New Realism, New Barbarism, Boris Kagarlitsky

A second book of Boris Kagarlitsky that I’d like to present here is “New Realism, New Barbarism”, written one year before “The Twilight of Globalization”. In this book, Kagarlitsky not only attacks vigorously the ideas of neoliberalism, but also those of the ‘new left’.  But more important for our purpose, he proposes a radical left alternative that perhaps sounded far-fetched twelve years ago, but seems far more reasonable today in the aftermath of the big financial collapse, witch is still not over.

Kagarlitsky refuses to believe that the Marxist project has run its course and argues that Marx’ ideas are more timely now than ever. He analyses concepts like ‘the end of the proletariat’ and ‘the end of work’ and investigates the impact of new technologies. 

“Capitalism is in crisis, but so is the left,” says Kagarlitsky in his opening sentence. The crisis of the left was not only a permanent political factor throughout the 1990s, as Kagarlitsky point of, but it continues today, despite the financial collapse. But: “The crisis of the left was moral en ideological rather than social,” he claims. “In the West, in Latin America and to a certain extent in Eastern Europe a whole generation of activists, intellectuals and leaders was inspired by the ideas and experiences of the great radical movements of 1968. That area ended in 1989” (with the fall of the Berlin Wall).

He continues: “Ideologically, 1968 was an attempt to combine libertarian culture with Marxist theory; but culture and style were absorbed by capitalism, Marxism was declared dead and the radical middle-class intellectuals, who led the movement for a couple of decades, surrendered. (…) While the Communist Manifesto now reads as if it was written just a few weeks ago, the political left prefers other sources of inspiration, which are eagerly purveyed to them by bourgeois media. (…) Ironically, it is the very success of neo-liberal capitalism that is making the traditional socialist project as defined by Marx and Engels both necessary and feasible. It is not Marxism but its revisions that are becoming outdated in the area of free market capitalism and globalization”.

In Kagarlitsky’s view, leftists exaggerate the importance of globalization, the weakening of the state and so forth, but they also underestime the importance of the hegemony of the neo-liberal project.

In his introduction ‘The New Barbarism”, given the fact that the free market is disintegrating before our eyes, Kagarlitsky asks a very important question: “It would seem that the time for alternatives has now come. But where are these alternatives? And why have they not as yet been formulated?”

“Advances in technology continue; the only difference is that they cease to improve life for the majority of people. Indeed, technological development becomes a negative factor. With every turn in the spiral of technological revolution, more and more contradictions and disproportions accumulate. Relationships become confused, the structures and systems of rule become steadily more complex, and the processes become less and less predictable. Significant groups of the population become alienated from the economic system, not only in poor countries, but also in rich ones.”

“This means that with every new stage of technological development the number of people who are unable to join in this process will grow, and that, for outsiders, the chance at some point of enjoying the fruits of progress will steadily diminish. In each society there are now millions of people who are doomed to second-class employment, who are excluded from civil society and who, in practice, have been cast aside from the new civilization. These people cannot be called a reserve army of labour, since the new technologies are beyond their reach. The outsiders make up an anti-systemic layer within society; accumulating the potential for hatred and protest, they are by no means always capable of self-organization, and lack their own ideology and alternatives.”

According to Kagarlitsky, the lack of revolutionary perspectives has led to a profound crisis of reformism. “However, it is the development of modern capitalism which makes the traditional programme of the Left not only a real alternative, but quit simply the only alternative. (…) The history of liberalism itself shows that ideas that are thought hopelessly out of date can suddenly make a very strong comeback. (…) Without a broad nationalization of private capital (‘the expropriation of the expropriators’), without overcoming the ‘free market’, it is impossible to carry out even a minimal reform of the health care system or to improve social welfare”.

However, “Most left parties are not afraid of anything so much as of their own traditions. Instead of discussing what nationalization means today, they are wasting their time trying to prove to the ruling elites that there will be not any nationalizations. (…) The lack of alternatives is leading to the erosion of all forms of representative democracy. But in this case the crisis of democracy, unlike the case in Europe in the 1920s or in Latin America in the 1970s, it is not leading to the rapid collapse of democratic institutions. Instead, these institutions are slowly degenerating and dying out. They are increasingly being by-passed not only by economic decision-making, but even by the political process itself.”

The Arrogant ‘Civilization’ and the Barbarians at the Gates

Kagarlitsky warns: “The West should not comfort itself with the hope that the hunger, bloodshed and economic collapse on the periphery will not touch the centre.  The fall of the civilizations of antiquity also began with collapse of the periphery. In this respect, the past has a terrible lesson to teach us. The ‘end of history’ is not a foolish joke by a person who has read too much Hegel, but a real possibility. (…) Humanity as a biological species has survived the fall of a series of civilizations. It will also survive the collapse of the ‘global’ bourgeois civilization of our time.”

“If western Europeans and North Americans are the new Romans, then others of us –Eastern Europeans, Latin Americans, Africans and Asians- who live on the periphery of the Western world must be the new barbarians. This might seem like a bad joke, but people shouldn’t laugh.”

“The Maastricht and Hengan agreements, which for the West became symbols of a drawing together of people, were perceived in the East as new symbols of the division of the continent,” Kagarlitsky explains.

“There are striking similarities between the last triumphs of Rome in the fourth century and the last triumphs of the West in the years from 1989 to 1991. In each case these triumphs were somewhat unexpected; they were preceded not by a series of successes, but by a period of uncertainty and crisis, which was suddenly replaced by a new, aggressive self-confidence. It might now seem that the West has regained its former dynamism. But this is an illusion. (…)he legions might still inspire fear, but they cannot control the situation.”

And “The West cannot change, and has no wish to change, the system under which the prosperity of the wealthy countries of the centre rests on the humiliation and exploitation of the countries in the periphery.”

The parallel with the barbarians continues: “The first barbarians arrive as immigrants and even as honoured guests. They are invited; they are needed for their labour power, as hired workers. And finally, they come as representatives of ‘local elites’. (…)  Very soon, however, the streams of immigrants become so large that no empire could ever cope with them. The ‘centres’ try to shut themselves off from the periphery. Barriers are erected. Once again, the frontier is under lock and key. The struggle against illegal immigration comes to figure among the crucial tasks of the state. But the flood of immigrants can no longer be stopped. Millions of despairing people, pressed onward by other, still more despairing people, break down all obstacles. They organize themselves, learn to resist, become conscious of their interests and rights. (…)

And “Behind the peaceful immigrants come the warriors. The more ‘civilization’ is closed off from the barbarian invasion, the more frequent and bloody the clashes become. By now the forces of the centre are no longer able to withstand the onslaught of the periphery. Civilization collapses. The barbarians remain on their own. They have lost their former respect for their own traditions and values; now they also cease to believe in the civilization whose “weakness” has been exposed. (…) Civilization created the barbarians, the barbarians have destroyed civilization. The dark ages begin.”

“Most people have come to believe in the idea of personal enrichment,” Kagarlitsky observes. “They were searching not for a collective, but for an individual way out of the crisis. But millions of people, even if acting individually, nevertheless constitute a social mass.

The demoralization of the left does not end class struggle or abolish social contradictions. But if socialists themselves do not believe in an alternative, neo-liberalism will be confronted not with political protest but with elemental rage. Were there should be opposition, the crisis of left ideology has created a vacuum, and this vacuum is giving birth to chaos. Albania in March 1997 was like Russia in February 1917, but without Bolsheviks and without even Mensheviks.

The following lines were written with the upheavals in Albania in the late 90ies in mind, but they are still appropriate for the revolutionary upheavals we witness today in the Arab world: “ The only answer is the self-organization of the people. (…) But spontaneous self-organization has its own natural limits. Any uprising is accompanied by destruction. The political powerlessness of a demoralized opposition turns inevitable social upheavals into national catastrophe.”

After Albania there was the Asian crisis, then the Russian rouble collapsed. Latin American currencies followed the rouble. “The collapse of civilization takes place where there is no alternative. (…) In such a situation the spontaneous resolving of contradictions ‘from below’ is accompanied by the collapse of all these institutions and elites.”

“Such epochs demand not moderation but radicalism; not modest but ambitious projects, not slow, gradual steps, but decisive actions. Millions of people whose interests lie in change have neither an ideology, nor a programme, nor organization. Everything that was created earlier has been devalued, has become obsolete or corrupt. It is easy to fall into hopelessness. But it is necessary to move forward.” 

The Left As it Is

“The 1980s were bad years for the left. European socialist parties were already in crisis, but this crisis became incomparably more acute by the mid 1990s, following the collapse of the communist movement. The presidency of Mitterrand in France began with fine hopes and ended in universal disappointment. The failure of the most serious reformist project in post-war Western history makes it imperative to rethink the question of the possibilities and prospects of reformism. No less striking was the collapse of Soviet perestroika, which can also be described as a sort of reformist project, and which had a very strong, although also short-lived influence on all of world left culture.”

“In the late 1980s the will to practice regulation was transformed into mere vague desires, since socialists feel a sort of superstitious dread before the might of transnational corporations. They perceive globalization not as a socio-economic process with a complex dynamic, with structural contradictions and particular strong and weak points, but as an irreversible turning point, an evil visitation, an invasion by an incomprehensible and insuperable force. This has also paralysed their will to resist. Nevertheless, resistance to capitalism continues. From being organized, however, it has become spontaneous, and from being political it has become social. The masses are more radical than the ideologues, who, out of inertia, refer to the ‘conservatism’ of the masses.”

“Right-wing social democrats feel totally impotent. Meanwhile, left socialists and communists dream of becoming rightwing social democrats. They are prevented from doing so only by their own past, which g-has to be overcome at any cost. Wherever left socialists, through the use of radical slogans, abruptly increase the number of their supporters, they renounce their own ideas, hoping to acquire ‘respectability’ and to prove their inoffensiveness to the ruling elites. The net result, however, is that they loose their supporters, after which the ruling elites also loose all interest in them.”

The neurosis of the Left

“One has the feeling that the left has been possessed by an instinct for suicide,” Kagarlitsky sneers.  “The tragic experience of the Russian Revolution lies with a leaden weight on their consciousness.” As a result of the victory of the West in the Cold War, Russia has been transformed into part of the periphery of the capitalist world, “but there are no grounds for speaking of the birth of Russian capitalism. The regime that arose on this basis is best described by the word ‘kleptocracy’ – the rule of thieves”. (…) “When, in 1998-99, the system crumbled and everyone started to speak about the need for nationalization and social change most of the official left was completely unprepared. Socialism was back in fashion. “

“According to today’s way of thinking Eduard Bernstein, who considered that the end was nothing and the movement everything, was excessively radical. Bernstein believed in social change. To the intellectuals of the end of the twentieth century, socialism appears not as an alternative to capitalism, not as a new state of social being and not even as a political movement, but as a set of vales”.

‘Socialist values’

“Donald Sassoon justly notes that the golden age of European socialism coincided with the most successful period in the development of capitalism. (…) The more successful the socialists became, the more dependent they found themselves on the prosperity of capitalism. The crisis of capitalism have invariably been accompanied by severe cries of the left parties (…) Paradoxically it seems that what is good for capitalism is good for socialism as well. But in practice, socialist reforms have not by any means been the simple consequence of capitalist prosperity. In the 1930s and 1940s they played a decisive role in overcoming the crisis”.

“It is quite obvious that the efficiency of enterprises is not equivalent to the efficiency of the system as a whole, and that the efficiency of the economic system does not guarantee the successful development of society. In addition, contemporary capitalism has reached a state where maximizing economic efficiency (taking account of the technological, ecological, social and cultural problems that arise) leads to the undermining of the basis of the very society that requires maximum efficiency as a principle of existence. The absolute 100 per cent efficiency of all the elements of the economy would lead to the rapid collapse of the system as a whole. “

“On the level of ideology, this is perceived as a contradiction between efficiency and justice, or, let us say, between freedom and equality.  Liberals accuse social democrats of ‘inefficiency’, while social democrats accuse liberals of pursuing ‘anti-social policies’. Both are right. Neither can exist without the other, and however they might fight, they coexist quite well.”

“Defending social principles within capitalist society, social democracy acts as this society’s main stabilizer. In general, modern social democracy is the embodiment of the bourgeois social principle. In this sense the continual reverses suffered by social democratic parties in the West and their constant ideological concessions to liberals, are symptoms of a new, very profound and dangerous crisis of society as a whole.”

“At one and the same time the system both ‘works’ (in order to be convinced of this, it is enough to go into a supermarket) and ‘fails to work’ (in order to see this, it can be enough to step out of the supermarket onto the street). This duality must inevitably give rise to the need for change. But what is to be changed? The logic of the bourgeois social principle suggests that the secondary elements of the system must be changed, while its bases are left intact. The trouble is that it is precisely the secondary elements of the system that works best. The source of the problems lies in the system’s bases. It is these that need to be changed, as far as possible sparing the workable modern structures.”

Reforms After the Revolution.

“In essence, what we see today, is nothing other than the crisis of the historical consequences of the Russian Revolution of 1917. The social reforms of the post-war era were nothing other than a sort of reaction by Western society to this revolution. Prince Kropotkin in his time reminded Lenin that revolutionary terror held back the spread of the principles of the French revolution in Europe for a whole 80 years. In Kropotkin’s view, the same would happen with Russian socialism as well. Lenin undoubtedly took another view. The question, of course, was not simply one of terror, but of the structures and practices to which the revolution gave issue. The Soviet model was plainly unsuitable for distribution in Europe.”

“The influence on Western society of the 1917 revolution was enormous, but quite different from what the ideologues of October had hoped. The Russian experience provoked concessions from the ruling classes, and at the same time became an obstacle to the search for a distinctive European model for radical change. A solution was found in reformism, and the success of the reformist efforts was in direct proportion to the seriousness of the ‘revolutionary blackmail’ embodied in the world communist movement and the ‘Soviet menace’. This might be called a ‘deferred revolution’.”

“The great secret of the capitalist system is that, unlike traditional societies, it is not self-sufficient. This is also one of the reasons for the astonishing dynamism of the capitalist economy. In order not to perish, it has to go forward. Growth makes it possible to remove or to soften contradictions that would otherwise tear capitalist society apart from within. The economy has to develop, or it will collapse.  However, permanent growth is impossible, especially since it is prevented by the contradictions of the system itself.”

“A pure, complete capitalism would soon reach the point of self-destruction. This is why capitalism, from its early stages of development, has always needed external stabilizers. Rosa Luxemburg showed the importance for maintaining the equilibrium of capitalism of the role played by the incorporation into the world system of the non-capitalist periphery, where a fully formed bourgeois society has not come into being. In the countries of the centre, the institutions and traditions that remain as the heritage of feudalism have played a no less important role. Monarchy, the bourgeoisified British aristocracy, academic establishments, the Christian religion and the Confucian ‘family’ in the East have not merely been the heritage of the past, but also a guarantee of future stability.”

“The strength of the protestant ethic lay in the fact that while being bourgeois, it was at the same time also traditional. But as modernisation proceeded, the old institutions became weakened or bourgeoisified to the point where they could no longer play their compensatory role effectively. Their place was gradually taken by the labour movement. The potential gravediggers of capitalism acted simultaneously as its support. Capitalism found new props not in institutions inherited from the past, but in newly conceived elements of the future: the welfare state, social democracy and the New Deal.”

“Needing reforms, capitalism at the same time is constantly forced to restrain them in order to stop the process from going beyond the bounds of the permissible, and is also forced to annul the results of these reforms whenever the direct need for them disappears. The neo-liberal wave testifies not only to the fact that social democratic reforms did not succeed in altering capitalism fundamentally, and in the final accounting were defeated by it, but also to the fact that these reforms included a definite (though generally unauthorized) potential for systematic changes. It was precisely for this reason that many institutions of the welfare state were demolished.” 

The New Realism

“The crisis of the left in the 1990s obliged many politicians and ideologues to rethink the role of the labour movement under the conditions of capitalism.  Earlier, the stabilizing role played by socialism in relation to capitalism had either been denied or attributed to the unprincipled actions of social traitors, to the need for temporary, transitional measures and so forth. Now, playing this stabilizing role is seen as the key task of the left and its main strength.”

