Wednesday, June 30, 2010

Number crunching

Treasury figures show that the spending cuts will cost 1.3m jobs, 600,000 of them in the public sector. HM Treasury estimates that this will be made up for with the creation of 2.5m new jobs. David Cameron now claims that 2 million new private sector jobs will be created in the next parliament, citing the 'independent' Office of Budgetary Responsibility. The private sector thinks not. The TUC seriously doubts it. And the think-tanks don't believe it. For good reason, as well. Anthony Painter points out that in the last decade the years of growth lasting from 1999 to 2007 saw the creation of only 1.52m private sector jobs, or 190,000 jobs a year. The Treasury is relying on the creation of 500,000 new jobs every year for the next five years, in a period of economic stagnation. There is no way in hell that is happening. Not only that, but most of the job growth in the last decade accomodated growth in the labour force. Now, the total labour force will grow by o.25% each year from 2011. That means the economy would have to add a net ≈100k jobs per year, just to avoid unemployment increasing. That it could feasibly manage. But half a million new jobs every year is an ornate fib with brass balls on.

Gramsci on crisis and resistance

“A crisis cannot give the attacking forces the ability to organize with lightning speed in time and space; still less can it endow them with fighting spirit. Similarly, the defenders are not demoralized, nor do they abandon their positions, even among the ruins, nor do they lose faith in their own strength or in their own future … Mass ideological factors always lag behind mass economic phenomena … therefore, at certain moments, the automatic thrust due to the economic factor is slowed down, obstructed or even momentarily broken by traditional ideological elements - hence, there must be a conscious, planned struggle to ensure that the exigencies of the economic position of the masses, which may conflict with the traditional leadership’s policies, are understood. An appropriate political initiative is always necessary to liberate the economic thrust from the dead weight of traditional policies.
Antonio Gramsci, ‘The Modern Prince’ and ‘State and Civil Society’ in Geoffrey Howell-Smith & Quintin Hoare, eds., Selections from the Prison Notebooks, Lawrence & Wishart, 1971, pp. 168 & 235

The Meaning of David Cameron, reviewed

There's a complimentary, but critical, review of my latest book in the summer edition of the Socialist Review here. Though the reviewer considers the book "brilliant" in some respects, he takes issue with one aspect of it, namely that pertaining to the balance of class power in the UK. Rather than take the huff, as would be my natural inclination ("does he know who I am?"), I will take this as an opportunity to discuss what The Meaning of David Cameron does and does not set out to claim.

First of all, the reviewer is quite right to say that the power of organised labour has not been completely "broken", but it is a misunderstanding of the book to think that it says otherwise. Were that my contention, the passages in the book dealing with union resistance to New Labour, even acknowleding that there continues to be a trade union movement at all to speak of, wouldn't make a great deal of sense. I suspect that the only context in which it is likely that such a state of affairs would actually come about would be under fascism. There are degrees, however. The reviewer is right to say that union density hasn't reached the lows of the 1920s, when it reached just 23%, but unionised workers currently represent less than a third of the workforce, a fall from a peak of 55% in 1979. It is true that this is partly because the workforce has expanded, but the inability to reproduce past rates of organisation is part of the problem - and I suggest that it is in part due to the recomposition of the working class and the defeats that I mention in the book. The recomposition of the working class, by the way, did not just entail a shift from manufacturing to services. It was a spatial recomposition, with production increasingly shifted to geographical areas with lower rates of unionisation, both in the UK and internationally - think of the shift in production from the 'snowbelt' to the 'sunbelt' in the United States, for example. It is true, as the reviewer says, that manufacturing has not always been the vanguard of the working class, and that the sharp falls in manufacturing employment doesn't doom working class organisation. But the rate of organisation that has persisted in manufacturing has not been reproduced in the service economy - as yet. And I certainly don't suggest that "the basic social contradictions" (ie, class conflict) have somehow disappeared with the shift from manufacturing - quite the reverse.

The militancy of the working class, moreover, has experienced a precipitous decline, with days lost to strike action reaching an historic nadir in 1998. During the 1920s, when union density was historically very low, the lowest number of days lost to strike action was 1.17m in 1927 - this, a year after a record high of 162.2m in 1926. In 1998, the number of days lost to strike action was 282,000, and this in a decade in which the number of strike days rarely exceeded a million. In the 2000s, the figure increased somewhat, but still remained historically low, peaking when New Labour picked a fight with a group of public sector workers. The figure of 900,000 strike days lost in 2004 was at the time considered unusually high, because it doubled the figure from the previous year. The loss of more than a million days in 2007 was also unusually high for the last decade. Last year, less than a half a million days were lost to strike action, in the middle of huge job losses. Would it not be fair to say that, to some degree, relative to its previous condition, the British ruling class succeeded in breaking the power of organised labour?

Secondly, I do maintain that neoliberalism as a class project was overwhelmingly "successful in its own terms". The attack on the working class, some of whose effects I discuss above, enabled a new spurt of accumulation by suppressing wage claims, permitted successive rounds of efficiency 'downsizing' and 'rationalising' (because of the reassertion of "management's right to manage"), produced new systems of work discipline and organisation that increased the rate of exploitation, enabled/compelled social democracy to adapt to neoliberalism, and opened up new avenues for profitable investment in previously socialised sectors either through full privatisation or private finance initiatives. The result is that profit rates in the advanced capitalist countries, while never recovering to their historically anomalous pre-1973 levels, did improve dramatically on the lows resulting from the systemic global crises in 1974-5 and 1980-2, and a new period of growth - centred on south-east Asia - was initiated. In the UK, that period of growth was interrupted only once before the credit crunch, with the 1991-2 recession. In global terms, there have been localised, and sectoral crises, but there hasn't been the kind of systemic, global crisis of capitalism seen in the mid-70s and early 1980s until the collapse of Lehman Brothers. This is not to say that neoliberalism didn't throw up its own problems, perpetual instability and the constant requirement for state intervention to shore up finance among them. Nor does it imply that the pace of neoliberal accumulation wasn't shaped and constrained by continued opposition - New Labour's battles with the PCS union show that it has been. But it does suggest that neoliberalism succeeded in its principal aim of restoring profitability by increasing the rate of exploitation.

While I'm on this subject, one aspect of this story that I don't give due attention to in The Meaning of David Cameron is imperialism, and the war against the global South which enabled a hugely increased rate of exploitation outside of the core capitalist economies, thus enhancing profit rates without necessarily resulting in stronger growth or robust rates of investment inside the core economies. Obviously, the narrative's focus is mainly on the United Kingdom, but a large part of the recovery in profit rates for British capitalism was due to Brittania's ability to hang on the coat-tails of the American empire. That is an aspect of the neoliberal assault that you may wish to bear in mind when reading The Meaning Of....

Thirdly, I referred to neoliberalism as a "hegemonic" project, but I did not foresee that this would be a controversial point. I think I'm using the concept of hegemony in its conventional marxist sense, first popularised by Plekhanov and taken up by Gramsci. It accounts for the way in which ruling classes in bourgeois democracies achieve the acquiescence of workers to their rule which, though the threat of force always lies behind it, is not merely coercive. Gramsci noted that mature capitalist democracies are not usually susceptible to sudden, catastrophic revolutionary assaults because behind the armed forces of the state lies a robust, complex civil society bloc that is capable of conserving the status quo. The rulers didn't merely have the armoury of the state to rely on: they had hegemony. A hegemonic bloc is one that incorporates fractions from multiple classes into a particular mode of class rule, not merely by winning them over in the battle of ideas, but by at least appearing to meet the interests of the incorporated groups at some level. In this context, I note that Thatcher, though she admired Pinochet, acknowledged that she could not import his methods to the UK. It would be "inappropriate", she said. Hence, it was not enough to defeat organised labour, nor was it possible to create a "police state" as some alarmed critics claimed - she had to produce a constituency favouring her policies, ostensibly benefiting from them, that extended well beyond the ruling class. The hegemonic bloc created by neoliberalism comprised high finance, internationally oriented services and manufacturing industry owners, a section of the professional middle class, most of the petit-bourgeoisie and a segment of workers. This doesn't mean that the ruling class got everything its own way. There remain counter-hegemonic forces, which are not negligible. But that is the normal state of affairs in a hegemonic regime.

