis, the traffic crisis, etc. We should explain that the use of modern communication networks should be free! Why pay huge amounts of money for bits and bytes that can be easily and freely transported through the Internet. The culture of ‘free knowledge’, ‘free software’, ‘free music’ etc.’ that rules the internet but is under threat by capitalist property rights should be extended to areas like public transport, energy, etc.
That needs huge investments in environmental friendly energy: solar energy, wind energy, the heat of the earth energy, etc. Then, the question arises what sort of institution can do these kinds of investments? We should really point to the fact that the “collective” state sector in Europe build a tunnel under the English Chanel, build the massive particle accelerator for CERN in Geneva, developed Airbus, etc. The Internet as so many other inventions was an invention of the Pentagon. In fact, probably a majority of the developments in science and new inventions is done by the state, not in the least during times of war when the state usurps more powers.
So yes, we should defend “the state” or rather the public sector, but link it with the democratisation of the state institutions, and expose the lies of the neo-liberals about the so-called impotence of the state. And if we go back to the question of property rights: what institution or which power will be able to expropriate the owners? If we talk about socialisation of the means of production, we need to start somewhere. Capitalism tries to overcome the limitations of the national state by creating international institutions like the EU, but the only instrument the EU gas to impose its rules, are the national states. They gave the European parliament more power over the Commission, in order to give the EU some democratic credentials, but the fact of the matter is that in reality, bourgeois democracy and parliamentarism is in decline. And even in its high days, parliamentary democracy is a very limited form of democracy anyway, that has nothing to do with real power of the people over their representatives.
Democracy and the market
Also on the question of freedom and democracy, which is supposedly a neo-liberal value opposed to bureaucratic state dictatorship, I think we should stand for “radical democracy” (I think that the concept of workers democracy is out of date and that using that kind of language is a barrier that alienates ourselves from workers), defending the idea of maximum freedom for the individual for matters concerning our personal life (choice of education, euthanasia, abortion, gay marriage, personal consumption etc.) but that people should have a say in all the collective decisions that have an influence on their personal life. These are decisions concerning the workplace, the local community: infrastructure, shops, parks, schools, Medicaid, etc., the regional community, the national and finally the international community. Some issues really have to be solved on a continental or even a world scale: the environment, the climate crisis, the use of natural resources, international transport, etc. The question of we should pose these issues as transitional demands aimed at existing international institutions is to me a secondary or tactical question. The main thing is that we need to develop a programme for all these different levels and work out in practice international alternatives based on the existing international organisations, not only of the working class, but also of different world social movements such as doctors without borders, NGO’s, Greenpeace, the anti-global movement, the P2P movement, etc.
Finally, that leaves us with the question of the market. I think that price mechanisms and the market would still play a role in the allocation and accounting of the means of production. I think that planning as perceived by classical Marxism is quite unrealistic and we need to learn from historical experiences of the NEP in Russia and present day reforms in China. In its own way, capitalism has already integrated the world economy. Financial markets are global, multinational are global, corporations are more and more integrated through all kinds of networks.
The main developments in modern technology did not follow a rational plan, but followed rather the laws of chaos theory: the Internet, Linux, Wikipedia, Flicker, Facebook, Twitter, etc. But the old, vertical hierarchic structures of the traditional capitalist business model is more and more a fetter on further development, just as intellectual property rights are a fetter on the further development of science and knowledge. Never before in history the means of communications have been more powerful and ‘democratic’ than today. With the use of the Internet and a cheap camera, everyone in the world can contribute to news channels. The possibilities of today’s technology are beyond our imagination. Education, culture… could be totally free and accessible to everyone on the planet. But this is not happening under capitalism. It will only become possible under socialism, on the condition that we can integrate all these possibilities (and necessities) in a clear and coherent socialist programme and arm the left again with a realistic vision of a new, socialist society.
What is Socialism?
Today, even a child can answer the question ‘What is Socialism?’ If you would ask a twelve year old what socialism is, the child would run to the computer and ‘Google it’. If it were an English child, it would probably panic, not only because of the length and the complicated nature of the definition, but also because of the many different versions of it. A Dutch-speaking child would be in more luck. It would find a very short definition that I here want to translate into English: “Socialism is a society based on equality, social justice en solidarity, or the collective term for a variety of political and ideological currents that strive to that kind of society.” There.
Peer production
Off course, we can argue about this definition, but I do not think the definition of socialism is the main issue we should concentrate on. There is a matter of fact, it would probably be a better idea to discuss Wikipedia and other examples of so-called peer production that are challenging traditional hierarchical capitalist business models. Wikipedia is a profoundly anti-capitalist and even communist way of producing and distributing knowledge. It is based on the principle ‘to each according to need, from each according to ability.’ The contributors or editors are not paid and the users are not charged, which again flies in the face of all capitalist logic. Furthermore, Wikipedia is egalitarian produced on the basis of horizontal reciprocities rather than hierarchical control.
Another famous example of peer-production is Linux. Thanks to the Internet Linux was build by thousands of computer programmers worldwide, most of them working for companies such as Microsoft, IBM and others, who collectively and voluntarily build a new and –according to many better and more stable computer operating system that today is used by major corporations like BMW and in a country like China. Open-source production could (and probably will) revolutionise businesses worldwide, but these developments are hardly discussed by the left. The early defenders of open sources and peer production were – and often still are- branded by the establishment as the “new communists”. In fact, there is a group on Facebook called ‘Telekommunisten’, that I enthusiastically support, although I often hardly understand what they are saying. It has more then 2000 supporters and I strongly recommend you to ‘like it’. They are for instance campaigning against intellectual property rights and are strong defenders of piracy, which of course get them into conflict with capitalist interests.
Of course, as with every new technology, capitalism tries to use these new developments into their advantage. Google started an on-line encyclopaedia that introduces the concept of monetary rewards depending on the amount of visits of the page you made. It remains to be seeing if they will be able to produce a better online encyclopaedia than Wikipedia, but I doubt it. I do not think that the Internet and peer production by themselves will ‘automatically’ create the conditions for a superior system that will destroy or replace capitalism, as some of the theoreticians of peer production argue. But we must consider them as an important bridge to a future “social-ist” society and the demands of the peer movement should be integrated in a socialist programme. These examples teach us important lessons. It shows money and material gains are not the main motivators of scientists, intellectuals and high skilled technicians. Once their material needs are met, they are driven by curiosity, the challenge of solving problems, the joy of working collectively on a project, of contributing to a better world, etc.
Behavioral Economics
By the way, modern psychology, anthropology, behavioural economics and other social and human sciences provide us hundreds of other examples that not only contradict the ruling ideology of the free market, but confirm socialist ideas. For instance, Daniel Kahneman, the Israeli-American psychologist and expert in behavioural economics, who won the Nobel Prize Economics in 2002, did a large Gallup survey on happiness amongst 600.000 Americans. The most interesting result they found, which they absolutely did not expect to find, was the following. They looked how feelings of happiness vary with income. It turned out that below an income of 60.000 dollars a year, people got progressively unhappier the poorer they got. But above that income, extra income did not make any difference for the so-called ‘experiencing self’. But for the ‘remembering self’, there was no limit: the more money you make, the more satisfaction you get.
It would lead me to far to explain the difference between the two selves, but it goes like this: there is a difference between being happy in your life and being happy about your life. People can be very satisfied about their life, without experiencing happiness in their life. The first relates to the remembering self, the second to the experiencing self. This is for instance the reason why for the remembering self (your memory) there is absolutely no difference between a good holiday of two weeks and one of just one week or even a long weekend. The extra week of good times spent do not ad extra happiness in your memory. I think the same rule goes for having a good night out drinking beer. So, above a certain limit, extra money will not make you happier in experiencing your life. That is why rich people who go bust and even go to prison because they committed fraud often find themselves happier afterwards. Sometimes they write a book and become rich again, but this is another story.
I want to tell you just one more story that I found inspiring. Dan Ariely, another famous expert in behavioural economics, did an experiment with some students of the Massachusetts Institute of Technology. He gave them a bunch of games that involved creativity, motor skills and concentration. The students got three levels of rewards: a small reward, a medium reward and a large reward. The better the performance, the larger the reward. What happened? As long as the tasks involved only mechanical skills, bonuses worked as expected: the higher the pay, the better the performance. Think of Stakhanovism. But once the task called for even rudimentary cognitive skills, a larger reward led to poorer performance. Then they said, okay, perhaps there is a cultural reason behind all this. So they went to Madurai in India and did the same test. After all, a modest reward according to American standards can be substantial there. What happened? This time, people offered the medium reward did no better than people offered the small rewards. But people offered the highest rewards, did the worst of all. In 8 of the 9 tasks they examined across three experiments, higher incentives led to worse performance.
Behind this study was not a socialist conspiracy. Economy professors from the IMT, Carnegie Mellon University of Pittsburgh and the University of Chicago carried it out. And the Federal Reserve Bank of the United States sponsored it. The London School of Economics, alma mater of 11 Nobel laureates in economics, looked at 51 studies of pay-for-performance plans inside of companies. They came to the conclusion that financial incentives can result in a negative impact on overall performance. A lot of other examples can be given, not in the least the negative impact of big bonuses to bankers and CEO’s of multinational corporations. There is an enormous mismatch between what science knows and what capitalist businesses do. And they do it because of ideological reasons, and, off course, greed.
By the way, when I talk about the wiki model and behavioural economics, I talk about a layer in society of high skilled workers, intellectual professionals, scientists, etc. that we should and can win over to the ideas of socialism. I totally agree with the comments made by Harry Rattner on this issue. To me it is obvious we need the active support of these professionals in building the new society. And again, many other examples within modern capitalism can be given. Take the IT-people. The majority is not organised, although most of them – as many others that do not belong to the traditional industrial working class- are wage earners. There is a matter of fact, and these are old figures from 1990, 80% of the population in Europe and 90% of the population in the United States are wage earners. If you add to this figure the self-employed whose income depends often exclusively on the work they do for the big corporations, plus small business owners, the actual capitalist class is a very tiny, even insignificant proportion of the population.
On the other hand, the traditional industrial working class in the West has been declining over the last decades, although it is still a substantial minority. But on a world scale the traditional working class is still growing. What we see developing in Western Europe, North America, Australia and many parts of Asia, is the so called knowledge society, where cognitive and creative skills are becoming more and more important and where the old methods of the stick and the carrot do not work anymore. On the other hand, more and more work in the service sector becomes also routine-based and is ‘exported’ to the countries of the underdeveloped world: certain kinds of accountancy, computer programming, etc.
A Very Heterogeneous Working Class
That brings me to another point: the composition of the working class in advanced capitalist societies. In Marx’ time, the working class was mainly male, industrial and homogeneous, although there were also huge differences between for instance the work of a coal miner, a steel worker, a seafarer and a mechanic. These differences were not much greater than those between a worker in a modern factory and a white-collar worker in the service sector. It was the experience of social conflicts and common struggle over many years that caused the traditional working class to feel itself as a united whole, and to place its common interests above narrow professional distinctions. In a sense, I think it will be necessary to rebuild the labour movement in the same way as more then a hundred years ago. The modern ‘proletariat’ will have to go through similar experiences, taking into account that is far more heterogeneous then in the old days: half are women, you have the immigrants, part time workers, households with mixed social compositions, etc.
However, what is lacking more than ever is a coherent socialist programme that unites this modern, heterogeneous army of wage earners and that scares the hell out of the capitalist class. And here is the main contradiction of our time. Neo-liberalism is collapsing before or eyes, yet the working class feels totally impotent because it lacks an ideology, a clear programme and a credible alternative. These fundamental weaknesses do not stop the class struggle, as we see on a mass scale in Greece, Spain, Portugal and France. But the working class needs desperately a project to fight for, and that is impossible without at least a vision and a prospect for a better alternative to capitalism. Let us not forget that capitalism is not popular. In Liege, a group of young people protested, carrying placards with titles: “More money for the rich!”, “Africa, pay your debt!”, “More cuts in the health system!” And so on. Some people that did not understand that it was a fake demonstration by left students were horrified. If you make the programme of the right parties concrete, many who vote for them won’t agree. But without the weapon of a socialist alternative, we are completely unarmed against the attacks of the ruling class.
This alternative is today much more important than in the time of Marx and Lenin, because not only in the minds of the ex Stalinist and reformist leaders of the labour movement, but also in the consciousness of broad layers of workers, the possibility of an alternative to the free market system no longer exists. The collapse of Stalinism did not clear the decks for Trotskyism, but pushed the revolutionary left into a deep crisis, showing the bankruptcy of their political and organizational methods.
Need for a Clear Alternative
The Communist Manifesto written 162 years ago was not only a venomous attack on capitalism, but it breathed confidence and optimism about the future. Marx thought that capitalism was doomed because of its inherent contradictions. The workers would take power and create a socialist society based on egalitarian and democratic principles. Marx did not have a blueprint of this future society, nor did he thought that this was necessary, hence his attacks against the utopian socialists and anarchists. He relied on the capability of workers to run the future socialist society by themselves. You could argue that Marx had a determinist view of capitalism, and a voluntaristic view on the working class and its organisations.
To a large extent the same can be said about the Bolsheviks. They did not have a clear idea how society would look like after taking power. The establishment of Soviets was not a part of their original programme. But when the Soviets were formed, the Bolsheviks recognized the dual power developing in Russia and were creative enough to call for ‘all power to the Soviets’. It is also worthwhile to mention that the masses did not follow the party of Lenin on the basis of ideology or a clear vision on the future society. They supported the Bolsheviks because they were promised peace, land and bread.
After taking power in 1917, given the circumstances of Civil War and the defeat of the revolution in the West, the Bolsheviks needed to improvise. They did not follow a roadmap to a preconceived plan for a socialist society. They in fact relied on revolution in the West and tried to cling to power. However, The Russian Revolution has been used always as a ‘model’ for the revolutionary left, and you couldn’t say anything bad about the Bolsheviks before Lenin’s death in 1924. This way of thinking is typical for a cult and has nothing to do with scientific socialism. It is not because you support the Russian Revolution and consider it as a major victory of the working class in that time, that you need to present and defend it as the perfect example or the only road to socialism.
We can give all the reasons in the world why the Russian Revolution led finally to a Stalinist dictatorship, but the fact of the matter is that by the early nineties, it ended in the conscious break-up of the USSR by the bureaucracy and in capitalist restoration. However, the existence of an alternative to capitalism in the USSR throughout a whole historical period, and the formation of similar states after the Second World War in Eastern Europe, China, Cuba and other underdeveloped countries, had profound effects on the balance of class forces on a world scale. The fear of ‘communism’ helped the workers in the West to obtain huge concessions from the capitalists in the form of the welfare state. This provided an objective basis for the ideas and position of reformism. By the way, I think that the difference between the traditional reformists and the present day leadership of social democracy is that the former really did believe in changing society. Today, as the Russian Marxist Boris Kagarlitsky (whose books I consider as an important source of inspiration) points out, Bernstein would appear as a radical from the left.
Splits of 'Revolutionary Left Cults
The fall of communism in Eastern Europe and Russia, and the unprecedented economic successes as a consequence of the market reforms in China, which are perceived by the masses as successes of capitalism, have a huge impact on the moral of the left all over the world. Again, with the bankruptcy of both Stalinism and reformism, you would expect that the revolutionary left would finally experience a break-through, but exactly the opposite happened. The CWI, the IMT, the Fourth International and other cultic organisations also entered a period of crises, probably more serious than the one they experienced in the early nineties.
By the way, I do not think it is a coincidence that the first split of the CWI happened after Stalinism collapsed, and that the IMT went into a similar, if not even more serious crisis in the aftermath of the collapse of the international financial system. And the reason of these crises is because they offer no real alternative that workers can believe in. They brag about the correctness of their analysis, depict a catastrophic perspective for capitalism and put forward some slogans about socialism. The concrete question: what will you do if you take power, remains unanswered. And -off course- they do not have a democratic organisational structure necessary to adapt to new challenges. They are led by guru-type leaders who consider every doubt or criticism as an attack against their political ability and authority. And just like the reformists, they are stuck in the past, trying to mechanically apply old formulas to present day society.
So the most important question we need to answer is this: what would we, and by “we” I mean the left, do if we came to power? This is, what Shakespeare said, the question. After 150 years of experiences, we cannot just say: leave it to the workers. But we also have to realise that a lot of the work is already done, outside this group. Today, there are hundreds of books analysing the capitalist crisis, explaining the evils of the free market and neo-liberalism and arguing for an alternative society. But a lot of them are written by academics who often do not have real links with the organised labour movement. Most of them write in a wooden language not understood by ordinary people and then they wonder why their books don’t sell, although there are popular authors criticizing the capitalist system like Naomi Klein, Noam Chomsky, Michael Moore and others. They are excellent in criticising capitalism, but also lack a clear alternative. It is always fighting against, never fighting for.
"Nuts to Crack"
So we need a clear alternative. In order to do draw up this socialist programme, I think we have to go back to the basics of Marxism. To me, the main questions that need to be resolved are the following:
Public ownership of the means of production, posing the question of the right of ownership
The state and the question of democracy
The relationship towards inter-state and international organisations such as the UN, the IMF, the World Bank, the Nafta, the EU…
The market: to which extent will the market play a role in a socialist society.
It is obvious that they are all interlinked and I do not have a worked out proposal, and even if I would, I would not have the time to deal with them here. So will limit myself to some general remarks concerning those four main issues.
Private Ownership of Means of Production
Let’s start with the private ownership of the means of production. This means that the owners can sell and buy the means of production and that they are entitled to their surplus. In a modern advanced economy however, ruled by very large transnational corporations, there is already a division between the ownership, the shareholders whose interests are supposed to be defended by the board of “independent” directors, and the control by professional managers led by a CEO. The owners seldom run their own companies, except in old, traditional family owned corporations such as IBM. Furthermore, depending on the corporation, a substantial part of the shares is owned directly or indirectly by small shareholders, even workers through the medium of pension funds.
Multinationals are large, highly bureaucratic organisations. They are ruled from offices in Washington, New York, London or Moscow, and suffer from the same illnesses as the centralized economy in the former Soviet Union. When trade union delegations negotiate with the local management of a company belonging to a multinational, they find sometimes a sympathetic ear. But then they complain that the real bosses in America do not understand them. Furthermore, these institutions are using the national states and international organisations to defend their interests. So the impotence of the state that we are thought nearly everyday is very relative.
The State
That leads us to the second point: the question of the state. In the time of Marx, the state was mainly an instrument of coercion and oppression: the police, the courts, the army, and the state officials. Hence the need was raised to ‘smash’ the state. But in a modern economy, the state stands also for education, culture, health insurance, public transport and other public services, in brief, the welfare state. These are elements of the new society within the old. When the neo-liberals talk about the need of cutting the state sector, they do not talk about the army, the police, the courts, the prisons, etc. In fact, the repressive elements of the state are strengthen because the break-up of the welfare state creates more inequality, more violence and more crime.
So we need to consider the state as a hybrid, and not only defend the social or socialist elements, but we also need to develop a programme for the democratisation of the state and the public sector. We should acknowledge the fact that the present state institutions are run in a very bureaucratic, hierarchic and often inefficient manner. Without a programme of the necessary transformation of the state sector, we leave the reform of it in the hands of the right.
You see, I think that the left in general lives far too much in the past. Society screams for radical solutions, but the left is seen as the defenders of the status quo because it lacks an alternative. The vicious demagogues of the so-called populist and extreme right parties and movements such as the Tea Party in the US are filling the gap. As for the other sectors in society: revolution is ‘le mot du jour’: they speak about the technical revolution, the digital revolution, the bio-technical revolution, the scientific revolution, or talk about the need for a revolution in education, in business models, etc. There is a matter of fact, the only people who don’t speak about revolution, is the revolutionary left. I can give lots of examples. Workers understand that you won’t solve the budget crisis, the debt crisis, the migration crisis, mass unemployment, etc. with a tax on wealth or the establishment of a public bank. They know that radical measures are needed. In Belgium, the idea of splitting the country is winning more and more support. The nationalists are saying sure, in the short run, a split will lead to economic difficulties and we will become poorer. But keeping Belgium as it is and the status quo will be worse. So, they are proposing a radical solution that will off course solve nothing and make matters much worse, but the party that put forward this idea is the main party in Flanders, with 30 percent of the vote.
So, I think we need to develop an offensive programme defending the need to expand public services instead of cutting them. We should explain that this is necessary to solve the ecological crisis, the environmental crisis, the traffic crisis, etc. We should explain that the use of modern communication networks should be free! Why pay huge amounts of money for bits and bytes that can be easily and freely transported through the Internet. The culture of ‘free knowledge’, ‘free software’, ‘free music’ etc.’ that rules the internet but is under threat by capitalist property rights should be extended to areas like public transport, energy, etc.