“The historian of socialism Davis Sassoon is convinced that the leaders of social democratic parties who accept the need for privatization and the free market are not time-savers and political renegades but sages who have realised the true meaning of history. It remains only to reject the idea that socialism ‘is a state of affair which is to occur after capitalism’. Instead, we are urged to recognize that ‘the object of socialism is not the abolition of capitalism but its coexistence with social justice.”

Because the idea of justice is not rejected by rightists, and because the need to improve the system is recognized by the ruling class, the left therefore should not struggle against the bourgeoisie and the right-wing parties, but collaborate with them. But if leftists do not differ qualitatively from rightists, why are they needed at all? The evolutionary improvement of capitalism is fundamentally incompatible with reformism. Evolution demands not social reformers but thoughtful conservatives, competently carrying day-to-day administration. Reform is needed where natural evolution, improving the structures and making routine adjustments of course, is insufficient; where contradictions fraught with ever more serious crises are accumulating. A reformist movement begins by stating that the system is bad. It is something quite different that the reformers are not intent on demolishing the system ‘down to its foundations’, but merely wish to replace important elements of it. A sharp critique of capitalism formed at the staring point not only for revolutionary Marxism, but also for social democratic ‘revisionism’. That is why social democrats succeeded in carrying out reforms in the 1940s and 1950s. Roosevelt’s New Deal in the US also proceeded  from the premise that the system needed to be altered, that society was in profound crisis and that a social explosion could be avoided only if serious changes were put into place. The ‘new realism’ in Europe, by contract, proceeds from approval and acceptance of the present society. The question is not whether this society is good or bad in itself (it is good for some, and for others – not so good). The problem is that no alternatives are being developed on this basis.

“Socialism has managed to play a major role in improving capitalism precisely because of its anti-capitalist essence. If socialism were not a real alternative, if it did not have its own economic and social logic, on the basis of which creating a new society was a real possibility, it would not have been able to develop ideas and approaches useful for the successful introduction of change. Reforming the system required an ideological impulse from outside. If socialist society ceased to be a fundamental alternative to capitalism, if the labour movement lost its capacity for aggressive behaviour and became incapable of determined struggle against the bourgeoisie, it would not be able to curb anyone or anything. Without class hatred there would not be any social reforms or social partnership. As a rule, partnership is not born of mutual sympathies between the partners, but of an understanding that refusing to collaborate could have catastrophic results.” 

“The book ‘The State We’re In”, by Will Hutton (who was called Blair’s guru) has in practice become the first attempt to formulate a positive, more or less systematic new realistic programme, and to show that there are fundamental differences between new realism and neo-liberalism”. Hutton proposed a broad list of ‘feasible and achievable reforms’, such as a written constitution; the democratization of civil society; the republicanisation of finance, the recognition that the market economy has to be managed and regulated, both at home and abroad: the upholding of the welfare state that incorporates social citizenship; the construction of a stable international financial order beyond the nation state.

“If we add to this appeals to nationalize natural monopolies and to campaign for a more regulated international capitalism, the programme of reforms appears genuinely impressive” says Kagarlitsky. Moreover, “If Tony Blair were to carry it out, he would undoubtedly be the most radical social democratic leader of the past decade. But there is no need to criticize Blair for indecisiveness: such a programme cannot be implemented in any case.”

“Hutton is obliged to single out those elements of the new realism that distinguish it from the prevailing neo-liberal doctrines. But it is precisely this distinction that cannot be observed in practice. Left-wing economists constantly criticize their liberal colleagues for regarding society as a soulless mechanism, ignoring the social and cultural aspects of the processes that are occurring. Then, when they say about formulating their own positive programme, they fall into the same error. An ‘optimal’ economic policy is impossible because every social group, whatever it proclaims, strives not for optimal equilibrium, or maximum efficiency, or even for the triumph of justice, but for concrete results for itself.”

“A real ruling class will actively resist any attempts at reform. Even if these reforms are essential to the overall interests of capitalism, any interest group that does not directly benefit from them will do everything it can to thwart them. The counterweight to sabotage by the elites has always been the mobilization of the masses. But this is the last thing that enters into the plans of the new realists.”

The Dialectic of Reform

“By the early twentieth century social democracy had begun to display a duality of theory and practice, and on the other was the socialist utopia. But the one did not simply contradict the other; it also complemented it. Modern reforms and optimum decisions have never inspired anyone to struggle. It was precisely for this reason that the social democrats for so long maintained their official allegiance to the socialist ideal that they were in no particular hurry to attain. Under the new conditions, when believe in utopia has been buried and the Soviet threat does not exist, the reformers are unable to mobilize either supporters or arguments in order to frighten their opponents. The forces of capital that confront the demobilized workers are organized and united by the neo-liberal hegemony. Unless the relationship of forces changes, reforms are impossible.”

The result, as one of the leaders of the Brazilian Workers’ Party justly remarked, is that ‘a moderate but consistent progressive today cannot other be then radical…’”

At a certain point any reformist project faces a choice between radicalization and retreat The logic of new realism guarantees that the choice will be made in favour of rejecting reforms entirely. Kagarlitsky’s looks at several historical examples, like France under Mitterrand, or South Africa under the ANC: “In April 1995 a national congress of the South African Communist Party approved a set of Strategic Perspectives, in which the need was stressed for radical measures to transform society. This document accurately reflected the state of contemporary Marxist thought, and can be counted among the best programmatic texts adopted by left parties during the 1990’s. It called for the creating of a modern decentralised public sector, and for the democratisation of the economy. Criticizing the defeatist illusions of those who considered that globalization had made radical policies impossible, the authors of the document emphasised that on coming to power, leftists through their own actions had to create a ‘new global situation’. For this, collaboration between the countries of the South and international solidarity were essential.”

“However, this excellent document not only failed to help the Communist Party in its struggle against the growing neo-liberal influences within the government, but was not even able to stop communist ministers from implementing neo-liberal polities. The trouble was that globalization and the neo-liberal onslaught were perceived as purely external phenomena, while the analysis of South African society itself remained completely traditional. While indicating that the bourgeoisie was still ‘the main strategic opponent’, the party ideologues pointed to substantial contradictions within its ranks: “There are important tensions between the foreign multinationals, local monopoly capital, and the non-monopoly sector.”

“Attempts to split the bourgeoisie along the lines of these contradictions were naïve precisely because they failed to take account of the new global reality. In fact, globalization is by no means an external factor. Its most important aspect is the hegemony of neo-liberal ideology in relation to the entire bourgeois class.”

The Rise of the Militant Right

“The new realism of the left is not only a humanized neo-liberalism, but also an ineffective one. The triumph of New Labour at the elections on 1 May 1997 (…) Provided striking proof of the fact that the new realism has been an effective means of bidding for power. But the majority of voters in all cases (…) voted in essence not for the policies urged by the left, and not even against the politicians of the right, but above all for change. And change is what the new realism cannot offer and is unwilling to offer. The very point of the new realism lies in is continuity with relation to the defeated rightists. The more hopes the victory of such leftists arose; the deeper and more dramatic will be the eventual disappointment.” It can be argued that these experiences of the Blair governments are now being repeated with the Obama administration in the USA, although under different economic circumstances and the rise of the Tea Party.    

“The presence in office of ‘realistic’ leftists is everywhere accompanied by a rapid growth in the ranks of the radical anti-democratic right. (…) in France, the abrupt rise of Le Pen has been one of the most obvious consequences of 14 years of socialist rule. (…) Traditional left demands are being appropriated by the far right and mixed with racism and nationalism, witch is a disastrous combination for Hungary”, observes the ideologue of the party’s ‘Left Platform’ faction, Tames Krausz. New rightists who enjoy support from the dispossessed sector of the population present ‘a far word prospect than the first conservative government.’

The Elitist Left

“The realists are least of all interested in their traditional social base. They are sure that the majority of the poor and the working class will support them in any case, since these social layers have nowhere else to go. The politics of the new realists are orientated toward winning the support of the middle layers. But the poor, forgotten by everyone, are unexpectedly finding an alternative. The obvious and quite open betrayal of their interests by the ‘left’ forces them to turn to the extreme rightists, who not only make demagogic use of the hardships of the poor, but unlike the ‘realistic’ leftists really do put forward demands that reflect the concrete interests of a significant part of the population”.    

In their speeches, just demands are mixed with nationalist and racist lies to the effect that immigrants and people of other nationalities are the source of all evil. But unless we recognize that, for example, the hostility of the new right to European integration corresponds fully to the moods and the needs of millions of people, we will not understand the reasons for the swift rise in support for politicians such as Le Pen.

“As the left turns elitist, the right becomes populist. In the centre of the political stage, the place of the weak left is taken by the strong right. Such is the logic of the political struggle. (…) The left lacks the resolve to talk about bureaucracy. The far right talks about it. The left tries to show that international institutions are playing a beneficial role. The far right denies this. The masses listen, and quite soon come to understand that the propaganda of the left contains no less demagogy, at the very least, than that of the right.”

“Since the collapse of the Second International, the left had never been so demoralized and discredited,” observes Kagarlitsky. “It is instructive to observe that in no country of the world had any attempt to found a new party on the basis of new realist ideology been successful. The parties that have embraced this ideology have invariably been old organizations shamelessly exploiting their traditional social base, which continue giving them support solely in memory of the services (revolutionary and reformist) these parties have rendered in the past. (…) “What confronts us, is not a new phase in the development of the left movement, but merely the shameful last stage in the degeneration of bureaucratic centralist organizations. They have long ago lost any notion of the reasons why they were once set up.”

What About the Workers?

“However great the loyalty of the traditional supporters of left parties might be, it has its limits. This is recognized by the politicians themselves. The moderate ‘realists’ wait in terror for a revolt by their own supporters. Meanwhile the radicals, seeing that this revolt cannot possibly happen, lose all respect for the proletariat.”

“While loosing faith in the historic mission of the working class, the politicians have by no means ceased to believe in their own indispensability. But if the traditional idea of struggling for worker’s liberation loses its hold, it becomes unclear for whom the party exists, and whom the parliamentary factions represent. One of the ideologues of the Spanish United Left, noting that the majority of workers preferred social democrats and even rightists, recommended that leftists orient to ‘sectors of the youth and of the middle layers – that is to say, to groups of the population that at a particular moment can be motivated by ideology. In Russia, Aleksandr Buzgalin is certain hat society ‘is not simply divided into owners of capital and hired workers’. Of no less and perhaps even of more importance is the ‘contradiction between conformists and those who are capable of joint social creativity.”

“It is true that the discipline of a capitalist factory is a poor school for self-management and democracy. But non-conformism does not equal revolutionism either. In societies where innovations are becoming a requirement of the market, non-conformism may be no more than a manifestation of a sort of meta-conformism. Cooperatives and various experimental creative and productive associations give birth to their own norms and conventions, which at times are no less rigid than the old industrial culture. The overwhelming majority of workers, doomed to struggle for their survival, simply cannot allow themselves the luxury of ‘free creativity’.”

“Social democracy is also becoming more and more remote from the working class. Socialist parties, Sassoon notes, have come increasingly to be dominated by middle-class activists and as a paradoxical result have come to reflect the class basis of post-industrial society more accurately. (…) In addition, the average Labour Party member is considerably richer than the average voter.”

“In most countries workers continue from inertia to vote for ‘their’ parties, but only because they have no alternative. (…) ‘What has been lethal for the left is the fact that its parties have been avenues for social climbing on the part of some of their members, and not organisms for change.”, wrote the Spanish commentator Enrique del Olmo:

These practices and many others have created a left that is uncritical, apolitical, domesticated, deideologized, and lacking in political initiative both on the general and the day-to-day level. This is a left that passively contemplates the fact that it is in retreat, that it is pedalling without knowing where it is going, and that despite being aware of all this it is helpless to do anything about it.”

“This is true not only of social democracy, but also to a significant degree to the radical left, including the extra parliamentary and even the revolutionary left. These latter currents are the target of the ironic remark by the Spanish writer José Jiminez Lozano to the effect that here are obviously two sorts of ‘reds’ –‘the earlier type, who had ideals but nothing to eat, and the others, ‘who were called “reds” for some other reason, but who couldn’t really be reds.’ Membership in a strong left arty opens certain prospects for personal success even if this party is in opposition. Left organizations serve as mechanisms providing vertical mobility for educated and active sons and daughters of the lower strata of society and for a section of the middle class. There is nothing intrinsically evil in this, especially since the left should not demand that its leaders and activists totally renounce the pleasures of life for the sake of rendering ascetic service to an idea. But these circumstances should be kept in mind. During the period of crisis of the political movement the activity of the left opposition is at risk of degenerating into another, more refined, variety of conformism.”

“Te de-ideologization of the labour movement was accompanied by an inevitable erosion of the moral demands made on leaders and intellectuals. As the centre of gravity shifted from the workers to the middle-class, the traditional system of norms and values gradually disappeared. The left movement became ripe for the new morality in just the same way that the Christian Church by the early sixteenth century had become ripe for the Reformation. The contempt for workers shown in intellectual left circles was matched only by the contempt for these circles shown by workers. And however numerous the new middle class in Western countries might have become, it proved incapable of developing its own morality. The natural rejection of an exclusive orientation toward industrial workers that took place as the world of labour underwent profound changes did not lead to the appearance of a new, broader ideology. Instead of trying to unite various groups of the exploited around itself, the left came to express the naïve self-love of the ‘broad’ middle class. The only ‘unification’ that can be achieved on such a basis is between intellectuals and bureaucrats”.

“Setbacks in themselves are not so terrible. Far more dangerous is the inability of the left forces to respond correctly to these reverses. In politic, knowing how to retreat means knowing how to sacrifice tactical positions for the sake of strategic goals, and understanding that it may be necessary to reject power in order to preserve the movement. Not least, it means remaining true to one’s goals and principles in a period of setbacks.” 

De-Revising Marx

In the second Chapter Kagarlitsky urges us to return to the basics of classical Marxism, starting with an explanation of what revisionism is and a quit humorous comment on the attitude towards Marxism: “The more life there is in Marx’ views, the more natural the desire to bury him appears. No one strives to ‘bury Hegel’ or refute Voltaire, since it is clear even without this that Hegelianism and Voltairianism belong to the past. The ideas of the philosophers of the past have become dissolved in modern theories. With Marx this had not happened. Nor can it happen, since the society which he analysed, criticized and dreamed of changing is still alive. In this sense the end of Marxism can come only with the end of capitalism.”

“In order to become moderate, socialism had to pass through revisionism. If Marxism belongs to the past, then its harsh conclusions have lost their moral significance for contemporary society. All that remains of historical socialism is a set of general values, which everyone is free to interpret as he or she wishes. It is quite obvious that capitalism is changing, and it is therefore useless to wage war on it with the help of quotations from book written in the last century. Neither moderation nor compromise are sins in themselves. Under particular political conditions any serious party is doomed to have to seek compromises. In politics, one must not fail to take into account the relationship of forces.”

“But people ideologize their practice in their own particular fashion, and turn justifications of present-day actions into the ideology of the future. This means that a political conjuncture that is unfavourable for us is turned into an ideal state, a forced deviation into a wise strategy and weakness into valour. Were this has occurred, defeat becomes irreversible and tactical weakness becomes strategic impotence, while the goal of the movement, instead of being to transform society, becomes a more successful adaptation to it.”

But “Historically, revisionist discourse was very important for the development of socialist thought. Bernstein’s revisionism was the starting point for Lenin, Trotsky, Gramsci and so forth. (…) According to Inozemtsev, ‘after the Great Depression and the Second World war Western society underwent changes which (…) had by the mid 1960s placed this socium outside the boundaries of the capitalist system. ‘ Western society was said to have entered a transitional phase, and all subsequent changes would take place ‘in evolutionary fashion’. In the course of this evolution all the goals all the goals of the former Marxist socialism were being achieved, but without upheavals, without class war, without expropriations or other unpleasantness, though not, of course, without social and political conflicts, the possibility of which not even the most moderate writer would deny.”

“Technological changes gave birth not to the economy of free creativity, but to the economy of cheap labour power. The intensity of exploitation began to increase. The dependency of workers on management began to grow, and wages fell not only in developing countries and the former communist states, but from the mid 1990s in a number of western countries as well. It was, as German economist Winfried Wolf formulated ‘the return of normal capitalism’.”