Lastly, when I wrote of Cameron benefitting from a "taboo on class politics",this was in a context in which I pointed out that the majority were unconvinced by Blair's "the class war is over" spiel, that most still identify as working class, that class is still the crucial motivator in voting behaviour, and that Cameron provokes a class hatred which Labour has sought to capitalise on. So, my argument isn't rebutted by pointing out that class hatred helped deprive Cameron of an overall majority. The "taboo" I speak of doesn't really operate among the majority of people, but among the intelligentsia, politicians and the commentariat. For example, the sociologist Huw Beynon has pointed out that just when a record number of people registered the view that there was a class war taking place in Britain, social scientists, historians and other scholars were coming to precisely the opposite conclusion. Such shifts in intellectual culture profoundly shape normal political discourse, in that its products are then filtered through the capillaries of the capitalist media, pundits start to echo its conclusions, and the majority of elected politicians who worry about being demonised by the media soon learn to obey its norms. The New Labour politicians who expressed anxiety and embarrassment over the party's 'class war' strategy are an example of what I am talking about.

Now, I think the reviewer's overall concern is that I may be doom-mongering, offering a stilted perspective that oversells the achievements of neoliberalism and thereby precludes the possibility of working class resurgence. But as I have sought to outline, that rests on some profound misunderstandings of what I have written. Empirically, the situation of the working class and the Left is difficult, but there is no reason why this can't be reversed, provided the problem is given due recognition.

Tuesday, June 29, 2010

International Socialism

The latest International Socialism journal is out, and it has some particular goodies worth checking out in advance of Marxism 2010. To wit: Sebastien Budgen's superlative tribute to Daniel Bensaid; Joseph Choonara's review of an intriguing pair of books by Dimitris Milonakis and Ben Fine; Gonzalo Pozo on the permanent arms economy; Ian Birchall on anarchism; and Gareth Dale and Xanthe Whittaker on sex work.

While I'm here, I had meant to plug the ISO's annual Socialism conference that took place in Chicago recently. Instead, here is the excellent We Are Many website, which boasts an array of radical MP3s and videos, including comprehensive coverage of the Socialism event. Several ISO luminaries will be speaking at Marxism this year.

Capitalism, recession and resistance

Capitalism was bailed out at a global cost of some $20tn. But this didn't resolve the crisis - it shifted it from the private sector to the public sector, saving the investment banks from outright collapse at the expense of the public treasury, leading the sovereign debt crises we've seen. Now, having rallied behind bail-outs, global ruling classes are increasingly shifting behind austerity and structural adjustment after the fashion of that imposed on the 'global south' in recent decades. But that in turn will merely shift the crisis on to a new plane, because the private sector is not well-placed to make up for the sudden contraction in demand that is being imposed. There's nowhere to pick up the slack.

Look at the US. Money supply is plummeting, which means the rate of investments and transactions is collapsing. Companies aren't borrowing, consumers aren't borrowing, which means they aren't spending. Structural unemployment remains extremely high. Emergency legislation is being introduced to prevent nearly two million Americans from suddenly losing their unemployment insurance in the next week - though the extension is only until 30th November. If unemployment figures continue to be poor, some investors now say they are worried that the US will face a second recession. The fantasy of renewed growth led by auto sales, always groundless, has just been dealt another blow as sales fall. Now consider China. Having invested in a proportionally much larger stimulus than the US, its sluggish performance is sending Asian stock markets reeling. The strike wave that I described continues to roll on, which means that capital may find its ability to transfer the costs of the crisis to the Chinese working class limited.

Elsewhere in south-east Asia, which was a key driver of global growth in the 1980s and 1990s, Japan is still in the doldrums, as demand for its exports continues to fall, unemployment rises once more and output falls. It has stuck in a cycle of deep crises since the early 1990s. Europe is in no state to lead the recovery since significant sectors of it are in deep recession (the PIGS countries), and those states now imposing structural adjustment may soon join them. The UK is headed for a period of extremely weak demand. Even on the previous government's advertised cuts, the IFS estimated that the average family would be £2840 worse off per year by 2017 as a result of fiscal contraction. Recent studies show that the Cameron cuts will reduce household income across the board, by as much as 8% in the poorest decile. So where is all the demand going to come from to support any recovery? Paul Krugman thinks that the most likely prospect now is a prolonged, 'third depression'.

The world's very jittery financial capitalists are reflecting this dilemma. The cuts are supposedly being introduced to appease "the markets" (a global demigod about whom it is best to speak only in hushed, respectful tones) but said markets don't appear to respond uniformly well to austerity. Hence, they have shown a tendency 'reward' countries that impose harsh cuts, but then 'punish' those that appear to them to risk recession or political unrest in doing so. This is interesting for a number of reasons. It suggests that the ruling class is far more fractious and uncertain than it would like us to think. They desperately want to make the working class pay for this crisis, but are deeply worried about the effect this may have on growth and future opportunities for profitable investment. It also suggests that the best response to bullying from finance capital and the ratings agencies is to create such tremendous political pressure that there is too much risk for them in political unrest to embark on spending cuts.

Strike waves are already sweeping Europe. France has seen repeated general strikes, with resistance initially stoked by the tremendous uprising in Guadeloupe. Greece has been in upheaval since the earliest days of the crisis, and has ground to a halt again today. Icelanders overthrew their government and voted in a radical new administration. Italy, despite labouring under a horrifically reactionary government with mafia-led racist pogroms, a depleted left and a rising far right, is undergoing a succession of general strikes against austerity. Ireland has seen huge strikes, and occupations. Even the UK, though its labour movement has been very conservative in response to the recession and job losses thus far, has seen some impressive examples of militancy with significant local successes. But it's just not enough, nowhere near equal to the scale of the ruling class attack.

Going on the evidence of what has happened in the UK, for example with the terrible handling of the Bassa dispute by the Unite leadership, I would infer that the problem is partly that the even the most combative unions have not been able to adapt to what is a qualitatively new situation. Their organisational inertia and their relative ideological conservatism has produced an at best hesitant, faltering response. Union leaders that have come out of decades of defeat and falling union density want to be acquiescent in practise, even if they feel compelled to sound belligerent. They want to behave as if something like capitalism-as-usual will be restored soon, even if they know that it can't be. Or perhaps they believe that a re-elected Labour government will ultimately 'see sense' and 'do the right thing'. The truly epochal nature of this crisis needs to be registered before a proportionate response can be mustered, and I have the sinking feeling that as far as the labour movement is concerned, the last people to get it will be the union bureaucracy.

Sunday, June 27, 2010

David Edgar and Lenin's Tomb on apostasy (Marxism 2009)

Just seen that this talk is available on Resistance MP3s. It's the panel discussion between myself and playwright David Edgar concerning the topic of "left-right defectors" at Marxism 2009. Edgar's discussion, generously plugging Liberal Defence, covers the subject since WWII - the Cold War liberals, the neocons, the British New Right, and today's Islamophobic terror-warriors. My own contribution focuses on the two examples of Mussolini and Spargo, partly to undercut the tendency to interpret such apostasy in light of the Cold War and Stalinist terror, and highlight the militarist and anti-democratic aspect of such apostasy. Listen, why not, and come to Marxism 2010. My own meeting on racism in Britain today takes place on Friday morning, 10am, at the Royal National Hotel.

The first cracks in the coalition?

The Liberals, having campaigned on opposition to VAT tax rises, are suffering due to being part of a coalition introducing them. A Telegraph poll has Lib Dem support down 5% to 16% - a tremendous collapse compared to Clegg's pre-election honeymoon, with Labour gaining 4% and the Tories up 2%. Now, it seems that about half of Liberal voters may defect.