That needs huge investments in environmental friendly energy: solar energy, wind energy, the heat of the earth energy, etc. Then, the question arises what sort of institution can do these kinds of investments? We should really point to the fact that the “collective” state sector in Europe build a tunnel under the English Chanel, build the massive particle accelerator for CERN in Geneva, developed Airbus, etc. The Internet as so many other inventions was an invention of the Pentagon. In fact, probably a majority of the developments in science and new inventions is done by the state, not in the least during times of war when the state usurps more powers.
So yes, we should defend “the state” or rather the public sector, but link it with the democratisation of the state institutions, and expose the lies of the neo-liberals about the so-called impotence of the state. And if we go back to the question of property rights: what institution or which power will be able to expropriate the owners? If we talk about socialisation of the means of production, we need to start somewhere. Capitalism tries to overcome the limitations of the national state by creating international institutions like the EU, but the only instrument the EU gas to impose its rules, are the national states. They gave the European parliament more power over the Commission, in order to give the EU some democratic credentials, but the fact of the matter is that in reality, bourgeois democracy and parliamentarism is in decline. And even in its high days, parliamentary democracy is a very limited form of democracy anyway, that has nothing to do with real power of the people over their representatives.
Democracy and the market
Also on the question of freedom and democracy, which is supposedly a neo-liberal value opposed to bureaucratic state dictatorship, I think we should stand for “radical democracy” (I think that the concept of workers democracy is out of date and that using that kind of language is a barrier that alienates ourselves from workers), defending the idea of maximum freedom for the individual for matters concerning our personal life (choice of education, euthanasia, abortion, gay marriage, personal consumption etc.) but that people should have a say in all the collective decisions that have an influence on their personal life. These are decisions concerning the workplace, the local community: infrastructure, shops, parks, schools, Medicaid, etc., the regional community, the national and finally the international community. Some issues really have to be solved on a continental or even a world scale: the environment, the climate crisis, the use of natural resources, international transport, etc. The question of we should pose these issues as transitional demands aimed at existing international institutions is to me a secondary or tactical question. The main thing is that we need to develop a programme for all these different levels and work out in practice international alternatives based on the existing international organisations, not only of the working class, but also of different world social movements such as doctors without borders, NGO’s, Greenpeace, the anti-global movement, the P2P movement, etc.
Finally, that leaves us with the question of the market. I think that price mechanisms and the market would still play a role in the allocation and accounting of the means of production. I think that planning as perceived by classical Marxism is quite unrealistic and we need to learn from historical experiences of the NEP in Russia and present day reforms in China. In its own way, capitalism has already integrated the world economy. Financial markets are global, multinational are global, corporations are more and more integrated through all kinds of networks.
The main developments in modern technology did not follow a rational plan, but followed rather the laws of chaos theory: the Internet, Linux, Wikipedia, Flicker, Facebook, Twitter, etc. But the old, vertical hierarchic structures of the traditional capitalist business model is more and more a fetter on further development, just as intellectual property rights are a fetter on the further development of science and knowledge. Never before in history the means of communications have been more powerful and ‘democratic’ than today. With the use of the Internet and a cheap camera, everyone in the world can contribute to news channels. The possibilities of today’s technology are beyond our imagination. Education, culture… could be totally free and accessible to everyone on the planet. But this is not happening under capitalism. It will only become possible under socialism, on the condition that we can integrate all these possibilities (and necessities) in a clear and coherent socialist programme and arm the left again with a realistic vision of a new, socialist society.
2010-11-05
The Importance of Happiness
I came across this very interesting article by Harry Ratnerthat I found here
WHAT IS or what should be the purpose of political activity? Most people would say it should be to strive for a better or more progressive society. But how should one define “better” or “progressive”?
Since Marx identified the growth of the productive forces as the motor force of progress, there has been a tendency to judge the progressiveness and desirability of various forms of society primarily by economic criteria. If an economic system developed the productive forces it was progressive and therefore desirable. Thus, for Marx, because capitalism developed the productive forces it was progressive compared with the previous feudal and mercantilist societies. It only ceased to be progressive when it became a fetter on their further development.
In the Communist Manifesto Marx enthuses: “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.”
In this view the fact that the growth of capitalism was accompanied by massive poverty, slums, wars and exploitation – i.e. possibly avoid- able misery – seems to be of secondary importance; they were unavoidable “growing pains”. It is true that elsewhere Marx points to the dehumanising aspects of capitalism, to alienation etc. But that is seen more in the context of the contradictions of a more mature capitalism leading to its demise. Capitalism in its youth was progressive; it was necessary for the further development of the productive forces which would later make communism possible and historically inevitable. This implied that the accompanying misery and exploitation was an inevitable cost of progress.
Marxists are not the only ones who argue that economics and economic growth are the most important, even determining factors in the health and desirability of societies. Economists, politicians, both New Labour and Tory, repeat that a healthy economy and economic growth are the key to well- being and essential to the solution of all social problems. Market forces determine everything. Only get the economy right and everything follows.
Both Marx and the modern neoliberals are guilty of this economic determinism. This over- emphasis of the economic over other factors – political, cultural, ethical, emotional is wrong. It is wrong on two accounts. Firstly as an explanation of how societies work. Secondly as the sole, or even main, criterion for judging the “progressiveness”, “health” and desirability of different societies.
Why economic determinism is wrong
In places Marx writes as if the material forces of production have a built-in, intrinsic urge – almost a will of their own – to expand quite independently of human decisions or actions. Further, he argues that the stage of development of the productive forces rigidly determines the relations of production, i.e. the economic (and hence the political) relations between classes. “The hand mill gives you society with the feudal lord; the steam mill, society with the industrial capitalist” (The Poverty of Philosophy).
As one critic of Marx, Peter Singer, comments: “But isn’t all this much too crude? Should we take seriously the statement about the hand mill giving us feudal lords, and the steam mill capitalists? Surely Marx must have realised that the invention of steam power itself depends on human ideas, and those ideas, as much as the steam mill itself, have produced capitalism” (Peter Singer, Marx, OUP, 1980).
History, real empirical history – not history tailored to suit abstract theory – is a history of social changes brought about by the complex interaction of economic, political, ideological and cultural factors. It is not a history of the economic base exclusively determining the political and ideological superstructure but of a multi-way interaction between all these factors. Causality runs both ways between base and superstructure. Even Marxists acknowledge that when the superstructure becomes a fetter on the productive forces it is events in the superstructure – i.e. political struggle, socialist revolution – that are necessary to bring about changes in the economic base.
And political struggles do not have to depend on a supposed “ripeness” of economic development. Referring to the Marxist argument that early capitalism was progressive because it enabled the 50 productive forces to grow we must ask whether it was inevitable that the growth of mankind’s productive forces should take place in a capitalist way? That it should be accompanied by ruthless exploitation and misery? Were these unavoidable accompaniments of this growth? Was it not possible that this growth could have occurred under different relations of production than capitalist ones?
Was it really inevitably determined by the then level of development of the economy that the Chartist movement should have been defeated and in retreat from 1848 onward? No! It was the relationship of political forces that determined that the Monster Petition and mass demonstrations of 1848 failed to win reforms and that subsequently the movement declined. If the Chartists had been successful in winning sufficient extensions to the franchise to enable a radical reforming government to win elections such a government might not have established socialism but it might have been able to introduce significant reforms. The Chartist programme was not just about parliamentary reform. Its activists were imbued with the ideas of Robert Owen, of advocates of land reform and cooperation and of the early socialists, One must admit that the concept and the feasibility of the central planning of a mainly state- owned economy could only arise after the further development of capitalism had given rise to large enterprises and the socialisation of the productive process. The level of development of the economy in the early and middle nineteenth century, the existence of a multitude of small enterprises and the relative primitiveness of communications and statistics certainly made central planning of state- owned industries unfeasible. But the common ownership of the means of production does not necessarily mean state ownership and central planning. Common ownership can also mean co- operatively owned enterprises interacting via the market. And could not have such a government, resting on a working class constituency, carried out Robert Owen’s socialist and co-operative policies? Could not a wide extension of co-operative ownership have prevailed over capitalist owner- ship – or at least competed on equal terms? With all that this implies for better working conditions?
Eventually reforms such as the limitations on child labour, reduced working hours, progress in housing and sanitation, pensions, sick pay and unemployment benefits were achieved even under Liberal and Tory governments right up to 1914. A Chartist breakthrough in 1848 or earlier and the election of radical reforming governments would have meant the far earlier achievement of these reforms. It might not have been socialism. It might still have been capitalism but it would have resulted in a more humane capitalism and the reduction of the sum of human misery and a better quality of life. Surely not an unimportant consideration. For some Marxists the struggle for reforms is important mainly as a means of raising class-consciousness in preparation for the final struggle for power. The fact that the reforms won might actually reduce misery and make for a better quality of life are largely ignored.
If we go back further in time to the English Revolution we know that ideas of common owner- ship of the land and economic and political equality motivated the radical wing of the Cromwellian Model Army. Was it really inevitably determined that the Levellers should have been defeated? Certainly the emergence of socialist ideas did not have to await the development of the productive forces to a specific stage, whether the steam mill, electricity or even telecommunications. Even more than in the 19th century the conditions of simple reproduction with thousands of independent producers that existed in the 17th and 18th centuries were unfavourable to either the idea or feasibility of socialist central planning; but they were not inimical to co-operatives operating in a market economy and a democratisation of land tenure as well as a long lasting democratisation of the state structure. A co-operative and democratic Commonwealth arising out of the English Revolution was not an impossibility.
We know of course that this did not happen and that, in actual fact, industry did develop from this time under capitalist property relations, i.e. private ownership. But the adoption of new technology, division of labour and concentration of production into large units making economy of size possible could also have taken place under co- operative ownership. It was not the level of development of the productive forces and the level of technology that held back the growth of co- operative ownership and democratisation of land tenure but the general ideology of the time – which favoured the idea of private ownership and private pursuit of wealth. Obviously the general economic and material conditions of the time and the interests of the various classes and strata of society were important factors in forming this general ideology. But they were not the only factors.
In our explanation of why society developed in a certain way and not in others we need to abandon the idea that the economic base mainly, or even in the final analysis, determines the super- structure. We need to see how the superstructure – political forces and ideology – themselves affect the economic base. Sometimes the main current of causality flows from the base to the superstructure. At other times it flows the other way.
Premature revolutions?
This leads to the question of whether attempts to introduce socialism (or any other change in the economy) are premature. And, if so, when?
Marxism’s theory of stages of social change, dependent on the development of the productive forces reaching a stage when the political super- structure “became a fetter”, implied that only when capitalism had reached its full development could a socialist revolution be possible. Hence, as orthodox Marxists, Kautsky and the Mensheviks argued that the Bolshevik revolution of October 1917 was premature because the level of economic development in Russia was inadequate and any attempt to introduce socialism bound to fail. Subsequently the isolation of the Soviet regime in a hostile capitalist world and its degeneration and eventual collapse back into capitalism was deemed by many to have confirmed this. I too, in an article in New Interventions on the 80th anniversary of the revolution, described it as “premature and diseased from infancy”. I think such a description is only half correct. In the context of political possibilities it was not premature. The Bolsheviks banked every- thing on the spread of the revolution to Germany and other advanced industrial countries and the establishment of a federation of Soviet states with a sufficiently powerful industrial base to make the construction of socialism feasible.
Was it inevitable that the revolutionary situations in Germany from 1918 to 1923 should have failed to result in a Soviet Germany? The abortion of the revolution in 1923 was due as much to political factors – the mood of the masses, the mistakes of the Communist Party leadership – as to purely economic factors, i.e. the stabilisation of the economy and the end of inflation at the end of August 1923 – themselves the result of political decisions.
So in that sense the Bolshevik seizure of power in 1917 was not premature. The subsequent degeneration of the regime was not due solely to economic causes. The policies of the Bolsheviks diseased it from the beginning. Firstly the refusal of Lenin and Trotsky – mirrored by the equal intransigence of the right wing Mensheviks and Social Revolutionaries – to accept a coalition government of all the pro-Soviet parties. Secondly the forcible dissolution of the Constituent Assembly. These policies led to the complete isolation of the Bolshevik government and its increasing reliance on terror to survive; leading to the suppression of the Kronstadt revolt and the eventual rise of Stalinism.
The Russian revolution could only be described as premature if one accepts Marx’s argument that socialism can only be built on the material foundations developed by advanced capitalism and that no social formation, no economic system, leaves the stage until it has exhausted all its potential for development. Since it is now evident that in 1917 capitalism had by no means exhausted its potential to develop the productive forces, then – according to Marxist theory – it could be argued that the Russian revolution was premature. But I think I have shown why this conclusion is wrong.
The Russian revolution also shows how, in certain situations when the combination of economic, political, military forces is finely balanced, the decisions of a small group of individuals, the dozen or so members of the Bolshevik Central Committee, and one individual among them, can have a profound influence on history. If the Bolshevik Central Committee had not decided to seize power there would have been no October Revolution – and the future of the whole world would have been different in many incalculable ways.
There is no reason why socialists should wait until capitalism has exhausted all its potential before trying to replace it. In any case how does one decide at exactly what point capitalism has indeed exhausted its potential? Lenin and others thought that outbreak of the First World War in 1914 had marked this stage. In 1939 Trotsky and the 4th International thought that capitalism was over-ripe. They were wrong. But capitalism survived not because it had not exhausted its potential for growth – as the subsequent post-war expansion showed – but because of the relationship of forces on the political plane. Capitalist society was on the brink of collapse following the two world wars – in 1917-23 and 1943-45. It was the weakness of the forces of social revolution and the support given the faltering regimes by social democracy and Stalinism that helped it survive. At the same time it must be remembered that after the initial political crises had been survived it was capitalism’s continued potential for economic recovery after 1923 and 1948 that finally turned back the tide. The fact that capitalism had not exhausted its economic potential (making an increase in the general standard of living and the establishment of the Welfare State possible) was a factor making possible its political victory and hence its survival. Another example of the interaction between the economic and the political.
If, in 2005, the prospect for the advance of socialism in the near or immediate future seems dim it is not because the economic conditions are not ripe but because the political conditions are not. And these will only become ripe if and when socialism wins the battle for the hearts and minds.
We must reject economic determinism and reinstate the role of the political – and indeed the role of individuals and assemblies of organised individuals (parties and governments) – as at least as important factors as the economic in deter- mining history. We must analyse societies and their histories in a holistic way; seeing the economic, the political, the ideological as a complex assembly inter-reacting with each other within an overall context.
We must also rescue the role of the individual and of organised individuals as important factors in history.
Marxists may argue that I am being unfair to Marx and Marxists. They will point out that Marxism does recognise the role of individuals and the political superstructure. They will remind me of Marx’s comment that “men make their own history, but they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given, and transmitted from the past”. However, many (fortunately not all) Marxists take the reference to circumstances not chosen by themselves but “directly given and transmitted from the past” to mean essentially the level of development of the productive forces. And we are back to economic determinism.
The quality of life
Let us now deal with how economic reductionism is wrong in the second way – in its overemphasis on the state of the economy in determining well- being and in the neglect of other factors, the cultural, the psychological and the personal.
Oliver James, a well-known psychologist argued in his book Britain on the Couch (Century, London 1997) that though people in Britain were materially better off then than in the 1950s they were unhappier.
He quotes from statistics showing that the incidence of stress, depression, suicides, violence, drug abuse, alcoholism, and marriage breakdown had all increased compared with the 1950s despite the increase in material wealth of the majority of the population, including the working class.
James argues: “It is almost a tenet of modern life that as a nation becomes wealthier, the satisfaction and well-being levels of its citizens will rise accordingly – affluence should breed happiness and this is the ultimate justification offered by politicians for placing increased prosperity at the heart of their politics. Yet this principle seems to apply only up to a certain basic level and not beyond. Large surveys of national well-being and satisfaction levels show that when a nation moves from developing (‘Third World’) to developed status, there is a significant increase in well-being. But once nations reach the level where most or all of their citizens’ basic needs for food, shelter and so on are being met, relative affluence beyond that does not make a difference. Although there are large variations between developed nations in how happy they say they are, the explanation is not differences in wealth. The well being of three of the richest, Germany, Japan and the USA, is less than that of many poorer nations, such as Ireland, Finland and Australia. Furthermore, the surveys have consistently found little change over time, despite increases in wealth. The USA, for example, is much richer than in the 1950s yet about the same numbers say they are happy today as compared with then. Even more dramatically, the Japanese real per capita income increased fivefold between 1958 and 1987 without any change in the
reported amount of well-being. Thus within dev- eloped nations, it appears that raising the incomes of all does not increase the happiness of all” (pp.44- 45).
James’ basic explanation for this is the way advanced capitalism has developed. The drive to encourage consumerism as a means of expanding its markets has created, even in well-off people, expectations that cannot be met.
“Put crudely, advanced capitalism makes money out of misery and dissatisfaction, as if it were encouraging us to fill the psychic void with material goods. It can also profit from fostering spurious individualism by encouraging us to define our- selves through our purchases, with ever more precisely marketed products that create a fetishist concern to have ‘this’ rather than ‘that’. Even though there is often no significant practical or aesthetic difference” (pixy).
“A sharp rise in aspirations and individualism since 1950, necessary for continuous economic growth, has led to an all-consuming preoccupation with our status, power and wealth relative to others. No sooner than we achieve a goal, we move the goalposts to create a new and more difficult one, leaving ourselves permanently dissatisfied and depleted, always yearning for what we have not got, a nation of Wannabees” (p.xii).
“Since 1950, expectations have risen dramatically for personal and professional fulfilment (especially among young women as well as men). Likewise, demands for individualism have inflated. The media (particularly television), increased hours spent at school and competitiveness there and increased pressure to compete at work make us obsessively preoccupied with how we are doing compared to others and whether we are individual enough” (p.7).
“For that vast majority unable to achieve their inflated aspirations and to obtain objective confirmation of their sense of their individual importance, upwardly comparing simply rams home their inadequacy and encourages depression.... In a society undergoing rapid industrialization and expansion social mobility may be widespread. But in traditional agrarian societies, social status is hereditary. Where there is little or no possibility of changing your social position through ability, such as in a feudal or caste system you are unlikely to make undiscounted comparisons with your betters. Princes or kings are simply a different category of human to which you cannot aspire by the definition of your society. It would not occur to you. This may explain the ostensibly surprising fact that the most oppressed group of women in the developed world, the Japanese, are also by far the most satisfied compared with men” (p.88).
One can disagree with many of James’ arguments; it can be objected that he exaggerates today’s discontents and minimizes those of previous periods. Is it really the case that the feudal serf was not so discontented; or that Japanese women do not suffer unhappiness because of their low status? And is it not a fact that people in 1950 – and earlier – did aspire to better status and compare themselves unfavourably with others? If they did not, what is the explanation for all the struggles by the working class and the disadvantaged such as women, gays and racial minorities against discrimination and for better treatment?
It can also be argued that many of the statistics of depression, stress and mental illness quoted are misleading and exaggerate the increase. For ex- ample the awareness and diagnosis of such conditions have changed since the 1950s. People did suffer from stress and depression then but their condition was not recognised, they were not dig- nosed as suffering from these conditions. They did not appear in the statistics.
James is wrong in citing the increase in the incidence of divorces and separations as a cause of increasing unhappiness. Undeniably the process of divorce and separation and the break-up of personal relationships are stressful and traumatic. But the situation that existed when divorce was difficult, when people were trapped for a lifetime in unhappy marriages – with all that it entailed in misery for both partners and children – was far worse than it is today. The old restrictive sexual mores condemned young women who had children out of wedlock to ostracisation. Women were forcibly separated from their babies and forced to give them away for adoption; the women were put in institutions. This caused untold misery. So did all the old taboos and prejudices. The sexual revolution of the sixties which introduced much more tolerant attitudes, easier divorces and more sexual equality and the decriminalisation of homosexuality has not abolished all problems of sexuality but it has improved matters and eliminated at least some causes of unhappiness
Even if we disagree with much of what James argues, he nevertheless draws welcome attention to the fact that much of the quality of life is determined by non-economic factors. The overall quality of life depends not just on the economy but on cultural, emotional and psychological factors; on perception of one’s social and material situation, on personal relationships and self- esteem.
What is to be done?
James links depression and unhappiness with low serotonin levels in the brain. He does not make clear whether he believes unhappiness causes the low serotonin levels or whether it is the low serotonin levels that cause the unhappiness. James seems to argue that it is a bit of both. Unsurprisingly, as a clinical psychologist, he advocates the better use of medication, government action to make medicines cheaper and more available, and increased resources for mental health care. One cannot quarrel with that. But is there not also the need to change society?
James does acknowledge this. He writes: “It is neither a necessary condition nor an inevitable destiny of advanced capitalism that it should induce low levels of serotonin. By changing the social environment to one that is more in accord with our species’ inherited tendencies we could correct the chemical imbalance. In the short term, low-serotonin individuals can do so through psychotherapy as well as by taking pills. But only changes in the way we are organised as a society will address the fundamental problem” (p.xiii).
So what conclusions are we to draw from this re-emphasis on the overall quality of life as opposed to over-emphasis on the economic?