“Revisionist theoreticians have preferred to ignore neo-liberalism, or to present it as a temporary phenomenon which nearly renders the generally harmonious development of society more complex. But neo-liberalism is not a ‘zigzag of development’, not an error of the politicians, but the trunk route of the evolution of capitalism. Its essence lies in the fact that bourgeois society can no longer allow itself to maintain the social achievements of previous decades. … As capitalism becomes a global system, it is inevitably becoming both harsher and more profligate.”

The Time of Reaction

“The reaction that set in after 1989 differed from all previous reactions in that it succeeded in presenting itself in the guise of progress and modernisation.”

“Everything changed radically from the mid-1980s. For the first time since the nineteenth century the bourgeoisie acquired an attacking ideology. Neo-liberalism succeeded in presenting itself as a force aiding modernization and dynamism, accusing the labour movement, the left and the trade unions of conservatism, of hostility to technical progress, and of a desire to sacrifice the future for the sake of immediate prosperity and ‘privileges’. At the same time, confidence in progress itself had been shaken. The environmental, feminist and post-modernist criticism of the mainstream ideology was based not on a more radical concept of progress, but on a profound doubt in progress as such. This represented a natural and understandable rethinking of the historical experience of the nineteenth and twentieth centuries. But for the left, this change of mood in society was catastrophic.”

“As the theoreticians of the German Party of Democratic Socialism have noted, during the 1990s neo-liberal propaganda has managed to depict as obstacles to modernization and progress precisely those structures and relationships that had earlier been cited as the proof of the ‘civilized’ nature of capitalism.  This is connected with the fact that the period of social reaction on the world scale has also been a time of technological renewal. This in itself is nothing new; something similar occurred in the first half of the nineteenth century, during the initial stages of the Industrial Revolution. Only later, and in hindsight, was it to become clear that new technologies do not strengthen the positions of triumphant reactionary elites, but undermined them.

After the workers’ movement had grown in strength thanks to the rise of modern trade unionism and the appearance of the first socialist parties, the experience of the century that followed had become fixed in a particular piece of labour movement mythology. Kagarlitsky points out two extremely dangerous errors: “In the first place, workers and their ideologues become convinced that any technological and industrial development strengthened their position. In the second place all these people, whether socialists or communists, reformist or revolutionaries, viewed history as a rectilinear process of constant movement towards more ‘advanced’ forms of social organization.”

The result was that “The collapse of the historical illusions of the left and the labour movement has been accompanied by an unprecedented crisis of values and loss of self-confidence, although the only strategies that were really defeated were the rectilinear ones based on a mechanical vision of social progress.”

Escaping from Utopia

“Without the traditional principles of socialism, the left no longer has clear criteria for judging what is progressive and what is reactionary, or even any serious idea of the role which ‘national, ethnic and cultural’ movements play within the system of world order/disorder. Even the fact that most such movements in Eastern Europe have embraced neo-liberal economic programmes does not embarrass today’s Western leftists. In the eyes of these people, manifestations of a new barbarism are becoming indistinguishable from the struggle for the rights of workers.”

“Today people are willing to fight and die for their ethnic and national identities. However, unlike the early and mid-twentieth century, few will fight for socialism. Only when new movements for social justice and postmodern socialisms have sunk deep roots around the globe and become weeded to people’s most basic needs an interests will we have a powerful banner that mobilizes individuals to dramatically change the world they live on.”

And, importantly: “The masses who made the Russian Revolution of 1905 and 1917 were not inspired by Marxist ideas either. People followed the Bolsheviks not because Lenin and Trotsky had a more developed theory of socialism, but because the Bolsheviks put forward the slogan of peace, land and social justice. What works is not ideology but a concrete programme.”  Moreover: “So long as the struggle against oppression is not the same time a struggle for a new society, it is doomed to defeat. Indeed, the reality is even worse; the discrediting of progressive utopianism in mass consciousness can have only one, inevitable result: its place will be taken by a reactionary utopia.”

“Unless there is a clear idea of a goal, it is impossible to work out either strategy or tactics. Lenin considered that the main service rendered by social democracy at the end of the nineteenth and the beginning of the twentieth centuries was to unite Marxism with the workers’ movement. This explosive mixture really did shake the world. Lenin, as a genuine follower of the traditions of the Enlightenment, was convinced that proletarian consciousness would readily penetrate the masses with the help of the intelligentsia. In reality the process was mutual. The masses could not elaborate theory, but without links to the mass movement theory becomes ossified. When Marx’s ideas became the ideology of the workers’ movement they underwent a transformation, and became Marxism.”

“It is entirely natural that a theoretician is obliged to be more radical than a practical activist. Still, Marx made a distinction between compromises in politics and in thought. If compromise is allowable for a politician, a thinker has to maintain a ‘simple moral tact’ where it is concerned. That which is possible is not always obligatory. Politics is the art of compromise, and here the possibility of a divorce between theory and practice is already present. The concrete actions of Lenin, Trotsky and Gramsci did not necessarily flow from their theoretical constructs (this is illustrated in compelling fashion by the contrast between their writings in periods of action and the texts they composed during periods in prison or emigration). But the practical activity of the representatives of classical Marxism nevertheless remained closely linked to their theoretical quests. In the post-war period this link was severed.”

“Marxism has indeed suffered a historical defeat. However, this did not come at the end of the 1980s when the Berlin Wall fell, but much earlier, when theory again became detached and isolated from the movement. This did not happen only in the East with the founding of Stalinist ‘Marxism-Leninism’. As early as the 1930s Marxism in the west became the province of academic circles, while for social democracy and the communist parties the general ‘classical’ formulae remained no more than dead letter.”

“The socialist project has to be translated into a language people understand. This is not the language, cultivated by Western intellectuals, of postmodernist radicalism and multiculturalism. It is the simple, but blunt language of classical Marxism. (…) Marx’ decisive contribution to political theory lay in the fact that he showed the necessity and possibility of abandoning utopian day-dreaming in favour of seeking practical change. Rejecting pragmatism, the Marxist tradition proclaimed the need to unite idealism (in terms of fidelity to aims and principles) with the political realism of concrete actions. (…) In effect, the left is facing the same need that confronted it a hundred years ago: to take the step from utopia to theory, from dreams to reality.

Reclaiming the Tradition

“The weakness of the left was a real fact of political life in the 1990s. Anti-capitalist politics must therefore take on a defensive character. Resistance to the offensive of capital is the message of the moment. But this resistance has to be strong and effective. It has to be based on a clear and sober understanding of the situation, of the left’s own capacities and of the goals of the adversary. Ideological concessions weaken one’s resistance. In politics, clear goals and confidence in the justice of one’s cause are indispensable conditions for victory. Concessions do not open up new possibilities for making advances. The paradox of the late twentieth century lies in the fat that the very weakness of the left obliges it to be uncompromising. With the present relationship of forces, there can be no ‘new consensus’ or ‘conditions, favourable to workers, for a new social compromise’. Everyone who dreams of reforms must first struggle to change the relationship of forces, and this means becoming a revolutionary and a radical in the traditional sense”.

“All consciousness is limited. There cannot be complete knowledge. A return from ill-defined and ambiguous post-Marxist theorizing to the tough, simple truths of classical Marxism is an essential condition of effective political practice, even if we now have an exquisite understanding of the restricted nature (but not falsehood) of many of Marx’ original premises”.  Indeed, “De-revising Marxism does not mean being dogmatic. The revolutionary socialism of the early years after 1917 was innovative but anti-revisionist. A call to embrace traditional values had nothing in common with rejecting dialogue or leading a hermetic existence. The active affirmation of tradition requires interaction with the outside world.”

“From the time of the Reformation, neo-traditionalism had been the ideology of revolutionaries. Martin Luther, calling for a return to the Bible, was a typical neo-traditionalist. Under the slogan of restoring traditional piety, the English puritans carried out an immense social overturn, opening up a new era in the history of their own country and of Europe. This traditionalism had nothing in common with conservatism. In the name of traditional values and principles, the world that had perverted and rejected these principles was repudiated. The result was change and innovation.”

“A return to traditions is among the most effective of mobilizing methods. Tradition is what is familiar, understandable and accessible to the masses. At the same time, it stands opposed to the soulless pragmatism and egoism of the elites. Except in relation to traditions, new ideas are not assimilated by popular consciousness. Revolts against injustice always rest on the traditional ideas of justice.”

However, under new conditions tradition cannot be defined by traditional methods. Kagarlitsky looks at traditional Islam: “Fundamentalism has little in common with traditional Islam, which suffered defeat in its collision with the West. (…) In societies which have not been radically modernized, there is no fundamentalism. Only where tradition has been undermined or destroyed has fundamentalism been able, as it were, to construct it afresh, in a shape appropriate to the realities and opportunities of the late twentieth and the early twenty-first centuries (…) Islamic fundamentalism … is quite unlike a closed system that rejects everything ‘alien’. On the contrary, it continually assimilates new methods and new experience.  It is open to the word, but open in an aggressive manner, on the offensive. Here leis its real danger, just like the danger of the new European nationalism, which cannot be explained by using simple references to traditions of populism and fascism surviving in this or that country since the 1930s. Offensive action sharply changes the meaning of tradition, which is no longer simply preserved but affirmed. It is renewed, and enriched with new experience.”

“Those who appeal to tradition include not only the insurgent poor, but also elites striving to regain lost positions. Neo-liberalism is one of the most significant examples of neo-traditionalist ideology. Needing to counter socialism with their own offensive project, the ideologues of the financial bourgeoisie did not start inventing new ideas. On the contrary, they turned to their traditional, classical programme, finding inspiration in the works of the theoreticians of the golden age of capitalism. Meanwhile, neo-liberalism and the neo-classical school in economics are nothing like a mechanical recycling of the old liberalism. Even Adam Smith’s ‘invisible hand’, to which continual references are made, was by no means the British economist’s central idea. “

“At the same time as the reactionary forces are making active use of tradition, the left has proven incapable of doing this, since it has lost its main tradition, of active struggle against capitalism. If socialists want to become a real force again, they must also return to their best basic propositions. This is gradually beginning to be recognized by theoreticians, although the politicians still reject it.”

“A return to Marxism means above all restoring the centrality of class in political thinking of the left. Classical Marxism never argued that the contradiction between labour and capital was the only contradiction present in society, or necessarily the most acute. Nor did Marx and Engels assert that society was divided totally and without exception into classes. … Marx and Engels merely asserted (and quite rightly) that the contradiction between labour and capital was crucial, and that without it other problems and contradictions could not be resolved. Class reductionism has in fact been a real characteristic of the Marxist tradition.  … Meanwhile, a secondary contradiction is no less real than the main one, and understanding the one without the other is impossible.”

“Many sociologists in the west note that class no longer plays the same pervasive role as before in society and in people’s lives, especially since people define their social status more through consumption then production. (…) Nevertheless, consumption is impossible without production, and de-classing is impossible without class-structures. The contradiction between labour and capital remains central and fundamental despite appearance of a multitude of new problems and the exacerbation of old ones.”

The Return of the Proletariat

In Chapter 3, Kagarlitsky explains: “Rapid cutbacks in jobs in the industrial developed capitalist countries have provided the starting point for sociological theories about ‘the end of the proletariat’, and even about ‘the end of work’.”

And: “Among leftists, an enthusiastic interest in new social perspectives linked to changed technologies had been superimposed on disillusionment with the historic mission of the working class. It was wrong”.

Post-industrial Mirage

“Scepticism concerning the potential of the working class has been a perfectly natural result of the series of defeats not only for specific participants, for parties and trade unions, but also for the traditional class politics of the left.” Kagarlitsky quotes the New York Left Business Observer:

‘People have been worrying about machines replacing human labour since the beginning of capitalism. Yes, machines do replace workers –but employment nonetheless continues to expand, quadrupling in the US over the last sixty years. In most parts of the world, aside from Europe and Africa, employment is growing. Throughout history, capitalism has constantly draw new people into paid labour, through the demand for jobs outstrips the system’s capacity to provide them.’

“Abrupt rises in the technological level of production have almost always led to the devaluation of labour power and to increase employment. (…) At a certain point even very sophisticated machines start becoming uncompetitive with very cheap workers. (…) The end of work is an idea of bureaucrats.”

“Fashionable sociological theories aside, traditional industry and the working class are not disappearing from the modern world. What is happening is that the world division of labour is undergoing dramatic changes. Traditional industrial production is more and more being transferred from the countries of the capitalist centre to those of the periphery and semi-periphery. Even in the West, the traditional worker remains a typical figure. ... 27 per cent of the economically active population (in France) are industrial workers.”

“A high proportion of the growth in service employment is due to the contribution of those in such employment make to the production of goods in final consumption. It is, in other words, in large part an expression of the complexity of the division of labour. The coordination of modern industry, geographically dispersed and incorporated in an international division of labour, involves a high proportion of employees distant from the direct manufacture of goods but nevertheless integral to their production and consumption.”  

“The organization of labour depends not only on technology, but also on the relationship of forces between labour and capital in the enterprise. The efforts by large corporations to avoid having workers concentrated in large plants, is quite understandable. Modern methods of organizing production, such as lean production, re-engineering and outsourcing, are not aimed at forcing out traditional workers but at controlling them and forcing them to work more intensively. All this is evidence not of the disappearance of the working class, but of the restructuring of the system of hired labour and of the simultaneous intensification of its exploitation. The threat of unemployment also forces people to work more for the same money.”

Technological Aristocracy

“Noting the growth in the exploitation of traditional workers, whether blue collar or white collar, economists have turned their attention to the fact that within the framework of large corporations a new layer of ‘technological aristocracy’ is arising; in part, these people occupy the same place as the ‘worker aristocracy’ of the early twentieth century.” 

“However paradoxical it may seem, this could again strengthen the position of the workers in relation to entrepreneurs. The more the process of labour becomes individualized, the more difficult it is to find replacements for the workers involved. Economists note that the new technologies and the accompanying forms of organization of labour are making management more difficult.”

“Companies now rely more on networks of consultants, business service providers and suppliers; vertical integration is no longer regarded as, in itself, the best option for the coordination of economic activity. As companies have moved in this direction, however, they have had to learn to coordinate the activities of growing numbers of often physically distant providers over whom they lack direct, bureaucratic control.”

To show the limits of the opportunities for super-exploitation, Kagarlitsky quotes Simon Head: “The skills of the technical aristocracy who design software and reengineer work forces will remain in strong demand among corporations that cannot afford to lag behind in the competition in technological innovation. But since such skills are difficult to acquire, they will remain in short supply, and their price will continue to rise.”

“Mainstream economists see this problem as purely organizational. However, it poses a serious challenge to the very system of capitalist management. Effective use of worker’s potential becomes impossible unless there is a serious redistribution of power within the enterprise. (…) The contemporary equivalent of craft knowledge is professional knowledge, and there are many examples of private firms that are quite successful despite the fact that most of their employees are professionals who are well insulated from the normal forms of coercion.”

“The paradox lies in the fact that workers themselves and their organizations still have not realized all the advantages that have arisen as a result of the situation, and have not been able to unite themselves in order to exploit these advantages to the fullest.” (my emphasis)

“In describing the perspectives of the new technological elite, the Russian political scientist Alksandr Tarasov argues that Marx was too hasty in identifying the anti-capitalist revolution with industrial workers, since ‘the revolutionary subject has to appear, as might now be said outside the System.’ Industrial workers cannot break through the limitations of the logic of the capitalist factory. It was not peasants who destroyed feudalism, but the bourgeoisie, which despite being hemmed in by the feudal estate, was not directly exploited by it. In precisely the same fashion, the anti-capitalist revolution will be consummated when the new technological elite to which the bourgeoisie has given birth sets out to get rid of it”.

“The owners of capital try to establish control over the creative process, and this inevitably provokes opposition. The use of traditional capitalist methods of control over workers within the firm is rendered more difficult by the fact that the computer break down the boundary between work and leisure, free time and work time, since it is at the same time a means both of production and of leisure. Some ‘serious’ programmes include game-like elements, and vice-versa”.

“The computer specialist Yury Zatuliveter comes to a similar conclusion, arguing that the tasks of technological development impel the people carrying them out to take radical positions. ‘The main task associated with computers’, he maintains, does not consist in devising more perfect programmes, but in transforming society.” (…) Innovative ideology is the result of a historical encounter between the radical intelligentsia and a mass social layer that feels the need for new ideas. In this case, no such encounter has yet occurred.”