If that held true in a general election, I'm guessing that the Liberals would be wiped out in the London and the north-east, and seriously depleted in their south-western strongholds. What the Liberals have done here is to apply a pincer squeeze on their own support. Giving George Osborne a 'progressive' imprimatur enables the Tories to shed their nasty reputation with centrist, and conquer currently Liberal-occupied territory. Passing a budget that openly attacks the public sector, welfare, and introduces regressive taxes - all the while giving in to the Tories in issues such as immigration, nuclear weapons and war - destroys the Liberals' reputation as a slightly progressive alternative to New Labour.

It's early days, but there are already presentiments of a potential meltdown in the Liberal faction of the coalition, with some Liberal MPs expressing unease or threatening rebellion. Simon Hughes has been elected deputy leader of the Liberals the better to coopt and contain people like him, but he has a real problem in that he represents a sizeable chunk of London's working class. And there is a crop of more recent Liberal arrivals who have sprung up in former Labour heartlands, who are at more immediate risk than Hughes. People like Sarah Teather, who exchanged her conscience for a cabinet position (she probably thought it was a bargain), will pay a high price for their loyalism. The party bosses undoubtedly think they need to brazen this out, wait for the immediate shock-waves to pass, and I've made the point before that Liberal voters, while not especially left-wing on economic issues, are largely not Thatcherites. Unlike many Liberal activists, they never supported the Orange Book crowd who took control of the party after the ouster of Charles Kennedy, and were never free market fundamentalists. This is less than a week after the budget was unveiled. Let's see what happens when it really starts to hurt.

Saturday, June 26, 2010

On "armed forces day"

Today is UK "Armed Forces Day", a squalid ritual of deference and domination. So, before heading out to watch a town full of bumpkins masturbate into the bunting, I thought I'd canvas Tomb opinion on the vital question of 'British values' and 'patriotism'. I've set the poll so that you can vote as many times as you like - it makes no difference, because the final result will be determined by the markets:

Thursday, June 24, 2010

A weak and nasty government

The coalition government pitched its budget as a "progressive" one, ensuring that the burden of the austerity would be borne by the rich more than the poor. They even produced statistics to buttress this claim. If it was progressive, the rich weren't complaining. Bankers and businessmen applauded, while trade unionists expressed horror. No one believed the government's claim, the IFS cast serious doubt on it, and the FT has now produced its own statistical analysis, suggesting that the truth is exactly the reverse of what Osborne and Cable have claimed. It has been noted that the way in which cuts have been introduced, not as part of an express ideological commitment but in feigned sorrow and regret and with an attempt to package it as a progressive agenda, reflects the government's weakness. In fact, it expresses the weakness of the ruling class more generally, which does not have a coherent doctrine, an agreed solution, or even a faction with a determined agenda that is capable of asserting hegemony in their class and winning a measure of public support. In that respect, comparisons to the savage 1981 budget are misplaced.

However, the government does have a strategy, which involves terrorising and cajoling people. They have talked up the need for cuts, quite relentlessly, once in office. They have tried to create a panic about the state of the public finances, simulating a Greek-style shock, though in fact the fiscal situation is better than it was thought it would be. They have used the budget to not merely cut, but threaten severe attacks on all non-ringfenced public spending, slashing an average of a quarter of the budget across departments. But their real target is, and always has been, welfare. They hope that by scaring people about what they will do to education, transport, justice, etc., they will gain support if they suddenly decide to shift more of the burden to welfare.

And on the subject of welfare, quelle surprise, they are coming back for more. To begin with, promises enshrined in the coalition agreement that supposedly protected the poorest, such as the pledge not to attack bus travel subsidies and winter fuel payments for pensioners, are about to be tossed overboard. The welfare system is experiencing a phased attack, each additional blow intended to gain acquiescence and soften people up for more. The FT approves, editorialising in favour of more welfare cuts, and cuts in public sector pay, to avoid cuts in other areas such as justice and transport. The Economist agrees, bemoaning the fact that no party could publicly call for attacks on welfare during the election, but insisting that welfare must bear more of the burden. This is the ruling class in full battle cry - bail out the banks, pay off the bond traders, keep the basic infrastructure working, and make the poorest bear the cost.

At the moment, polls show that the government's strategy is working, and that most people acquiesce in the cuts agenda. I would say 'support', rather than acquiesce, but this would imply that the agenda was being approved rather than met with terrorised compliance. The polls also suggest that the strategy would have been less successful had the Liberal Democrats not formed part of the Tory government. In fact, support for the budget is almost identical to the level of combined support for the two governing parties. Give them their due - the civil service played a blinder by negotiating this lash-up government.

However, looked at from their perspective, the ruling class - whether they be in the Institute of Directors or in the highest levels of the state bureaucracy - must know how fragile this situation is. They have never taken polls as holy writ, but as materials to work with, sometimes to validate their policies as democratic, sometimes to plan strategy, sometimes to bludgeon their opponents with. They know how fragile any poll based 'consensus' is. They know that there is a real risk that this budget could produce the feared 'double dip' recession, and that even if it doesn't, public opinion could resile at the first sign of strikes and social unrest. They are also aware that their grasp on opinion has so far depended on allowing people to think that they personally might be spared the worst of the austerity, that the burden will be shifted to someone else. The actual experience of being clobbered, after a year or so of being protected by stimulus expenditure, is liable to shift opinion in dramatic and unexpected ways. And while support for the budget is fragile, opposition to it is extremely motivated. At the moment, socialists have between a quarter and a third of the public to work with, most of it probably concentrated in the public sector and in the unionised working class. That's the most important constituency, the one strategically best placed to resist, and we can build from that.

Wednesday, June 23, 2010

Money doesn't make the world go round: on the marxist theory of money

Guest post by Rick Kuhn:

You can’t eat a collateralised debt obligation: why money doesn’t make the world go round

The global financial crisis that began in 2007 was clearly about money, credit and finance. For mainstream economists and politicians, from neoliberals like John B. Taylor at Stanford, and Australian opposition leader Tony Abbott, through pragmatists like Barack Obama and Australian Labor prime minister Kevin Rudd to Keynesians and social democrats like Paul Krugman at Princeton and John Quiggin at the University of Queensland, this was the full story.

They debate whether the nature of markets or the inadequacies of government regulation led to the hysterical speculation of the mid 2000s and then the breakdown of the global credit system. The notion that the causes of the crisis may lie in the way in which capitalist production is structured by class relations doesn’t cross their minds.

The mainstream accounts of the crisis are wrong, but they seem to make sense in three ways. First, they offer more or less plausible explanations of movements in prices, supply, demand and economic indicators. Out of these they spin happy-ever-after stories about what needs to be done to overcome the problems that led to the crisis.

They operate, secondly, in the interests of the capitalist class by justifying practical steps to sustain profit rates. This may be by preventing rapid economic collapse, through government stimulus spending. Or, on the other hand, they may urge governments to reduce their deficits, by cutting back on public spending, employment and living standards, in order to restore profits.

Although rival schools of mainstream economics don’t acknowledge it, the differences between these approaches are mainly questions of timing: when the necessary cutbacks will lead to minimum pain for bosses.

Finally, plausible, but superficial explanations of the crisis also serve ruling class interests by concealing how capitalist exploitation necessarily leads to economic breakdowns like that of 2007-2009, when the capitalist system cannot even maintain working class living standards. As the Communist Manifesto put it, the ruling class ‘is unfit to rule’ because it cannot even guarantee the survival of the wage slaves it exploits.

Profits are only restored through a crisis when large numbers of people are thrown out of work as production is ‘rationalised’, productive resources lie idle and working class living standards are slashed by employers and governments.


