And what is true?: February 2013

A quick tour of the history of socialism and its relevance today.

What is socialism?

There are lots of political movements and strains of political thought that can be grouped under the heading of "socialism". In Britain, we've had Diggers, Levellers, Luddites, Chartists, co-operative Owenites and Christian socialists; also Fabians, Labourites and guild socialists. In France, the conspiracy of equals and the Paris communards, the syndicalists' revolutionary unionism. In Russia, Prince Peter Kropotkin's anarcho-communism, and the writings of Nikolai Chernyshevsky, including What is to be Done?, a classic novel of social propaganda that inspired both the peasant populists and Lenin. In America, the Knights of Labour, Eugene Debs and the Wobblies. Not forgetting Marxism in its 57 varieties.

The main distinctive idea that runs through them is probably egalitarianism, the striving for equality in social, economic and political life. In this, it should be—but has not always been in practice—unswervingly democratic and anti-elitist, in favour of the maximum possible popular control, not only of political power, but also of social and economic power. I would say it is also inescapably a philosophy of freedom, because it recognises that the fates of individuals, their room to manoeuvre and to develop, are inseparably intertwined with the kinds of societies that they live in.

So socialism aims to contribute to the political, cultural and institutional changes that might help to equip the majority working population with the self-confidence, skills and opportunities to shape the outcomes of their own lives, individually and together. But it aims to do this not only in Britain, or in Europe, but everywhere. This is another impulse that is usually considered to be essential to socialism: internationalism. The well being of people in China, Poland or Angola is not less important to me than that of people in Britain. On the other hand, neither is it more important.

Precursors, emergence and split

Some of the main elements of socialist thinking can be traced back to the distant past. An example from the 16th century would be Thomas More's Utopia, a word he invented meaning "nowhere". (As a tie-in with our constituency, that's why William Morris's socialist novel of the 19th century is called News from Nowhere.) In the blurb, More (or his publicist!) describes the work modestly as "A pamphlet truly golden, no less beneficial than enjoyable concerning the republic's best state". He argues for the abolition of private property, because he thinks that the uneven distribution of wealth that it produces is unjust. For him, a more equal distribution of wealth would do away with two equally objectionable social outcomes: the idleness of the rich and the excessive work load of the poor. That's the upside. On the downside, the "good" society he imagines is rigidly regimented, and its rulers are selected from a "gifted" group—an idea reminiscent of Plato's philosopher kings that, unfortunately, has tended to crop up periodically in various guises in the history of the socialist movement.

So there are precursors to socialist ideas before the modern era. But socialism really only starts to develop as a social and political force with the industrialisation and urbanisation that were part and parcel of the development and spread of capitalism. (The distinctive economic purpose under capitalism is to produce goods and services that can be sold above cost. In contrast, in pre-capitalist agrarian economies—in Europe, usually called feudalism—production of crops and small manufactures was for use by those who produced them (the peasants or serfs), minus the tribute ceded to the feudal lord in return for military "protection".) This is because the intensification of competition between businesses under early capitalism triggered fluctuations in wages and working conditions that encouraged the establishment by workers and artisans of their own organisations in order to protect and educate themselves.

Other important schools of thought feeding into socialist ideas, both at the start and ever since, are Renaissance humanism, which puts people at the centre of things, and the European Enlightenment, which emphasises reason, evidence and the possibility of social improvement.

A chance for reconciliation?

Of these broader trends, probably the most important distinction has been (a little confusingly) between social democracy and socialism. In the 19th century, these terms were more or less interchangeable, but today the differences between them are conventionally summarised as accommodation or hostility to private property, capitalism and business; an emphasis on gradual versus rapid political and social change, of reform versus revolution; of democratic as against authoritarian methods, acceptance of parliamentary democracy versus the rejection of it. This difference, although present earlier, was crystallised by the Bolshevik Revolution in Russia in 1917. However, in the wake of the collapse of the Soviet Union in 1991, and now the severe and ongoing crisis of global capitalism since 2007—especially in the advanced capitalist countries, like ours—the social and political conditions that sustained this split no longer exist. There may therefore be some grounds for believing that the hard and fast divisions between the socialist and social democratic approaches are, in places, starting to dissolve. For me, this is a good thing, as it should allow us to be a bit more eclectic in our thinking about the future, a bit less rivalrous, a bit more free-wheelin', a bit more pick-'n-mix.