“As the new economic sectors develop, the position of the technological aristocracy that is concentrated in them becomes more and more vulnerable. The technological revolution of the late twentieth century is developing according to the same logic as the Industrial Revolution of the eighteenth and nineteenth centuries. This is the case not only with the production of computers and other modern equipment, but also with the intellectual products themselves. The demands by software firms for increases in productivity of labour set in train the same processes already witnessed in the traditional sectors.”

Here, Kagarlitsky quotes Zatuliveter:

‘Unlike industrial forms of the design and production of equipment, the production of programmes has remained in the phase of artisan labour, with the predominance of the human factor making the volume of production directly dependent on the number of adequately qualified people who can be attracted. … The resolving of this problem will lead to the collapse of artisan (extensive) forms of software production, and will result in a shift to industrial (intensive) forms, with the volumes of production expanding mainly through increases in the productivity of labour.’

“A concentration of production is taking place, with the effect of bringing more and more programmers together in the staff of particular firms. Within the milieu of the programmers, the need of self-organization is increasingly coming to be felt, along with an understanding of these workers of their subordinate and dependent position. The exploitation of their labour is becoming intensified as well. Resistance to the supremacy of capital is growing. All this is strikingly similar to the processes described by Marx and his pupils with reference to industrial capitalism.”

“As the breadth of application of the new technologies increases and the number of specialists able to use them grows, the pressure on the workers in the modern sector increases as well. The logic of capitalism demands that the traditional factory discipline be extended to include them? However, replacing one specialist with another remains a relatively difficult matter, since the work itself is becoming more and more individual in quality, and training workers needs time. The result, as Block notes, is that ‘managerial coercion tends to be weakened because of the need to maintain continuity of production’. Moreover, ‘supervision itself can become problematic at high levels of skill; management acting unilaterally might simply not be able to figure out the most efficient way to organize the labour force and the distribution of the tasks. Workers of the new type are more capable of resistance, including on a individual basis, and also of self-management. The greater the pressure on such workers, the more rapidly they become conscious of their role in society, and of the contradictions between their own interests and the logic of the development of capital.”

The Crocodile Phenomenon (no, not Pat)

“By the end of the 1980s no more than 17 per cent of the US workforce remained in industry. (… ) Because of the higher productivity of modern industrial technology, the spread of wage-earning underway will never lead to a nucleus of industrial wage labour as great as that in Europe and the united States, where as much as 50 per cent of the labour force was at one point employed in industry. The level will probably never be attained in the industrializing third world, and this has led to the suggestion that the industrial working class will not have such an unifying and dominant role in the whole labour movement as was the case in early industrialized countries.”

“The forecasts of an uninterrupted decline in the role of industry in Western societies are not being born out either. As a rule, such processes cannot be linear. (…) (Industrial employment is indeed declining, but to an even greater degree it is being restructured.

“In the mid 1990s more and more white-collar jobs were being lost. The automation of banks and service enterprises meant that fewer and fewer clerks were needed, while more and more technicians were carrying out essentially the same functions as their colleagues in industry. Researchers observed that the myth about the transformation of the services area into the main motive force for economic growth was based to a significant degree on its technological backwardness compared with industry. At the same time as industry cut its workforce through the rapid introduction of new technologies, ‘white-collar productivity grew only slowly or even declined.’ By the mid-1990’s, however, firms had learned how to use information technologies to reduce the number of white-collar and middle management jobs. That is what downsizing is about. The relationship between industry and services was again changing, this time to the advantage of industry.”

“Production is more and more dispersed, but it is impossible to get by without the blue collars. The traditional industrial worker still remains one of the key figures in the modern economy. (…) The spread of the new does not by any means signify the disappearance of the old. All that changes is the relationship of forces and the distribution of roles between them.”

“The dinosaurs died out, but crocodiles survived and found a place in a world populated by mammals. Something similar is happening with industry as well. Its role in the world has changed. The traditional sectors will no longer serve as the motor of economic growth in most of the developed countries. The working class will no longer be the most massive class in society (although on a world scale it has never had this distinction). But this does not mean that it has no future. The survival and development of the working class in a changed society is just as natural as the survival throughout the twentieth century of a multi-million-strong peasantry.”

Proletarization

“The exploitation of hired labour has grown more intense in virtually all sectors of the economy. The new hire-and-fire labour market made even the middle class terribly insecure about their jobs and future earnings, a fear which is wholly justified, observes Will Hutton.”

“The technological revolution of the late twentieth century has passed through the same basic stages as the Industrial Revolution of the nineteenth century. (…) The large scale introduction of machines at that time led to a dramatic weakening in the positions of organized manufacturing workers. The old unions and guilds were destroyed, but modern trade unions rose up in heir place.” (…) The transition from the manual processing of data to computer processing amounted to a thoroughgoing revolution in the organization of labour.”

And here’s a passage I relate to very well: “A natural consequence of the technological revolution on a world scale is the proletarianization of the ‘free professions’, and the rise of a ‘new technological proletariat’ often employed outside traditional industry.” (…) In terms of their economic position these workers are proletarians; in their ambition they are ‘unsuccessful petit-bourgeois’; in their lack of civic commitment they are lumpens; and in their level of education and specialized knowledge they are ‘the intellectual elite and heralds of the future.’ The same applies to the ideology of the ‘scientific proletarians’:

“It is easy to see that the changes of the late twentieth century have had a disorganizing impact both on traditional and on post-industrial workers. The former have lost their self-confidence, while the latter are swiftly losing their privileged, elite status. Alienation and false consciousness are the quite natural results of people’s inability to adapt themselves to new conditions. But such a state of affairs cannot continue indefinitely.”   

“Many processes typical of Western Europe in the early twentieth century are being repeated. But it is impossible to step into the same river twice. The failures of the European trade unions and of the left forces that have tried to mechanically reproduce ideas and actions that have never led to success are the best proof of that. It is in the process of overcoming setbacks that the movement can create new organizational forms and develop new leaders.”

In classical Marxism the working class consisted mainly of white males, irreligious but schooled in the traditions of Christian culture. Kagarlitsky makes the point that “It is not the proletariat that is vanishing into the past, but the classical concept of it.”

“Analysing the global expansion of capitalism, Immanuel Wallerstein is even inclined to assert that is on a world scale is not only failing to disappear, but on the contrary is growing at unprecedented rates. (…) The picture, however, is rendered dramatically more complex by the fact that proletarianization does not automatically mean the creation of the proletariat as a class of hired workers in the Marxist sense.  The majority of the workers who have been drawn into the capitalist economy during the last quarter of the twentieth century are semi-proletarians. Moreover, this intermediate state is not necessarily temporary and transitional; it is supported and reproduced by the system. It is here that the reasons for the weakness, inconsistency and contradictorily nature of many anti-systemic movements must be sought”.

Informal Work and Traditional Sector

The world of modern-day labour is complex, heterogeneous and hierarchical. Depending on the technological level of production, workers may have quite different living and working conditions, and different requirements for the reproduction of their labour power. “Finally, the rapid growth of the informal sector has enormous significance for the modern economy. The millions of people who are engaged in informal and often illegal economic activity are just as essential a part of the world economy as yuppies from Wall Street,” says Kagarlitsky, and further, “Both the modernized and the traditional sectors have their own processes under way, often proceeding in parallel. Each sector is experiencing its own social differentiation, and provides the setting of the development of distinct ideologies and forms of political organization”.

“The growing complexity of the economy also gives rise to a number of new contradictions within the world of labour itself. The American researcher Norma Fields writes of ‘the polarization of the global workforce into elite, high-stress work at the top and sweatshop labour at the bottom, leaving a growing middle to be un- or underemployed for more and more of its life. Conflicts of interest arise between workers in the modernized and traditional sectors, and between skilled and unskilled workers.”

“However, the contradictions that arise from the heterogeneity of the labour scene must inevitably result in disagreements among trade unions and worker’s political organizations. (…) In the service sector the level of exploitation is even higher. The appearance in the US of massive numbers of cheap service jobs against a background of declining numbers of expensive jobs in industry speaks for itself. However, these differences are extremely important from the point of view of the ideology and organization of the labour movement.”

“On the political level, the contradiction between traditional and post-industrial labour is expressed in the schism between the old and new left. While members of the old left are demoralised and are loosing confidence in the future, adherents of the new left are disorientated, and lack a clear strategy. Possessed with the idea of renovation, they are generally unable to develop a political programme and ideology that can ensure a firm bond with workers in the traditional sector.”

“Just as the new forms of labour cannot totally supplant the old, the new left culture has no chance if it arises as the negation of the old. On the contrary, the task of the left politicians and ideologues is to achieve the integration of the great traditions of the labour movement with the new trends that are becoming increasingly evident as the turn of the century approaches. The political and economic programme of historical socialism must not be rejected by the left movements of the new epoch, but on the contrary, needs to be built into a new, broader and more complex context.”

“Late capitalism both confirms the most important conclusions and forecasts of Marx, and at the same time gives rise to new facts, new contradictions and a new social experience not reflected in any way in classical left theories” (…) The increasingly complex structures of labour mean that the labour movement itself, its principles and organization and its methods of activity all have to change. This is a genuine problem, answers to which have to be provided not by postmodern or even Marxist sociology, but by the experience of real struggle.”

“The new epoch demands that leftists carry out another rethink of their role in society. The politics and ideology of the left have to be aimed at-helping to integrate the world of labour. Shared interests have to be identified and common demands formulated. Here we are not talking about mechanical vanguards, that subordinates ‘backward’ layers to the goals and tasks of ‘advanced’ elements. On the contrary, what is involved is a complex search for mutual understanding, since ‘advanced’ layers always finish up paying for their social egoism. “

“The terms ‘industrial worker’ and ‘proletarian’ are no longer synonyms. This means that it is necessary to reject the primitive workerism that has characterized socialists since the early twentieth century, and to return to Marx’ original concept, that linked the future of society not simply with industrial workers, but with the proletariat in the broad sense of the word.” (…) The point is not only that the proletarian of the late twentieth century is different from the proletarian of Marx’ time, but hat the formation f the ‘traditional industrial proletariat’ was also preceded by a lengthy period of evolution. (…) The multitude of representatives of workshops and trades did not immediately become conscious of themselves as a class, did not immediately discover shared interests and develop a common consciousness. It was the process of political and organizational unification that created the working class as we know it from history”.

“Studying the process of formation of contemporary political parties, Gramsci came to the conclusion that from time to time the need arises to ‘free the economic movement from the fetters of traditional politics’. Often, the changed needs of the masses contradict their traditional slogans. On the basis of these needs, a ‘new historic bloc’ arises. The industrial proletariat became such a historic bloc in the late nineteenth century. It was only after having recognized itself as a class that the industrial proletariat managed to unite broader social layers around itself. It was not by chance that the ideas and even the organizational forms of the labour movement proved so attractive to the intelligentsia, the petty bourgeoisie, the peasantry and sections of the middle layers.”

“Ultimately, the differences between the work of coal miners, steel workers, seafarers and mechanics are almost as great as the differences between the work performed by any of them and that of workers in the post-industrial sector and the service area. It is the experience of social conflicts and joint struggle over many years that has caused the traditional working class to feel itself to be an united whole, and to place its common interests above narrow professional distinctions. The changes that have occurred in the social and employment structure of society could not fail to undermine this hegemony. The new structure demands that workers make new efforts to organize themselves. In a sense, it is necessary to begin anew the work performed by socialists, labour activists and trade union leaders a hundred years ago. It is essential to identify common interests and to assert their primacy over narrow group concerns.”

“A new historic bloc is now being born. It is broader than the traditional working class, but represents the historical continuation of this class. (…) The world of labour today is not just ‘objectively’ disarticulated. For it to become a united social force, a unifying politics is required. If this politics is to come into being, there is a need for left organizations that have overcome not only the stereotypes of the classical past, but also the opportunist temptations of the present.”

New Technologies, New Struggles

In the next chapter, Kagarlitsky points out that “The history of modern computer technology serves as an excellent illustration of the classical Marxist thesis of the contradiction between the forces of production and productive relations. Efforts to turn information into a commodity and to distribute it according to the laws of the market clearly retard development and lead to numerous conflicts. Among the manifestations of the contradiction involved here is ‘information piracy’. (…) The main centres of computer piracy are Russia, Bulgaria, Turkey and China, where unlicensed programs make up 90 percent of those in use…”

“The production of computer programs follows laws quite different from those that govern industrial production. In industrial production, costs fall somewhat as the scale of output increases, but producing each new item requires additional quantities of labour and raw materials. With software nothing of the sort happens. There are no additional costs apart from those involved in producing a compact disc and recording information on it. The buyer pays not for the commodity, but for the right to use it. The same also applies for telephone lines and electronic mail; from the moment the line is installed, the costs of the firm that installs it do not rise in proportion to the intensity with which it is used. The costs rise only for the client”.

“The economist Aleksandr Buzgalin notes that on the scale of society as a whole the defence of intellectual property is irrational. Society has an interest in keeping the direct and indirect costs associated with receiving information as low as possible. … However, the mechanism for the distribution of costs is unacceptable to corporations that defend their exclusive rights over intellectual property. (…) In essence, what is involved here is not commercial profit, but a sort of monopoly rent. By refusing to pay it, pirates and their purchasers create a competitive market where one does not exist. (…) The notion of ‘intellectual property’ contains an inherent contradiction; knowledge is the only product that you can pass on to another person at the same time as retaining it yourself. In this area, the question of what belongs to whom is very contentious.

“If in the US it is customary to emphasize copyright (…) in Russia the stress is on the rights of the author; that is, the primary right to commercial use lies with the author, who is free to retain this right or to cede it to another person.”

Geopolitics of Knowledge

“In the computer industry as in any other, transnational companies extract super profits by exploiting cheap, skilled labour power in the countries of the periphery. In the mid-1990s about 99 percent of the on-line databases containing scientific data and information on the technology of management, production, medicine and education were located in the US. While surrendering everything else, including the production of microprocessors, to Korean, Spanish and Japanese firms, the American corporations are trying to develop the production of knowledge at home.”

“The Chinese authorities –understand that software piracy is opening the way for their country to enter the world of information technologies. Meanwhile, the cooperation which is developing spontaneously between pirates in Eastern Europe and China is laying the basis for a distinctive new economic order. Master copies are made in Russia, mass production takes place in China and Bulgaria, and the sales markets encompass all the former communist bloc. This is a highly integrated and decentralized ‘common market’”.

“The victory of the pirates would lead to the collapse of the whole system of software production. The right of program developers to receive a decent wage has to be guaranteed, and the normal functioning of firms has to be ensured; this would be impossible if the software they produced was used free of charge by any and everyone.”

“The paradox lies in the fact that the way out of the problem is not to struggle against piracy, but against the system of which piracy is one of the results. Relations based on monopoly rent have to be replaced by relations of mutually beneficial cooperation. The point is that most users of licensed products only buy them because they want to obtain the latest product. There is clearly a need to limit the right to the commercial exploitation of programs to a definite period (say one and a half years). … If this were done, a substantial proportion of pirated software would be legalized. Widely used programs would become just as much common property as the classics of world literature. (…) Compulsory licensing would not by any means amount to state piracy, since the producer would receive compensation or royalties. However, this would mean the end of monopoly rent.”

What would in fact be involved would be the socialization of the software market. (…) The worldwide computer network, the Internet, is evolving in the same direction.

The Struggles in Cyberspace

“The Internet does not function according to the laws of the market; rather, it exists on a basis of communist principles, since it belongs to no one and everyone. The costs of maintaining the system are justly distributed among its users, and everyone benefits from it according to their needs and abilities. In the global sense the Internet and modern-day information technologies meaning the beginning of the end of market capitalism and the abolition of private property in the form which it has historically assumed. ‘Intellectual property’ is a contradiction in terms. The ownership of knowledge (something closely associated with privilege, inequality, dictatorship and censorship) is vanishing into the past, but authors’ rights remain, as do the mutual obligations of participants and the need for cooperation.”

“The Internet that is opening up new possibilities for humanity is also becoming an arena of fierce struggle. Against the background of a government policy of control and filtration, large Western monopolies (once again, primarily Microsoft) are persisting with efforts to turn the Internet into an arena for their expansion. (…) The only way order can be maintained in the network is on the basis of free association. A far greater danger for the network lies in the efforts to control people’s access to the information on the pretext of defending ‘intellectual property’.”