We must remember that the ills James identified in advanced capitalism are nothing compared with the misery of the masses in the Third World, in Africa, Latin America, large parts of Asia and Eastern Europe. The priority must be to combat this poverty. It can only be done if their peoples struggle for themselves. But we in the wealthier countries have an internationalist duty to assist in their struggles.
Some on the left argue that the only solution to Third World poverty is world socialism. Just as some have also argued that campaigning for feminist issues, or for gay rights, that any single- issue campaign that cuts across class lines is a distraction from the fight for socialism. That only the overthrow of capitalism and world socialism will resolve all this issues. And that the main aim of fighting for demands (which many argue cannot be achieved under capitalism) is to prepare and train the working class for the final onslaught on capitalism.
This is nonsense. A sufficient motive and justification for political activity is the maximisation of human happiness. So any reforms or measures that increase the potential for happiness and reduce misery are worth pursuing for that reason alone, even if they are merely reforms within capitalism. In the Third World this includes campaigning for the cancellation of debt, increased aid for providing clean water to villages, making medicine and services to combat the Aids epidemic more available, and a whole host of immediately feasible objectives.
In advanced capitalist countries, in addition to combating the residual poverty of the poorest layers, attention must be given to improving the non-economic as well as the economic quality of life – altering society to make it more compatible with our emotional needs. Some progress has been made. There has been some improvement in the status of women, the liberalisation of sexual mores, improvements in other non-economic fields. But much remains to be done in campaigning for improvements even within the parameters of capitalism. For example the legalisation of voluntary euthanasia – saving thousands from the avoid- able agony of lingering and undignified deaths.
How does all this relate to the fight for social- ism? A socialist world is still desirable. But one does not have to wait till it is achieved to win measures that increase well being.
The conclusion to all this is that the aim of all political activity must be to create a social frame- work that maximises the potential for happiness and reduces misery. Social change – whether it be
the achievement of a socialist society or merely reforms within capitalism – is a means to an end. And that end is not just economic growth in itself but economic growth that is sustainable, is not destructive of the environment and underpins a social framework that maximises the potential for better personal relationships and a better emotional life, i.e. that maximises happiness.
The ultimate end – to which all else is a means – must be the maximisation of happiness.
Harry Ratner
WHAT IS or what should be the purpose of political activity? Most people would say it should be to strive for a better or more progressive society. But how should one define “better” or “progressive”?
Since Marx identified the growth of the productive forces as the motor force of progress, there has been a tendency to judge the progressiveness and desirability of various forms of society primarily by economic criteria. If an economic system developed the productive forces it was progressive and therefore desirable. Thus, for Marx, because capitalism developed the productive forces it was progressive compared with the previous feudal and mercantilist societies. It only ceased to be progressive when it became a fetter on their further development.
In the Communist Manifesto Marx enthuses: “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.”
In this view the fact that the growth of capitalism was accompanied by massive poverty, slums, wars and exploitation – i.e. possibly avoid- able misery – seems to be of secondary importance; they were unavoidable “growing pains”. It is true that elsewhere Marx points to the dehumanising aspects of capitalism, to alienation etc. But that is seen more in the context of the contradictions of a more mature capitalism leading to its demise. Capitalism in its youth was progressive; it was necessary for the further development of the productive forces which would later make communism possible and historically inevitable. This implied that the accompanying misery and exploitation was an inevitable cost of progress.
Marxists are not the only ones who argue that economics and economic growth are the most important, even determining factors in the health and desirability of societies. Economists, politicians, both New Labour and Tory, repeat that a healthy economy and economic growth are the key to well- being and essential to the solution of all social problems. Market forces determine everything. Only get the economy right and everything follows.
Both Marx and the modern neoliberals are guilty of this economic determinism. This over- emphasis of the economic over other factors – political, cultural, ethical, emotional is wrong. It is wrong on two accounts. Firstly as an explanation of how societies work. Secondly as the sole, or even main, criterion for judging the “progressiveness”, “health” and desirability of different societies.
Why economic determinism is wrong
In places Marx writes as if the material forces of production have a built-in, intrinsic urge – almost a will of their own – to expand quite independently of human decisions or actions. Further, he argues that the stage of development of the productive forces rigidly determines the relations of production, i.e. the economic (and hence the political) relations between classes. “The hand mill gives you society with the feudal lord; the steam mill, society with the industrial capitalist” (The Poverty of Philosophy).
As one critic of Marx, Peter Singer, comments: “But isn’t all this much too crude? Should we take seriously the statement about the hand mill giving us feudal lords, and the steam mill capitalists? Surely Marx must have realised that the invention of steam power itself depends on human ideas, and those ideas, as much as the steam mill itself, have produced capitalism” (Peter Singer, Marx, OUP, 1980).
History, real empirical history – not history tailored to suit abstract theory – is a history of social changes brought about by the complex interaction of economic, political, ideological and cultural factors. It is not a history of the economic base exclusively determining the political and ideological superstructure but of a multi-way interaction between all these factors. Causality runs both ways between base and superstructure. Even Marxists acknowledge that when the superstructure becomes a fetter on the productive forces it is events in the superstructure – i.e. political struggle, socialist revolution – that are necessary to bring about changes in the economic base.
And political struggles do not have to depend on a supposed “ripeness” of economic development. Referring to the Marxist argument that early capitalism was progressive because it enabled the 50 productive forces to grow we must ask whether it was inevitable that the growth of mankind’s productive forces should take place in a capitalist way? That it should be accompanied by ruthless exploitation and misery? Were these unavoidable accompaniments of this growth? Was it not possible that this growth could have occurred under different relations of production than capitalist ones?
Was it really inevitably determined by the then level of development of the economy that the Chartist movement should have been defeated and in retreat from 1848 onward? No! It was the relationship of political forces that determined that the Monster Petition and mass demonstrations of 1848 failed to win reforms and that subsequently the movement declined. If the Chartists had been successful in winning sufficient extensions to the franchise to enable a radical reforming government to win elections such a government might not have established socialism but it might have been able to introduce significant reforms. The Chartist programme was not just about parliamentary reform. Its activists were imbued with the ideas of Robert Owen, of advocates of land reform and cooperation and of the early socialists, One must admit that the concept and the feasibility of the central planning of a mainly state- owned economy could only arise after the further development of capitalism had given rise to large enterprises and the socialisation of the productive process. The level of development of the economy in the early and middle nineteenth century, the existence of a multitude of small enterprises and the relative primitiveness of communications and statistics certainly made central planning of state- owned industries unfeasible. But the common ownership of the means of production does not necessarily mean state ownership and central planning. Common ownership can also mean co- operatively owned enterprises interacting via the market. And could not have such a government, resting on a working class constituency, carried out Robert Owen’s socialist and co-operative policies? Could not a wide extension of co-operative ownership have prevailed over capitalist owner- ship – or at least competed on equal terms? With all that this implies for better working conditions?
Eventually reforms such as the limitations on child labour, reduced working hours, progress in housing and sanitation, pensions, sick pay and unemployment benefits were achieved even under Liberal and Tory governments right up to 1914. A Chartist breakthrough in 1848 or earlier and the election of radical reforming governments would have meant the far earlier achievement of these reforms. It might not have been socialism. It might still have been capitalism but it would have resulted in a more humane capitalism and the reduction of the sum of human misery and a better quality of life. Surely not an unimportant consideration. For some Marxists the struggle for reforms is important mainly as a means of raising class-consciousness in preparation for the final struggle for power. The fact that the reforms won might actually reduce misery and make for a better quality of life are largely ignored.
If we go back further in time to the English Revolution we know that ideas of common owner- ship of the land and economic and political equality motivated the radical wing of the Cromwellian Model Army. Was it really inevitably determined that the Levellers should have been defeated? Certainly the emergence of socialist ideas did not have to await the development of the productive forces to a specific stage, whether the steam mill, electricity or even telecommunications. Even more than in the 19th century the conditions of simple reproduction with thousands of independent producers that existed in the 17th and 18th centuries were unfavourable to either the idea or feasibility of socialist central planning; but they were not inimical to co-operatives operating in a market economy and a democratisation of land tenure as well as a long lasting democratisation of the state structure. A co-operative and democratic Commonwealth arising out of the English Revolution was not an impossibility.
We know of course that this did not happen and that, in actual fact, industry did develop from this time under capitalist property relations, i.e. private ownership. But the adoption of new technology, division of labour and concentration of production into large units making economy of size possible could also have taken place under co- operative ownership. It was not the level of development of the productive forces and the level of technology that held back the growth of co- operative ownership and democratisation of land tenure but the general ideology of the time – which favoured the idea of private ownership and private pursuit of wealth. Obviously the general economic and material conditions of the time and the interests of the various classes and strata of society were important factors in forming this general ideology. But they were not the only factors.
In our explanation of why society developed in a certain way and not in others we need to abandon the idea that the economic base mainly, or even in the final analysis, determines the super- structure. We need to see how the superstructure – political forces and ideology – themselves affect the economic base. Sometimes the main current of causality flows from the base to the superstructure. At other times it flows the other way.
Premature revolutions?
This leads to the question of whether attempts to introduce socialism (or any other change in the economy) are premature. And, if so, when?
Marxism’s theory of stages of social change, dependent on the development of the productive forces reaching a stage when the political super- structure “became a fetter”, implied that only when capitalism had reached its full development could a socialist revolution be possible. Hence, as orthodox Marxists, Kautsky and the Mensheviks argued that the Bolshevik revolution of October 1917 was premature because the level of economic development in Russia was inadequate and any attempt to introduce socialism bound to fail. Subsequently the isolation of the Soviet regime in a hostile capitalist world and its degeneration and eventual collapse back into capitalism was deemed by many to have confirmed this. I too, in an article in New Interventions on the 80th anniversary of the revolution, described it as “premature and diseased from infancy”. I think such a description is only half correct. In the context of political possibilities it was not premature. The Bolsheviks banked every- thing on the spread of the revolution to Germany and other advanced industrial countries and the establishment of a federation of Soviet states with a sufficiently powerful industrial base to make the construction of socialism feasible.
Was it inevitable that the revolutionary situations in Germany from 1918 to 1923 should have failed to result in a Soviet Germany? The abortion of the revolution in 1923 was due as much to political factors – the mood of the masses, the mistakes of the Communist Party leadership – as to purely economic factors, i.e. the stabilisation of the economy and the end of inflation at the end of August 1923 – themselves the result of political decisions.
So in that sense the Bolshevik seizure of power in 1917 was not premature. The subsequent degeneration of the regime was not due solely to economic causes. The policies of the Bolsheviks diseased it from the beginning. Firstly the refusal of Lenin and Trotsky – mirrored by the equal intransigence of the right wing Mensheviks and Social Revolutionaries – to accept a coalition government of all the pro-Soviet parties. Secondly the forcible dissolution of the Constituent Assembly. These policies led to the complete isolation of the Bolshevik government and its increasing reliance on terror to survive; leading to the suppression of the Kronstadt revolt and the eventual rise of Stalinism.
The Russian revolution could only be described as premature if one accepts Marx’s argument that socialism can only be built on the material foundations developed by advanced capitalism and that no social formation, no economic system, leaves the stage until it has exhausted all its potential for development. Since it is now evident that in 1917 capitalism had by no means exhausted its potential to develop the productive forces, then – according to Marxist theory – it could be argued that the Russian revolution was premature. But I think I have shown why this conclusion is wrong.
The Russian revolution also shows how, in certain situations when the combination of economic, political, military forces is finely balanced, the decisions of a small group of individuals, the dozen or so members of the Bolshevik Central Committee, and one individual among them, can have a profound influence on history. If the Bolshevik Central Committee had not decided to seize power there would have been no October Revolution – and the future of the whole world would have been different in many incalculable ways.
There is no reason why socialists should wait until capitalism has exhausted all its potential before trying to replace it. In any case how does one decide at exactly what point capitalism has indeed exhausted its potential? Lenin and others thought that outbreak of the First World War in 1914 had marked this stage. In 1939 Trotsky and the 4th International thought that capitalism was over-ripe. They were wrong. But capitalism survived not because it had not exhausted its potential for growth – as the subsequent post-war expansion showed – but because of the relationship of forces on the political plane. Capitalist society was on the brink of collapse following the two world wars – in 1917-23 and 1943-45. It was the weakness of the forces of social revolution and the support given the faltering regimes by social democracy and Stalinism that helped it survive. At the same time it must be remembered that after the initial political crises had been survived it was capitalism’s continued potential for economic recovery after 1923 and 1948 that finally turned back the tide. The fact that capitalism had not exhausted its economic potential (making an increase in the general standard of living and the establishment of the Welfare State possible) was a factor making possible its political victory and hence its survival. Another example of the interaction between the economic and the political.
If, in 2005, the prospect for the advance of socialism in the near or immediate future seems dim it is not because the economic conditions are not ripe but because the political conditions are not. And these will only become ripe if and when socialism wins the battle for the hearts and minds.
We must reject economic determinism and reinstate the role of the political – and indeed the role of individuals and assemblies of organised individuals (parties and governments) – as at least as important factors as the economic in deter- mining history. We must analyse societies and their histories in a holistic way; seeing the economic, the political, the ideological as a complex assembly inter-reacting with each other within an overall context.
We must also rescue the role of the individual and of organised individuals as important factors in history.
Marxists may argue that I am being unfair to Marx and Marxists. They will point out that Marxism does recognise the role of individuals and the political superstructure. They will remind me of Marx’s comment that “men make their own history, but they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given, and transmitted from the past”. However, many (fortunately not all) Marxists take the reference to circumstances not chosen by themselves but “directly given and transmitted from the past” to mean essentially the level of development of the productive forces. And we are back to economic determinism.
The quality of life
Let us now deal with how economic reductionism is wrong in the second way – in its overemphasis on the state of the economy in determining well- being and in the neglect of other factors, the cultural, the psychological and the personal.
Oliver James, a well-known psychologist argued in his book Britain on the Couch (Century, London 1997) that though people in Britain were materially better off then than in the 1950s they were unhappier.
He quotes from statistics showing that the incidence of stress, depression, suicides, violence, drug abuse, alcoholism, and marriage breakdown had all increased compared with the 1950s despite the increase in material wealth of the majority of the population, including the working class.
James argues: “It is almost a tenet of modern life that as a nation becomes wealthier, the satisfaction and well-being levels of its citizens will rise accordingly – affluence should breed happiness and this is the ultimate justification offered by politicians for placing increased prosperity at the heart of their politics. Yet this principle seems to apply only up to a certain basic level and not beyond. Large surveys of national well-being and satisfaction levels show that when a nation moves from developing (‘Third World’) to developed status, there is a significant increase in well-being. But once nations reach the level where most or all of their citizens’ basic needs for food, shelter and so on are being met, relative affluence beyond that does not make a difference. Although there are large variations between developed nations in how happy they say they are, the explanation is not differences in wealth. The well being of three of the richest, Germany, Japan and the USA, is less than that of many poorer nations, such as Ireland, Finland and Australia. Furthermore, the surveys have consistently found little change over time, despite increases in wealth. The USA, for example, is much richer than in the 1950s yet about the same numbers say they are happy today as compared with then. Even more dramatically, the Japanese real per capita income increased fivefold between 1958 and 1987 without any change in the
reported amount of well-being. Thus within dev- eloped nations, it appears that raising the incomes of all does not increase the happiness of all” (pp.44- 45).
James’ basic explanation for this is the way advanced capitalism has developed. The drive to encourage consumerism as a means of expanding its markets has created, even in well-off people, expectations that cannot be met.
“Put crudely, advanced capitalism makes money out of misery and dissatisfaction, as if it were encouraging us to fill the psychic void with material goods. It can also profit from fostering spurious individualism by encouraging us to define our- selves through our purchases, with ever more precisely marketed products that create a fetishist concern to have ‘this’ rather than ‘that’. Even though there is often no significant practical or aesthetic difference” (pixy).
“A sharp rise in aspirations and individualism since 1950, necessary for continuous economic growth, has led to an all-consuming preoccupation with our status, power and wealth relative to others. No sooner than we achieve a goal, we move the goalposts to create a new and more difficult one, leaving ourselves permanently dissatisfied and depleted, always yearning for what we have not got, a nation of Wannabees” (p.xii).
“Since 1950, expectations have risen dramatically for personal and professional fulfilment (especially among young women as well as men). Likewise, demands for individualism have inflated. The media (particularly television), increased hours spent at school and competitiveness there and increased pressure to compete at work make us obsessively preoccupied with how we are doing compared to others and whether we are individual enough” (p.7).
“For that vast majority unable to achieve their inflated aspirations and to obtain objective confirmation of their sense of their individual importance, upwardly comparing simply rams home their inadequacy and encourages depression.... In a society undergoing rapid industrialization and expansion social mobility may be widespread. But in traditional agrarian societies, social status is hereditary. Where there is little or no possibility of changing your social position through ability, such as in a feudal or caste system you are unlikely to make undiscounted comparisons with your betters. Princes or kings are simply a different category of human to which you cannot aspire by the definition of your society. It would not occur to you. This may explain the ostensibly surprising fact that the most oppressed group of women in the developed world, the Japanese, are also by far the most satisfied compared with men” (p.88).
One can disagree with many of James’ arguments; it can be objected that he exaggerates today’s discontents and minimizes those of previous periods. Is it really the case that the feudal serf was not so discontented; or that Japanese women do not suffer unhappiness because of their low status? And is it not a fact that people in 1950 – and earlier – did aspire to better status and compare themselves unfavourably with others? If they did not, what is the explanation for all the struggles by the working class and the disadvantaged such as women, gays and racial minorities against discrimination and for better treatment?
It can also be argued that many of the statistics of depression, stress and mental illness quoted are misleading and exaggerate the increase. For ex- ample the awareness and diagnosis of such conditions have changed since the 1950s. People did suffer from stress and depression then but their condition was not recognised, they were not dig- nosed as suffering from these conditions. They did not appear in the statistics.
James is wrong in citing the increase in the incidence of divorces and separations as a cause of increasing unhappiness. Undeniably the process of divorce and separation and the break-up of personal relationships are stressful and traumatic. But the situation that existed when divorce was difficult, when people were trapped for a lifetime in unhappy marriages – with all that it entailed in misery for both partners and children – was far worse than it is today. The old restrictive sexual mores condemned young women who had children out of wedlock to ostracisation. Women were forcibly separated from their babies and forced to give them away for adoption; the women were put in institutions. This caused untold misery. So did all the old taboos and prejudices. The sexual revolution of the sixties which introduced much more tolerant attitudes, easier divorces and more sexual equality and the decriminalisation of homosexuality has not abolished all problems of sexuality but it has improved matters and eliminated at least some causes of unhappiness
Even if we disagree with much of what James argues, he nevertheless draws welcome attention to the fact that much of the quality of life is determined by non-economic factors. The overall quality of life depends not just on the economy but on cultural, emotional and psychological factors; on perception of one’s social and material situation, on personal relationships and self- esteem.
What is to be done?
James links depression and unhappiness with low serotonin levels in the brain. He does not make clear whether he believes unhappiness causes the low serotonin levels or whether it is the low serotonin levels that cause the unhappiness. James seems to argue that it is a bit of both. Unsurprisingly, as a clinical psychologist, he advocates the better use of medication, government action to make medicines cheaper and more available, and increased resources for mental health care. One cannot quarrel with that. But is there not also the need to change society?
James does acknowledge this. He writes: “It is neither a necessary condition nor an inevitable destiny of advanced capitalism that it should induce low levels of serotonin. By changing the social environment to one that is more in accord with our species’ inherited tendencies we could correct the chemical imbalance. In the short term, low-serotonin individuals can do so through psychotherapy as well as by taking pills. But only changes in the way we are organised as a society will address the fundamental problem” (p.xiii).
So what conclusions are we to draw from this re-emphasis on the overall quality of life as opposed to over-emphasis on the economic?
We must remember that the ills James identified in advanced capitalism are nothing compared with the misery of the masses in the Third World, in Africa, Latin America, large parts of Asia and Eastern Europe. The priority must be to combat this poverty. It can only be done if their peoples struggle for themselves. But we in the wealthier countries have an internationalist duty to assist in their struggles.
Some on the left argue that the only solution to Third World poverty is world socialism. Just as some have also argued that campaigning for feminist issues, or for gay rights, that any single- issue campaign that cuts across class lines is a distraction from the fight for socialism. That only the overthrow of capitalism and world socialism will resolve all this issues. And that the main aim of fighting for demands (which many argue cannot be achieved under capitalism) is to prepare and train the working class for the final onslaught on capitalism.
This is nonsense. A sufficient motive and justification for political activity is the maximisation of human happiness. So any reforms or measures that increase the potential for happiness and reduce misery are worth pursuing for that reason alone, even if they are merely reforms within capitalism. In the Third World this includes campaigning for the cancellation of debt, increased aid for providing clean water to villages, making medicine and services to combat the Aids epidemic more available, and a whole host of immediately feasible objectives.