Social democracy

The main line of social democratic belief is in the amelioration of the worst social and economic effects of capitalism through evolutionary reforms, using the existing political system. It is characterised by gradualism, as well as accommodation or even partnership with capitalism, and at least parts of the capitalist class.

In this sense, the writings of the early 19th century of Henri de Saint-Simon can be seen as foreshadowing the social democratic approach. Saint-Simon was a slightly mad aristocrat with a fondness for grandiose schemes, but who fought for the republic in the French revolution. He thought it was in the interests of workers and peasants to join with industrialists to sweep away the power of the "unproductive" land owners and their hangers on in the clergy. But he was not wholly a democrat. With the "parasites" (the landowners and the clergy) tamed politically, and their social and economic power checked, he imagined business leaders and intellectuals using industry and science gradually to raise the incomes and the educational-cultural level of the working population, who might in this way eventually rule themselves. (Again, this is a bit similar to Plato and Thomas More; also, arguably, to Leninism.)

In Britain, the Chartists' campaign for parliamentary reform is almost a case study of proto-social democratic politics. Chartism was a working class movement that rose in the 1830s in response to the Corn Laws, which restricted grain imports and so put up the price of food, hitting the livelihoods to the working class and the urban poor in particular. It had a list of political demands, or a charter, to change the workings of parliament as follows:

universal male suffrage;
a secret ballot;
constituencies of equal size;
abolition of property qualification for MPs;
pay for MPs; and
an annual parliament.

It took until 1918 to achieve five of the six demands, or around 80 years. The sixth demand, for an annually chosen parliament, has remained elusive.

Continental social democracy and British Labourism can be linked through the association of Eduard Bernstein with the Fabians in the 1880s. There is more than an inkling of reformism in the socialism of Ferdinand Lassalle, the great rival of Karl Marx for the leadership of the early German socialist movement. I especially like his idea of producer (rather than consumer) co-operatives which, supported by state funds, might provide a way for the working class to become its own collective employer, and of countering the "inevitability" of falling wages (a standard assumption of 19th century economics). But the case for reformism was most cogently and dramatically set out by Eduard Bernstein.

In contrast to the middle class Marx and Engels, whose fathers were a lawyer and a cotton manufacturer, respectively, Bernstein's dad was a train driver. Starting off as a bank clerk, Bernstein educated himself through his involvement in the budding socialist movement in Germany. He was instrumental in helping to create a unified German workers' party in Gotha 1875, and in 1891 wrote the second "practical" part of its political programme (the Erfurt programme). Following Bismarck's anti-socialist laws of the late 1870s, he left Germany and eventually ended up in Britain, where he became friends with Marx's great collaborator, Friedrich Engels, and, after his death, the executor of Engels's literary estate. Bernstein edited the newspaper of the German socialist party for ten years and became, alongside Karl Kautsky, one of its two most well-known thinkers.

It was because of this position as the virtual inheritor of the political mantle of Marx and Engels that Bernstein's open and systematic profession of reformism in The Prerequisites for Socialism (known in English as Evolutionary Socialism) made such waves in European socialist circles at the end of the 1890s. This was known as "the revisionist controversy". In particular he:

rejected the ideas that the collapse of capitalism was inevitable and that class struggle was essential to realise socialism;
thought capitalism, through state intervention, was capable of overcoming its worst tendencies regarding unemployment, distribution and overproduction;
thought parliamentary democracy could pave the way to socialism through promotion of workers' rights, as well as by co-operation with both peasants and dissatisfied elements of the middle class; and
emphasised the moral case for socialism: it wasn't inevitable, but "ought to be".