“The struggle for the right to the free exchange of information shows the degree to which democracy, on the threshold of the new century, has become inseparable from socialism. Knowledge is becoming the basis of production and of prosperity. As UNESCO expert Philippe Queau observes, neo-liberal policies aimed at privatising knowledge and at turning it into a source of private profit represent a clear infringement of ‘the right of the public to information’. These policies are in conflict with the ethnical norms that have spontaneously been established in the Internet. Efforts to transfer bourgeois norms to the network, dividing users into rich and poor, meet with spontaneous resistance.”

“Resolving the contradictions that are arising as a result of the development of the global information space does not require prohibitions, but laws aimed at defending the interests of program users and developers. But their interests are counterposed to those of large Western firms that profit from the scale of intellectual property.” (…) Transforming information into a commodity serves in practice to undermine the bases of the market economy itself. (…) The normal functioning of the market requires a maximum of information openness, while the concept of individual property demands the restricting and regulating of access to information. This contradiction not only explodes many of the dominant theories, but also affects the practical work of enterprises. ‘The profit structure of the markets directly undermines the basis of the market system itself. (…) The rule of private property also retards the development of hardware. The “inter-departmental” barriers that have spontaneously arisen in the information space come increasingly often in conflict with the technical norms of mass production, and artificially limit the capacity of the channels of free commodity exchange.” (Yuriy Zatuliveter)

(Yuriy Zatuliveter) ‘The only way to save market mechanisms of production and consumption from being overwhelmed by unavoidable contradictions is by creating a single, unified information space, which must first of all come to include the computer hardware and software industries.’ Only then will the development of technology be subordinated not to the interests of the ‘moneybags’, but to the ‘fundamental laws of information’. The laws presuppose general access, equality and common ownership of ‘new values’? In sum, it is possible that the computer world is preparing to take a historically irreversible step toward the socialism that has until now remained out of reach.

 

“Excessive consciousness of property rights on the part of firms may undermine and prevent potentially productive strategic alliances and cooperative relations. (…) Attitudes to property will change of their own accord if property relations change. This is a question of politics, of a struggle of interests – a struggle that is only just beginning.

5. The New Periphery

In Chapter 5 Kagarlitsky looks at what he calls ‘the new periphery’: the countries of Eastern Europe and the former soviet states, including Russia. Here he makes a very important comment: “The customary explanation for the weakness of the left, ‘leadership sell-outs’, cannot be regarded as satisfactory, since efforts during the years from 1989 to 1999 to found an honest and principled left opposition –and there were many such attempts- also ended in failure.”

“During the ten years since the fall of the Berlin Wall, Eastern Europe has not simply rejected communist slogans and privatized state enterprises, creating its own financial oligarchy. It has also become part of the world capitalist economy – its new periphery. All the traditional features of a peripheral economy are present. Debt dependency (…) Dependency on foreign markets and technology increased, and the informal economy expanded. A shortage of capital (…) became a general problem for the economies of the region.

“The modernization potential of the Soviet system, however, had clearly been exhausted by the end of the 1970s. This occurred earlier in some countries than in others. In the USSR economic growth rates began falling as early as 1959, when post-war reconstruction was essentially completed. Czechoslovakia, which suffered least during the war and which had possessed the most developed economy in pre-communist times, was the first country to find it no longer had any prospects for development within the framework of the existing system. This was why, in 1968, the movement for reforms in Czechoslovakia was supported and even initiated by a significant section of the party-state elite.”

“The road of development that had been chosen ensured that the countries of Eastern Europe would increasingly be drawn into the world economy, as the periphery of the West. Their dependency increased steadily throughout the 1970s and 1980s. At the same time, their internal problems were not being solved. (…) The movement of 1989 was just as much an uprising by enraged consumers as it was a revolt of an awakened civil society.”

“The result was the collapse of the communist regimes in Eastern Europe in 1989 and in the USSR in 1991. However, the change of regime did not by any means signify a shift in the general direction of development. Meanwhile, the removal of the structures of communist power served precisely to open the road to the final transformation of the countries of Eastern Europe into the periphery of the capitalist world system. In this sense, the years from 1989 to 1991 were neither a turning point, nor the beginning of a new epoch, but merely saw the culmination of processes that had developed over the preceding decades. It is this which explains the astonishing ease with which the communist elites yielded power.”

“The old nomenclature solved its crisis at the price of destroying the system. The nomenklatura sought to retain its positions, converting power into money, so that with the help of this money it could hold on to power. The communist elite had begun turning bourgeois long before 1989. The disintegration of the eastern bloc allowed it to openly proclaim itself a bourgeoisie.”

“In the course of the 1970s the bureaucrats underwent substantial changes. The Brezhnev period was the time when the ruling layer in all the countries of the Soviet bloc became totally corrupted. Paradoxically, this corruption made the bureaucracy receptive to the slogans of democracy. The new needs that had arisen among the elite could be fully satisfied only in an open society. In addition, there was a need for a new mechanism for the legitimization of authority. In circumstances where society was becoming increasingly stratified, an egalitarian ideology no longer suited the people at the top, since it could not serve as a justification for their rule.”

“This is why the slogan ‘socialism with a human face’ was everywhere quickly rejected. The convinced communists of earlier times readily became liberals or right-wing social –democrats. (… ) East Germany was an exception. It was simply annexed by the west. The consumer expectations of the masses were satisfied, but the local nomenclature was forced out by the incomparable more wealthy and powerful Western bourgeoisie. After the bureaucrats had been dealt with, the local intelligentsia began to be subjected to oppression as well. The victims protested. These were active, educated, experienced people. Denied the opportunity to become integrated into the system, they were full of desire to change it. It is not surprising that in the German ‘new Lander’ the left movement revived far more quickly than in the rest of Eastern Europe.”

Capitalist Reality

The consumer paradise turned out to be a club for the chosen few. “A rapid growth in the ‘shadow economy’ occurred in almost all the countries that underwent liberalization. It is curious that in 1989 the ideologues of reform invariably argued that the black market and illegal business flourished exclusively under conditions of central planning and strict state regulation, as an elemental reaction by society to ‘unnatural’ restrictions on economic activity. Practice has shown otherwise. … ‘Removing the state as the main agent of control in the economy has not led to market self-organization and competition, but to organized bandits taking over this function.”

Despite demagogic promises of modernization, the economy and society in virtually all these countries have undergone precisely the reverse. “The decade from 1989 to 1999 has been a period of global triumph for neo-liberalism. The collapse of communism in Eastern Europe not only strengthen the process through which these countries were being drawn into the capitalist world economy as a new periphery, but also allowed the strengthening of neo-liberal hegemony in the West and the Third World. The left was demoralized. For the peoples of the Third World, the ending of the Cold War, a development which in Europe was perceived as an enormous achievement, signified a return to the times of undivided economic and political domination by the West.”

Nationalism: Myth of the Golden Age

“Not surprisingly, neo-liberal ideology in its pure form quickly lost its attractiveness. If the people were to accept further sacrifices, additional motivations were needed. Neo-liberalism was reinforced with nationalism”.

“In Eastern Europe, of course, nationalism was nothing new. In their search for a national alternative to communist theory and practice, the ideologues of nationalism turned to the years before 1945 (in Russia, to the times of tsarism), seeing in them a sort of golden age. From the very first, the regimes that succeeded the communists saw their goal as resurrecting the past. Hence the general restoration of old state-symbols and at times also old constitutions.”

“The return to the passed was always utopian. In all the countries of Eastern Europe the social, economic and even demographic structure of society had changed radically since the 1920s and 1930s. In some countries the national make-up of the population has changed as well. For Russians living in Latvia and Estonia, the transition to independence meant the loss of citizenship rights. (…) The idea of returning to a pre-war golden age was a reactionary one, since the existing society, after being transformed by 40 years of communist rule, was on a far higher level of social and economic development than the one to which it was proposed to return.”

“The idea of ‘savage’, ‘primitive’ and ‘backward’ capitalism in Eastern Europe suits leftists and neo-liberals alike. It allows the former to refer calmly to classical Marxist texts, while the latter, by contrast, can argue that in the course of time or as civil society develops, Eastern European capitalism will also become ‘civilized’, just like in the West. In reality, both sides are profoundly mistaken. In Europe in the epoch of savage capitalism there was neither a IMF, not-r a developed system of stock market speculation, nor transnational corporations. The backward and savage Eastern European structures are intimately connected to the advanced and civilized Western ones. Moreover, Western capitalism in the 1990s has by no means been evolving toward a more civilized character. Trying to explain the processes occurring in the East by using such concepts as ‘backwardness’ and underdevelopment’, or by referring to the costs of primitive accumulation, makes no sense at all, since the general principles of neo-liberal reform have been applied both in eastern and Western Europe, as well as in the countries of the Third World and in the United States. During the 1990s, in other words, it is not o much that post-communist capitalism has become civilized, as that Western capitalism has become savage. The only difference is the fact that neo-liberal policies in the west have run up against the tight defensive ranks of the institutions of civil society. The bourgeoisie has been forced to conduct drawn-out positional warfare against the welfare state.  (…) In the post-communist countries, were civil society was weak, the neo-liberal model could be imposed through a ‘cavalry attack’, that is, far more quickly and consistently. (…) Post-communist democracy has turned out to be just as underdeveloped and backward as the local capitalism.

Non-capitalist Capitalism

“Peripheral capitalism develops according to a logic different from that of the capitalism of the countries of the centre. The notorious accumulation of capital, which is supposed to ensure the rise of a local entrepreneurial class, has turned out to be impossible, since within the framework of the globalized world economy a spontaneous redistribution of investment resources constantly takes place, to the advantage of the centre. By the end of the decade almost all the states of the former communist bloc were encountering the same problem as the developing countries of Africa, Asia and Latin-America – a shortage of investment.”

“The most distinctive characteristic of post-communist social structure in eastern Europe is the absence of a capitalist class. … With few exceptions, it is the poor of communism that have become even poorer, and the powerful of the ancient regime who have become the new upper class. … The nomenklatura has been bourgeoisified, but it has not become a fully fledged bourgeoisie. It has merged with the world capitalist system, accepting the rules of the system’s game, but has not shed its own specific features. From the communist system, the nomenklatura and the technocrats inherited not only their contacts and power, but also to a significant degree their methods of rule. These methods have turned out to be perfectly compatible with privatization and liberalization, leaving both market ideologues and orthodox Marxists in an impasse. Can such societies be called capitalist at all?”

“Early in the century Rosa Luxemburg observed that capitalism, while including more and mire countries into its orbit did not destroy the traditional structures there completely. On the contrary, the traditional elites played a decisive role in the formation of the capitalist economy, providing it with access to new markets and cheap resources. Such a role has also been played by the post-communist corporative structures in Eastern Europe. (…) The dependence of workers on management; the remnants of social welfare provisions, transformed into bureaucratic paternalism; and political clientelism have all provided an affective defence against class struggle.

“In most of the countries of Eastern Europe the leftist have become ‘Westernizers’ (perhaps the only way in which they differ from the rightists), while in Russia, which has experienced a profound national humiliation, the Communist party has turned to Slavophilism. In each case, however, the left parties are trying to base themselves not on the masses, not on the majority of workers, but on particular sections of the local elites. In effect, the leftists have become part of the neo-liberal system, unable and unwilling to act as expressions of mass protest.”

From Resisting the Change to Changing the System

“Any serious attempt at cleansing capitalism using liberal formulas is doomed to the same failure as Gorbachev’s perestroika. Destroying the corporative and nomenklatura structures without undermining the very bases of peripheral capitalism is impossible. Efforts to replace the nomenklatura pseudo-bourgeoisie and the criminal clans with ‘real’ entrepreneurs cannot succeed without placing the very principle of private entrepreneurship and the ‘sanctity of private property’ in doubt.  This is why the question of modernization in Eastern Europe can be resolved only by the left, and only through radical anti-bourgeois measures.”

“In practice, the making of real decisions is already remote from democratic procedures (something that can be observed in the west as well), while state institutions are becoming increasingly authoritarian, and nationalist movements are rising up from below. How can this be resisted? Opposition to the system is growing. Elements of the working class, passing through the school of the market, are being transformed into a potential mass base for left movements, although this base is incomparably smaller than orthodox Marxists have supposed. It is important to note, however, that the left can easily find itself allies.”

“In this situation, leftists are obliged to put forward their own project. This project will be national, and at the same time consistently anti-nationalist. … In the modern world, it is impossible to wage a struggle for national independence on one’s own. … Despite all the old resentments, there can be no hope of independent development without regional integration.”

“The national project of the left also has to be anti-nationalistic because it can rest only on a broad bloc that includes both various groups of workers, and also an important layer of technocrats who have an interest in changing the priorities of development. … In Eastern Europe a single, homogeneous working class of the type described in the works of traditional Marxism does not exist. In essence, it does not exist anywhere. Under the conditions of peripherical capitalism, y-the left movement arises not as a class movement, but as a popular one.”

The way out of the existing situation is not through ‘social accord’, but through tough confrontation and the expropriation of the post-communist oligarchy, through radical structural reforms. National interests have to be counterpoised to the interests of the elites.  (…) Any project of national development requires a dramatic increase in the role of the state as the key investor. This means that privatization must sooner or later be replaced by a policy of broadening the public sector”.

No Way back to the USSR

“The Soviet years did not pass in vain. Society became far more educated, developed and complex. It is precisely for this reason that the orthodox communist grouplets trying to live by the formulae of the 1920s are so weak. The left faces the task of drawing lessons from the history of Soviet communism, and also from the experience of national development in then Third World. In this case the problem is not how ‘socialist’ these models were. What is important is that both arose as alternatives to peripheral capitalism. Both suffered defeat”.  

“A revival of the left in Eastern Europe (and in the world as a whole) depends ultimately on the degree to which leftists succeed in becoming the leading democratic and innovative force. First, the left has to propose a new model of the state and the public sector – open, dynamic, and orientated toward carrying out the strategic tasks of development. The success of the left also depends on whether it can advance, as an alternative to globalization, a new model of regional integration, in which the various components enjoy equal rights and are free from the imperial heritage. (…) A real political struggle in the post-communist countries is still only beginning, and so far there are more questions than answers. One thing is obvious: there will be no special fate for the citizens of Eastern Europe after 1989. We will either win or lose together with the majority of humanity.

CONCLUSION

The real answer to the question about Marx being alive and well after so many years is that capitalism is alive. (…) One can hope that sooner or later things will improve because ‘this is just a matter of time’. It is not. And this is not just a cyclical crisis. It is structural. And it is here to stay at lest as long as we keep the global structures of the free market liberal capitalism unchanged”.

“After undermining the state as the agent of regulation, after defeating socialist challenges, global capitalist institutions (including multinational companies) discovered that they are not able to control the process which they themselves started.

The society has changed since the times of Karl Marx, no doubt about that. But how did it changed? Many of the prophecies made by Marx were actually premature for his own time, but now they come true. Capitalism is now global. So is its crisis.

The simple truth is that Marxist analysis of capitalism is correct. But while this is becoming more and more evident to market analysts and managers this is not the case among socialist politicians”.

“The left remains hostage to its own failures and neuroses. It is not only weak politically but it lacks the determination and moral strength needed for action. It can win elections but not struggles. Unless it dares to speak again about class solidarity, nationalization and redistribution, unless it challenges the system of global capital and its local political representatives, it has no chance to change anything”.

The Twilight of Globalization - by Boris Kagarlitsky

I found The Twilight of Globalization - Property, State and Capitalism by Boris Kagarlitsky (Plutopress, 2000) extremely inspiring and useful for our discussion on the state. Boris Kagarlitsky, a Russian Marxist theoretician and sociologist, was a political prisoner under Brezhnev and latterly an adviser of the Chair of the Federation of Independent Trade Unions in Russia. He is now coordinator of the Transnational Institute Global Crisis Project and Director of the Institution of Globalization and Social Movements (IGSO) in Moscow.

Although The Twilight of Globalization was written 11 years ago, long before the financial crash, the analysis is still fresh and valid. Kagarlitsky argues that the socialist movement needs to develop a program for the transformation of the state, and formulate an agenda based on the notions of citizenship and human rights and its own new vision of a democratic and decentralised state.

Here’s an extended synthesis of this important book.    