In advanced capitalist countries, in addition to combating the residual poverty of the poorest layers, attention must be given to improving the non-economic as well as the economic quality of life – altering society to make it more compatible with our emotional needs. Some progress has been made. There has been some improvement in the status of women, the liberalisation of sexual mores, improvements in other non-economic fields. But much remains to be done in campaigning for improvements even within the parameters of capitalism. For example the legalisation of voluntary euthanasia – saving thousands from the avoid- able agony of lingering and undignified deaths.
How does all this relate to the fight for social- ism? A socialist world is still desirable. But one does not have to wait till it is achieved to win measures that increase well being.
The conclusion to all this is that the aim of all political activity must be to create a social frame- work that maximises the potential for happiness and reduces misery. Social change – whether it be
the achievement of a socialist society or merely reforms within capitalism – is a means to an end. And that end is not just economic growth in itself but economic growth that is sustainable, is not destructive of the environment and underpins a social framework that maximises the potential for better personal relationships and a better emotional life, i.e. that maximises happiness.
The ultimate end – to which all else is a means – must be the maximisation of happiness.
Harry Ratner
2010-11-01
The Come-back of the State (and How to Get Rid of It)
I am currently preparing, in collaboration with a co-writer, a book on the state and socialism. The working title of the project is “The Come-back of the State and How to get Rid of It”.
At this stage, we only have some rough outlines and a list of modern (and classic) literature on the subject. But we share more then sixty years of experience within (and outside) the social democracy, both in Sweden and in Belgium.
As this is a living project, research and discussions will and must influence the final structure and content of the book. For the development of the ideas, different discussions forums, both in “real life” and on the Internet, will be very useful.
Thus, the contributions on this blog are part of a bigger project. They must be considered as “building blocks” for our book. So, don’t be shy to praise, but more importantly, don’t hesitate to criticize without mercy. I will be thankful in both cases.
Any feedback is more than welcome.
Jean Lievens, November 1, 2010
At this stage, we only have some rough outlines and a list of modern (and classic) literature on the subject. But we share more then sixty years of experience within (and outside) the social democracy, both in Sweden and in Belgium.
As this is a living project, research and discussions will and must influence the final structure and content of the book. For the development of the ideas, different discussions forums, both in “real life” and on the Internet, will be very useful.
Thus, the contributions on this blog are part of a bigger project. They must be considered as “building blocks” for our book. So, don’t be shy to praise, but more importantly, don’t hesitate to criticize without mercy. I will be thankful in both cases.
Any feedback is more than welcome.
Jean Lievens, November 1, 2010
2010-10-21
A Programme for the Left
I think this is a very usseful basis for further discussion. It was recently poublished on the (provisional) website 'TANIT'
This article A Programme for the Left was written in 1997 and appeared in New Interventions Vol.7 No.3. It was written 13 years ago as the new Labour government was about to be elected and correctly foretold ‘Within a few years Blair’s government will have exhausted any credit…Massive disillusionment will set in. In the absence of any credible socialist alternative…this disillusionment will lead to apathy or new lease of life for Torysim. …by the same token the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.’ Now, thirteen years after this was written, this is the exact situation we are in.
I welcome the initiative of the comrades who have started TANIT and endorse the views expressed by Pat Byrne in his article ‘Towards a New International Tendency’
I submit this article as a contribution to the effort by TANIT to evolve a realistic programme around which a revived socialist movement could grow. Please download it on to your website
Harry Ratner
A Programme for the Left
By Harry Ratner
BARRING major upsets, it is probable that there will be a Labour government within the year. Though there will be general relief at the ending of 18 years of Tory rule, many people on the left hold no great hopes that the New Labour government will tackle the problems of poverty, unemployment and insecurity. New Labour has given early warning, even before coming to office, that it intends to make no major changes to the existing economic system, no major interference with the free market, no increase in state direction of the economy, no inroads on the power of big business and the multinationals, no curbs on the City speculators, and no increase in public spending. So how are the problems of poverty, unemployment, insecurity and the collapse of the welfare state and infrastructure to be tackled?
Within a few years, Blair’s New Labour government will have exhausted any credit it will have enjoyed, as the problems it promised to tackle will remain unresolved. Massive disillusionment will set in. In the absence of any credible socialist alternative, the danger is that this disillusionment will lead to apathy or a new lease of life for Toryism, or the strengthening of reactionary, racist and fascist movements. By the same token, the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour, will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.
It will not be enough for the left to bemoan Blair’s abandonment of any socialist or even specifically meaningful policies; not enough to speak in general terms of the need for radical and socialist policies. The left, both within the Labour Party and outside, must elaborate a feasible alternative programme in specific terms. It must spell out concretely what should be done by a socialist government, not in the distant future, but in the actual present. To quote Alec Nove, it must define a "feasible socialism" conceivable in the lifetime of a child already conceived. And having done so, it must campaign within the trade union and labour movement for such a programme.
The first step, however, is to seek to regroup the scattered forces of the left around such a programme. Disagreement as to whether to remain in the Labour Party or work outside it need not be an obstacle. If agreement on policy and a programme of demands can be achieved, those who wish to campaign for it within the Labour Party should be free to do so, while they and others in the Socialist Labour Party or other organisations could still work together in the trade unions and other milieus for these agreed policies and demands.
A Feasible Alternative to Existing Capitalism
It would be utopian to imagine that a fully developed socialist society could be established overnight. The best we can hope for is to begin the transition to such a society starting from where we are now. Given the globalisation of the economy, it is also evident that such a transition cannot be successful on a narrow national base, but requires to be carried out on at least a European scale. Therefore the programme outlined below must be campaigned for and applied within at least the European community, and as much as possible beyond Europe.
It now seems to be generally acknowledged, except by die-hard Stalinists, that the top-down, bureaucratically run command economies of the Soviet Union and its satellites were neither socialist nor viable, and that top-down bureaucratic nationalisation, as introduced by the postwar Labour government in Britain, is not the final answer either. State ownership in and of itself is not socialism, especially in the absence of political pluralism and democracy.
A general consensus seems to be emerging that while some strategic industries and services may well be best administered centrally, the whole of the economy need not be state-owned. Cooperatively-owned, democratically self-managed autonomous enterprises liaising with each other through market mechanisms, and with local communities and interest groups having an input, might be a better form of "social ownership". (See, for example Pat Devine’s Democracy and Economic Planning, the Common Ownership After Clause Four conference held in Manchester in September 1995, discussions in the Red-Green network, and Alec Nove’s The Economics of Feasible Socialism.)
Overall planning at the macro level to ensure environmentally friendly and sustainable growth would be conducted through a democratically-agreed national and/or regional plan financed through a publicly-owned banking network.
Outlined below are proposals for such a programme around which I believe the left could unite. It is not intended as a final word; it is put forward as a basis for discussion. Amendments and criticisms are welcome. It comprises three main strands: the democratisation of economic life at the grassroots, overall planning and co-ordination, and the democratisation of the state.
Democratising the Economy
A number of different forms of ownership and control are appropriate.
Firstly, some industries and services, because of their very nature and/or monopoly position, operate best as centrally-administered large interrelated units, for example, the railways, energy generation (gas and electricity) and the oil industry. They should be taken back into public ownership. However, unlike previous nationalisations, there should be provision for worker/employee representation and participation in management decisions, and also a meaningful participation by the users (gas and electricity consumers, passengers) in decision-making. The exact method of representation of employees, users and other interested groups (for example, localities in which the enterprises are located) would need to be worked out in detail, as well as procedures for reconciling or mediating conflicts of interest.
Secondly, firms not suitable for state-owned centralised administration and employing (say) over 50 people could operate as cooperatively-owned autonomous self-managed enterprises engaging with each other and consumers through market mechanisms. The boards of these self-managed enterprises would be composed of elected representatives of the stakeholders, that is to say, the workforce and, where appropriate, other groups affected by their operations (for example, local communities and residents whose environment might be affected by the operations of the enterprise). This might be done by allocating seats on the management board to local residents’ associations, local authorities and community groups. The management boards, thus constituted, would appoint and employ professional managers, technicians, accountants, etc. These enterprises would aim to be commercially viable and self-financing. The allocation of profits to further expansion or distribution among the stakeholders (the workforce, local communities, etc) would be decided by the management boards, subject to discussion and ratification by the stakeholders.
We should say to Tony Blair and other politicians who talk airily about a "stakeholding society": "Fine, let’s turn these soundbites into reality. If you are serious about stakeholding, give real power to the stakeholders – the workers and local communities. This is how we propose to do it. What do you propose?"
What should happen to the existing owners? We need to distinguish between private owners and shareholders, that is to say, capitalists on the one hand, and institutional shareholders such as pension funds which represent the savings and contributions of ordinary working people on the other. As far as the capitalists and fat cats, whose wealth results from the past and present exploitation of workers, share options and the like, are concerned, it could be argued that outright confiscation might be natural justice. However, in an attempt to minimise opposition (and opposition from the rich and powerful is inevitable) and in return for acceptance of these measures and cooperation in the change-over to a democratic stakeholding economy, a Labour or socialist government could offer compensation in the form of changing existing ordinary shares into bonds or debentures paying a fixed rate of interest payable out of profits.1
Nevertheless, in order to placate small and medium shareholders and isolate the really rich, this form of compensation would be justified. A really serious socialist government would say to big business: "The choice is yours. Either you accept the will of the majority and get some compensation, or you oppose and sabotage it – and get nothing!"
Obviously, the detailed elaboration of a legislative programme will need to be worked out with political organisations and trade unions calling on the specialised expertise of economists and lawyers. But that itself is by no means sufficient. A top-down imposition of such democratisation of industry would not work unless the mass of the working class itself was imbued with a consciousness of its necessity, prepared to struggle for it, and prepared to participate in its functioning. This is why a campaign at grassroots level, within the unions and on the shopfloor, among office workers and supermarket employees, etc, is necessary.
In the 1960s and 1970s the Institute for Workers’ Control coordinated the activities of trade unionists and shop stewards in pushing the idea of workers’ control. A revival in some form of such a campaigning body should be considered. It could be called A Campaign for Social Ownership and Real Stakeholding. It could also provide a framework in which socialists and greens within the Labour Party, the Socialist Labour Party, the trade unions, the green movement and other organisations could work together. A start was made in September 1995 at the Common Ownership after Clause Four conference, which was co-sponsored by a number of organisations, and also attracted some Red-Green Network activists. This should be built on, and, if possible, liaison established with similar movements in Europe and elsewhere.
Thirdly, pension funds and insurance companies must be democratised. A large proportion of shares are owned by institutions such as pension funds and insurance companies, and represent the savings and contributions of millions of working people. These could well remain in the hands of these funds and companies, but they need to be democratised. Detailed proposals for democratic representation of pension contributors, existing pensioners and the insured, and how to fit them into the new economic structures, need to be worked out with the help of experts in these fields.
Again, action and legislation at government level need to be supplemented by campaigning by pensioners’ organisations, trade unions and local communities.
Finally, privately-owned firms employing less than 50 people would continue, but would be obliged to recognise trade unions, measures against unfair dismissal, etc. Self-employed builders, craftsmen, shop keepers, etc, would also continue to operate.
Planning
One of the problems that will have to be addressed is how the activities of a multitude of autonomous enterprises producing for a market can be reconciled with rational economic planning.
The abolition of capitalist ownership and control and its replacement by social ownership is itself a great step forward. But it will not resolve the anarchy and planlessness associated with market forces. For example, if we have several autonomous enterprises producing the same commodities, that is, competing with each other in the market, just as under capitalism, some will be more successful, others will go to the wall, and we will end up with new monopolies (although these will be cooperatively owned), while the workforces of the failed ones will become unemployed. Some sort of overall regulation of the different sectors of industry would need to be enforced to prevent this, and to regulate the optimum number and sizes of the different enterprises.
What happens if due to technological progress leading to increased productivity, there is overproduction of a particular product? Do the members of the cooperatives decide to halve the workforce, that is, sack half of themselves? Or amalgamate with similar enterprises, and dispense with half of their combined workforce? Or what? Obviously, the rational solution is for all workers to benefit from increased productivity by a general reduction in working time, thus giving all increased leisure time without a drop in material consumption.
Obviously, some sort of co-ordination and regulation within each branch of industry or economic sector to set the overall size of the sector and the optimum number and sizes of enterprises will be necessary. Devine suggests in his Democracy and Economic Planning that "negotiated co-ordination bodies" for each industry or sector, made up of representatives of each enterprise (plus other interested groups) could carry out these functions. Within the set parameters, enterprises would still be autonomous, relating to each other and the public via market mechanisms. This would be very different from the detailed central control of all such activities that operated in the Stalinist command economies, and which spawned a huge and corrupt as well as inefficient bureaucracy.
Similarly, at the level of the economy as a whole, the relations between the different industries and sectors, between capital goods and consumer goods, and between these and social services, health, education, etc, would be determined by the allocation of major investment and finance through an integrated state budget at national, regional and local levels.
A Publicly Controlled Banking and Investment Network
This co-ordination can be achieved through the overall control of major investment at regional, national and international levels. It would be the duty of the elected state institutions to work out the social priorities according to which society’s resources would be deployed: how much in gross terms of society’s production should be earmarked for personal consumption, new investment, health services, pensions, public transport, education and so on. The overall costs having been estimated, the state budget then allocates the required finance. For example, if it is decided that new hospitals or schools are needed, the necessary finances are allocated for this. The contracts for building the hospitals and schools, providing the equipment, etc, are tendered for by autonomous enterprises. These would then liaise with their suppliers via market mechanisms.
Thus the state, rather than profit-driven private finance, would determine the overall allocation of resources and new investment on the basis of social needs – and this includes determining the overall level of economic activity to ensure full employment.
Control over the allocation of investment capital between economic sectors and regions must be taken out of the hands of private capital, and vested in democratic society. This is essential if unplanned and chaotic economic activity with its booms and slumps, social inequalities and destruction of the environment is to be replaced by activity driven by social priorities.
The obvious way to do this is by taking the banks and major financial institutions into public ownership, establishing an investment bank or network of banks at national and regional levels to provide the necessary finance for the public services referred to above, and credit and finance for the autonomous enterprises.
Again, here we need to be realistic and not utopian. The transformation of the existing financial institutions, with their myriad connections with the global market into a publicly-owned and accountable system will be a complex task. It will not be accomplished simply by socialist commissars marching into boardrooms and "taking over", and installing a committee of bank employees. A serious socialist movement will need to enlist the assistance of academics, economists and other experts in working out a feasible programme of transformation.2 That is why, even now, a serious socialist movement must try and establish a dialogue between workers and sympathetic academics.
Under capitalism productivity increases lead to unemployment as competing firms "downsize" in order to increase dividends and undercut competitors. In the proposed set-up, increased productivity should result either in increased leisure for all, or increased production of other needed goods and services, or assistance to poorer developing countries – or a combination of these. This would be possible because the overall level of production and how it would be distributed among various sectors would be determined by overall planning at the macro level through the allocation of finance by the publicly-owned or controlled banking system.
In contrast to the discredited rigid command economies of the now defunct Stalinist regimes, the detailed interrelations between autonomous enterprises would be regulated by market mechanisms – but within the general framework set by the overall plan.
Public Ownership or Merely Control?
Economic policy in Britain during the Second World War provides an example of how it is possible to combine effective planning of the economy with market mechanisms. Physical controls on the use of resources (steel and raw materials) were imposed so that firms could only secure these commodities if their use was essential to the war effort. More significant was the establishment of state control over capital investment. Thus a firm was only able to secure finance from the banks for expansion of its productive capacity by applying to the Capital Issues Commission, which only granted authorisation if this was considered essential to the war effort, or necessary for the meeting of civilian needs within the overall parameters set by the War Cabinet. Similarly, the building of a new factory or the closure of an existing one had to be authorised, and was sanctioned only if it fitted in with the needs of wartime production. Despite the destruction by bombing, the U-boat blockade, and the strains of war, the system worked – even though the banks and industry remained in private ownership.
This prompts the question as to whether the complete taking of the banks and financial institutions into public ownership is necessary, or merely the sort of public control of capital investment and resources that existed in wartime. However, the vital difference between the situation that existed during the Second World War and the future situation envisaged is that during the war the controls were exercised by a capitalist government (albeit with Labour participation) pursuing a war in defence of British capitalism, and that therefore the capitalists accepted these controls. It is unlikely – to say the least! – that such acquiescence would be forthcoming in the event of a socialist government imposing such controls. Much more likely are attempts at sabotage, destabilisation and military conspiracies. Nevertheless, acting from a position of strength, a future socialist government could buy off, minimise or split the opposition by telling the capitalists: "Either you accept the will of the majority, cooperate and retain some profits – or face expropriation."
Beyond National Boundaries – The European Dimension
The globalisation of the economy and the international division of labour make it impossible to resolve problems on a purely national basis. This is why the policies outlined here must be fought for and implemented on an international scale. It would be utopian to expect that socialist governments could come to power simultaneously all over the world. However, the progress towards an integrated European Union with a common currency and central bank, and eventually an integrated state comprising most of Europe, does make feasible and conceivable the implementation of a socialist programme on a European Community scale.
That is why we must be pro-European and in favour of a common currency. However, this does not mean accepting the Maastricht convergence criteria which are deflationary, and which would lead to further erosion of jobs and welfare. In this context we must support the campaign by European MPs such as Ken Coates and other British and European MPs for rejection of these criteria, and for using new financial instruments for borrowing and investment such as the European Investment Fund, and the establishment of a European Public Sector Borrowing Requirement to create the 15 million jobs target of the Delors White Paper on growth.
Side by side with this, a coordinated campaign by the European trade unions for a continent-wide reduction in average working time must also be part of the campaign against unemployment – as well as an all-European trade union and shop steward campaign for social ownership. To this end the perspective must be the development of an integrated movement on a Europe-wide scale to campaign for these policies.
The Environment – A Red-Green Alliance
Marxists have traditionally condemned capitalism because it acts as a fetter on the development of the productive forces. It was thought a ceiling above which they could not rise had been reached by the 1930s or even earlier. Since the Second World War, there has been a dramatic increase, and despite recessions there is no sign that a ceiling has been reached. Instead, it has become apparent that the untrammelled development of capitalist industrialisation threatens an environmental disaster. This and the exhaustion of non-renewable natural resources may impose limits and constraints on acceptable industrial growth. It is this realisation which has prompted the world-wide development of Green movements. It is becoming increasingly apparent that it is the unplanned and chaotic nature of profit-driven capitalism that stands in the way of a rational use of resources, and sustainable and environmentally-friendly economic development.
The proposals outlined here for overall economic planning through public control of all major investment and for community participation in local enterprises should therefore appeal to the Greens.
An example of how such policies could link with the concerns of Greens and environmental campaigners is the problem caused by the proliferation of private car ownership. This causes atmospheric pollution, destruction of the environment due to new road building (the Newbury by-pass conflict), traffic jams, etc. The obvious solution is the development of an integrated bus and rail public transport system, and the reduction of the number of cars on the roads. At present this comes up against two obstacles. The profitability of public transport is obviously not sufficient to attract private capital. And right wing governments intent on curbing public expenditure will not finance or subsidise public transport. The other obstacle is the vested interests of the car industry. Reducing the number of private cars threatens a loss of profits for motor manufacturing firms, and a loss of jobs for car workers.
Both these obstacles disappear if all major capital investment is socially controlled through a publicly-owned or controlled banking system which directs investment according to a democratically worked out integrated transport policy. Once the desired mix of rail, bus and private car transport and the appropriate road and rail network to go with them has been worked out, the necessary capital investment and finance is provided through a national or European investment fund.
If this integrated transport policy also involves the loss of jobs in the motor car industry, the plans would include the creation of alternative jobs or a general reduction in working time, or a combination of both, with the necessary finance for alternative employment being provided through the public banking and investment institutions.
Another example of how public control over the allocation of capital could help solve environmental problems would be the allocation of finance for research into and development of alternative sources of energy, for example, wind and wave power to replace fossil fuels. At present this does not attract private finance.
The Democratisation of the State
The "state" has been mentioned several times in the sections dealing with overall economic planning. What sort of state is envisaged?
Marxists have argued that the state is the executive of the ruling class. From this premise the conclusion is drawn that socialism cannot be achieved using the existing state machine; that this state machine will have to be replaced by a "workers’ state".
Certainly the existing state machine has inbuilt obstacles to the achievement of socialism – for example the fact that parliament has no real control over the cabinet, which can declare war, introduce a state of siege, etc, without parliamentary approval, the House of Lords, the royal prerogative, etc, etc. A radical restructuring of the state machine to widen democratic control and initiative from below is obviously necessary. But this does not mean that socialists cannot or must not use existing institutions. So long as parliament is still relatively freely elected, and so long as alternative structures have not arisen naturally, as a result of social movements, it is ludicrous for socialists to talk of "destruction of the state machine" and its replacement by non-existent "soviets".