Capitalism is an impressive building; its impressive outer surface is money and movements of prices on markets. But the vital structures of capitalist production make that fa├žade possible and keep it in place. The link between them is the commodity form, the way most of the things we need, food, clothing, shelter, transport etc have a price and are bought and sold.

For millennia, money has been an aspect of economic activity. Societies which consistently make commodities need money. Commodities are things produced for sale rather than to satisfy the immediate needs of producers or those who exploit them by taking what they have made. In class societies before capitalism, the producers were generally peasants, occasionally slaves. The main exploiters were the senior officials of states which imposed taxes, feudal lords who extracted rent, or slave owners.

Money arose as the producers themselves or their exploiters traded commodities. It performed vital functions that were impossible if trade was only based on barter. Initially money took the form of a special commodity, particularly gold, that had value itself because, like other commodities it was the product of human labour. The money commodity served as a ready standard for measuring the prices of all other commodities. And, under capitalism, price ultimately derives from the amount of labour time that goes, on average, into producing commodities. It was the ‘universal equivalent’ that could also be used to buy any other commodity, that is, it was a means of exchange.

Under capitalism, most production takes the form of creating commodities and the commodity form is a feature of the production process itself. People sell their ability to work, their labour power, as a commodity to bosses. The distinction between labour power and labour is important here. Employers extract as much labour as they can out of the labour power whose control they have purchased, by making sure that workers don’t slack off by taking long breaks, going slow or otherwise wasting time that belongs to the boss.

Labour power is a commodity like all others in that its value is the amount of labour that went into making it, in the form of the effort to make the commodities necessary for the reproduction of human beings. Not only food, childcare etc but also the costs of learning specific skills used at work.

But labour power is also different from other commodities. It is human creativity for sale, capable of generating more value than it took to produce it in the first place.

When it is set to work, bosses owns the right to direct that labour power as well as the tools and raw materials it uses to produce new commodities. The new commodities, and the additional value embodied in them, created by human labour, likewise belong to the bosses. That’s where profits come from.

In class societies before capitalism, exploitation was pretty obvious: lords, state officials or slave owners simply took away things you produced or what they were worth in money. There was no exchange of equivalents; just a rip-off, ultimately backed up by the threat of violence. Under capitalism, exploitation is concealed by the sale of labour power. The exploitation happens through the exchange of commodities at their value for money rather than because exploiters get commodities or money for nothing.

The commodity form and money are capitalism’s self-camouflage. Economics seems to be all about them, but they conceal the exploitation of wage labour, that is class relations, in the production process.

The owners of wealth do not always immediately reinvest the value that they have accumulated. They may be saving up for a new project, or repetition of an old one, or holding off for better conditions before they invest again. In these circumstances, money serves as a convenient store of value. This was straightforward when there was a special, durable money commodity.


States’ regulation of money was, from long ago, an aspect of managing the commodity-based economy of their territories and also of funding their own activities. Developed capitalism has progressively dispensed with the money commodity. Initially states supplemented the money commodity with symbols for it. Eventually, the coins and notes that we are used to keeping in our pockets and purses, became the only valid form of money within each state’s boundaries. When such symbolic money can no longer be converted into the monye commodity it is ‘fiat money’. The money we use today is fiat money; gold no longer plays a role in the monetary system.

When there are credit arrangements, under which commodities can change hands at a different time from the payment for them, money is a means of payment. This creates credit money, promises to pay that are distinct from cash which might only be needed when contracts are finally settled. As economic activity grew in scale and complexity, banking emerged and credit money became increasingly important. Credit money was created by those involved in trade and banks, which held otherwise idle reserves of those who were not themselves using the value they had accumulated, as deposits and lent them out.

Internationally, the money commodity facilitated trade across the boundaries of states. Just as states eventually replaced commodity money with fiat money, financial institutions and states have accepted some national currencies as the means to settle international accounts. They are known as ‘reserve currencies’. Since World War II, the most important has been the US dollar, even after the link between it and gold was severed in 1971.

But the acceptability of a reserve currency can change. The rise of the Euro as a reserve currency to rival the US dollar, for example, has recently been undermined by economic crisis in the Euro zone. The weakness of the economies of Greece and other European Union countries with very high levels of government debt have led to worries about stability of the Euro.

While money pre-dates the dominance of the capitalist mode of production, the transactions, planning and allocation of resources of capitalism are impossible without money, credit and finance (the activities of banks and similar institutions in directing funds to where they will earn the greatest return).

Although indispensable for capitalism, credit and financial activities do not create new value. Interest and financial profits derive from new value created in the productive sector of the economy. Capitalists in the productive sector who borrow have to hand over a share of their profits to lenders in the form of interest for the right to use the lender’s capital. States which borrow have to pay interest out of their revenue which ultimately comes from the productive sector. And workers have to shell out some of their wages to keep up with payments on mortgages and other loans.

With the transition away from reliance on the money commodity at home or in international transactions, the stability of currencies and consequently credit and financial arrangements more than ever relies on the confidence capitalists have in them. This trust is based on the strength of the economies with which the currency is associated and especially on the power of the state that backs it to ensure that it can be exchanged for a predictable quantity of real value embodied in commodities, even though it has no intrinsic value itself.

So, even though the United States was at the centre of the global crisis of 2007-2009, during the periods of greatest uncertainty the US dollar was bought up as a ‘safe-haven’ currency. The unparalleled killing power of the armed forces of the USA guarantees the value of the dollar.

Credit and finance

The complications of credit and financial systems mean that there can be all kinds of glitches. The failure or even worries about a single corporation can trigger a contraction of credit. Lenders may be reluctant to provide funds until they can work out whether the failure exposes potential borrowers, as creditors or customers, to problems. In a similar way, problems in one financial institution can ripple out to others. Contractions in credit can slow down or stop growth in the production of real commodities, or even lead to less being produced.

The net of businesses exposed to such problems has been spread wider by new mechanisms to spread the risk that credit and other contracts won’t be met, in the form of insurance and hedge funds. When problems are small and their dimensions easy to determine, this cushions their impact. If the failures are large and both their scale and implications are unclear, these efforts to spread risk end up spreading the crisis.

In the United States, financial institutions during the early and mid 2000s gambled that housing prices would rise for ever. They made ‘sub-prime’ loans to people who would never be able to pay them back. Then, to spread the risk, the loans were bundled together and sold off as securities. People with mortgaged houses had to pay interest and repayments to the owners of the securities who were also entitled to the revenue from sale of the home if mortgage payments weren’t made.

Such securities are a form of ‘fictitious capital’, traded as though they are real commodities with an intrinsic value. In fact they are only the right to an income stream that arises from a financial arrangement rather than from the use of the money to directly generate new value in a real production process. Not only mortgage backed securities, but also shares and government bonds are forms of fictitious capital.

Financial instruments can be even more complicated. ‘Collateralised debt obligations’ are bonds, promises to pay interest at a specified rate, issued by companies whose assets are holdings of other loans, bonds or securities. This is not to mention derivatives. They can be futures or options: contracts to buy or sell, or the rights to sell or buy at specified prices real commodities, amounts of particular currencies, shares, bonds etc at a specific point in the future. Or they can be swaps: agreements to exchange the income steams from different financial assets.

Shares were initially designed to raise money for productive investment; bonds as a form of readily tradeable loan; and more arcane instruments as, perhaps, means of spreading risk. But most of the trading in fictitious capital today is speculative: gambling in the hope of making gains at the expense of other players in the market. It does not create new value and just shuffles around existing value, held by other speculators or by productive capitalists.
The rapid growth of financial speculation has meant that the implications of problems in one geographical area or economic sector for the rest of the economy are ever harder to work out before the crisis hits.

But the healthier the real economy which underpins the tower of financial activity, the more rapidly will local and sector specific problems be sorted out. Extensive new avenues for highly profitable productive investment can offset the jitters and losses caused by the failure of expectations in credit and financial markets.