In his preface, Kagarlitsky argues that the crisis of the left is by a lack of ideological vision. To overcome this crisis we need de-revise Marxism and revitalise its theoretical tradition basing our policies on class interests, although these have to be redefined on the basis of the new social contradictions. Kagarlitsky makes the case that the popular argument about the ‘impotence of the state’ in a globalized economy is not only wrong, but also deeply dishonest because it hides the use of state institutions by the organizations of financial capital and multinational corporations: “It is precisely the strength of these capitalist institutions that forces us to put even greater emphasis on strengthening the nation-state as a countervailing force and the basis of any democratic participation”.

With the triumph of neo-liberalism the state was dramatically weakened, says Kagarlitsky in his introduction. Neo-liberalism turned international institutions like the IMF, the World Bank, the WTO that were established to provide some degree of public control over the international market into instruments of deregulation. “These institutions operate in the same way as the Soviet Politburo under Brezhnev,” claims Kagarlitsky. “IMF and World Bank experts decide what to do with the coal industry in Russia, how to reorganize the companies in South Korea or how to manage the finances of Mexico. The greater the scale of the problems, the more simplistic and primitive are the proposed answers” and “(This) new Big Brother is global or multinational, but even more faceless and even less accountable than before”. In addition, global capitalism is wasteful because it is both market-dominated and over-centralized.

Sociologically and economically there is not such a thing as a global capitalist class, claims Kagarlitsky, “but there is an integrated global capitalist network, whose movements and variable logic ultimately determine economies and influence societies. Thus, above a diversity of human-flesh capitalists and capitalist groups there is a faceless collective capitalist, made up of financial flows operated by electronic networks.” This description looks surprisingly like the old Big Brother-type faceless bureaucracy. In such circumstances, the left has to defend national societies against the global elites and against the national state, which is transformed into their tool.

In the first chapter, The State and Globalization, Kagarlitsky explains that Marx and Engels spoke of state institutions as a system of organized and legalized class coercion. Lenin not only saw in the question of power the main question of any revolution, but also reduced it to the seizure and subsequent transformation of the ‘state machine’. By the 1970s, however, it had become obvious that the state no longer enjoyed a monopoly on power. “Too few leftists have posed the question of using the state as a bridgehead in the struggle of real power. Without this, any discussion on reforms loses its meaning,” claims Kagarlitsky. He points out that the main weakness of socialists has always been their underestimation of the need for links between socio-economic and political reforms. “The new problems of society require a qualitatively transformation of the state system” he argues.

“The state system, as an instrument of the ruling class, cannot fail to take account of the interests of other social layers as well,” Kagarlitsky explains. “If kings and lords constitute a link with the pre-capitalist past, the welfare state provides a link with the future. Neo-liberal reaction is aimed at breaking this link. (…) The representatives of the social sphere – those working in public services, science, education, etc. – do not like the state, but their situation becomes still worse when state institutions are weakened. Intellectuals cannot stand bureaucrats, but they constantly appeal to them for help. Without the state the secular intelligentsia cannot exist.”

And he goes on: “The contradiction between the theoretical need for the renewal of the state and the practical bankruptcy of the state in its present-day form spills over into the impotence of the political strategy of the left, the confused declarations of ideologues and the bewilderment of activists. A theoretical argument, which is frequently invoked to justify inaction, holds that the national state, as a central element in the strategy of leftists (whether Marxists or social democrats), is now losing its significance. The weakening of the role of the national state in the context of the ‘global market’ is an incontestable fact. But it is equally indisputable that, despite this weakening, the state remains a critically important factor in political and economic development. It is no accident that transnational corporations constantly make use of the national state as an instrument of their policies.”

Leftists need their own international economic strategy and have to act in a coordinated way on a regional scale. But the instrument and starting point of this new cooperation can only be a national state explains Kagarlitsky, who considers theories on ‘stateless socialism’ completely absurd.

The logic of Globalization

The image of the state as a demoralized bureaucratic machine, unable to carry out effective management and merely swallowing the money of taxpayers, is also held by many on the left. “But the problem of the state becomes insoluble for leftists from the moment they reject the idea of the radical transformation of the structures of power (…) The democratization of power and the participation of the masses in decision-making cannot in themselves guarantee that social reforms will be successful. But if leftists, on coming to power, do not begin promptly to democratize the institutions of the state, this can only end in the degeneration and ignominious collapse of the left government”.

The widespread thesis of the ‘impotence of the state’ amongst leftists has acquired three bases: governments are seen as powerless in relation to transnational corporations, to international financial institutions and to interstate formations such as the EU. But globalization is nothing new; capitalism was born and grew to maturity as a world system. Only towards the end of the eighteenth century national capitalism, rooted in the social structures of particular Western countries, began to develop. “This national capitalism, like modern nations themselves, was not a precondition for but a product of the development of capitalism as a world system,” argues Kagarlitsky. “At the end of the twentieth century, capitalism is again becoming directly global. This does not put an end to national societies or states, although these, as in the epoch of early capitalism, are in profound crisis”. The newest period of globalization is not the ‘ultimate’ phase of capitalism but rather a product of state policies linked to international economic institutions. But “the prediction by Marx and Engels in the Communist Manifesto that capitalism would overcome all state and national boundaries has been realized in full measure only 150 years later”, claims Kagarlitsky.

The ‘Impotence of the State’

According to Kagarlitsky, the thesis of the ‘impotence of the state’ is a self-fulfilling prophecy. “A state that acts strictly according to the rules dictated by neo-liberal ideology and the International Monetary Fund does in fact become impotent”. But “Anyone who tries to issue a challenge to the existing order discovers that the state remains quite strong enough to take up the struggle”. International financial institutions have acquired enormous influence, but they cannot pursue their policies except through the agency of the state. “For the left”, Kagarlitsky explains, “the whole point of conquering power is to change the rules of the game, and at the same time to destroy the present complex of relations between national governments and international financial and political institutions. For many of these institutions, hostility and massive non-compliance on the part of national governments would be a real catastrophe, especially if the dissatisfied states tried to set up their own parallel international structures or to transform the existing ones. It is precisely because many radical alternatives lie directly on the surface, ready to be picked up, that banishing any thought of the possibility of new approaches on the national and international levels is a matter of life and death for neo-liberal ideology.”

This last and also the following quotes are very useful in determining our position towards international and inter-state institutions: “The strength of the International Monetary Fund and other international financial institutions consists above all in the fact that they coordinate their actions on an international scale, while their opponents are isolated. Consequently, the answer to financial blackmail should not be to renounce reform, but to search for allies in the international area, combining this with a clear policy of change and with reliance on the mass movement within the country.”

Inter-state agents can become agents of regulation and the public sector can receive a new impulse for its development on the inter-state level. But “international structures created within the context of a neo-liberal project cannot simply be improved and reformed. The road to a new type of integration lies through an acute crisis and, possibly, through the dismantling of these structures”.

“An understanding of the fact that integration is essential cannot reconcile serious leftists either to the European Union and the Maastricht Treaty or to the Commonwealth of Independent States. On the contrary, it is necessary to wage an irreconcilable struggle against the present international order in the name of the principles of democratic integration. The decisive role in this struggle will be played by processes occurring within the framework of the ‘old’ national states”. And “Ultimately, all international institutions represent continuations of national states, rest upon them and are powerless to act without them. This applies to the European Union, to the United Nations Organization, to NATO, and even to the International Monetary Fund and the World Bank, which at times are perceived as independent global entities.”

The Weakness of Globalized Capitalism

Without the participation of the national state, transnational capital could not keep its indispensable markets open and its boarders closed; nor could it manipulate the price of labour power and raw materials. Capitalism is impossible without laws, and laws do not exist outside states. “During the 1980s and 1990s the scale of state intervention in economic, social and cultural life has not diminished, but on the contrary has grown,” argues Kagarlitsky. “Practice shows that keeping markets open demands no less activity from governments than protectionism”. Moreover, almost nowhere has neo-liberalism led to a sharp reduction in the size of the government apparatus. In Russia, the public sector was cut to a tenth of its former size, but the state apparatus increased approximately three-fold! In many other countries cuts in spending on social needs were accompanied by increases in spending on the repressive apparatus, the privatization of the public sector dramatically increases the load on the taxation service, and so forth.

The priorities of the state were revised under the pressure from he liberals, but they can also be altered under the pressure of the workers. According to Kagarlitsky, “The ‘impotence of the state’ is a propaganda myth. But in order for the state to be able once again to carry out its regulatory function in the interests of workers, it must itself be radically transformed and in a certain sense globalized (through democratically organized inter-state associations). Left organizations, struggling under changed conditions, no longer need only mutual solidarity but also direct coordination of their actions, making it possible to campaign effectively on the international level.”  

Neo-liberal Hegemony vs. Democracy

Kagarlitsky makes an important point that helps us understand the new nationalist movements better: “The economy can be global, although the significance and potential of national economies should not be underestimated. But society remains restricted by the frameworks provided by countries, just as the possibility of society making an impact on political and economic decisions is limited by the framework of the national state. Therefore the desire of peoples to retain the symbols and institutions of ‘their own’ states is due not only to traditionalism, nationalism or ‘sentimentality’, but to an instinctive understanding that if these symbols and institutions are lost, the final possibility for these peoples of influencing their own fate will be lost as well. Transnational bureaucracies are also state structures, and have quite obvious national roots. But they are not democratic institutions.”

And according to Jan Otto Anresson “Today – despite the internationalization of the economies – the nation-states are still supposed to be that community through witch people primarily identify themselves and through which they are able to make common decisions. The hollowing out of the nation-states thus implies a weakening of the possibilities to realize democratic communities”.

Finally, “There are no democratic institutions on the global level. Capital is being globalized, but not people. However cosmopolitan our culture might be, the overwhelming majority of people remain physically restricted by heir conditions of daily life, bound to some particular place. There is nothing intrinsically evil in this. National society and the state will remain the level on which social change is really possible and necessary. It is quite another matter that under the conditions of globalization not only revolution but also reform cannot be successful unless it spreads to a whole number of countries.”  

On a political level, the globalization of the economy has rendered the social democratic compromise pointless. “Enterprises work for the world market, but society remains national. The growth of wages does not guarantee demand for one’s own goods. The old social contract is collapsing, since it is impossible to ensure either general social discipline on the side of capital, or consumer discipline on the side of workers, who have developed the habit of spending their high wages on goods produced by the half-starved toilers in South Asian sweatshops.”

According to the theoretician of the German ‘greens’, Elmar Altveter, instead of complaining about the internationalization of capital, the left would do better to struggle for ‘social regulation yielding global results’ because regulation is impossible on the basis of the old state methods. So it has to rest on ‘global civil society’ that unfortunately only exists in the imagination of theoreticians. The so-called ‘free associations-‘ particularly on a world level are just as utopian as elitist. “Regulation really does need to become regional and global,” argues Kagarlitsky. “However, this cannot be on the basis of ‘civil society’, but must be on the basis of democracy and civil equality of rights, something which is impossible outside the state.”

The state needs to be used by the left, but also changed: “So long as workers, with the help of the state, do not succeed in changing the rules of the game, imposing countervailing limitations on capital, there cannot be any kind of balance, and consequently even the most moderate reformism is impossible. The weakness of the left arises from its unwillingness to use the force of the state against the bourgeoisie. The growth in influence of transnational structures requires the creation of a counter-weight. But at the same time the new situation demands the radical transformation of the state, of its institutions and of its social nature.”

“The general thesis of the ‘impotence of the state’ deliberately ignores the fact that there are very different states in the world – Belgium and the US, Hungary and Russia, Brazil and Costa Rica, China and Brunei.” And “In most cases the supposed ‘impotence of the state before the market’ is in fact a manifestation of the impotence or weakness of some states in the face of others, whose governments have taken on themselves the role of high priests and interpreters of the ‘logic of the market’. This is shown to perfection by the discussions surrounding the common European currency. (…) The conservative government of Germany literally compelled its partners to agree to limit their budget deficits to 3 percent as an essential condition for the introduction of a common monetary unit. (…) Any such criterion, like the planning targets of the Soviet area, is a product of formal bureaucratic thinking that has nothing at all in common with he ‘logic of the market’.

“The more the powers of the state are transferred to specialized private structures and independent (although formally state or inters-state) financial institutions, the more the sphere of democracy is narrowed. Involvement by the population in making decisions is reduced to a minimum, and once a choice has been made it becomes ‘irreversible’

Citizenship in decline

After the fall of the Berlin Wall from constituting an association of free citizens, democracy is being transformed into an oligarchy, a form of interaction of elites that are interested in democracy only as a means for legitimizing their power. Elections, free discussion and the struggle between parties are turning into a ‘democratic façade’. The result is that “The new democracies are afflicted by the same ailments as the old. Corruption is eating away at their political institutions. Disillusionment with democratic institutions, with elections and parliamentarism, is on the rise, even in countries that have long traditions of the struggle for freedom.”  

“Classical capitalism, was characterized by a positive dynamic; civil rights were won by workers, by new immigrants, by women, and by the inhabitants of colonies and overseas departments. The principle of universality triumphed. But in present-day capitalism a countervailing tendency is starting to triumph for the first time. Citizenship is increasingly becoming a privilege, as in a slave-owning society or a feudal republic”.

“Modern society needs changes no less far-reaching than during the era of the great European revolutions of the seventeenth to the nineteenth centuries. What are required are not only social revolution, but also a fundamental change in perceptions of the state and society. Because of the complexity of modern society, radical approaches are rejected as unrealistic, but this complexity is itself among the causes of the present-day crisis. Increasing complexity is a sign that a civilization is in a Spenglerian impasse.”  However,  “Complexity is not necessarily a virtue. The task of social revolution is precisely to carry out a radical simplification. The false choice imposed by the liberals of ‘more state or less state’ has to be rejected. What is now required is neither a reduction nor a broadening of state participation, but its radical transformation, a different state.” (my emphasis)

Towards the New State

“In other words, the strategy of the left has to consist not of defending the old state, but of using the crisis of this state to ensure that the basis for new institutions is laid both on a national and also on an international, inter-state level. What’s required here is an all-permeating democratization that encompasses not only the structures of political power, but also the institutions of social security; self-government; the public sector; and last but not least, the mutual connections between these various structures and institutions.”

If the left does not take up this task, the radical right will step in: “It is necessary to overstep the bounds of the traditional institutions of formal democracy not because we can in theory create something better, but because these institutions in their earlier form no longer work in any case. If the left does not take on itself the task of radically reforming the state, then this goal will sooner or later be urged by the radical right. If democracy does not affirm itself as an extra-market and to a significant degree anti-market system, the masses will follow those who call for restricting the elemental forces of the market in the name of authority, hierarchy, the nation and discipline”.

Is Nationalization Dead?

From the time of Marx, the connection between state property and socialism represented the unshakable basis of left ideology. Kagarlitsky is critical towards the notion of “socialization”: “How does a concept of socialization (various forms of stakeholding capitalism and workers’ cooperatives) differ from social-democratic regulation?” and “It remains incomprehensible why the forms that became consolidated as a result of social conflict should be those of indirect socialization, rather than the most barbaric forms of private, or for that matter, state property. It is also quite unclear how these deliberately less radical approaches (…) would lead to more radical changes, which could not be achieved through nationalization”.

“Talk of the efficiency of the nationalized sector (…) makes no sense in isolation from the question of the social nature and structure of the state. ‘The conservative state guaranteed the ultimate failure of public ownership. In other words, the failure of earlier nationalizations was due not to the ‘inefficiency of state management in general’, but to the vices of particular state institutions, vices which also made their effects felt in other areas of life, including those in which private property predominated.” But “The main shortcoming of ‘soft’ socialization is that it never happens” and ”Any serious attempt to put a moderate programme into effect will engender the need for more radical measures, including the broadening of the state sector”.

Self-management alternative

Criticizing the Mondragon model, Kagarlitsky argues “On the overall social level it makes no difference whether a productive facility belongs to one person or to a group of people, if it does not belong to the community as a whole.” And “In essence, the transition from state to collective-labour property has served merely as a cover for the seizure of management and by private financial groups of control over enterprises, as well as for managerial irresponsibility and for intensified exploitation of the workforce.”