When the Tory Heath government was forced to resign by the miners’ strike in the 1970s, even the most militant miners accepted as natural that the government to replace it should be decided by a general election. As long as parliamentary democracy exists and is accepted by the mass of the working class and middle class, socialists must have the perspective of winning a socialist majority in parliament. True, we must be aware of the possibility, even probability, that reactionary forces would attempt to subvert an elected socialist government by military coup d’états, etc (as in Chile), and that in any case a socialist majority would have to undertake a radical transformation of the state machine – democratisation of the armed forces and police, stricter control of these forces, etc. It is quite possible that the scenario might be a re-run of the English Civil War of the seventeenth century with Parliament versus the modern Royalists in the course of which a New Model Army and new popular institutions would develop. But this does not justify rejecting the "parliamentary road" in advance, or calling for non-existent soviets as if the Russian revolutionary road of October 1917 had universal application.
Instead, a realistic and feasible set of measures to transform the existing state structures in Britain and Europe, including the structures of the European Community, must be worked out side by side with the economic policies and demands outlined here.
These new structures should encompass political plurality and open government, and enable input from grassroots level in decision making, with maximum decentralisation and devolution of power downwards consistent with overall planning. More detailed proposals need to be worked out.
This document does not deal (except insofar as they are subsumed in the economic proposals) with other aspects of policy – on education, health services, pensions, armaments, foreign policy, aid to underdeveloped countries, etc. All these should be the subject of other documents and discussion.
Some Thoughts on Compromise
Discussing the transfer of enterprises to social ownership, the possibility of compensation for existing shareholders was considered. The possibility of control of the banking system as an alternative to outright nationalisation has also been considered. Reference has also been made to the fact that something similar to the wartime control of material allocations and capital investment, might work even if private ownership of large parts of industry and banking were retained. All these would represent a compromise with capitalism. I can imagine such talk might arouse the concern of some comrades. Let us be clear. Of course we would prefer not to have to make these compromises. But in some circumstances compromises may be necessary in order to weaken or neutralise the opposition of big business and its supporters, to win wavering elements to our side. If the opposing forces are evenly balanced, and a drive for outright defeat of the reactionary anti-socialist forces is too costly in human and material terms, then we should be prepared to say to the owners: "Look, if we can reach agreement, we are prepared to offer or increase compensation if you agree to social ownership; we are even prepared to leave you in ownership if you will agree to accept our directives on how the resources are to be used, and our priorities and directives on how and where your capital is to be invested. If you cooperate, well and good. If you don’t and you sabotage our measures, then we shall be forced to take over completely."
This, in fact, was the attitude first adopted by the Bolsheviks. A very clear exposition of the Bolsheviks’ thinking was given by Trotsky in an interview with the American correspondent E.A. Ross:
"Is it the intention of your party to dispossess the owners of industrial plant in Russia?"
"No", he replied, "we are not ready yet to take over all industry.... For the present, we expect out of the earnings of a factory to pay the owner five or six per cent yearly on his actual investment. What we aim at now is control rather than ownership."
"What do you mean by ‘control’?"
"I mean that we will see to it that the factory is run not from the point of view of private profit, but from the point of view of the social welfare democratically conceived. For example we will not allow the capitalist to shut up his factory ... because it is not yielding him a profit. If it is turning out economically a needed product, it must be kept running. If the capitalist abandons it, he will lose it altogether, for a board of directors chosen by the workmen will be put in charge.... By sticking to this principle you can keep up the existing industrial outfit. But in some branches – say the making of motorcycles or tractors – new factories are called for.... Where will the money come from that will build these new factories? We can impose on the capitalist to whom we allow a dividend of five or six per cent on his capital the obligation to reinvest in some industry – a part, say, 25 per cent – of what he receives."3
As we know, this attempt at neutralising the opposition of some capitalists and winning the cooperation of others was abandoned when the compromise was rejected and civil war unleashed. But there is no reason in principle why such compromises should not be offered in future.
Let us suppose that a socialist party has come to power (in Britain or any other advanced capitalist country, or even in several within the European Union) on a programme similar to the one outlined here. It has an electoral majority and the support of a mass movement encompassing a majority of the politically active working class and a fair section of the professionals and academics. It is meeting with opposition from the right, which may, if pushed, escalate into outright sabotage and military conspiracies backed by foreign powers. The cost, both material and human, of meeting and defeating this head-on would be high, and the outcome uncertain. In such a situation, a socialist government might justifiably attempt to implement the compromises mentioned above in order to defuse some opposition, win over waverers, and isolate the hard core reactionaries. This would be from a position of strength, backed by an active popular movement, and combined with measures to dismantle the undemocratic and reactionary features of the state apparatus (for example the House of Lords and the royal prerogative), and replace them with popular-based institutions. From such a position of strength the reactionary forces and big business would be given the choice: "Either you accept the democratic will and cooperate with the measures enacted, or else we shall be forced – with popular backing – to expropriate you completely. We prefer the easier way as this will obviate human suffering; the choice is up to you."
Such compromises, backed by mass support, would be very different to the retreats and "compromises" offered by Tony Blair before the fight has even begun; compromises and retreats on which no forward-going movement can be based, and which, in fact, discourage any popular mobilisation for anything at all.
To Sum Up
What has been proposed are a publicly-owned or controlled banking system and public control of all major investment funds, and some state-owned centrally-administered utilities and industries, with the rest of the economy to consist of cooperatively-owned autonomous enterprises (with community as well as worker participation), small privately-owned firms, and the self-employed. Overall planning will operate at the macro level ensured by the public control of major investments, and within this overall framework market relations between enterprises and between producers and consumers. There will be the democratisation of the existing state structures.
Obviously, not all problems and conflicts of interest would be eliminated. But concentrations of private wealth and power would have been eliminated, and all would participate in decision-making through a combination of local democracy within each enterprise and each industry, and overall democracy at local, regional, national and eventually international level. Devine calls this "negotiated co-ordination". One would not claim the programme outlined here will establish a fully socialist society rather than one in transition (this raises the question of exactly what is meant by "socialism"), but at least it would be a better society than the present one. More importantly, it can present a feasible alternative as a platform around which the left and Greens can regroup.
Notes
1. One of the arguments of the New Labour leadership against committing themselves to renationalisation of the privatised utilities and railways is the cost of buying out the existing shareholders. This is a false argument since the exchange of the existing shares for interest-paying bonds does not involve any actual transfer of money. This, in fact, is what happened when the 1945 Labour government nationalised the railway companies. Shares in the railway companies were simply exchanged for transport stock paying a fixed interest. Left wingers at the time complained that this was too generous, since the private railway companies had not paid out any dividends since the First World War, and the interest payments were an intolerable extra burden on the nationalised railways.
2. The prospect of professional economists – whose job is to justify and help run the present system – assisting in its socialist transformation may, at the moment, seem ludicrous. But in a situation in which the existing system is obviously unable to function, and a feasible alternative has been embraced by millions who have brought a radical and socialist government to power, then a fair number of these "bourgeois experts" would be won over, and would be prepared to cooperate with the new regime. Was it not Marx who said that under some circumstances sections of the propertied classes "would rally to the proletariat", on condition, of course, that the proletariat was serious in its intentions.
3. "A Talk with Trotsky", The Independent (USA), 9 March 1918; reprinted in A. Richardson (ed), In Defence of the Russian Revolution, London, 1995, pp.185-7.
This article A Programme for the Left was written in 1997 and appeared in New Interventions Vol.7 No.3. It was written 13 years ago as the new Labour government was about to be elected and correctly foretold ‘Within a few years Blair’s government will have exhausted any credit…Massive disillusionment will set in. In the absence of any credible socialist alternative…this disillusionment will lead to apathy or new lease of life for Torysim. …by the same token the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.’ Now, thirteen years after this was written, this is the exact situation we are in.
I welcome the initiative of the comrades who have started TANIT and endorse the views expressed by Pat Byrne in his article ‘Towards a New International Tendency’
I submit this article as a contribution to the effort by TANIT to evolve a realistic programme around which a revived socialist movement could grow. Please download it on to your website
Harry Ratner
A Programme for the Left
By Harry Ratner
BARRING major upsets, it is probable that there will be a Labour government within the year. Though there will be general relief at the ending of 18 years of Tory rule, many people on the left hold no great hopes that the New Labour government will tackle the problems of poverty, unemployment and insecurity. New Labour has given early warning, even before coming to office, that it intends to make no major changes to the existing economic system, no major interference with the free market, no increase in state direction of the economy, no inroads on the power of big business and the multinationals, no curbs on the City speculators, and no increase in public spending. So how are the problems of poverty, unemployment, insecurity and the collapse of the welfare state and infrastructure to be tackled?
Within a few years, Blair’s New Labour government will have exhausted any credit it will have enjoyed, as the problems it promised to tackle will remain unresolved. Massive disillusionment will set in. In the absence of any credible socialist alternative, the danger is that this disillusionment will lead to apathy or a new lease of life for Toryism, or the strengthening of reactionary, racist and fascist movements. By the same token, the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour, will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.
It will not be enough for the left to bemoan Blair’s abandonment of any socialist or even specifically meaningful policies; not enough to speak in general terms of the need for radical and socialist policies. The left, both within the Labour Party and outside, must elaborate a feasible alternative programme in specific terms. It must spell out concretely what should be done by a socialist government, not in the distant future, but in the actual present. To quote Alec Nove, it must define a "feasible socialism" conceivable in the lifetime of a child already conceived. And having done so, it must campaign within the trade union and labour movement for such a programme.
The first step, however, is to seek to regroup the scattered forces of the left around such a programme. Disagreement as to whether to remain in the Labour Party or work outside it need not be an obstacle. If agreement on policy and a programme of demands can be achieved, those who wish to campaign for it within the Labour Party should be free to do so, while they and others in the Socialist Labour Party or other organisations could still work together in the trade unions and other milieus for these agreed policies and demands.
A Feasible Alternative to Existing Capitalism
It would be utopian to imagine that a fully developed socialist society could be established overnight. The best we can hope for is to begin the transition to such a society starting from where we are now. Given the globalisation of the economy, it is also evident that such a transition cannot be successful on a narrow national base, but requires to be carried out on at least a European scale. Therefore the programme outlined below must be campaigned for and applied within at least the European community, and as much as possible beyond Europe.
It now seems to be generally acknowledged, except by die-hard Stalinists, that the top-down, bureaucratically run command economies of the Soviet Union and its satellites were neither socialist nor viable, and that top-down bureaucratic nationalisation, as introduced by the postwar Labour government in Britain, is not the final answer either. State ownership in and of itself is not socialism, especially in the absence of political pluralism and democracy.
A general consensus seems to be emerging that while some strategic industries and services may well be best administered centrally, the whole of the economy need not be state-owned. Cooperatively-owned, democratically self-managed autonomous enterprises liaising with each other through market mechanisms, and with local communities and interest groups having an input, might be a better form of "social ownership". (See, for example Pat Devine’s Democracy and Economic Planning, the Common Ownership After Clause Four conference held in Manchester in September 1995, discussions in the Red-Green network, and Alec Nove’s The Economics of Feasible Socialism.)
Overall planning at the macro level to ensure environmentally friendly and sustainable growth would be conducted through a democratically-agreed national and/or regional plan financed through a publicly-owned banking network.
Outlined below are proposals for such a programme around which I believe the left could unite. It is not intended as a final word; it is put forward as a basis for discussion. Amendments and criticisms are welcome. It comprises three main strands: the democratisation of economic life at the grassroots, overall planning and co-ordination, and the democratisation of the state.
Democratising the Economy
A number of different forms of ownership and control are appropriate.
Firstly, some industries and services, because of their very nature and/or monopoly position, operate best as centrally-administered large interrelated units, for example, the railways, energy generation (gas and electricity) and the oil industry. They should be taken back into public ownership. However, unlike previous nationalisations, there should be provision for worker/employee representation and participation in management decisions, and also a meaningful participation by the users (gas and electricity consumers, passengers) in decision-making. The exact method of representation of employees, users and other interested groups (for example, localities in which the enterprises are located) would need to be worked out in detail, as well as procedures for reconciling or mediating conflicts of interest.
Secondly, firms not suitable for state-owned centralised administration and employing (say) over 50 people could operate as cooperatively-owned autonomous self-managed enterprises engaging with each other and consumers through market mechanisms. The boards of these self-managed enterprises would be composed of elected representatives of the stakeholders, that is to say, the workforce and, where appropriate, other groups affected by their operations (for example, local communities and residents whose environment might be affected by the operations of the enterprise). This might be done by allocating seats on the management board to local residents’ associations, local authorities and community groups. The management boards, thus constituted, would appoint and employ professional managers, technicians, accountants, etc. These enterprises would aim to be commercially viable and self-financing. The allocation of profits to further expansion or distribution among the stakeholders (the workforce, local communities, etc) would be decided by the management boards, subject to discussion and ratification by the stakeholders.
We should say to Tony Blair and other politicians who talk airily about a "stakeholding society": "Fine, let’s turn these soundbites into reality. If you are serious about stakeholding, give real power to the stakeholders – the workers and local communities. This is how we propose to do it. What do you propose?"
What should happen to the existing owners? We need to distinguish between private owners and shareholders, that is to say, capitalists on the one hand, and institutional shareholders such as pension funds which represent the savings and contributions of ordinary working people on the other. As far as the capitalists and fat cats, whose wealth results from the past and present exploitation of workers, share options and the like, are concerned, it could be argued that outright confiscation might be natural justice. However, in an attempt to minimise opposition (and opposition from the rich and powerful is inevitable) and in return for acceptance of these measures and cooperation in the change-over to a democratic stakeholding economy, a Labour or socialist government could offer compensation in the form of changing existing ordinary shares into bonds or debentures paying a fixed rate of interest payable out of profits.1
Nevertheless, in order to placate small and medium shareholders and isolate the really rich, this form of compensation would be justified. A really serious socialist government would say to big business: "The choice is yours. Either you accept the will of the majority and get some compensation, or you oppose and sabotage it – and get nothing!"
Obviously, the detailed elaboration of a legislative programme will need to be worked out with political organisations and trade unions calling on the specialised expertise of economists and lawyers. But that itself is by no means sufficient. A top-down imposition of such democratisation of industry would not work unless the mass of the working class itself was imbued with a consciousness of its necessity, prepared to struggle for it, and prepared to participate in its functioning. This is why a campaign at grassroots level, within the unions and on the shopfloor, among office workers and supermarket employees, etc, is necessary.
In the 1960s and 1970s the Institute for Workers’ Control coordinated the activities of trade unionists and shop stewards in pushing the idea of workers’ control. A revival in some form of such a campaigning body should be considered. It could be called A Campaign for Social Ownership and Real Stakeholding. It could also provide a framework in which socialists and greens within the Labour Party, the Socialist Labour Party, the trade unions, the green movement and other organisations could work together. A start was made in September 1995 at the Common Ownership after Clause Four conference, which was co-sponsored by a number of organisations, and also attracted some Red-Green Network activists. This should be built on, and, if possible, liaison established with similar movements in Europe and elsewhere.
Thirdly, pension funds and insurance companies must be democratised. A large proportion of shares are owned by institutions such as pension funds and insurance companies, and represent the savings and contributions of millions of working people. These could well remain in the hands of these funds and companies, but they need to be democratised. Detailed proposals for democratic representation of pension contributors, existing pensioners and the insured, and how to fit them into the new economic structures, need to be worked out with the help of experts in these fields.
Again, action and legislation at government level need to be supplemented by campaigning by pensioners’ organisations, trade unions and local communities.
Finally, privately-owned firms employing less than 50 people would continue, but would be obliged to recognise trade unions, measures against unfair dismissal, etc. Self-employed builders, craftsmen, shop keepers, etc, would also continue to operate.
Planning
One of the problems that will have to be addressed is how the activities of a multitude of autonomous enterprises producing for a market can be reconciled with rational economic planning.
The abolition of capitalist ownership and control and its replacement by social ownership is itself a great step forward. But it will not resolve the anarchy and planlessness associated with market forces. For example, if we have several autonomous enterprises producing the same commodities, that is, competing with each other in the market, just as under capitalism, some will be more successful, others will go to the wall, and we will end up with new monopolies (although these will be cooperatively owned), while the workforces of the failed ones will become unemployed. Some sort of overall regulation of the different sectors of industry would need to be enforced to prevent this, and to regulate the optimum number and sizes of the different enterprises.
What happens if due to technological progress leading to increased productivity, there is overproduction of a particular product? Do the members of the cooperatives decide to halve the workforce, that is, sack half of themselves? Or amalgamate with similar enterprises, and dispense with half of their combined workforce? Or what? Obviously, the rational solution is for all workers to benefit from increased productivity by a general reduction in working time, thus giving all increased leisure time without a drop in material consumption.
Obviously, some sort of co-ordination and regulation within each branch of industry or economic sector to set the overall size of the sector and the optimum number and sizes of enterprises will be necessary. Devine suggests in his Democracy and Economic Planning that "negotiated co-ordination bodies" for each industry or sector, made up of representatives of each enterprise (plus other interested groups) could carry out these functions. Within the set parameters, enterprises would still be autonomous, relating to each other and the public via market mechanisms. This would be very different from the detailed central control of all such activities that operated in the Stalinist command economies, and which spawned a huge and corrupt as well as inefficient bureaucracy.
Similarly, at the level of the economy as a whole, the relations between the different industries and sectors, between capital goods and consumer goods, and between these and social services, health, education, etc, would be determined by the allocation of major investment and finance through an integrated state budget at national, regional and local levels.
A Publicly Controlled Banking and Investment Network
This co-ordination can be achieved through the overall control of major investment at regional, national and international levels. It would be the duty of the elected state institutions to work out the social priorities according to which society’s resources would be deployed: how much in gross terms of society’s production should be earmarked for personal consumption, new investment, health services, pensions, public transport, education and so on. The overall costs having been estimated, the state budget then allocates the required finance. For example, if it is decided that new hospitals or schools are needed, the necessary finances are allocated for this. The contracts for building the hospitals and schools, providing the equipment, etc, are tendered for by autonomous enterprises. These would then liaise with their suppliers via market mechanisms.
Thus the state, rather than profit-driven private finance, would determine the overall allocation of resources and new investment on the basis of social needs – and this includes determining the overall level of economic activity to ensure full employment.
Control over the allocation of investment capital between economic sectors and regions must be taken out of the hands of private capital, and vested in democratic society. This is essential if unplanned and chaotic economic activity with its booms and slumps, social inequalities and destruction of the environment is to be replaced by activity driven by social priorities.
The obvious way to do this is by taking the banks and major financial institutions into public ownership, establishing an investment bank or network of banks at national and regional levels to provide the necessary finance for the public services referred to above, and credit and finance for the autonomous enterprises.
Again, here we need to be realistic and not utopian. The transformation of the existing financial institutions, with their myriad connections with the global market into a publicly-owned and accountable system will be a complex task. It will not be accomplished simply by socialist commissars marching into boardrooms and "taking over", and installing a committee of bank employees. A serious socialist movement will need to enlist the assistance of academics, economists and other experts in working out a feasible programme of transformation.2 That is why, even now, a serious socialist movement must try and establish a dialogue between workers and sympathetic academics.
Under capitalism productivity increases lead to unemployment as competing firms "downsize" in order to increase dividends and undercut competitors. In the proposed set-up, increased productivity should result either in increased leisure for all, or increased production of other needed goods and services, or assistance to poorer developing countries – or a combination of these. This would be possible because the overall level of production and how it would be distributed among various sectors would be determined by overall planning at the macro level through the allocation of finance by the publicly-owned or controlled banking system.
In contrast to the discredited rigid command economies of the now defunct Stalinist regimes, the detailed interrelations between autonomous enterprises would be regulated by market mechanisms – but within the general framework set by the overall plan.
Public Ownership or Merely Control?
Economic policy in Britain during the Second World War provides an example of how it is possible to combine effective planning of the economy with market mechanisms. Physical controls on the use of resources (steel and raw materials) were imposed so that firms could only secure these commodities if their use was essential to the war effort. More significant was the establishment of state control over capital investment. Thus a firm was only able to secure finance from the banks for expansion of its productive capacity by applying to the Capital Issues Commission, which only granted authorisation if this was considered essential to the war effort, or necessary for the meeting of civilian needs within the overall parameters set by the War Cabinet. Similarly, the building of a new factory or the closure of an existing one had to be authorised, and was sanctioned only if it fitted in with the needs of wartime production. Despite the destruction by bombing, the U-boat blockade, and the strains of war, the system worked – even though the banks and industry remained in private ownership.
This prompts the question as to whether the complete taking of the banks and financial institutions into public ownership is necessary, or merely the sort of public control of capital investment and resources that existed in wartime. However, the vital difference between the situation that existed during the Second World War and the future situation envisaged is that during the war the controls were exercised by a capitalist government (albeit with Labour participation) pursuing a war in defence of British capitalism, and that therefore the capitalists accepted these controls. It is unlikely – to say the least! – that such acquiescence would be forthcoming in the event of a socialist government imposing such controls. Much more likely are attempts at sabotage, destabilisation and military conspiracies. Nevertheless, acting from a position of strength, a future socialist government could buy off, minimise or split the opposition by telling the capitalists: "Either you accept the will of the majority, cooperate and retain some profits – or face expropriation."