Economic crisis

The rate of profit in the advanced capitalist economies has been trending downwards for more than four decades. The scale of speculative financial activity in the lead up to the current crisis was itself is a consequence of limited outlets for profitable productive investments.

During the first phase of the crisis, from 2007 to 2009, the problems began in the US housing market and spread throughout the global financial system, leading to recessions and the economic contractions in most countries.

Credit froze up across the planet as banks stopped lending to each other, or anyone else, out of fear that borrowers might hold toxic assets like mortgage-backed securities and therefore be unable to pay back loans. Lack of credit and worries about the future led businesses to suspend investments, individuals to put off spending that could be delayed.

Governments which could afford to spent big to keep their economies, so reliant on credit money, going. In the USA, Australia, Japan, Germany, Britain, China and other countries, governments borrowed, created more fiat money in the form of central bank funds or dipped into reserves to shore up, bail out or take over banks and other financial institutions. To promote consumption, they encouraged borrowing by cutting interest rates, gave cash handouts to citizens and spent up big themselves. The Chinese regime set lending quotas for banks.

Only poorer governments, of necessity, did not engage in stimulus spending. This was the approach extreme neoliberals recommended everywhere. That approach certainly sent less efficient businesses to the wall and put pressure on working class living standards. But it risked killing off so many firms that the remainder would not be able to drive an economy-wide recovery for many years.

If real economies are fundamentally sound, then stimulus policies should jump start robust economic growth. Both state revenues and real estate prices would rise. Governments would use their increased tax income to pay off debt. Public and private financial institutions would sell off real estate without making phenomenal losses. The Keynesians would proclaim the truth of their dogma, the pragmatists the wisdom of their policies.

Instead, a second phase of the crisis became more obvious this year. As the Greek economy crumbled under the weight of public debt, the social democratic government began to attack working class living standards by cutting wages in the public sector, pensions and spending on health, education and welfare.

Now there is a growing consensus that cutting government deficits is the key to maintaining financial stability and thus restoring prosperity.

Spain, likewise under a social democratic government, but also conservative regimes in Germany, Britain, Italy and France are inspired by this dogma.

Rudd has promised to do the same; Abbott to do it harder and faster. Obama is moving in the same direction.

Financial austerity measures did not begin in 2010. In countries particularly hard hit by the crisis or with weak economies, the cuts began much earlier, for example in Iceland, Ireland and the Baltic states.

A return to financial stability won’t solve the basic problems that led to the crisis: you can’t eat a collateralised debt obligation. Its fundamental causes lie in the displacement of living labour by machinery and equipment the key to raising productivity under capitalism driven by competition among capitals and hence a lower average rate of profit across the economy. But efforts to cut public spending are part of a solution to the crisis in the interests of bosses and at workers’ expense.

The other elements of this solution are squeezing more profits out of workers and allowing more relatively unprofitable businesses to go bankrupt. Even as some governments engaged in stimulus spending during the early stages of the crisis, employers across the world used uncertainty about jobs and rising unemployment to hold or push down wages and increase workloads.

As governments economise on their spending they will be less able to bail-out weak capitals. This means their assets can be bought up cheap and set in motion again but risks more widespread of corporate collapses and the possibility that idle machinery, equipment and buildings will just be allowed to rust and rot alongside unemployed workers.

The alternative solution, workers’ revolution, is not risk free either. But it holds out the promise that we can get off the deadly, profit driven ferris wheel with its booms and slumps, and start producing to satisfy human needs.

Rick Kuhn’s Henryk Grossman and the Recovery of Marxism won the Deutscher Prize in 2007. He is a contributor to Socialist Alternative,

Tuesday, June 22, 2010

Marxism 2010

We've got a tough few years ahead of us, those of us labouring in the iron cage of Hayekian liberty. The working class, if it doesn't get its forces together and resist fast, is going to get absolutely clobbered. It already is suffering quite dramatically in terms of income, and the share of production that it consumes, but it's going to get worse before it gets better.

Benefits are to be cut, and market-based systems and privatization by stealth pushed further through the public sector. The immigration cap and the general racist climate means that the club is going to fall particularly hard on the heads of cleaners, tube workers, NHS staff and other groups who perform some of the most difficult and least rewarding labour in Britain. Fascism, emerging from under several European rocks, was deprived of some crucial victories in the recent election, but it remains a threat. The habitual far right tactic of penetrating football crews is showing some modest signs of success in attracting a periphery beyond the usual array of sad, middle aged white men with paunches. The forces of resistance are not inconsiderable. The last decade has seen the unexpected growth of sizeable antiwar constituencies, the confident political self-assertion of Muslim communities, big movements for international justice and debt cancellation, and sometimes impressive examples of rank and file industrial militancy. But it has to be said, the organised labour movement has so far been the slowest to anger, the last to act and the first to back down under pressure. And it is organised labour that needs to act now, like never before.

Internationally, the ruling classes of the advanced capitalist states are uniting around an austerity agenda, with Osborne today tipping the balance further in favour of that agenda. The United States is bidding to maintain its hegemony by buttressing the Dollar-Wall Street Regime, an increasingly perilous enterprise made all the more so by shifting vectors of global power signified by the ambivalent relationship with China, and the friction with Russia in central Asia. The other component of US hegemony is the NATO alliance. Obama's blandly managerial tone in foreign affairs belies the brutal expansion of the frontier in Afghanistan and Pakistan, the geopolitical rationale of which is, in part, the need to maintain NATO as a functioning tool of Euro-American dominance with Washington in the captain's seat. The Democrats have demonstrated more interest than the GOP in rolling back democratic gains in the Latin and Central American back yard, as Hondurans have discovered, and as Venezuela may soon discover to their cost. Israel, the United States' key Middle East asset, is being permitted - perhaps encouraged - to veer into increasingly lunatic provocations, possibly culminating with an attack on Iran. Things could get spectacularly ugly. Recessions and depressions bring out the worst in ruling classes everywhere. If you want to know what the United States is capable of if it feels its dominance is threatened, don't think about Obama's soporific charm. Think of the perpetual shock and dread unleashed by the Bush administration, the constant affront to minimal ethical norms, the calculated lunacy, the sadistic transgressions... and increase that by whatever multiple seems appropriate to the severity of the crisis.

In light of all this, I suggest we have some issues to discuss. We need to get a few things straight. We need to talk about the economy, and about the budget cuts. We need to talk about capitalism, political theory, the Tories and New Labour, the trade unions, racism, US imperialism and Zionism. We need to understand our present in light of the past, and in all of its complexity. We need history. We need science, education and culture. We need philosophy. We need nothing less than a total understanding of our situation. We need Marxism 2010.

The unspeakable in full cahoots with the indefensible

Osborne's budget is an attack on consumption, and a bonus for capital. It is a redistribution of wealth from the poorest to the wealthiest, on the assumption that it is the wealthy who will drive economic growth. VAT, a notoriously regressive tax, is to rise by two and half percentage points to 20% - Osborne had promised in opposition that he would not need to increase VAT, knowing how unpopular this would be. Housing benefits will be cut, disability benefits cut, child benefits frozen, and other benefits such as job seekers allowance will rise in line with CPI rather than RPI. The total annual reduction in spending on benefits will reach £11bn by 2014.

Most public sector workers will have a pay freeze for three years, meaning a de facto pay cut by whatever the rate of inflation is (currently 3.5%). Average real term spending cuts will amount to 25% except in ringfenced spending in health and international aid. 25% is a huge reduction, even bigger than anticipated, or advertised. There are a few off-setting measures that would in theory protect the poorest - linking pensions to earnings, increasing child tax credits - but the net effect will be a severe squeeze on working class consumption.