Perhaps even more importantly: “Not only does the transformation of workers into owners fail to overturn the logic of capitalist exploitation; on the contrary, it extends it to its very limit, transforming the ‘external’ contradiction between labour and capital into an ‘internal’ one, replacing the discipline of hired labour with the far harsher principle of self-exploitation. In the Mondragon cooperatives the worker-owners are forced to limit their own incomes in the name of accumulation. (…) The conclusion is irresistible that for a particular person a cooperative enterprise, subject to the same logic of the accumulation of capital, may turn out to be a much harsher exploiter than a private capitalist or a state company.”


“The transition from individual to collective entrepreneurship basically changes nothing; in both cases we are simply dealing with corporations. The key idea of socialists has always been to put capital under the control of society. Of society, and not simply of the producers. In its pure form productive democracy is just as elitist and anti-humane as any other ‘democracy of the elect’. Moreover, it is anti-environmental and anti-intellectual”.

“Ultimately, having an orientation to collective property does not spare us from having to make a choice between capitalism and socialism. If we choose capitalism, then the exploitation of a particular worker within an enterprise is replaced by the exploitation of the whole collective ‘from outside’. Hired labour has been done away with, but hat is so much worse for the workers, since it has been replaced by a feudal type of exploitation in which the workers use their own means of production, but are unable to dispose of their surplus product. This is a step backward with democratic capitalism, whose most important conquests have been free hired labour and the workers’ solidarity to which it gives rise”.

“The contradiction between labour and capital cannot be resolved on the level of an enterprise or of a group of enterprises. The economic interests of workers cannot be reduced to the interests of the labour collectives. Every worker is at the same time a consumer, who needs health care, education and environmental protection. The needs of workers often contradict one another. Integrating all these interests is possible only on the level of society. For the activity of enterprises to correspond to the real needs of society, producers must always be under control. Either this control is exercised by the ‘invisible hand of the market’, combined with a fully visible financial oligarchy, or the government takes on itself the same function.”

“Nor it is possible to justify collective property with reference to the need for a ‘mixed economy’. In itself, the combining within society of various forms of property, management and labour organization is neither a blessing nor a goal. A ‘mixed economy’ may transform society, transcending the logic of capitalism, or it may represent a backward and undeveloped form of the same capitalism. This depends above all on the nature of the state, and on the role and structure of the public sector.”

 The Mobilization Model

Nationalization is not a method for managing industry but a means of changing the social and economic structure of society. Kagarlitsky: “The centralized mobilizational system proved unsuited for day-to-day administration in the conditions of a developed industrial economy and consumer society. But it does not follow from this that the former successes should be doubted, or that the mechanisms of the mobilizational economy are completely unviable. They can work successfully where there is an objective need for them.”

“The rejection of nationalization signifies in practice the rejection of serious efforts to transform society. Unquestionably, the existence of state property on its own does not yet constitute socialism. It does not automatically ensure either a more just contribution of national income or a more harmonious development. But without a strong state sector, resolving all these problems is impossible in principle”.

“While fully recognizing the limitations of ‘state socialism’, we cannot fail to see the necessity of it. … Unless the state sector acts as the core of the productive system, ‘self-managed enterprises’ will be starved of investment and, ultimately, will be enslaved by financial capital.”

“The only way to break the economic power of large finance capital is through nationalization. Alternative strategies for modernization and restructuring then become possible. Only with the emergence of a state sector is it possible to speak of serious social control over the investment process”.

The myth of the inefficiency of the state sector

“The decentralization of power becomes a reality on the basis of decentralized socialization of property,” says Kagarlitsky. “Private capital is undergoing a rapid centralization and concentration not only on the national but also on the world level. Paradoxically, an association of regions can create more effective counterweights to this than a centralized bureaucratic state. The real rather than imaginary participation of workers in management can also be ensured on this basis. It is also possible on this level to resolve the contradictions between the productive, consumer, environmental, cultural and other interests of particular people”

Many late-twentieth-century writers note that the founders of socialism placed their faith not so much on the elements of socialism that had grown up within the framework of capitalism, but on the constructing of a new society, a task that would begin following victory in the class struggle. Collective property seems more attractive precisely because it arises and develops within capitalist society. However, the same can be said of the state sector. It is only necessary to make a critical study of the available experience, without restricting oneself to statements concerning the failures in the Soviet Union.

A peculiarity of the state sector   is that its future depends on the course of the political struggle and the relationship of class forces in society. For this very reason, however, the state sector is strategically important for any socialist and even democratic project. This struggle does not come to an end with nationalization, but merely takes on a different form.

The experience of China in the 1990s also shows the absurdity of the myth of the ‘inevitable inefficiency’ of state enterprises. “It was the work of the state enterprises that allowed the private and cooperative sector to make extra profits. It was the state sector that paved the way for the development of the social and productive infrastructure. (…) The losses of the state sector in China are in fact a hidden form of subsidy for the private sector. This is why the market reforms without privatization that have been implemented in China have led to a dramatic growth of private business ‘from below’, while the privatization in eastern Europe, and especially in Russia, has been accompanied by an extremely weak development of private entrepreneurship.”

What Can Nationalization Achieve?

“The results of nationalization depend in the first place on the condition of the state, on its structures and on its social character. The effectiveness of nationalization, its ability to resolve social problems and speed development, like the structure of the state sector, the position of the workers within it and the degree of democracy in management, all depend on the relationship of forces in the country.”

Historically, “The success stories include the activity of state firms in Austria and Norway. The state sector played a significant role in the modernization of French industry after the Second World War…. The nationalized banking sector served as one of the foundations of the ‘South Korean economic miracle’ of the 1970s and 1980s, showing the degree to which state property could operate successfully in the financial sphere, considered the holy of holies of capitalism.”

“Speaking of the economic achievements of state enterprises is impossible without mentioning the main success story of the late twentieth century, the Internet. This gigantic information network arise and for a long time existed as an ordinary state enterprise, organized and financed by the US government.”

“The experience of state entrepreneurship in the twentieth century shows that it is most effective when a need has appeared for assimilating new areas, for achieving new organizational and technological breakthroughs, and for creating the infrastructure and potential for further development.”

“Without public property the modern form of capitalism could simply not have developed. Globalization and liberalization became possible thanks to the preceding decades of economic expansion, which rested on the strength of the state economy”.

“The weakness of the state sector has always been its inability to catty forward its development on the basis of its own success. The state finds it easier to innovate than to administer. It finds it easier to create the new than to manage what has been created. This is why the state sector, after ensuring a breakthrough, loses the initiative and yields it to private enterprise. But does this lean that the state is doomed merely to plough the fields, the harvest from which will be gathered by private capital?”

Transforming the State

“It is clear that the model of the state enterprise, like the model of the state, needs to be dramatically altered. This is the essential task of radical reformism, the feature that distinguishes it from dogmatic currents of a communist or a social democratic stripe.”

“The degree of readiness to nationalize strategically important sectors of the economy or monopoly enterprises can be taken as a measure of the seriousness of a reformist government. Both ruling elites and left-wing politicians know very well that even successful nationalization does not mean the destruction of capitalist relations in society. But it does create the possibility that qualitatively new institutions and a new relationship of social forces may appear. Nationalization limits the options for international finance capital. It is precisely the threat of property losses that forces the elites to make serious concessions. In other words, until the question of property is posed, smaller, ‘individual’ problems will not be solved. “


“The environmental crisis demands changes in the approach taken to the use of resources. … Wherever possible, individual consumption has to be replaced by collective consumption. This applies above all to transport, and to heating and utilities (water, gas, electricity). The basis for effectiveness of collective consumption can only be high-quality socialized public services, under public control.”
   
“Forms and levels of socialization should be differentiated. Various types of production permit and demand different degrees of socialization. If the economy is complex, with a variety of different technological levels, the public sector can also only exist as a complex multi-level system, and not as the homogeneous, monolithic structure which socialists dreamed of in the past.”

New Approach to Property

“New technologies and new methods of organization also require changes in the approach taken to property. … The combining of market criteria with hierarchy is a fundamental principle of management under capitalism. But in present-day conditions this principle fails to work, or prevents firms from establishing between themselves the new ‘competition-cooperation’ relations that are essential if technological potential is to be used to the full. ‘New forms of governance’, based on other approaches and values, are indispensable. We shall not find out from the works of the economists how to make these approaches and values the dominant ones in society.”

“The expanded role of pension funds, like the growth in the number of worker-owned enterprises and the vitality of the often-condemned state firm, prove that the traditional capitalist system of property has been exhausted to the point where it inevitably gives birth, in the course of its development, to various ‘socialist’ experiments. However, these ‘buds of socialism’ will not be able to transform society on their own. Even capitalism, which arose within feudal society, could not get by without massive expropriation of the property of the church and the aristocracy, or without the abolition of the feudal rights which served as the economic prop of the old classes. In just the same way, it is hard to imagine that the new society will manage to arise without violating capitalist concepts of the right of property.”  

Property is above all an expression of social relations. It is another question to what degree formal legal concepts succeed in expressing the essence of these relations. “The task of the left consists of ‘generating new legal relations, new forms of property, new forms of rights and obligations’. In Specht’s view it is necessary to proceed both from the ‘dualism of private and state-owned property’ and from the counterposing of the collective enterprise to the nationalized one”.

“Partnerships between the state (as general partner) and working collectives or members of working collectives can be designed. Such variations can depend on sectors of the economy, on the sources of finance, on the management know-how sometimes to be obtained from an outside party, on contributions of assets to the companies. Issues such as liability for the state-owned enterprises, the role of enterprises in contributing to the general well being would influence the decision as to which property regime is to be applied. Yet the leading principle should be to restrict the choice of form and content of such property rights as little as possible.”

“It is quite obvious that future attempts at mechanically duplicating the Soviet model of centralized planning or of state enterprise are doomed to failure. But it is also obvious that a redistribution of power in the economy and society to the advantage of the majority, experimentation with property rights and radical changes in the position of workers on the job are all impossible without the state. If the sate is deliberately stripped of the right to hold property, there cannot be any guarantees of property for workers, and no legally secure defence of the collective interests of the majority of the members of society. Nor can state regulation have any hope of success.”

“The functions of ownership have to be redistributed, not in favour of the private entrepreneurship that has now outlived its time, but of decentralized managerial structures that ensure the democratic participation of workers in decision-making”.

“Historically, Marxism called for the nationalization of the means of production to the degree that capital was embodied in them. A democratic economy is impossible without the socialization of the process of reproduction of capital – that is, of the process of accumulation and investment.”

Nations and Nationalism

No one has ever managed to provide an exhaustive definition of a nation. According to Stalin, a nation is a stable, historically established community of people, which have arisen on the basis of a common language, territory, and economic and cultural life, and which has a common mentality manifesting itself in the field of culture.

A nation is a historical and political phenomenon.  “Nations, like classes, are not ‘natural’; they are born out of processes of political and economic development which include conscious work by political elites setting out to form their own ‘national’ culture”.

“The creation of national states in Europe coincided with the rise of industrial capitalism and was organically liked to it. The transformation of communities and tribes into peoples, and of peoples into nations, occurred as an integral part of the process of formation of the modern state.” Kagarlitsky agrees with Emmanual Wallerstein claiming that in almost every case statehood preceded nationhood, and not the other way around, despite a widespread myth to the contrary.

“The trouble is that in the process of modernization by no means all peoples have become nations. Meanwhile, states have arisen and collapsed, merged and split. Many peoples have developed within federations, at the same time possessing their statehood and not possessing it. Globalization, initiated by the centres of the world capitalist economy, has been superimposed on the continuing search for national self-identification and state self-organisation in the countries of the periphery and semi-periphery. The incompleteness of this process helps explain the dramatic nature of the conflicts that have arisen in the late twentieth century.”

“It is in the nature of human beings to idealize movements that have achieved success. Bolshevism became a worldwide political model of revolutionary organization for sixty years because Lenin and Trotsky succeeded on 7 November 1917 in taking and holding on to power in Petrograd. National liberation movements have been idealized in the same way. Only later has it become evident that all national movements, even those which on the whole adhered to leftist and democratic positions and have played a progressive role in history, have included reactionary components. Since the 1970s these reactionary tendencies in national movements have begun growing stronger, to a significant degree because of the growth of the general ideological and structural crisis of the left. In addition, the exhaustion of the democratic potential of traditional nationalism in a changed society is becoming more and more obvious.”

“It is obvious that attempts to solve traditional problems under qualitative different social, cultural and technological conditions will have quite different consequences. The national state is not the same in the twentieth century as it was in the period from the seventeenth to the nineteenth centuries. But to create modern forms of statehood without passing through a period of historical ripening is impossible. This means an inevitable repetition of the bloody conflicts in the past, of the injustices, cruelties and authoritarian methods that lie at the basis of any state. It means that the deliberate strengthening in society, even if only for a short time, of obsolete, archaic structures and relationships, the creation of new hierarchies clearly incompatible with the tasks of the modern world, and the implementation of policies which lag behind present-day life by a whole epoch. It is quite probable that the development of various peoples has been retarded and deformed because they have lacked their own states in the past. But the belated formation of a national state no longer compensates for this, just as gluttony in old age cannot make up for malnutrition in childhood. Moreover, he new state reflects all the contradictions and deformities of the earlier national development.”

Self-determination

“Self-determination has been achieved not by peoples but by territories, and not by nations but by elites, by the bureaucratic apparatus. On becoming the new state power, the old bureaucracy tries to legitimize itself through aggressive national rhetoric and symbolic actions aimed at defending ‘national interests’ from the ‘foreign adversary’.”

“Western leftists are inclined to sympathise with ‘small’ peoples and to show no special liking for ‘imperial’ ones. They are ready to speak out against German, French, Russian, Serbian and with certain reservations Croatian nationalism, while expressing sympathy for Ukraine, Bosnian, Catalan and Quebecois nationalism.  Meanwhile, they fail even to notice that ‘small’ nationalism usually becomes a real force when behind its back there looms the state interests of one or another of the ‘large’ ‘imperial’ nations – the very same United States, Russia or Germany. Moreover, the bearers of the ‘national idea’ are most often not the oppressed masses, but the local bureaucracy. “

“With the world economy becoming increasingly globalized, only large state formations are capable of pursuing autonomous financial and economic policies. In such circumstances it is quite obvious that world financial centres such as the International Monetary Fund and the World Bank, along with the ruling strata in the US, have an interest in combining increased economic integration with political disintegration.”


“The ‘national idea’ has its own internal logic of development. It moves rightward, in the direction of fascism, until blood begins t flow, and then will not be sated. Those who want to climb on board this idea will be forced to travel with it.”

“The idea of national statehood is linked closely with violence. A nation which no one threatens does not have an acute need for its own national state. A modern state cannot be reduced to, organized violence. Nevertheless, organized violence is in historical terms the first principle of the formation of states. It plays a huge role in the creation of national self-consciousness. It is not by chance that monuments to military leaders adorn the squares of most European cities, including the most peaceful.

Marx and Engels were absolutely right when they declared that no people can be free while it oppresses other people. But they were talking specifically about oppression; the existence of multi-national states did not in itself strike them as unnatural.

‘National  Question’ or the Problem of Democracy?

Socialist thinkers have advanced three alternatives for solving the national question: federalism, ‘self-determination up to the point of succession’ and cultural-national autonomy.

“Perhaps more strongly than anywhere else, the nationalism of the twentieth century has developed in the middle classes, in the bureaucratic milieu and among representatives of the ‘free professions’ for whom ‘ethnicity’ and a sense of participation in ‘their culture’ have been able to provide guarantees of earnings, career advancement and independence. Hence the anti-bourgeois essence’ of the national struggle in no way provides a guarantee that it will be democratic or leftist.”

According to Kagarlitsky, the weak point of Lenin’s concept of ‘self-determination’ is the stress it places on the administrative-political status of a particular territory: “What is the crucial element here – the people of the land? In principle, self-determination, according to Lenin, cannot be separated from a definite territorial area. For this reason it is not only prone to infringe upon the rights of  minorities inhabiting the same territory, but it also limits the realization of the national rights of that section of the people that lives outside of the territory’s boundaries.”

“The cases in which minorities have been successfully integrated show that the national question is ultimately one of civil and cultural rights. Where these rights are violated, nationalism is transformed from the ideology of narrow ethnic and corporative groups into a mass movement.”