Beyond National Boundaries – The European Dimension
The globalisation of the economy and the international division of labour make it impossible to resolve problems on a purely national basis. This is why the policies outlined here must be fought for and implemented on an international scale. It would be utopian to expect that socialist governments could come to power simultaneously all over the world. However, the progress towards an integrated European Union with a common currency and central bank, and eventually an integrated state comprising most of Europe, does make feasible and conceivable the implementation of a socialist programme on a European Community scale.
That is why we must be pro-European and in favour of a common currency. However, this does not mean accepting the Maastricht convergence criteria which are deflationary, and which would lead to further erosion of jobs and welfare. In this context we must support the campaign by European MPs such as Ken Coates and other British and European MPs for rejection of these criteria, and for using new financial instruments for borrowing and investment such as the European Investment Fund, and the establishment of a European Public Sector Borrowing Requirement to create the 15 million jobs target of the Delors White Paper on growth.
Side by side with this, a coordinated campaign by the European trade unions for a continent-wide reduction in average working time must also be part of the campaign against unemployment – as well as an all-European trade union and shop steward campaign for social ownership. To this end the perspective must be the development of an integrated movement on a Europe-wide scale to campaign for these policies.
The Environment – A Red-Green Alliance
Marxists have traditionally condemned capitalism because it acts as a fetter on the development of the productive forces. It was thought a ceiling above which they could not rise had been reached by the 1930s or even earlier. Since the Second World War, there has been a dramatic increase, and despite recessions there is no sign that a ceiling has been reached. Instead, it has become apparent that the untrammelled development of capitalist industrialisation threatens an environmental disaster. This and the exhaustion of non-renewable natural resources may impose limits and constraints on acceptable industrial growth. It is this realisation which has prompted the world-wide development of Green movements. It is becoming increasingly apparent that it is the unplanned and chaotic nature of profit-driven capitalism that stands in the way of a rational use of resources, and sustainable and environmentally-friendly economic development.
The proposals outlined here for overall economic planning through public control of all major investment and for community participation in local enterprises should therefore appeal to the Greens.
An example of how such policies could link with the concerns of Greens and environmental campaigners is the problem caused by the proliferation of private car ownership. This causes atmospheric pollution, destruction of the environment due to new road building (the Newbury by-pass conflict), traffic jams, etc. The obvious solution is the development of an integrated bus and rail public transport system, and the reduction of the number of cars on the roads. At present this comes up against two obstacles. The profitability of public transport is obviously not sufficient to attract private capital. And right wing governments intent on curbing public expenditure will not finance or subsidise public transport. The other obstacle is the vested interests of the car industry. Reducing the number of private cars threatens a loss of profits for motor manufacturing firms, and a loss of jobs for car workers.
Both these obstacles disappear if all major capital investment is socially controlled through a publicly-owned or controlled banking system which directs investment according to a democratically worked out integrated transport policy. Once the desired mix of rail, bus and private car transport and the appropriate road and rail network to go with them has been worked out, the necessary capital investment and finance is provided through a national or European investment fund.
If this integrated transport policy also involves the loss of jobs in the motor car industry, the plans would include the creation of alternative jobs or a general reduction in working time, or a combination of both, with the necessary finance for alternative employment being provided through the public banking and investment institutions.
Another example of how public control over the allocation of capital could help solve environmental problems would be the allocation of finance for research into and development of alternative sources of energy, for example, wind and wave power to replace fossil fuels. At present this does not attract private finance.
The Democratisation of the State
The "state" has been mentioned several times in the sections dealing with overall economic planning. What sort of state is envisaged?
Marxists have argued that the state is the executive of the ruling class. From this premise the conclusion is drawn that socialism cannot be achieved using the existing state machine; that this state machine will have to be replaced by a "workers’ state".
Certainly the existing state machine has inbuilt obstacles to the achievement of socialism – for example the fact that parliament has no real control over the cabinet, which can declare war, introduce a state of siege, etc, without parliamentary approval, the House of Lords, the royal prerogative, etc, etc. A radical restructuring of the state machine to widen democratic control and initiative from below is obviously necessary. But this does not mean that socialists cannot or must not use existing institutions. So long as parliament is still relatively freely elected, and so long as alternative structures have not arisen naturally, as a result of social movements, it is ludicrous for socialists to talk of "destruction of the state machine" and its replacement by non-existent "soviets".
When the Tory Heath government was forced to resign by the miners’ strike in the 1970s, even the most militant miners accepted as natural that the government to replace it should be decided by a general election. As long as parliamentary democracy exists and is accepted by the mass of the working class and middle class, socialists must have the perspective of winning a socialist majority in parliament. True, we must be aware of the possibility, even probability, that reactionary forces would attempt to subvert an elected socialist government by military coup d’états, etc (as in Chile), and that in any case a socialist majority would have to undertake a radical transformation of the state machine – democratisation of the armed forces and police, stricter control of these forces, etc. It is quite possible that the scenario might be a re-run of the English Civil War of the seventeenth century with Parliament versus the modern Royalists in the course of which a New Model Army and new popular institutions would develop. But this does not justify rejecting the "parliamentary road" in advance, or calling for non-existent soviets as if the Russian revolutionary road of October 1917 had universal application.
Instead, a realistic and feasible set of measures to transform the existing state structures in Britain and Europe, including the structures of the European Community, must be worked out side by side with the economic policies and demands outlined here.
These new structures should encompass political plurality and open government, and enable input from grassroots level in decision making, with maximum decentralisation and devolution of power downwards consistent with overall planning. More detailed proposals need to be worked out.
This document does not deal (except insofar as they are subsumed in the economic proposals) with other aspects of policy – on education, health services, pensions, armaments, foreign policy, aid to underdeveloped countries, etc. All these should be the subject of other documents and discussion.
Some Thoughts on Compromise
Discussing the transfer of enterprises to social ownership, the possibility of compensation for existing shareholders was considered. The possibility of control of the banking system as an alternative to outright nationalisation has also been considered. Reference has also been made to the fact that something similar to the wartime control of material allocations and capital investment, might work even if private ownership of large parts of industry and banking were retained. All these would represent a compromise with capitalism. I can imagine such talk might arouse the concern of some comrades. Let us be clear. Of course we would prefer not to have to make these compromises. But in some circumstances compromises may be necessary in order to weaken or neutralise the opposition of big business and its supporters, to win wavering elements to our side. If the opposing forces are evenly balanced, and a drive for outright defeat of the reactionary anti-socialist forces is too costly in human and material terms, then we should be prepared to say to the owners: "Look, if we can reach agreement, we are prepared to offer or increase compensation if you agree to social ownership; we are even prepared to leave you in ownership if you will agree to accept our directives on how the resources are to be used, and our priorities and directives on how and where your capital is to be invested. If you cooperate, well and good. If you don’t and you sabotage our measures, then we shall be forced to take over completely."
This, in fact, was the attitude first adopted by the Bolsheviks. A very clear exposition of the Bolsheviks’ thinking was given by Trotsky in an interview with the American correspondent E.A. Ross:
"Is it the intention of your party to dispossess the owners of industrial plant in Russia?"
"No", he replied, "we are not ready yet to take over all industry.... For the present, we expect out of the earnings of a factory to pay the owner five or six per cent yearly on his actual investment. What we aim at now is control rather than ownership."
"What do you mean by ‘control’?"
"I mean that we will see to it that the factory is run not from the point of view of private profit, but from the point of view of the social welfare democratically conceived. For example we will not allow the capitalist to shut up his factory ... because it is not yielding him a profit. If it is turning out economically a needed product, it must be kept running. If the capitalist abandons it, he will lose it altogether, for a board of directors chosen by the workmen will be put in charge.... By sticking to this principle you can keep up the existing industrial outfit. But in some branches – say the making of motorcycles or tractors – new factories are called for.... Where will the money come from that will build these new factories? We can impose on the capitalist to whom we allow a dividend of five or six per cent on his capital the obligation to reinvest in some industry – a part, say, 25 per cent – of what he receives."3
As we know, this attempt at neutralising the opposition of some capitalists and winning the cooperation of others was abandoned when the compromise was rejected and civil war unleashed. But there is no reason in principle why such compromises should not be offered in future.
Let us suppose that a socialist party has come to power (in Britain or any other advanced capitalist country, or even in several within the European Union) on a programme similar to the one outlined here. It has an electoral majority and the support of a mass movement encompassing a majority of the politically active working class and a fair section of the professionals and academics. It is meeting with opposition from the right, which may, if pushed, escalate into outright sabotage and military conspiracies backed by foreign powers. The cost, both material and human, of meeting and defeating this head-on would be high, and the outcome uncertain. In such a situation, a socialist government might justifiably attempt to implement the compromises mentioned above in order to defuse some opposition, win over waverers, and isolate the hard core reactionaries. This would be from a position of strength, backed by an active popular movement, and combined with measures to dismantle the undemocratic and reactionary features of the state apparatus (for example the House of Lords and the royal prerogative), and replace them with popular-based institutions. From such a position of strength the reactionary forces and big business would be given the choice: "Either you accept the democratic will and cooperate with the measures enacted, or else we shall be forced – with popular backing – to expropriate you completely. We prefer the easier way as this will obviate human suffering; the choice is up to you."
Such compromises, backed by mass support, would be very different to the retreats and "compromises" offered by Tony Blair before the fight has even begun; compromises and retreats on which no forward-going movement can be based, and which, in fact, discourage any popular mobilisation for anything at all.
To Sum Up
What has been proposed are a publicly-owned or controlled banking system and public control of all major investment funds, and some state-owned centrally-administered utilities and industries, with the rest of the economy to consist of cooperatively-owned autonomous enterprises (with community as well as worker participation), small privately-owned firms, and the self-employed. Overall planning will operate at the macro level ensured by the public control of major investments, and within this overall framework market relations between enterprises and between producers and consumers. There will be the democratisation of the existing state structures.
Obviously, not all problems and conflicts of interest would be eliminated. But concentrations of private wealth and power would have been eliminated, and all would participate in decision-making through a combination of local democracy within each enterprise and each industry, and overall democracy at local, regional, national and eventually international level. Devine calls this "negotiated co-ordination". One would not claim the programme outlined here will establish a fully socialist society rather than one in transition (this raises the question of exactly what is meant by "socialism"), but at least it would be a better society than the present one. More importantly, it can present a feasible alternative as a platform around which the left and Greens can regroup.
Notes
1. One of the arguments of the New Labour leadership against committing themselves to renationalisation of the privatised utilities and railways is the cost of buying out the existing shareholders. This is a false argument since the exchange of the existing shares for interest-paying bonds does not involve any actual transfer of money. This, in fact, is what happened when the 1945 Labour government nationalised the railway companies. Shares in the railway companies were simply exchanged for transport stock paying a fixed interest. Left wingers at the time complained that this was too generous, since the private railway companies had not paid out any dividends since the First World War, and the interest payments were an intolerable extra burden on the nationalised railways.
2. The prospect of professional economists – whose job is to justify and help run the present system – assisting in its socialist transformation may, at the moment, seem ludicrous. But in a situation in which the existing system is obviously unable to function, and a feasible alternative has been embraced by millions who have brought a radical and socialist government to power, then a fair number of these "bourgeois experts" would be won over, and would be prepared to cooperate with the new regime. Was it not Marx who said that under some circumstances sections of the propertied classes "would rally to the proletariat", on condition, of course, that the proletariat was serious in its intentions.
3. "A Talk with Trotsky", The Independent (USA), 9 March 1918; reprinted in A. Richardson (ed), In Defence of the Russian Revolution, London, 1995, pp.185-7.
A Programme for the Left
I think this is a very usseful basis for further discussion.
This article A Programme for the Left was written in 1997 and appeared in New Interventions Vol.7 No.3. It was written 13 years ago as the new Labour government was about to be elected and correctly foretold ‘Within a few years Blair’s government will have exhausted any credit…Massive disillusionment will set in. In the absence of any credible socialist alternative…this disillusionment will lead to apathy or new lease of life for Torysim. …by the same token the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.’ Now, thirteen years after this was written, this is the exact situation we are in.
I welcome the initiative of the comrades who have started TANIT and endorse the views expressed by Pat Byrne in his article ‘Towards a New International Tendency’
I submit this article as a contribution to the effort by TANIT to evolve a realistic programme around which a revived socialist movement could grow. Please download it on to your website
Harry Ratner
A Programme for the Left
By Harry Ratner
BARRING major upsets, it is probable that there will be a Labour government within the year. Though there will be general relief at the ending of 18 years of Tory rule, many people on the left hold no great hopes that the New Labour government will tackle the problems of poverty, unemployment and insecurity. New Labour has given early warning, even before coming to office, that it intends to make no major changes to the existing economic system, no major interference with the free market, no increase in state direction of the economy, no inroads on the power of big business and the multinationals, no curbs on the City speculators, and no increase in public spending. So how are the problems of poverty, unemployment, insecurity and the collapse of the welfare state and infrastructure to be tackled?
Within a few years, Blair’s New Labour government will have exhausted any credit it will have enjoyed, as the problems it promised to tackle will remain unresolved. Massive disillusionment will set in. In the absence of any credible socialist alternative, the danger is that this disillusionment will lead to apathy or a new lease of life for Toryism, or the strengthening of reactionary, racist and fascist movements. By the same token, the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour, will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.
It will not be enough for the left to bemoan Blair’s abandonment of any socialist or even specifically meaningful policies; not enough to speak in general terms of the need for radical and socialist policies. The left, both within the Labour Party and outside, must elaborate a feasible alternative programme in specific terms. It must spell out concretely what should be done by a socialist government, not in the distant future, but in the actual present. To quote Alec Nove, it must define a "feasible socialism" conceivable in the lifetime of a child already conceived. And having done so, it must campaign within the trade union and labour movement for such a programme.
The first step, however, is to seek to regroup the scattered forces of the left around such a programme. Disagreement as to whether to remain in the Labour Party or work outside it need not be an obstacle. If agreement on policy and a programme of demands can be achieved, those who wish to campaign for it within the Labour Party should be free to do so, while they and others in the Socialist Labour Party or other organisations could still work together in the trade unions and other milieus for these agreed policies and demands.
A Feasible Alternative to Existing Capitalism
It would be utopian to imagine that a fully developed socialist society could be established overnight. The best we can hope for is to begin the transition to such a society starting from where we are now. Given the globalisation of the economy, it is also evident that such a transition cannot be successful on a narrow national base, but requires to be carried out on at least a European scale. Therefore the programme outlined below must be campaigned for and applied within at least the European community, and as much as possible beyond Europe.
It now seems to be generally acknowledged, except by die-hard Stalinists, that the top-down, bureaucratically run command economies of the Soviet Union and its satellites were neither socialist nor viable, and that top-down bureaucratic nationalisation, as introduced by the postwar Labour government in Britain, is not the final answer either. State ownership in and of itself is not socialism, especially in the absence of political pluralism and democracy.
A general consensus seems to be emerging that while some strategic industries and services may well be best administered centrally, the whole of the economy need not be state-owned. Cooperatively-owned, democratically self-managed autonomous enterprises liaising with each other through market mechanisms, and with local communities and interest groups having an input, might be a better form of "social ownership". (See, for example Pat Devine’s Democracy and Economic Planning, the Common Ownership After Clause Four conference held in Manchester in September 1995, discussions in the Red-Green network, and Alec Nove’s The Economics of Feasible Socialism.)
Overall planning at the macro level to ensure environmentally friendly and sustainable growth would be conducted through a democratically-agreed national and/or regional plan financed through a publicly-owned banking network.
Outlined below are proposals for such a programme around which I believe the left could unite. It is not intended as a final word; it is put forward as a basis for discussion. Amendments and criticisms are welcome. It comprises three main strands: the democratisation of economic life at the grassroots, overall planning and co-ordination, and the democratisation of the state.
Democratising the Economy
A number of different forms of ownership and control are appropriate.
Firstly, some industries and services, because of their very nature and/or monopoly position, operate best as centrally-administered large interrelated units, for example, the railways, energy generation (gas and electricity) and the oil industry. They should be taken back into public ownership. However, unlike previous nationalisations, there should be provision for worker/employee representation and participation in management decisions, and also a meaningful participation by the users (gas and electricity consumers, passengers) in decision-making. The exact method of representation of employees, users and other interested groups (for example, localities in which the enterprises are located) would need to be worked out in detail, as well as procedures for reconciling or mediating conflicts of interest.
Secondly, firms not suitable for state-owned centralised administration and employing (say) over 50 people could operate as cooperatively-owned autonomous self-managed enterprises engaging with each other and consumers through market mechanisms. The boards of these self-managed enterprises would be composed of elected representatives of the stakeholders, that is to say, the workforce and, where appropriate, other groups affected by their operations (for example, local communities and residents whose environment might be affected by the operations of the enterprise). This might be done by allocating seats on the management board to local residents’ associations, local authorities and community groups. The management boards, thus constituted, would appoint and employ professional managers, technicians, accountants, etc. These enterprises would aim to be commercially viable and self-financing. The allocation of profits to further expansion or distribution among the stakeholders (the workforce, local communities, etc) would be decided by the management boards, subject to discussion and ratification by the stakeholders.
We should say to Tony Blair and other politicians who talk airily about a "stakeholding society": "Fine, let’s turn these soundbites into reality. If you are serious about stakeholding, give real power to the stakeholders – the workers and local communities. This is how we propose to do it. What do you propose?"
What should happen to the existing owners? We need to distinguish between private owners and shareholders, that is to say, capitalists on the one hand, and institutional shareholders such as pension funds which represent the savings and contributions of ordinary working people on the other. As far as the capitalists and fat cats, whose wealth results from the past and present exploitation of workers, share options and the like, are concerned, it could be argued that outright confiscation might be natural justice. However, in an attempt to minimise opposition (and opposition from the rich and powerful is inevitable) and in return for acceptance of these measures and cooperation in the change-over to a democratic stakeholding economy, a Labour or socialist government could offer compensation in the form of changing existing ordinary shares into bonds or debentures paying a fixed rate of interest payable out of profits.1
Nevertheless, in order to placate small and medium shareholders and isolate the really rich, this form of compensation would be justified. A really serious socialist government would say to big business: "The choice is yours. Either you accept the will of the majority and get some compensation, or you oppose and sabotage it – and get nothing!"
Obviously, the detailed elaboration of a legislative programme will need to be worked out with political organisations and trade unions calling on the specialised expertise of economists and lawyers. But that itself is by no means sufficient. A top-down imposition of such democratisation of industry would not work unless the mass of the working class itself was imbued with a consciousness of its necessity, prepared to struggle for it, and prepared to participate in its functioning. This is why a campaign at grassroots level, within the unions and on the shopfloor, among office workers and supermarket employees, etc, is necessary.
In the 1960s and 1970s the Institute for Workers’ Control coordinated the activities of trade unionists and shop stewards in pushing the idea of workers’ control. A revival in some form of such a campaigning body should be considered. It could be called A Campaign for Social Ownership and Real Stakeholding. It could also provide a framework in which socialists and greens within the Labour Party, the Socialist Labour Party, the trade unions, the green movement and other organisations could work together. A start was made in September 1995 at the Common Ownership after Clause Four conference, which was co-sponsored by a number of organisations, and also attracted some Red-Green Network activists. This should be built on, and, if possible, liaison established with similar movements in Europe and elsewhere.
Thirdly, pension funds and insurance companies must be democratised. A large proportion of shares are owned by institutions such as pension funds and insurance companies, and represent the savings and contributions of millions of working people. These could well remain in the hands of these funds and companies, but they need to be democratised. Detailed proposals for democratic representation of pension contributors, existing pensioners and the insured, and how to fit them into the new economic structures, need to be worked out with the help of experts in these fields.
Again, action and legislation at government level need to be supplemented by campaigning by pensioners’ organisations, trade unions and local communities.
Finally, privately-owned firms employing less than 50 people would continue, but would be obliged to recognise trade unions, measures against unfair dismissal, etc. Self-employed builders, craftsmen, shop keepers, etc, would also continue to operate.
Planning
One of the problems that will have to be addressed is how the activities of a multitude of autonomous enterprises producing for a market can be reconciled with rational economic planning.
The abolition of capitalist ownership and control and its replacement by social ownership is itself a great step forward. But it will not resolve the anarchy and planlessness associated with market forces. For example, if we have several autonomous enterprises producing the same commodities, that is, competing with each other in the market, just as under capitalism, some will be more successful, others will go to the wall, and we will end up with new monopolies (although these will be cooperatively owned), while the workforces of the failed ones will become unemployed. Some sort of overall regulation of the different sectors of industry would need to be enforced to prevent this, and to regulate the optimum number and sizes of the different enterprises.
What happens if due to technological progress leading to increased productivity, there is overproduction of a particular product? Do the members of the cooperatives decide to halve the workforce, that is, sack half of themselves? Or amalgamate with similar enterprises, and dispense with half of their combined workforce? Or what? Obviously, the rational solution is for all workers to benefit from increased productivity by a general reduction in working time, thus giving all increased leisure time without a drop in material consumption.