For capital, it's a different story. Government largesse flows in abundance - not for them the age of austerity. Corporation tax is to be reduced to 24% within four years. Capital gains tax will be increased for a very small minority of wealth-holders, but there will be a higher relief threshold for "entrepreneurs", such that the first £5m gained from the disposal of all or part of a business, or in the course of running a business, will be entitled to relief, reducing their tax to 10%. Small business tax will be cut to 20%, and employers contributions to National Insurance will be cut. A small bank levy will take back £2bn a year, but again it's a relatively trivial offset to a very large golden hello from the Tories and Liberals to their business friends.

The logic, insofar as logic is the correct term, is that such measures will encourage investment. Osborne complained in his budget that the state made up almost half of all income in society which was "unsustainable", and the Tories have long insisted that growth had to be stimulated in the private sector. But, as economists as diverse as Paul Krugman, Martin Wolf and Samuel Brittan point out, this is nonsense. The net effect of such measures will be to exert a serious downward pressure on demand, thus on growth and thus on investment. It will increase unemployment and reduce taxable income, which will tend to increase the deficit. David Blanchflower argued that previously announced austerity measures are likely to add a quarter of a million to the ranks of unemployed young people. And, although the media and the government have worked hard to scare people over this, repeating the mantra that there is no money, it needs to be repeated and underlined that there is no need to do this. Most of Britain's debt matures in more than a decade from now.

Politics is rarely pure, and never simple - but this is class war, pure and simple. That being the case, Bob Crow is surely right to call on the TUC to convene an emergency conference to plan and coordinate actions to defend working class living standards. He calls the cuts Thatcherite. Thatcher wishes she'd accomplished anything like this.

No need for austerity

The austerity measures to be unleashed by Osborne today are completely unnecessary according to Samuel Brittan, one of the founders of monetarism.

Monday, June 21, 2010

The Meaning of David Cameron, reviewed

Thanks to Bhaskar Sunkara for this review:

Seymour’s first book, The Liberal Defence of Murder, was a sprawling, well-researched tomb that covered centuries of liberal apologetics for imperial crusade. It has been compared to La Trahison des Clercs with some justice. His latest—namesake courtesy of Alain Badiou—is more like a pamphlet, a concise political intervention written just prior to the May elections.

The length of the work belies its scope and ambition. Seymour covers decades of neoliberal transformation. Decades that have allowed reaction to cloak itself in the garb of modernity. The entire story of the contemporary British working class is outlined here: from the battle for the franchise to the fight for independent political representation through the vehicle of the Labour Party. Then that party’s clash with the absolute limits of parliamentary socialism and metamorphosis into New Labour. Like Cameron and Clegg, Blair and his coterie weren’t aberrations, they were the products of larger trends.


To maintain my reputation as an irascible asshole, I should really find a few more qualifications, but The Meaning of David Cameron is relatively flawless. If the bourgeoisie was indeed a bit more classically conspiratorial and besieged, they’d stop the presses on this one.

The know-nothing economy

“The degradation of work brings with it the decolonisation of knowledge; employers do not like the educated, above all the intelligent worker. Intelligence is prejudicial to output; the conveyor belt operative and the machine formed so perfect a symbiosis that an idea in the one had the same effect as damage in the other. Still absence of mind won’t do either; inattention and forgetfulness could occasion as many disasters as lucid thought; it is necessary to be there, a vigilance without content, a captive consciousness kept awake only the better to suppress itself.
Jean-Paul Sartre, The Communist and the Peace

The CBI and their class struggle

Via Stroppyblog, I see that the CBI doesn't think our anti-union laws are robust enough:

On the regulation front, the CBI wants the Government to introduce a sustainable employment test to ensure that any future employment laws help, rather than hinder, the creation of new jobs.

Strikes damage economic growth and inconvenience the public. At a time of fragile recovery, strikes should require a higher bar of support. The CBI is therefore calling for changes to rules around ballots to ensure that industrial action can only go ahead if 40% of the balloted workforce support it, as well as a simple majority of those voting. This would prevent strikes going ahead based on a relatively small turnout of particularly active members.

In addition, the consultation period for collective redundancies should be shortened from 90 days to 30 days to reduce uncertainty for staff and allow employers to reshape their workforces swiftly to respond to significant falls in demand.

Ah. Mark the humanitarianism of the British ruling class, sacrificing their long-standing commitment to industrial democracy and proper consultation, lest it inconvenience anyone or leave them in a state of uncertainty. What would we do without them?

Working for capitalism

Class is not a thing but a relationship, an antagonism that is situated in production. Sociologists have long tried to understand class by reference to occuptional groupings because one can only identify what class one belongs to by locating oneself within the system of production. It is not a coincidence that workplace sociologists such as Bradley et al have done some of the essential work in restoring class to its central explanatory role in the social sciences. They build on the work of a generation of radicalised social theorists such as Huw Beynon, Theo Nichols, Richard Pfeffer and Harry Braverman, in describing how class power is inherited, wielded in the workplace, and rewarded with a greater or lesser share of profits - as well as how class systems are perpetually restructured as production is reshaped, and work takes on new forms.

Some social theorists maintain a sort of apocalyptic thesis in which technology and the 'knowledge economy' are rapidly obliterating the working class. In this view, work is something antiquated and mechanical, not something that one performs with advanced information technology or, heaven forfend, with the use of skilled knowledge. The worker is a dusty old chap with a spanner, not someone in a pressed shirt sitting in front of an LCD screen. Of course, 'work' has always had a broader meaning than such revisionists allow. The 'working class' has never been defined by a particular skill set, a particular kind of consumption, a particular set of values, sartorial tendencies or gustatory propensities. Therefore the emergence of a white collar proletariat with the ability to use Microsoft Office programmes should not seem counterintuitive - recruitment agencies make a living from this phenomenon. Their class situation is predicated on their relationship to the means of production, which determines how much power and self-direction they will have in the workplace.

In light of this, consider the following talk from Dan Pink, a sort of management guru and former speech-writer for Al Gore. He introduces the topic of 'drive', of what motivates people, and affirms - in a strangely affectless, yet gushing manner - the virtues of autonomy and self-direction in the workplace. It's a mantra for hippy capitalism:

Pink's assertions about what motivates people are not without interest. However, the first thing that strikes one about this little talk is that all of Pink's examples of "cool" workplace practises, wherein workers' productivity dramatically improves upon their being freed from management and the incentives structure, are taken from the software industry. They are taken from a set of employees whose particular role in production is necessarily in some sense both directive and executive. They are an atypical group of workers in this respect. The very fact that it would be possible to give them enough money for cash not to be a motivational issue, and thereafter allow them autonomy in the workplace, means that they are closer to the professional middle class than to the working class. For Pink and those of his persuasion, (and class purview no doubt), this is the future of work. But what the Pinks of this world don't get is that management has an interest in proletarianising such workers, and thus of turning their labour into a routinised series of discrete, mechanical tasks as far as possible.

When new technologies come along, part of the struggle between workers and management takes place over the former's mastery of the subject and thus their ability to resist managerial attempts to oversee, discipline and control their working day. The more managers can get to grips with this technology, or find surrogates and auxiliaries who already have a firm grip on it, the more they can break down workers' tasks into manageable units, the better to surveille, control and extract more surplus value. These processes are already well under way in the IT sector, and in all areas where information technology plays an important role. This is because it is capitalism, and under capitalism managers will always find themselves compelled to exert more control in the workplace, and reduce workers' autonomy accordingly. This might be irrational in one sense, in that suppressing creativity holds back innovation and production - but when has this not been the case under capitalism? When have management ever allowed skills to remain on the shop floor for too long? And when has bourgeois social theory not been available to obscure this process, such that the distribution of rewards and privilege is held to closely mirror the distribution of talent and desert? Only under socialism, in a situation where industry was democratically controlled and not subject to the extraction of profit, would motivations such as creativity, autonomy and altruism be important to production.