National Liberation and Capitalism
 
“The approach taken by the left to the national question has traditionally been part of a general anti-capitalist strategy. (…) Once in power, the Bolsheviks were forced to abandon many of their initial theoretical positions and to improvise. (…) After the hopes of revolution in Germany had collapsed, the Russian revolutionaries placed increasing hopes on the colonial peoples. Until 1918 the ‘colonial question’ had not held a particular important place in socialist ideology. Now a rise in anti-colonial nationalism became an essential element in the general strategy for breaking the chain of capitalism ‘at its weakest link’.”

“Also, the anti-colonial movements did not always have the same priorities as the workers’ movements in industrialized countries. This was especially apparent during the years of struggle against fascism, when many representatives of Arab nationalism placed their hopes on Nazi Germany as a potential source of support in their struggle for liberation from Britain.”

“If the anti-colonial movements of the 1920s had often been traditionalist and even reactionary, headed by torpid feudal elites, after the Second World war and the proclaiming of Indian independence the situation changed. In colonial and semi-colonial countries where a native industrial proletariat, a bureaucracy and an educated middle class had arisen, interest in socialism was growing.”

“The situation changed radically in the 1980s. The West seized the initiative and began to use nationalist movements in the struggle against communism. … The situation was even more confused because many slogans of the anti-communist resistance were precisely the same as those of the earlier national liberation movement. … The weaker the democratic and socialist alternative, the more attractive nationalism appeared.”

“Then at last came the year 1989, when the communist system disintegrated and the left movement in Europe suffered an unmistakable moral collapse. Globalization and neo-liberalism meant that the old anti-imperialist and anti-colonial slogans became empty; the hegemony of the ‘centre’ was now being exercised through new methods. But radicals continued mechanically to repeat the old formulas that everyone had grown sick of hearing. (…)

Internationalism

“A part of the Western left tries to sit on two chairs at once, supporting the idea of national statehood for minorities and of a multicultural society. This indicates either the lack of a programme, or the kind of programmatic “flexibility” that allows one to occupy any position depending on the circumstance. “

“How does a ‘prison-house of nationalities’ differ from a multinational state? The difference lies in democracy. What leftists must defend is not the principle of self-determination or that of cultural-ethnic pluralism, but democracy and human rights as such. The only ways of solving the national question that deserve support are those that meet these criteria.”

“To the idea of the ‘national state’, leftists need to counterpose their own concept of multinational and multicultural civil society. The programme of socialists has to be based on the principle of equal civil rights, in contract to the nationalist ideology of ‘vertical solidarity’ of the masses with ‘their’ elites. If left-wing tradition presupposes social solidarity and the ‘horizontal’ unity of workers, nationalism presupposes hierarchy and vertical organisation. Leftists and national-conservatives alike see in the state a means of achieving their economic goals. But their views of the nature and social purpose of the state are diametrically opposed. This is why leftists and nationalists will never be able to unite successfully, even if they voice similar social demands.”

“There is not, and cannot be, a single universal principle making it possible to solve national problems. But there can be a single criterion: respect for democratic rights and freedoms. The positions of the left ion the national question must be assessed from this point of view as well.”

“It is clear that as internationalists, leftists must call for the preservation of multinational and multicultural federations. But it is no less clear that the association must be free and voluntary. Meanwhile, the right of peoples to unite with one another has to be respected no less than their right to independence. “    

“Even if the majority of the people are wrong in demanding independence, socialists cannot support great-power coercion and repression. But this does not in any way signify that leftists must support a positive programme advanced by nationalists. When nationalism is not a form of defence of democratic rights, it is reactionary through and through. A nationalism which calls for limitations on the civil rights of ‘settlers’, which denies them equal rights in the use of their language and so on, is anti-democratic in its very essence. Also thoroughly dubious is the idea of supporting a new nationalism as a form of moral recompense for old wrongs (this is typically of Western leftists who feel a historic guilt for the crimes of their colonial period).”

“It is precisely because of the political weakness of leftists themselves that national demands are becoming a trap for them. If these demands are just, if they are supported by the majority of workers and are rejected by the ruling class, they can become a legitimate part of the socialist programme. But leftists do not understand the degree to which these slogans are their own, and the degree to which they are not. These demands are ultimately realized without the participation of leftists, and often despite their opposition, giving rise to new injustices along the way. In this respect the position of the left is tragic. In any national struggle, it is doomed to defeat. But this defeat cannot be either decisive or final, since in the final reckoning it is not national but social contradictions that decide how society develops. Every ‘victory’ in the national struggle simply turns into fresh dramas, until the national contradictions are overtaken by social development. What is catastrophic for leftists is not their inability to solve the national question, but their attempts to give this question a central place in their programme, or to solve it in isolation on the basis of their own ideology. For socialists, the best solution to the national question is to go beyond its boundaries.

The Third World Labyrinth: Is a Democratic Model Possible?

“For most of humanity, the twentieth century has been a period of modernization. As we approach the century’s end, we can state that all of the projects that have been advanced for global modernization have failed, and that the few instances of success do not change this general picture.”

“Traditional oligarchs, capitalists, technocrats and bureaucrats have proven equally incapable of carrying out successful modernization, or at any rate, of ensuring democratic development.”

“The transformation of the state into a monopoly proprietor and the creation of a statocratic system in Russia and China represented the most radical attempts at imposing a ‘final solution’ to the problems posed by this systematic diversity. (…) The contradictions of real life in these societies meant that the numerous theoreticians who sought refuge in a face-saving formula (‘degenerated workers’ state’, ‘state capitalism’, and so on) merely headed into a dead end. (…) The synthesis was unsuccessful. As the end of the century has neared, the statocratic system everywhere has began disintegrating into its component parts. The crisis of state power has called a new systematic diversity into being, and has returned the societies of Eastern Europe to a state of dependency and backwardness.”

“Marxists in the early twentieth century saw the root of the evil as lying in colonial exploitation. But when the countries of Asia and Africa achieved political independence, the dilemma was not solved, and in many cases the situation became even worse. In the 1970s the main problem was considered to be unequal exchange between industrial and agrarian raw material economies.”

“The only structure able to ensure that the investment cycle and the process of accumulation operate in the interests of peripherical societies is the national state. … The state inevitably subordinates accumulation and investment policy to the solving tasks which are its own and which it finds more natural. This was already grasped by J.M. Keynes.”

“A consistent socialization of the investment process, meanwhile, inevitably leads us outside the logic of capitalism. This is why neo-liberal reaction directs such furious attacks against all forms of state participation in the economy, even when this participation is essential for the stability of the bourgeois system itself.
Despite the failures of state planning, it remains an incontrovertible fact that the lower the level of development, the greater the need for the ‘statization’ of the economy, making possible the implementation of policies aimed deliberately at overcoming backwardness. … Statization of the economy, however, cannot by itself solve the problem. Authoritarian-bureaucratic power structures doom the state sector to inefficiency. The greater the backwardness, the worse the bureaucracy. … That is why the mixed economy remains an attractive but still vacuous slogan. Without structural reforms in the economy, and without the renewal of the system of state power, the mixed economy simply combines the vices of all the ‘models’ that have been tried and found wanting. The statization of the economy, while creating the preconditions for accelerated development, simultaneously places obstacles in the way of progress. In other words, the greater the need for a cure, the less effective the medicine. Socialists, calling for changes in the ‘class character’ of the state, have been unable to resolve this contradiction, since they have retained their faith in the old Enlightenment concepts.”

“Instead of arguing pointlessly about whether we need a ‘big state’ or a ‘small state’, we have to understand that what is necessary is a different state. A radical change in the structures of power is the only alternative to wandering in the labyrinths of authoritarian modernization.”

“The ideology of ‘reform and development’ might perhaps be reborn, but it is still not going to work. … the rise of social democratic ideology in Latin America has merely reflected the crisis of the revolutionary perspective, ‘a mood of disillusionment and anti-utopianism, but in itself this approach ‘lacks historical depth and strategic realism.’ The call to reject ‘utopian goals’ is tantamount to demanding abstention from action itself.”

“It is essential to return to democracy its original sense of people’s power. It is well known that the parliamentary road to change is far from being the most rapid. No less familiar are the catastrophic results of numerous attempts, Jacobin and Bolshevik, to speed up the changes, clearing out of the path the democratic ‘restrictions’ that hindered progress. The history of the Russian soviets in 1917 amounted to an unsuccessful attempt by the masses themselves to resolve this contradiction, creating democratic power of a new type.”

“Lenin and the Bolsheviks made many speeches praising the concept of a workers’ democracy arising spontaneously from below, but this democracy proved incompatible with the Bolshevik concepts of the party and the revolutionary state.
Through recognizing the role of the soviets and resting on the self-organization of the masses, the Bolsheviks were able to take and hold power in the autumn of 1917. But having used the soviets as a springboard to power, the Bolshevik party was unwilling and unable to renounce its own Jacobin politics. Modern-day leftists who have escaped the hypnotic effect exercised by the Jacobin-Bolshevik tradition will, it must be hoped, prove capable of drawing lessons from this experience.
It is obvious that the model of power that was embodied in the multi-party soviets of 1917 was extremely crude. In many respects the advantages of ‘worker’s democracy’ over parliamentarism were simply the fruit of the imagination of radical ideologues. It was the weakness and ineffectiveness of the soviets that led to the downfall of this form of democracy. The soviets lost their real power because they were unable to defend themselves effectively either against the onslaught of counterrevolution under civil war conditions, or against the Jacobinism of the Bolsheviks.
Nevertheless, if we want to break out of the vicious circle of ‘either parliamentarism or authoritarianism’, we have to reject the search for simple solutions.   … Nonetheless, the alternative to parliamentarism lies not in the dissolving of parliaments, but in the combining of parliaments ‘above’ with organs of popular power ‘below’. In other words, what we need is not soviets instead of parliaments, but soviets in addition to parliaments.”

“There is a democratic alternative, but it is not a bourgeois or liberal alternative. In these countries democracy is impossible without a substantial element of socialism. If the public sector plays a decisive role in the economy, if power lies in the hands of workers and their parties, and if self-management is beginning to develop within the state structures, then we are approaching a society in which direct and representative democracy are combined. But even this is not enough. The private sector and transnational corporations cannot merely be counterbalanced by enterprises directly serving the public interest. The very approach taken to development has to be changed.”

Capitalist rationality

“The experience of the twentieth century not only forces us to recognize that attempts at the rational organization of society on the model of the ‘big factory’ create a monstrous and totally irrational bureaucracy, but, still more important, also demonstrate the narrowness of the capitalist or ‘Western’ notion of rationality.”

“We will have found the way out of the labyrinth when we come to understand that the main task is not to achieve the highest possible growth rates, but to combine democracy and development, to ensure that every decision that is taken serves to guarantee the rights of the individual. The utopia of the homogeneous society, that has possessed the minds of modernizers of all political persuasions, has to be rejected. To have a democratic perspective means opting for a ‘motley society’.”

“Paradoxically, the growth of entrepreneurship ‘from below’ can also represent the outcome of the successful application of socialists measures. The overcoming of dependency, and the banishing of the bureaucratic and comprador capitalist interests that have exploited the country’s backwardness and dependency, open up definite opportunities for the development of democratic capitalism. There is inevitably a period of transition, during which the actual movement toward socialism is accompanied by the parallel development of national capitalist entrepreneurship. Ahead lies the promise of progress along several tracks and on several levels, and this is the sole guarantee of genuinely organic development.”

“Inevitably, numerous transitional forms of democratic economy will appear, such as genuine cooperation and communal property ownership; these will not in their essence be either socialist or capitalist. The role played by the public sector and by the state, which must be in the hands of the workers, is absolutely decisive for the creation of a viable democracy. Only the public sector can create the technological base for disseminating intermediate technologies, and for progressive changes in other sectors. Social ownership can take various forms – state, municipal and cooperative-collective. The decentralization of public property provides a guarantee of dynamic and integrated development that is unattainable either under the way of private monopolies, or under bureaucratic rule.

Such a strategy is impossible without the implementation of one of the most important socialist principles – that is, without democratic control over investments.”

“Communists and their allies shared the traditional idea of rigid delineation between the ‘democratic’ and ‘socialist’ phases of the revolutionary process. This concept proved untrue in practice even in relation to the Russian Revolution of 1917, and ha shown itself to be still more inapplicable under modern conditions. (…) However, the task of democratic change is precisely to create socialist institutions, which can serve as the core element of further development. Unless this task is carried out, democracy will never be consolidated; the social contradictions of a poor society will either blow it apart, or turn it into an empty farce.”

Beyond models

“The democratization of the economic structures and the dominant position of various types of public property should ensure greater equality, and as a result, a more stable society. (…) To jump across historical stages is impossible. The success off anti-capitalist measures creates the illusion of a ‘leap to socialism’. Nevertheless, society still passes through this stage, only taking a different route.  (…) Doing violence to reality not only leads to the degeneration of the revolution, but compromises its ideals on a world scale, and thus plays an objectively reactionary role.”

“A revolutionary regime in a backward country faces three possible variants. These are defeat and the restoration of the old order; degeneration, Thermion and ultimately, as the Soviet experience showed, bureaucratic restoration; and the consolidation of revolutionary changes through democratic reforms. The last of these roads is the most difficult. Ti presupposes the rise and survival of a sector of socialist self-management in an economy which retains elements of various systems. The new model of development gives birth to a new model of the class against capitalist and statist ones.”

“For a long time it was accepted that the main danger faced by a revolution came from its enemies. This is an illusion. The main danger faced by a revolution is inherent in the revolution itself. Revolutions, which go to far, perish. But a revolutionary process cannot be haltered by decree at a predetermined spot. A revolution has its own logic and its own momentum. Nevertheless the revolutionary process can, and at times must, be redirected onto a reformist track. In such cases there is talk of ‘rightward shifts’ and of ‘deviations’, but it is through such methods that the achievements of the revolution can and must be consolidated.
Reformism has to become part of revolutionary strategy. Making the transition from revolutionary ardour to the everyday work of reform is difficult, but it is precisely this which makes it possible to bring reality more closely into accord with the revolutionary ideal. “

“Without revolutionary resolve, the reformist project will never be implemented. Reformist illusions can therefore prove just as dangerous as revolutionary ones. (…) Reformist moods have provided the source of many great revolutionary movements. (…) Faced to choose between reform and revolution, a society will generally prefer reform, unless mass consciousness is firmly convinced that the revolution will proceed in a peaceful and democratic manner. (…) Historical reality, therefore, does not give us the luxury of a choice between revolutionism and reformism. Reformism lacks a purpose unless it is combined with revolutionary perspectives, and revolution without reformist work is equally pointless. (…) The democratic model is full of contradictions, but this is precisely the reason why it is viable.

Conclusion

“The temptation for the left to become nostalgic and conservative is strong and deeply rooted in the minds of millions of working people who form the core constituency  of the socialist movement. It is true that their situation has worsened since the introduction of neo-liberal reforms. But there is no way back. And this is why the neo-liberal global elite is not afraid of the nostalgic left.”

“The neo-liberal model of capitalism is unstable in principle. Rejecting the criticisms of both Marx and Keynes, and destroying the regulatory structures established under the influence of their ideas, the new world economic order has returned us to the rules of ‘classical’ capitalism – including overproduction and over-accumulation of capital.” (…) Marx was right when he insisted that these contradictions logically led to revolution. But where are the revolutionaries? Where is the revolutionary project?”

“Regulation remains an empty word unless the power of the New Big Brother is undermined politically and economically. That can be done and must be done internationally but through nation-states. The left must not just fight to conquer the state but first of all to transform it. That was the core idea of the original Marxist project and it is as valid today as it was hundred years ago. The state is weakened by the neo-liberal model –so we must use its weaknesses in our struggles.”

“We do not fight for more state or less state but for a different state. The network society will not emerge as a result of capitalist evolution but it can become a product of socialist transformation. We must recreate the public sector as decentralised and democratic, connected to community and accountable. We must re-establish the social security system on the basis of self-organisation and representation. And society must penetrate the state as deeply as possible.  (…) The left must reinvent the state- based on social networks, participation and citizenship, as opposed to the totalitarian hierarchies of the corporate Big Brother and multinational capitalist giants. (…) New Big Brother has to be stopped.”

“That can be achieved through class struggle and –through expropriation of big corporations. If we are afraid of thinking in these terms we are doomed to defeat politically and morally. Is the left capable of responding to the challenges it faces? Maybe it is not. But in this case the loser will not –just be the socialist movement but the humanity as a whole. “