Obviously, some sort of co-ordination and regulation within each branch of industry or economic sector to set the overall size of the sector and the optimum number and sizes of enterprises will be necessary. Devine suggests in his Democracy and Economic Planning that "negotiated co-ordination bodies" for each industry or sector, made up of representatives of each enterprise (plus other interested groups) could carry out these functions. Within the set parameters, enterprises would still be autonomous, relating to each other and the public via market mechanisms. This would be very different from the detailed central control of all such activities that operated in the Stalinist command economies, and which spawned a huge and corrupt as well as inefficient bureaucracy.
Similarly, at the level of the economy as a whole, the relations between the different industries and sectors, between capital goods and consumer goods, and between these and social services, health, education, etc, would be determined by the allocation of major investment and finance through an integrated state budget at national, regional and local levels.
A Publicly Controlled Banking and Investment Network
This co-ordination can be achieved through the overall control of major investment at regional, national and international levels. It would be the duty of the elected state institutions to work out the social priorities according to which society’s resources would be deployed: how much in gross terms of society’s production should be earmarked for personal consumption, new investment, health services, pensions, public transport, education and so on. The overall costs having been estimated, the state budget then allocates the required finance. For example, if it is decided that new hospitals or schools are needed, the necessary finances are allocated for this. The contracts for building the hospitals and schools, providing the equipment, etc, are tendered for by autonomous enterprises. These would then liaise with their suppliers via market mechanisms.
Thus the state, rather than profit-driven private finance, would determine the overall allocation of resources and new investment on the basis of social needs – and this includes determining the overall level of economic activity to ensure full employment.
Control over the allocation of investment capital between economic sectors and regions must be taken out of the hands of private capital, and vested in democratic society. This is essential if unplanned and chaotic economic activity with its booms and slumps, social inequalities and destruction of the environment is to be replaced by activity driven by social priorities.
The obvious way to do this is by taking the banks and major financial institutions into public ownership, establishing an investment bank or network of banks at national and regional levels to provide the necessary finance for the public services referred to above, and credit and finance for the autonomous enterprises.
Again, here we need to be realistic and not utopian. The transformation of the existing financial institutions, with their myriad connections with the global market into a publicly-owned and accountable system will be a complex task. It will not be accomplished simply by socialist commissars marching into boardrooms and "taking over", and installing a committee of bank employees. A serious socialist movement will need to enlist the assistance of academics, economists and other experts in working out a feasible programme of transformation.2 That is why, even now, a serious socialist movement must try and establish a dialogue between workers and sympathetic academics.
Under capitalism productivity increases lead to unemployment as competing firms "downsize" in order to increase dividends and undercut competitors. In the proposed set-up, increased productivity should result either in increased leisure for all, or increased production of other needed goods and services, or assistance to poorer developing countries – or a combination of these. This would be possible because the overall level of production and how it would be distributed among various sectors would be determined by overall planning at the macro level through the allocation of finance by the publicly-owned or controlled banking system.
In contrast to the discredited rigid command economies of the now defunct Stalinist regimes, the detailed interrelations between autonomous enterprises would be regulated by market mechanisms – but within the general framework set by the overall plan.
Public Ownership or Merely Control?
Economic policy in Britain during the Second World War provides an example of how it is possible to combine effective planning of the economy with market mechanisms. Physical controls on the use of resources (steel and raw materials) were imposed so that firms could only secure these commodities if their use was essential to the war effort. More significant was the establishment of state control over capital investment. Thus a firm was only able to secure finance from the banks for expansion of its productive capacity by applying to the Capital Issues Commission, which only granted authorisation if this was considered essential to the war effort, or necessary for the meeting of civilian needs within the overall parameters set by the War Cabinet. Similarly, the building of a new factory or the closure of an existing one had to be authorised, and was sanctioned only if it fitted in with the needs of wartime production. Despite the destruction by bombing, the U-boat blockade, and the strains of war, the system worked – even though the banks and industry remained in private ownership.
This prompts the question as to whether the complete taking of the banks and financial institutions into public ownership is necessary, or merely the sort of public control of capital investment and resources that existed in wartime. However, the vital difference between the situation that existed during the Second World War and the future situation envisaged is that during the war the controls were exercised by a capitalist government (albeit with Labour participation) pursuing a war in defence of British capitalism, and that therefore the capitalists accepted these controls. It is unlikely – to say the least! – that such acquiescence would be forthcoming in the event of a socialist government imposing such controls. Much more likely are attempts at sabotage, destabilisation and military conspiracies. Nevertheless, acting from a position of strength, a future socialist government could buy off, minimise or split the opposition by telling the capitalists: "Either you accept the will of the majority, cooperate and retain some profits – or face expropriation."
Beyond National Boundaries – The European Dimension
The globalisation of the economy and the international division of labour make it impossible to resolve problems on a purely national basis. This is why the policies outlined here must be fought for and implemented on an international scale. It would be utopian to expect that socialist governments could come to power simultaneously all over the world. However, the progress towards an integrated European Union with a common currency and central bank, and eventually an integrated state comprising most of Europe, does make feasible and conceivable the implementation of a socialist programme on a European Community scale.
That is why we must be pro-European and in favour of a common currency. However, this does not mean accepting the Maastricht convergence criteria which are deflationary, and which would lead to further erosion of jobs and welfare. In this context we must support the campaign by European MPs such as Ken Coates and other British and European MPs for rejection of these criteria, and for using new financial instruments for borrowing and investment such as the European Investment Fund, and the establishment of a European Public Sector Borrowing Requirement to create the 15 million jobs target of the Delors White Paper on growth.
Side by side with this, a coordinated campaign by the European trade unions for a continent-wide reduction in average working time must also be part of the campaign against unemployment – as well as an all-European trade union and shop steward campaign for social ownership. To this end the perspective must be the development of an integrated movement on a Europe-wide scale to campaign for these policies.
The Environment – A Red-Green Alliance
Marxists have traditionally condemned capitalism because it acts as a fetter on the development of the productive forces. It was thought a ceiling above which they could not rise had been reached by the 1930s or even earlier. Since the Second World War, there has been a dramatic increase, and despite recessions there is no sign that a ceiling has been reached. Instead, it has become apparent that the untrammelled development of capitalist industrialisation threatens an environmental disaster. This and the exhaustion of non-renewable natural resources may impose limits and constraints on acceptable industrial growth. It is this realisation which has prompted the world-wide development of Green movements. It is becoming increasingly apparent that it is the unplanned and chaotic nature of profit-driven capitalism that stands in the way of a rational use of resources, and sustainable and environmentally-friendly economic development.
The proposals outlined here for overall economic planning through public control of all major investment and for community participation in local enterprises should therefore appeal to the Greens.
An example of how such policies could link with the concerns of Greens and environmental campaigners is the problem caused by the proliferation of private car ownership. This causes atmospheric pollution, destruction of the environment due to new road building (the Newbury by-pass conflict), traffic jams, etc. The obvious solution is the development of an integrated bus and rail public transport system, and the reduction of the number of cars on the roads. At present this comes up against two obstacles. The profitability of public transport is obviously not sufficient to attract private capital. And right wing governments intent on curbing public expenditure will not finance or subsidise public transport. The other obstacle is the vested interests of the car industry. Reducing the number of private cars threatens a loss of profits for motor manufacturing firms, and a loss of jobs for car workers.
Both these obstacles disappear if all major capital investment is socially controlled through a publicly-owned or controlled banking system which directs investment according to a democratically worked out integrated transport policy. Once the desired mix of rail, bus and private car transport and the appropriate road and rail network to go with them has been worked out, the necessary capital investment and finance is provided through a national or European investment fund.
If this integrated transport policy also involves the loss of jobs in the motor car industry, the plans would include the creation of alternative jobs or a general reduction in working time, or a combination of both, with the necessary finance for alternative employment being provided through the public banking and investment institutions.
Another example of how public control over the allocation of capital could help solve environmental problems would be the allocation of finance for research into and development of alternative sources of energy, for example, wind and wave power to replace fossil fuels. At present this does not attract private finance.
The Democratisation of the State
The "state" has been mentioned several times in the sections dealing with overall economic planning. What sort of state is envisaged?
Marxists have argued that the state is the executive of the ruling class. From this premise the conclusion is drawn that socialism cannot be achieved using the existing state machine; that this state machine will have to be replaced by a "workers’ state".
Certainly the existing state machine has inbuilt obstacles to the achievement of socialism – for example the fact that parliament has no real control over the cabinet, which can declare war, introduce a state of siege, etc, without parliamentary approval, the House of Lords, the royal prerogative, etc, etc. A radical restructuring of the state machine to widen democratic control and initiative from below is obviously necessary. But this does not mean that socialists cannot or must not use existing institutions. So long as parliament is still relatively freely elected, and so long as alternative structures have not arisen naturally, as a result of social movements, it is ludicrous for socialists to talk of "destruction of the state machine" and its replacement by non-existent "soviets".
When the Tory Heath government was forced to resign by the miners’ strike in the 1970s, even the most militant miners accepted as natural that the government to replace it should be decided by a general election. As long as parliamentary democracy exists and is accepted by the mass of the working class and middle class, socialists must have the perspective of winning a socialist majority in parliament. True, we must be aware of the possibility, even probability, that reactionary forces would attempt to subvert an elected socialist government by military coup d’états, etc (as in Chile), and that in any case a socialist majority would have to undertake a radical transformation of the state machine – democratisation of the armed forces and police, stricter control of these forces, etc. It is quite possible that the scenario might be a re-run of the English Civil War of the seventeenth century with Parliament versus the modern Royalists in the course of which a New Model Army and new popular institutions would develop. But this does not justify rejecting the "parliamentary road" in advance, or calling for non-existent soviets as if the Russian revolutionary road of October 1917 had universal application.
Instead, a realistic and feasible set of measures to transform the existing state structures in Britain and Europe, including the structures of the European Community, must be worked out side by side with the economic policies and demands outlined here.
These new structures should encompass political plurality and open government, and enable input from grassroots level in decision making, with maximum decentralisation and devolution of power downwards consistent with overall planning. More detailed proposals need to be worked out.
This document does not deal (except insofar as they are subsumed in the economic proposals) with other aspects of policy – on education, health services, pensions, armaments, foreign policy, aid to underdeveloped countries, etc. All these should be the subject of other documents and discussion.
Some Thoughts on Compromise
Discussing the transfer of enterprises to social ownership, the possibility of compensation for existing shareholders was considered. The possibility of control of the banking system as an alternative to outright nationalisation has also been considered. Reference has also been made to the fact that something similar to the wartime control of material allocations and capital investment, might work even if private ownership of large parts of industry and banking were retained. All these would represent a compromise with capitalism. I can imagine such talk might arouse the concern of some comrades. Let us be clear. Of course we would prefer not to have to make these compromises. But in some circumstances compromises may be necessary in order to weaken or neutralise the opposition of big business and its supporters, to win wavering elements to our side. If the opposing forces are evenly balanced, and a drive for outright defeat of the reactionary anti-socialist forces is too costly in human and material terms, then we should be prepared to say to the owners: "Look, if we can reach agreement, we are prepared to offer or increase compensation if you agree to social ownership; we are even prepared to leave you in ownership if you will agree to accept our directives on how the resources are to be used, and our priorities and directives on how and where your capital is to be invested. If you cooperate, well and good. If you don’t and you sabotage our measures, then we shall be forced to take over completely."
This, in fact, was the attitude first adopted by the Bolsheviks. A very clear exposition of the Bolsheviks’ thinking was given by Trotsky in an interview with the American correspondent E.A. Ross:
"Is it the intention of your party to dispossess the owners of industrial plant in Russia?"
"No", he replied, "we are not ready yet to take over all industry.... For the present, we expect out of the earnings of a factory to pay the owner five or six per cent yearly on his actual investment. What we aim at now is control rather than ownership."
"What do you mean by ‘control’?"
"I mean that we will see to it that the factory is run not from the point of view of private profit, but from the point of view of the social welfare democratically conceived. For example we will not allow the capitalist to shut up his factory ... because it is not yielding him a profit. If it is turning out economically a needed product, it must be kept running. If the capitalist abandons it, he will lose it altogether, for a board of directors chosen by the workmen will be put in charge.... By sticking to this principle you can keep up the existing industrial outfit. But in some branches – say the making of motorcycles or tractors – new factories are called for.... Where will the money come from that will build these new factories? We can impose on the capitalist to whom we allow a dividend of five or six per cent on his capital the obligation to reinvest in some industry – a part, say, 25 per cent – of what he receives."3
As we know, this attempt at neutralising the opposition of some capitalists and winning the cooperation of others was abandoned when the compromise was rejected and civil war unleashed. But there is no reason in principle why such compromises should not be offered in future.
Let us suppose that a socialist party has come to power (in Britain or any other advanced capitalist country, or even in several within the European Union) on a programme similar to the one outlined here. It has an electoral majority and the support of a mass movement encompassing a majority of the politically active working class and a fair section of the professionals and academics. It is meeting with opposition from the right, which may, if pushed, escalate into outright sabotage and military conspiracies backed by foreign powers. The cost, both material and human, of meeting and defeating this head-on would be high, and the outcome uncertain. In such a situation, a socialist government might justifiably attempt to implement the compromises mentioned above in order to defuse some opposition, win over waverers, and isolate the hard core reactionaries. This would be from a position of strength, backed by an active popular movement, and combined with measures to dismantle the undemocratic and reactionary features of the state apparatus (for example the House of Lords and the royal prerogative), and replace them with popular-based institutions. From such a position of strength the reactionary forces and big business would be given the choice: "Either you accept the democratic will and cooperate with the measures enacted, or else we shall be forced – with popular backing – to expropriate you completely. We prefer the easier way as this will obviate human suffering; the choice is up to you."
Such compromises, backed by mass support, would be very different to the retreats and "compromises" offered by Tony Blair before the fight has even begun; compromises and retreats on which no forward-going movement can be based, and which, in fact, discourage any popular mobilisation for anything at all.
To Sum Up
What has been proposed are a publicly-owned or controlled banking system and public control of all major investment funds, and some state-owned centrally-administered utilities and industries, with the rest of the economy to consist of cooperatively-owned autonomous enterprises (with community as well as worker participation), small privately-owned firms, and the self-employed. Overall planning will operate at the macro level ensured by the public control of major investments, and within this overall framework market relations between enterprises and between producers and consumers. There will be the democratisation of the existing state structures.
Obviously, not all problems and conflicts of interest would be eliminated. But concentrations of private wealth and power would have been eliminated, and all would participate in decision-making through a combination of local democracy within each enterprise and each industry, and overall democracy at local, regional, national and eventually international level. Devine calls this "negotiated co-ordination". One would not claim the programme outlined here will establish a fully socialist society rather than one in transition (this raises the question of exactly what is meant by "socialism"), but at least it would be a better society than the present one. More importantly, it can present a feasible alternative as a platform around which the left and Greens can regroup.
Notes
1. One of the arguments of the New Labour leadership against committing themselves to renationalisation of the privatised utilities and railways is the cost of buying out the existing shareholders. This is a false argument since the exchange of the existing shares for interest-paying bonds does not involve any actual transfer of money. This, in fact, is what happened when the 1945 Labour government nationalised the railway companies. Shares in the railway companies were simply exchanged for transport stock paying a fixed interest. Left wingers at the time complained that this was too generous, since the private railway companies had not paid out any dividends since the First World War, and the interest payments were an intolerable extra burden on the nationalised railways.
2. The prospect of professional economists – whose job is to justify and help run the present system – assisting in its socialist transformation may, at the moment, seem ludicrous. But in a situation in which the existing system is obviously unable to function, and a feasible alternative has been embraced by millions who have brought a radical and socialist government to power, then a fair number of these "bourgeois experts" would be won over, and would be prepared to cooperate with the new regime. Was it not Marx who said that under some circumstances sections of the propertied classes "would rally to the proletariat", on condition, of course, that the proletariat was serious in its intentions.
3. "A Talk with Trotsky", The Independent (USA), 9 March 1918; reprinted in A. Richardson (ed), In Defence of the Russian Revolution, London, 1995, pp.185-7.
This article A Programme for the Left was written in 1997 and appeared in New Interventions Vol.7 No.3. It was written 13 years ago as the new Labour government was about to be elected and correctly foretold ‘Within a few years Blair’s government will have exhausted any credit…Massive disillusionment will set in. In the absence of any credible socialist alternative…this disillusionment will lead to apathy or new lease of life for Torysim. …by the same token the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.’ Now, thirteen years after this was written, this is the exact situation we are in.
I welcome the initiative of the comrades who have started TANIT and endorse the views expressed by Pat Byrne in his article ‘Towards a New International Tendency’
I submit this article as a contribution to the effort by TANIT to evolve a realistic programme around which a revived socialist movement could grow. Please download it on to your website
Harry Ratner
A Programme for the Left
By Harry Ratner
BARRING major upsets, it is probable that there will be a Labour government within the year. Though there will be general relief at the ending of 18 years of Tory rule, many people on the left hold no great hopes that the New Labour government will tackle the problems of poverty, unemployment and insecurity. New Labour has given early warning, even before coming to office, that it intends to make no major changes to the existing economic system, no major interference with the free market, no increase in state direction of the economy, no inroads on the power of big business and the multinationals, no curbs on the City speculators, and no increase in public spending. So how are the problems of poverty, unemployment, insecurity and the collapse of the welfare state and infrastructure to be tackled?
Within a few years, Blair’s New Labour government will have exhausted any credit it will have enjoyed, as the problems it promised to tackle will remain unresolved. Massive disillusionment will set in. In the absence of any credible socialist alternative, the danger is that this disillusionment will lead to apathy or a new lease of life for Toryism, or the strengthening of reactionary, racist and fascist movements. By the same token, the obvious bankruptcy of free market capitalism, whether administered by Tories or New Labour, will present an opportunity for the reversal of the long retreat of the socialist left, and for a renewal of support for socialist solutions to society’s problems. But this will only happen if socialists are able to develop and present a feasible and realisable alternative.
It will not be enough for the left to bemoan Blair’s abandonment of any socialist or even specifically meaningful policies; not enough to speak in general terms of the need for radical and socialist policies. The left, both within the Labour Party and outside, must elaborate a feasible alternative programme in specific terms. It must spell out concretely what should be done by a socialist government, not in the distant future, but in the actual present. To quote Alec Nove, it must define a "feasible socialism" conceivable in the lifetime of a child already conceived. And having done so, it must campaign within the trade union and labour movement for such a programme.
The first step, however, is to seek to regroup the scattered forces of the left around such a programme. Disagreement as to whether to remain in the Labour Party or work outside it need not be an obstacle. If agreement on policy and a programme of demands can be achieved, those who wish to campaign for it within the Labour Party should be free to do so, while they and others in the Socialist Labour Party or other organisations could still work together in the trade unions and other milieus for these agreed policies and demands.
A Feasible Alternative to Existing Capitalism
It would be utopian to imagine that a fully developed socialist society could be established overnight. The best we can hope for is to begin the transition to such a society starting from where we are now. Given the globalisation of the economy, it is also evident that such a transition cannot be successful on a narrow national base, but requires to be carried out on at least a European scale. Therefore the programme outlined below must be campaigned for and applied within at least the European community, and as much as possible beyond Europe.
It now seems to be generally acknowledged, except by die-hard Stalinists, that the top-down, bureaucratically run command economies of the Soviet Union and its satellites were neither socialist nor viable, and that top-down bureaucratic nationalisation, as introduced by the postwar Labour government in Britain, is not the final answer either. State ownership in and of itself is not socialism, especially in the absence of political pluralism and democracy.
A general consensus seems to be emerging that while some strategic industries and services may well be best administered centrally, the whole of the economy need not be state-owned. Cooperatively-owned, democratically self-managed autonomous enterprises liaising with each other through market mechanisms, and with local communities and interest groups having an input, might be a better form of "social ownership". (See, for example Pat Devine’s Democracy and Economic Planning, the Common Ownership After Clause Four conference held in Manchester in September 1995, discussions in the Red-Green network, and Alec Nove’s The Economics of Feasible Socialism.)
Overall planning at the macro level to ensure environmentally friendly and sustainable growth would be conducted through a democratically-agreed national and/or regional plan financed through a publicly-owned banking network.
Outlined below are proposals for such a programme around which I believe the left could unite. It is not intended as a final word; it is put forward as a basis for discussion. Amendments and criticisms are welcome. It comprises three main strands: the democratisation of economic life at the grassroots, overall planning and co-ordination, and the democratisation of the state.
Democratising the Economy
A number of different forms of ownership and control are appropriate.
Firstly, some industries and services, because of their very nature and/or monopoly position, operate best as centrally-administered large interrelated units, for example, the railways, energy generation (gas and electricity) and the oil industry. They should be taken back into public ownership. However, unlike previous nationalisations, there should be provision for worker/employee representation and participation in management decisions, and also a meaningful participation by the users (gas and electricity consumers, passengers) in decision-making. The exact method of representation of employees, users and other interested groups (for example, localities in which the enterprises are located) would need to be worked out in detail, as well as procedures for reconciling or mediating conflicts of interest.