The left and the state

The biggest task of the Left in the coming period will be stop an attack on welfare and public services from being conducted in the name of some sort of spurious "Big Society" (counterposed in Cameron's campaign literature to the evils of "Big Government"). Yet for those wishing to come to terms with New Labour's dismal record on civil liberties, and with the reactionary 'populism' of Ed Balls et al, there's a real problem in that the ConDem government have been able to position themselves slightly to the Blairites' left on such issues. Does New Labour's obscene authoritarianism reflect poorly on the Left's attitude to the state? Frances Klug at Open Democracy thinks it does. Sunny Hundal at Pickled Politics rightly objects to the conflation of the Left with New Labour, but nonetheless asserts that there is a problem here, which he credits Anthony Barnett with raising.

The question of the left's relationship to the state is far more complex than one might gather here. For example, the Left has long championed - to varying degrees, admittedly - liberal anti-statist positions with respect to gender rights, crime, immigration, sexuality, political protest, religion, recreational drugs, etc. Notably, the Left made far more advances in these terrains in the 20th Century than outright liberals - though liberals within the Labour Party such as Roy Jenkins certainly deserve credit in this regard. In fact, though Frances Klug charges that the problem is the left's illiberality, counterposing to such left-wing statism a tradition of liberal egalitarianism deriving from the 18th Century Enlightenment, it is at least worth noting in passing that liberalism has a far more ambiguous relationship to the state and authority than this picture allows. After all, for all that Thomas Paine was an admirable chap, the mainstream of British liberalism is and always has been Hobbesian in its foundations - consequently, all to often authoritarian, imperialist, racist, and decidedly inegalitarian.

More importantly, this debate on the Left has a venerable pedigree. Barnett's critique of the imperial state emerges from his time in the New Left which - prompted by some of the limitations of Labourism in office - sought to understand why achieving radical reforms, even where they had demonstrable support, was so difficult. Their attention turned inevitably to the nature of the state that Labour had attempted to use to deliver said reforms. This produced a variety of critical analyses of the state, of the post-war compromise, and of the corporatist managerialism that has become synonymous with social democracy.

In response to the failings of corporatism, Labour left-wingers such as Tony Benn and Michael Barratt Brown began to subject the old forms of undemocratic statism, which they ultimately blamed for repressing workers' wage claims, holding down living standards, and serving the interests of capital. Others such as Brian Sedgemore encountered serious difficulties with the alleged 'neutrality' of the civil service, whom they accused of obstructing radical reforms. In this period, much of the Labour Left began to re-articulate a critique first outlined by Harold Laski, who maintained that the British constitution was so vague that it allowed serious abuses and repression, up to and including the effective suppression of parliamentary democracy, with no breach of the law taking place. Given the social relations in which the state was embedded, he argued, such repression would usually work to the benefit of capital. Any reforming government would have to work fast to outflank the inevitable attack on the government's legitimacy from the right, prevent the possibility of capital flight and an attack on the currency, resist media pressure, etc. They might have to pass emergency legislation permitting them to act hastily, outwith the usual domesticating, procrastinating procedures. In the long term, they would also have to challenge the undemocratic nature of the state itself. But here, constitutionalism prevailed. The Labour Left, from Laski to Benn, was never revolutionary: ultimately, there was nothing wrong with the state that could not be fixed by what was right with the state.

Perry Anderson, Tom Nairn and Ralph Miliband provided different responses to this question. For Anderson and Nairn, the British state was a unique amalgamation of modern capitalist bureaucracy, and ancient feudal privilege. This was a result of a compromise between the aristocracy and the "supine bourgeoisie" in the 'Glorious Revolution' of 1688. This resulted in bizarre anti-democratic contraptions such as royal prerogative, the crown-in-parliament, . It was also connected to the special influence enjoyed by the City of London. Put crudely, Anderson's thesis consisted of the following assertions: Britain had the first, but most mediated and least pure "bourgeois revolution" of any major European country; England had the first industrial revolution, and created a proletariat before the emergence of mature socialist theory, and the polarisation of industrial bourgeoisie and aristocracy was attenuated by the fear of this class, particularly in the wake of the French revolution and the Napoleonic wars; Britain had, by the end of the 19th Century, siezed the largest Empire in history, qualitatively distinct from other European powers, "which saturated and 'set' British society in a mould that it has retained to this day, with the consequence that most major figures of the British Left were vocal imperialists; among European nations, England alone emerged from the two world wars, unoccupied and without major exogenous shock or discontinuity to its social structure. This peculiar nature of the British state - a semi-feudal, imperialist state - held back the labour movement's progress, and stymied even moderate forms of social democracy, such that Britain's left performed poorly compared to continental counterparts.

Miliband's critique was more ecumenical - the problem with the state was not that it had feudal remnants, which were ultimately of secondary importance. The British state was not markedly different from other capitalist states in how it functioned. But its major institutions, from the civil service to the judiciary, saw their role as reproducing the society as it existed, and were resistant to reforms. Its elite personnel were interpenetrated with elite layers in private industry - the way in which nationalised industries were run by a combination of private capitalists and senior civil servants working with administrative models derived from their experience of ruling India, was a case in point. The state could be reformed in more democratic ways, and could be compelled to redistribute wealth and power, but the animus for the reform had to arise from constituencies outside the state - civil society. Notably, Klug acknowledges Miliband's critique but, oddly, not the fact that it draws on the a priori anti-statism of one Karl Marx whom she unfairly traduces as the source of left-wing statism, including that of opponents such as the Fabians - apre Marx, l'etat. This is crude. Has anyone, for example, read Marx on the Paris Commune?

At any rate, such is the New Left intellectual lineage that people like Barnett have drawn from - or rather, it's a potted history of the same. The milieu around Charter 88, of which Barnett was a founding member, were immersed in this stuff, and its demand for profound constitutional reforms were taken up by relatively moderate social democratic commentators such as Will Hutton. This debate, I repeat, is not new. If most on the Left differ with the diagnosis of Barnett and the Open Democracy liberals, it is not because their egalitarian commitments lead them to underestimate the problems with the state. It is because they disagree on the nature of the problem, and on the importance of the role played by such institutions as the monarchy, the Lords, the electoral system, etc.

The authoritarian tendencies in New Labour do not, I think, emerge from the left's ambivalent relationship to the state viz. redistribution and nationalisation. After all, Labour has previously been able to deliver decent liberal reforms *and* social democratic corporatism. Indeed, for as long as it was able to moderately redistribute wealth and maintain a decent welfare state, it was easier for Labour to pass what were sometimes unpopular pieces of liberal legislation. The source of New Labour's authoritarianism is, I think, two-fold.

Firstly, as Ross McKibbin argues in the London Review of Books, Labour has a Tory conception of the state - it accepts feudal privileges (the monarchy, the royal prerogative, etc); it accepts an undemocratic intelligence service; it accepts nuclear weapons; and it has always accepted the imperialist capacity of the state, from the Boers to Basra as it were. Secondly, it has accepted neoliberal dogma and the doctrine of meritocracy, which holds that the poor are in their position because of their own inadequacies, or because of the inadequacies of their parents. They are crime-prone, anti-social, feckless, and lazy. Hence, to combat social exclusion and create a more egalitarian society, it is necessary to control the poor with tougher sentencing, ASBOS, fines for parents of truant kids, witch-hunting "benefit scroungers", surveilling and intervening in potential problem families as soon as the child is born. In that way, the poor will become more productive, more responsible, more educated, and more skilled. From a supply-side perspective, this will reduce the "non-accelerating inflation rate of unemployment" (a doctrine that formed the basis of Brown's economic policy), thus reducing the margin of the 'socially excluded', the 20% of households with no one in employent and thus with no access to the ladder of meritocratic competition. Ironically, it is neoliberalism - which is held to be in some sense an anti-statist doctrine - that is responsible for New Labour's hardline statism.