The Fabian Society was started by a small group of middle class intellectuals (boo!) in the 1880s. Their goal was to create a democratically elected, centralised socialist state, bestriding a network of public enterprises, including nationalised monopolies. They hoped to achieve this through gradual political and legal change, underpinned and driven by a sort of slow cultural revolution. (The clue is in the name: Fabius Maxiumus, "the delayer", was a Roman general known for his tactic of postponing battle until the enemy had been worn down by the chase.) That's why education, and the production and dissemination of social research, was at the core of their strategy. For example, it was the Fabians who set up the London School of Economics (LSE) in the mid-1890s to study poverty.

Socialism

Marxism is the most profound and wide-ranging of the recognisable bodies of socialist thought, but it is also the most problematic. It has had the most impact, intellectually and historically, but a great deal of this has been tremendously destructive and negative. (There are plenty of non-Marxist strands of socialist thought, too, such as syndicalism, and the British and US democratic socialists.)

The main line of Marxist thinking is that the amelioration of the worst effects of capitalism merely serves to lengthen the lifespan of an unjust economic system, but cannot prevent its eventual decline. This is because of inherent degenerative flaws within the system, and because the interests of the vast majority of society—the working class—are incompatible with those of the capitalist class over the long run.

The envisaged pattern of social development, from earliest times into the future

An outline of the structure of society and the dynamics of economic and political change under capitalism according to classical Marxism looks like this:

In an unforgiving natural world, people club together to make a living. But only some ways of organising work to do this are compatible with the kinds of tools and equipment available.
These distinctive ways of organising work shape the kinds of social and political institutions, as well as the ideas and perceptions, that are compatible them, that grow out of them and support them as part of the same living, integrated social whole.
One benefit of co-operation is social and technological improvement: ie better tools and/or social organisation to make better use of those tools.
At some point, these improvements lead to the production of more goods than is needed for mere survival. With this comes the possibility of one social group living from the labour of others (classes), as well as the separation of intellectual and physical work.
Conflict between classes over who gets what from the emerging surplus is the great motive force of social and political change throughout history.
Under capitalism, market competition is an additional force driving forward rapid economic, social and especially technological change, conditioning the political and social landscape on which the struggle between classes takes place, putting limits on what is possible, but also creating new opportunities.
Just like the series of socio-economic systems before it, capitalism is an ensemble of interlocking social, political and economic institutions put together by people because they suited a characteristic way of making a living from the natural world and distributing the spoils. Centrally, this is based on the employment of workers by owners to work machines and equipment in return for a wage, with a view to selling the goods and services for more than they cost to produce. This relationship between owners of capital and owners of labour is the "general light" in which the other main socio-economic institutions bathe.
As capitalist development spreads within and across countries, it produces an expanding section of the population—the working class—whose awareness of their common interests in opposition to capitalism, as well as their capacity to pursue these interests politically, is fostered by socio-economic processes within the system. So, the factory—the classic example—disciplines workers in time management and exposes them to a similar kinds of exploitative experiences. But it also brings them into close proximity, allowing for comparison and discussion of these experiences, and so for the development of common strategies to address them. It gives them some of the tools—ideas of how to organise, and the educational basics needed to run complex production and administrative processes—that will help them to articulate and defend their own interests.
In contrast, the inner workings of the capitalist system tend to produce economic breakdowns of increasing severity. The short-term peaks and troughs of each business cycle tend to rise more weakly and fall more steeply around a general, economy-wide tendency for profitability to decline.
Why does profitability tend to decline? First, this is because labour is assumed to be the only source of new production value. At the same time, capitalist competition forces firms to innovate and invest on pain of extinction (which is the secret of its dynamism), so that investment rises at ever-faster rates. This results in a steady drop in the ratio of workers employed to capital invested. This is the same as saying there is a tendency to decline in the ratio of new value (from labour power) to capital investment. Which is the same as saying that there is a tendency for the rate of profit to fall.
As the economic mechanisms that hold capitalism together begin to malfunction in this way ever more widely, the institutional mechanisms needed to stabilise capitalist property ownership become less automatic and require more coercion. Political repression and state violence are practical proof that the state apparatus developed within capitalism—its parliaments, judiciaries, legal systems, bureaucracies, police forces and armies—is not neutral between economic systems, and so between classes, but is necessary for keeping the existing system going.
However, enduring economic weakness eventually undermines capitalism's stabilising institutions too. At some point, therefore, workers' organisations are strong enough, and those of the capitalist economy and state weak enough, for the existing order to be overthrown.
To be replaced with what? Probably socialism. Why? Because a more thoroughgoing development of equality and democracy—encompassing the economy and working life, as well as social policy and politics—reflects in a systematic way the common interests of the working class as they have developed within capitalism, in opposition to it.
The pivotal role of workers' organisations in the struggle against the previous, recently defeated economic system puts them in a unique position, in terms of political experience and legitimacy, to begin to set up the new economic, social and political institutions that reflect the collective interests of the working class, just as the institutions of capitalism did so for the capitalist class. The difference is that the collective interests or workers, and the social and political values they had developed in embryo under capitalism, are also more of less universal human interests and values, the interests and values of humanity in general.