Secondly, firms not suitable for state-owned centralised administration and employing (say) over 50 people could operate as cooperatively-owned autonomous self-managed enterprises engaging with each other and consumers through market mechanisms. The boards of these self-managed enterprises would be composed of elected representatives of the stakeholders, that is to say, the workforce and, where appropriate, other groups affected by their operations (for example, local communities and residents whose environment might be affected by the operations of the enterprise). This might be done by allocating seats on the management board to local residents’ associations, local authorities and community groups. The management boards, thus constituted, would appoint and employ professional managers, technicians, accountants, etc. These enterprises would aim to be commercially viable and self-financing. The allocation of profits to further expansion or distribution among the stakeholders (the workforce, local communities, etc) would be decided by the management boards, subject to discussion and ratification by the stakeholders.
We should say to Tony Blair and other politicians who talk airily about a "stakeholding society": "Fine, let’s turn these soundbites into reality. If you are serious about stakeholding, give real power to the stakeholders – the workers and local communities. This is how we propose to do it. What do you propose?"
What should happen to the existing owners? We need to distinguish between private owners and shareholders, that is to say, capitalists on the one hand, and institutional shareholders such as pension funds which represent the savings and contributions of ordinary working people on the other. As far as the capitalists and fat cats, whose wealth results from the past and present exploitation of workers, share options and the like, are concerned, it could be argued that outright confiscation might be natural justice. However, in an attempt to minimise opposition (and opposition from the rich and powerful is inevitable) and in return for acceptance of these measures and cooperation in the change-over to a democratic stakeholding economy, a Labour or socialist government could offer compensation in the form of changing existing ordinary shares into bonds or debentures paying a fixed rate of interest payable out of profits.1
Nevertheless, in order to placate small and medium shareholders and isolate the really rich, this form of compensation would be justified. A really serious socialist government would say to big business: "The choice is yours. Either you accept the will of the majority and get some compensation, or you oppose and sabotage it – and get nothing!"
Obviously, the detailed elaboration of a legislative programme will need to be worked out with political organisations and trade unions calling on the specialised expertise of economists and lawyers. But that itself is by no means sufficient. A top-down imposition of such democratisation of industry would not work unless the mass of the working class itself was imbued with a consciousness of its necessity, prepared to struggle for it, and prepared to participate in its functioning. This is why a campaign at grassroots level, within the unions and on the shopfloor, among office workers and supermarket employees, etc, is necessary.
In the 1960s and 1970s the Institute for Workers’ Control coordinated the activities of trade unionists and shop stewards in pushing the idea of workers’ control. A revival in some form of such a campaigning body should be considered. It could be called A Campaign for Social Ownership and Real Stakeholding. It could also provide a framework in which socialists and greens within the Labour Party, the Socialist Labour Party, the trade unions, the green movement and other organisations could work together. A start was made in September 1995 at the Common Ownership after Clause Four conference, which was co-sponsored by a number of organisations, and also attracted some Red-Green Network activists. This should be built on, and, if possible, liaison established with similar movements in Europe and elsewhere.
Thirdly, pension funds and insurance companies must be democratised. A large proportion of shares are owned by institutions such as pension funds and insurance companies, and represent the savings and contributions of millions of working people. These could well remain in the hands of these funds and companies, but they need to be democratised. Detailed proposals for democratic representation of pension contributors, existing pensioners and the insured, and how to fit them into the new economic structures, need to be worked out with the help of experts in these fields.
Again, action and legislation at government level need to be supplemented by campaigning by pensioners’ organisations, trade unions and local communities.
Finally, privately-owned firms employing less than 50 people would continue, but would be obliged to recognise trade unions, measures against unfair dismissal, etc. Self-employed builders, craftsmen, shop keepers, etc, would also continue to operate.
Planning
One of the problems that will have to be addressed is how the activities of a multitude of autonomous enterprises producing for a market can be reconciled with rational economic planning.
The abolition of capitalist ownership and control and its replacement by social ownership is itself a great step forward. But it will not resolve the anarchy and planlessness associated with market forces. For example, if we have several autonomous enterprises producing the same commodities, that is, competing with each other in the market, just as under capitalism, some will be more successful, others will go to the wall, and we will end up with new monopolies (although these will be cooperatively owned), while the workforces of the failed ones will become unemployed. Some sort of overall regulation of the different sectors of industry would need to be enforced to prevent this, and to regulate the optimum number and sizes of the different enterprises.
What happens if due to technological progress leading to increased productivity, there is overproduction of a particular product? Do the members of the cooperatives decide to halve the workforce, that is, sack half of themselves? Or amalgamate with similar enterprises, and dispense with half of their combined workforce? Or what? Obviously, the rational solution is for all workers to benefit from increased productivity by a general reduction in working time, thus giving all increased leisure time without a drop in material consumption.
Obviously, some sort of co-ordination and regulation within each branch of industry or economic sector to set the overall size of the sector and the optimum number and sizes of enterprises will be necessary. Devine suggests in his Democracy and Economic Planning that "negotiated co-ordination bodies" for each industry or sector, made up of representatives of each enterprise (plus other interested groups) could carry out these functions. Within the set parameters, enterprises would still be autonomous, relating to each other and the public via market mechanisms. This would be very different from the detailed central control of all such activities that operated in the Stalinist command economies, and which spawned a huge and corrupt as well as inefficient bureaucracy.
Similarly, at the level of the economy as a whole, the relations between the different industries and sectors, between capital goods and consumer goods, and between these and social services, health, education, etc, would be determined by the allocation of major investment and finance through an integrated state budget at national, regional and local levels.
A Publicly Controlled Banking and Investment Network
This co-ordination can be achieved through the overall control of major investment at regional, national and international levels. It would be the duty of the elected state institutions to work out the social priorities according to which society’s resources would be deployed: how much in gross terms of society’s production should be earmarked for personal consumption, new investment, health services, pensions, public transport, education and so on. The overall costs having been estimated, the state budget then allocates the required finance. For example, if it is decided that new hospitals or schools are needed, the necessary finances are allocated for this. The contracts for building the hospitals and schools, providing the equipment, etc, are tendered for by autonomous enterprises. These would then liaise with their suppliers via market mechanisms.
Thus the state, rather than profit-driven private finance, would determine the overall allocation of resources and new investment on the basis of social needs – and this includes determining the overall level of economic activity to ensure full employment.
Control over the allocation of investment capital between economic sectors and regions must be taken out of the hands of private capital, and vested in democratic society. This is essential if unplanned and chaotic economic activity with its booms and slumps, social inequalities and destruction of the environment is to be replaced by activity driven by social priorities.
The obvious way to do this is by taking the banks and major financial institutions into public ownership, establishing an investment bank or network of banks at national and regional levels to provide the necessary finance for the public services referred to above, and credit and finance for the autonomous enterprises.
Again, here we need to be realistic and not utopian. The transformation of the existing financial institutions, with their myriad connections with the global market into a publicly-owned and accountable system will be a complex task. It will not be accomplished simply by socialist commissars marching into boardrooms and "taking over", and installing a committee of bank employees. A serious socialist movement will need to enlist the assistance of academics, economists and other experts in working out a feasible programme of transformation.2 That is why, even now, a serious socialist movement must try and establish a dialogue between workers and sympathetic academics.
Under capitalism productivity increases lead to unemployment as competing firms "downsize" in order to increase dividends and undercut competitors. In the proposed set-up, increased productivity should result either in increased leisure for all, or increased production of other needed goods and services, or assistance to poorer developing countries – or a combination of these. This would be possible because the overall level of production and how it would be distributed among various sectors would be determined by overall planning at the macro level through the allocation of finance by the publicly-owned or controlled banking system.
In contrast to the discredited rigid command economies of the now defunct Stalinist regimes, the detailed interrelations between autonomous enterprises would be regulated by market mechanisms – but within the general framework set by the overall plan.
Public Ownership or Merely Control?
Economic policy in Britain during the Second World War provides an example of how it is possible to combine effective planning of the economy with market mechanisms. Physical controls on the use of resources (steel and raw materials) were imposed so that firms could only secure these commodities if their use was essential to the war effort. More significant was the establishment of state control over capital investment. Thus a firm was only able to secure finance from the banks for expansion of its productive capacity by applying to the Capital Issues Commission, which only granted authorisation if this was considered essential to the war effort, or necessary for the meeting of civilian needs within the overall parameters set by the War Cabinet. Similarly, the building of a new factory or the closure of an existing one had to be authorised, and was sanctioned only if it fitted in with the needs of wartime production. Despite the destruction by bombing, the U-boat blockade, and the strains of war, the system worked – even though the banks and industry remained in private ownership.
This prompts the question as to whether the complete taking of the banks and financial institutions into public ownership is necessary, or merely the sort of public control of capital investment and resources that existed in wartime. However, the vital difference between the situation that existed during the Second World War and the future situation envisaged is that during the war the controls were exercised by a capitalist government (albeit with Labour participation) pursuing a war in defence of British capitalism, and that therefore the capitalists accepted these controls. It is unlikely – to say the least! – that such acquiescence would be forthcoming in the event of a socialist government imposing such controls. Much more likely are attempts at sabotage, destabilisation and military conspiracies. Nevertheless, acting from a position of strength, a future socialist government could buy off, minimise or split the opposition by telling the capitalists: "Either you accept the will of the majority, cooperate and retain some profits – or face expropriation."
Beyond National Boundaries – The European Dimension
The globalisation of the economy and the international division of labour make it impossible to resolve problems on a purely national basis. This is why the policies outlined here must be fought for and implemented on an international scale. It would be utopian to expect that socialist governments could come to power simultaneously all over the world. However, the progress towards an integrated European Union with a common currency and central bank, and eventually an integrated state comprising most of Europe, does make feasible and conceivable the implementation of a socialist programme on a European Community scale.
That is why we must be pro-European and in favour of a common currency. However, this does not mean accepting the Maastricht convergence criteria which are deflationary, and which would lead to further erosion of jobs and welfare. In this context we must support the campaign by European MPs such as Ken Coates and other British and European MPs for rejection of these criteria, and for using new financial instruments for borrowing and investment such as the European Investment Fund, and the establishment of a European Public Sector Borrowing Requirement to create the 15 million jobs target of the Delors White Paper on growth.
Side by side with this, a coordinated campaign by the European trade unions for a continent-wide reduction in average working time must also be part of the campaign against unemployment – as well as an all-European trade union and shop steward campaign for social ownership. To this end the perspective must be the development of an integrated movement on a Europe-wide scale to campaign for these policies.
The Environment – A Red-Green Alliance
Marxists have traditionally condemned capitalism because it acts as a fetter on the development of the productive forces. It was thought a ceiling above which they could not rise had been reached by the 1930s or even earlier. Since the Second World War, there has been a dramatic increase, and despite recessions there is no sign that a ceiling has been reached. Instead, it has become apparent that the untrammelled development of capitalist industrialisation threatens an environmental disaster. This and the exhaustion of non-renewable natural resources may impose limits and constraints on acceptable industrial growth. It is this realisation which has prompted the world-wide development of Green movements. It is becoming increasingly apparent that it is the unplanned and chaotic nature of profit-driven capitalism that stands in the way of a rational use of resources, and sustainable and environmentally-friendly economic development.
The proposals outlined here for overall economic planning through public control of all major investment and for community participation in local enterprises should therefore appeal to the Greens.
An example of how such policies could link with the concerns of Greens and environmental campaigners is the problem caused by the proliferation of private car ownership. This causes atmospheric pollution, destruction of the environment due to new road building (the Newbury by-pass conflict), traffic jams, etc. The obvious solution is the development of an integrated bus and rail public transport system, and the reduction of the number of cars on the roads. At present this comes up against two obstacles. The profitability of public transport is obviously not sufficient to attract private capital. And right wing governments intent on curbing public expenditure will not finance or subsidise public transport. The other obstacle is the vested interests of the car industry. Reducing the number of private cars threatens a loss of profits for motor manufacturing firms, and a loss of jobs for car workers.
Both these obstacles disappear if all major capital investment is socially controlled through a publicly-owned or controlled banking system which directs investment according to a democratically worked out integrated transport policy. Once the desired mix of rail, bus and private car transport and the appropriate road and rail network to go with them has been worked out, the necessary capital investment and finance is provided through a national or European investment fund.
If this integrated transport policy also involves the loss of jobs in the motor car industry, the plans would include the creation of alternative jobs or a general reduction in working time, or a combination of both, with the necessary finance for alternative employment being provided through the public banking and investment institutions.
Another example of how public control over the allocation of capital could help solve environmental problems would be the allocation of finance for research into and development of alternative sources of energy, for example, wind and wave power to replace fossil fuels. At present this does not attract private finance.
The Democratisation of the State
The "state" has been mentioned several times in the sections dealing with overall economic planning. What sort of state is envisaged?
Marxists have argued that the state is the executive of the ruling class. From this premise the conclusion is drawn that socialism cannot be achieved using the existing state machine; that this state machine will have to be replaced by a "workers’ state".
Certainly the existing state machine has inbuilt obstacles to the achievement of socialism – for example the fact that parliament has no real control over the cabinet, which can declare war, introduce a state of siege, etc, without parliamentary approval, the House of Lords, the royal prerogative, etc, etc. A radical restructuring of the state machine to widen democratic control and initiative from below is obviously necessary. But this does not mean that socialists cannot or must not use existing institutions. So long as parliament is still relatively freely elected, and so long as alternative structures have not arisen naturally, as a result of social movements, it is ludicrous for socialists to talk of "destruction of the state machine" and its replacement by non-existent "soviets".
When the Tory Heath government was forced to resign by the miners’ strike in the 1970s, even the most militant miners accepted as natural that the government to replace it should be decided by a general election. As long as parliamentary democracy exists and is accepted by the mass of the working class and middle class, socialists must have the perspective of winning a socialist majority in parliament. True, we must be aware of the possibility, even probability, that reactionary forces would attempt to subvert an elected socialist government by military coup d’états, etc (as in Chile), and that in any case a socialist majority would have to undertake a radical transformation of the state machine – democratisation of the armed forces and police, stricter control of these forces, etc. It is quite possible that the scenario might be a re-run of the English Civil War of the seventeenth century with Parliament versus the modern Royalists in the course of which a New Model Army and new popular institutions would develop. But this does not justify rejecting the "parliamentary road" in advance, or calling for non-existent soviets as if the Russian revolutionary road of October 1917 had universal application.
Instead, a realistic and feasible set of measures to transform the existing state structures in Britain and Europe, including the structures of the European Community, must be worked out side by side with the economic policies and demands outlined here.
These new structures should encompass political plurality and open government, and enable input from grassroots level in decision making, with maximum decentralisation and devolution of power downwards consistent with overall planning. More detailed proposals need to be worked out.
This document does not deal (except insofar as they are subsumed in the economic proposals) with other aspects of policy – on education, health services, pensions, armaments, foreign policy, aid to underdeveloped countries, etc. All these should be the subject of other documents and discussion.
Some Thoughts on Compromise
Discussing the transfer of enterprises to social ownership, the possibility of compensation for existing shareholders was considered. The possibility of control of the banking system as an alternative to outright nationalisation has also been considered. Reference has also been made to the fact that something similar to the wartime control of material allocations and capital investment, might work even if private ownership of large parts of industry and banking were retained. All these would represent a compromise with capitalism. I can imagine such talk might arouse the concern of some comrades. Let us be clear. Of course we would prefer not to have to make these compromises. But in some circumstances compromises may be necessary in order to weaken or neutralise the opposition of big business and its supporters, to win wavering elements to our side. If the opposing forces are evenly balanced, and a drive for outright defeat of the reactionary anti-socialist forces is too costly in human and material terms, then we should be prepared to say to the owners: "Look, if we can reach agreement, we are prepared to offer or increase compensation if you agree to social ownership; we are even prepared to leave you in ownership if you will agree to accept our directives on how the resources are to be used, and our priorities and directives on how and where your capital is to be invested. If you cooperate, well and good. If you don’t and you sabotage our measures, then we shall be forced to take over completely."
This, in fact, was the attitude first adopted by the Bolsheviks. A very clear exposition of the Bolsheviks’ thinking was given by Trotsky in an interview with the American correspondent E.A. Ross:
"Is it the intention of your party to dispossess the owners of industrial plant in Russia?"
"No", he replied, "we are not ready yet to take over all industry.... For the present, we expect out of the earnings of a factory to pay the owner five or six per cent yearly on his actual investment. What we aim at now is control rather than ownership."
"What do you mean by ‘control’?"
"I mean that we will see to it that the factory is run not from the point of view of private profit, but from the point of view of the social welfare democratically conceived. For example we will not allow the capitalist to shut up his factory ... because it is not yielding him a profit. If it is turning out economically a needed product, it must be kept running. If the capitalist abandons it, he will lose it altogether, for a board of directors chosen by the workmen will be put in charge.... By sticking to this principle you can keep up the existing industrial outfit. But in some branches – say the making of motorcycles or tractors – new factories are called for.... Where will the money come from that will build these new factories? We can impose on the capitalist to whom we allow a dividend of five or six per cent on his capital the obligation to reinvest in some industry – a part, say, 25 per cent – of what he receives."3
As we know, this attempt at neutralising the opposition of some capitalists and winning the cooperation of others was abandoned when the compromise was rejected and civil war unleashed. But there is no reason in principle why such compromises should not be offered in future.
Let us suppose that a socialist party has come to power (in Britain or any other advanced capitalist country, or even in several within the European Union) on a programme similar to the one outlined here. It has an electoral majority and the support of a mass movement encompassing a majority of the politically active working class and a fair section of the professionals and academics. It is meeting with opposition from the right, which may, if pushed, escalate into outright sabotage and military conspiracies backed by foreign powers. The cost, both material and human, of meeting and defeating this head-on would be high, and the outcome uncertain. In such a situation, a socialist government might justifiably attempt to implement the compromises mentioned above in order to defuse some opposition, win over waverers, and isolate the hard core reactionaries. This would be from a position of strength, backed by an active popular movement, and combined with measures to dismantle the undemocratic and reactionary features of the state apparatus (for example the House of Lords and the royal prerogative), and replace them with popular-based institutions. From such a position of strength the reactionary forces and big business would be given the choice: "Either you accept the democratic will and cooperate with the measures enacted, or else we shall be forced – with popular backing – to expropriate you completely. We prefer the easier way as this will obviate human suffering; the choice is up to you."
Such compromises, backed by mass support, would be very different to the retreats and "compromises" offered by Tony Blair before the fight has even begun; compromises and retreats on which no forward-going movement can be based, and which, in fact, discourage any popular mobilisation for anything at all.
To Sum Up
What has been proposed are a publicly-owned or controlled banking system and public control of all major investment funds, and some state-owned centrally-administered utilities and industries, with the rest of the economy to consist of cooperatively-owned autonomous enterprises (with community as well as worker participation), small privately-owned firms, and the self-employed. Overall planning will operate at the macro level ensured by the public control of major investments, and within this overall framework market relations between enterprises and between producers and consumers. There will be the democratisation of the existing state structures.
Obviously, not all problems and conflicts of interest would be eliminated. But concentrations of private wealth and power would have been eliminated, and all would participate in decision-making through a combination of local democracy within each enterprise and each industry, and overall democracy at local, regional, national and eventually international level. Devine calls this "negotiated co-ordination". One would not claim the programme outlined here will establish a fully socialist society rather than one in transition (this raises the question of exactly what is meant by "socialism"), but at least it would be a better society than the present one. More importantly, it can present a feasible alternative as a platform around which the left and Greens can regroup.
Notes
1. One of the arguments of the New Labour leadership against committing themselves to renationalisation of the privatised utilities and railways is the cost of buying out the existing shareholders. This is a false argument since the exchange of the existing shares for interest-paying bonds does not involve any actual transfer of money. This, in fact, is what happened when the 1945 Labour government nationalised the railway companies. Shares in the railway companies were simply exchanged for transport stock paying a fixed interest. Left wingers at the time complained that this was too generous, since the private railway companies had not paid out any dividends since the First World War, and the interest payments were an intolerable extra burden on the nationalised railways.
2. The prospect of professional economists – whose job is to justify and help run the present system – assisting in its socialist transformation may, at the moment, seem ludicrous. But in a situation in which the existing system is obviously unable to function, and a feasible alternative has been embraced by millions who have brought a radical and socialist government to power, then a fair number of these "bourgeois experts" would be won over, and would be prepared to cooperate with the new regime. Was it not Marx who said that under some circumstances sections of the propertied classes "would rally to the proletariat", on condition, of course, that the proletariat was serious in its intentions.
3. "A Talk with Trotsky", The Independent (USA), 9 March 1918; reprinted in A. Richardson (ed), In Defence of the Russian Revolution, London, 1995, pp.185-7.
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