Sunday, June 20, 2010

United East End demo

There were at least a few thousand people at today's United East End demonstration, an anti-racist gathering supported by the trade unions, religious organisations and local politicians. The crowd mainly comprised local people, kids from the housing estates, a few people from the mosques, churches and synagogues, and a rather small contingent of leftists. It's worth noting that some of those who had expressed opposition to holding the rally nonetheless spoke at it, including the council leader and Bethnal Green & Bow MP Rushanara Ali. It might be relevant to note that there's an East London mayoral election coming up. As far as I could make out, George Galloway received by far the strongest reception at the rally, which was held at Altab Ali park after the demonstration. In general, my impression was that the most popular speakers were well-known local left-wingers such as Rania Khan and Lutfa Begum, former Respect councillors now belonging to the Labour group.

Some, including a few senior Labourites such as Jim Fitzpatrick, had suggested that such a rally could only cause 'trouble'. The logic behind this assertion is obscure, but perhaps it says something about the way the authorities look upon the young Bengali men who turned out in large numbers. Further anecdotal evidence of a peculiar official attitude to said people can be gleaned from the police's provocative behaviour after the event had passed off without disturbance. This included, I am told, refusing to allow white people to walk up Whitechapel because they alleged that Bengalis were violently attacking whites at random. Socialist Worker's report doesn't go quite that far, but notes that police "advised white people not to walk along the road 'because of fears about their safety'", which is ridiculous, nasty, and divisive behaviour. Interesting is it not? When fascists riot, we are told that they are giving expression to "legitimate concerns". When anti-fascists hold peaceful, democratic rallies, we are told they are merely causing trouble. From what perspective, I ask you, can such assertions hold true?

Friday, June 18, 2010

TUC's case against cuts

Via Liberal Conspiracy, the TUC has issued a pamphlet making the case against cuts. It's a bit late in the day, I think, but welcome nonetheless. The pamphlet assembles detailed evidence to demonstrate that the cuts will damage public services, undermine economic growth, and hurt the most vulnerable. Public services are both redistributive and countercyclical, which are valuable assets in an economic downturn. As Richard Exell points out in his Liberal Conspiracy article, most of the debts held by the government have exceptionally long maturity, so there is no urgent need to pay off the deficit right away. The TUC therefore argues that the debts should be paid off by stimulating economic growth, which will be harmed by the Tories' cuts package. Its a straightforward trade union argument - the desiderata of economic efficiency and social justice are complementary, rather than competing, ends. It will be interesting to see how these arguments play with the Labour leadership contenders, four of whom are committed to the idea that the deficit must be paid off with deep spending reductions, but they should form the foundation for a trade union based coalition against the cuts agenda.

The real eastenders

You probably didn't hear about this, but the other day some members of the English Defence League engaged in a sort kamikaze mission in Whitechapel, attacking members of the public and ripping the garments off Muslim women. They were rapidly outnumbered by the arrival of hundreds of locals, and police had to lock the EDL idiots in Whitechapel tube station for a few hours. This suicide attack, as it were, was probably the result of despair after the EDL leadership called off an equally suicidal march into the East End, purportedly against an Islamic conference that was to take place on 20th June (that's this Sunday). Now, even if there had been no political response to this, such a march would likely have provoked enormous opposition in this working class heartland.

But there was an immediate response, which was to call a United East End march to oppose the EDL - supported by several trade unions, by UAF, Love Music Hate Racism, by the Muslim Council of Britain, and by the Islamic Forum of Europe. As I've said before, it's important that there is a political response to such attacks, because groups like the EDL and their BNP allies want to polarise the community along racist lines. 17 years ago, the BNP made a small step in this direction by getting their first councillor elected in Tower Hamlets. The council's decision to rehouse Bangladeshi families in Millwall properties that could not be sold was being treated as an act of positive discrimination by the Liberals, who attempted to exploit the issue to win a seat that had come up for bye-election. The BNP, which had been building some pockets of support in the East End in the early 1990s, took the seat and only lost it after an energetic local campaign. They were subsequently shut out of Tower Hamlets for a long time. They stand candidates in places like Millwall and Bow West, but have yet to make a real breakthrough.

Now mark the response of the local Labour leadership. Tower Hamlets council, in the persons of leader Helal Abbas and deputy leader Josh Peck, put tremendous pressure on the organisers of said Islamic conference to call it off, citing allegations of 'views attributed to some of the speakers'. The organisers, the Islamic Society of City University (Isoc), are hardly a threat to anyone, though they are constantly being witch-hunted by the usual dirt from the Centre for Social Cohesion, and subject to repeated baiting by the City Inquirer and the scum over at Harry's Place. The Isoc works in an institution where Muslims are under increasing scrutiny. For example, lecturer Rosie Waterhouse recently called for the banning of the niqab there on the pathetic grounds that she found such dress 'threatening'. Muslims were also attacked in a spate of racist assaults near City University last year, though perversely the university management has used this as an excuse to close the Muslim prayer room. At any rate, the EDL, aware of the allegations against Isoc, attempted to exploit them. And the council seems to have responded by treating Isoc, an entirely peaceful organisation, as an equivalent to the violent bampots of the EDL.

The council also applied pressure to the conference hosts, the Troxy, to cancel the event, saying that they might have to review their working relationship with the company otherwise. That's a pretty big club to bring to any negotiation. The Troxy complied, and the event is looking for another venue. The EDL leadership, admitting that they would have been hammered had they tried to enter Tower Hamlets, called off the demonstration, claiming a victory. The United East End march, intended to underline the refusal of local communities to be divided along racial lines, is still going ahead. It's important, because these racist provocateurs have proven that they are intent on continuing to try and polarise the situation. There are, of course, other activities planned. The EDL are still going to try and march on Wembley, where they are likely to receive just as hostile a reception.

But there is a background of Islamophobic baiting of Tower Hamlets council. This includes Andrew Gilligan's creepy tirade against the Islamic Forum of Europe, through which the media has attempted to attack municipal multiculturalism. The EDL are simply trying to capitalise on that, attempting to position themselves as the cutting edge of the Islamophobic wedge being driven through the East End. The council, as its lobbying of the Troxy shows, is inclined to give in to some of this pressure. The United East End march will be attended by Labour councillors, including Helal Abbas, but it is only fair to note that the East London papers report pressure on the anti-fascists from some local politicians. Predictably, Jim Fitzpatrick, who saw off George Galloway's challenge in the 2010 election by baiting Muslims, has attacked the anti-fascists. You can't expect better from someone like Fitzpatrick. Sadly, Rushanara Ali, who took Galloway's former constituency back for Labour, also called for the march to be called off. It may be of relevance that both local MPs are backing Oona King's bid for mayor against Ken Livingstone. Now Tower Hamlets council, symbolising its commitment to "community cohesion", is flying the England flag from the Town Hall for the duration of the World Cup. Such pointless, trivial gestures neither fulfil their anti-racist mandate nor placate the racist right.

I think this has to be contextualised in terms of the turn being taken by the Labour Party nationally. If the last decade was marked by a revival of neo-Powellite ideology on the Labour right, among the Blairites in particular, that ideological turn is now being aggressively expounded by Labour leadership contenders over, eg, immigration. In a self-serving gesture, they claim that such politics will enable Labour to make amends with "the white working class". This is a cynical move. I suspect that people like Balls believe that by conceding ground to racist hysteria, they can both capitalise on it and contain it. That is reckless, and foolish. Caving in to the racists just gives them more credibility, more armoury, and more space to build in. It benefits the right, in more ways than one. Is it not alarming to Labour members that David Cameron could actually attack Balls from the left over this, characterising the latter as Labour's Alf Garnett? The other context, of course, is the local collapse of Respect. It has one councillor left in Tower Hamlets and no MPs. This doesn't mean its support is negligible, or that it couldn't carry on as a viable local organisation, but its previous clout might have allowed it to resist some of this rightward lurch. I hope it will do well in the upcoming East London mayoral ballot. Because it is the Fitzpatricks of the East End, not the antifascists, who are pursuing genuinely divisive politics, setting working class communities against one another, and attacking the anti-racist consensus that had been established until recently, and giving ammunition to the racists.