Some criticisms of Marxism

Not all criticisms of Marxism are worth bothering with, because they are often based on caricatures of what it says. But here are some questions that are worth thinking about:

Does capitalism have a tendency towards self-destruction? Profits may be lower in advanced capitalist economies than in immature ones, but evidence for a continuous long-term tendency towards a dwindling of profits on global scale has been harder to track down.
Is labour really the only source of value? Marx's labour theory of value says that the special quality of the commodity that the worker sells (labour power) is that it is worth more than its value (the cost of reproducing the worker), and that this is the source of all value, and so profits, in a capitalist economy. But this doesn't seem convincing, even to many modern Marxists. "The value of commodities should be thought of as determined by the amount of scarce resources of all sorts that are embodied in their production, not just labour" (Erik Olin-Wright, a contemporary American Marxist). And if there is no reason to think that labour power is the sole source of value, then there is no need expect that the drive to invest, spurred on by market competition, will eventually bring about general decline in profitability—which is supposed to be the main mechanism by which the ability of capitalist economic structures to reproduce themselves is systematically undermined.
Is there a tendency towards polarisation and simplification of classes? It seems more the case that, at least in the advanced capitalist West, working class structures have become more complex and stratified. As a result, the common experience of working life that is supposed to build collective values and political organisations may be absent. Also, capitalist democracies have offered real opportunities and some political space for working people to organise to improve their lives within capitalism, through compromise and co-operation between classes, in this way offsetting the development and attraction of anti-system ideas and political groups.
Violence and democracy. Is the aftermath of a violent political revolution really the best political terrain on which to conduct extensive and probably very lengthy experiments in democratic social and economic institution building? Revolutionary parties may be effective in some conditions in toppling states, but not in developing egalitarian democratic ones.

Marx's schematic presentation in his own words

"In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness. At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or - what is but a legal expression for the same thing - with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed. In considering such transformations a distinction should always be made between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, aesthetic or philosophic - in short, ideological forms in which men become conscious of this conflict and fight it out. Just as our opinion of an individual is not based on what he thinks of himself, so can we not judge of such a period of transformation by its own consciousness; on the contrary, this consciousness must be explained rather from the contradictions of material life, from the existing conflict between the social productive forces and the relations of production. No social order ever perishes before all the productive forces for which there is room in it have developed; and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself. Therefore mankind always sets itself only such tasks as it can solve; since, looking at the matter more closely, it will always be found that the tasks itself arises only when the material conditions of its solution already exist or are at least in the process of formation. In broad outlines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society. The bourgeois relations of production are the last antagonistic form of the social process of production - antagonistic not in the sense of individual antagonisms, but of one arising from the social conditions of life of the individuals; at the same time the productive forces developing in the womb of bourgeois society create the material conditions for the solution of that antagonism. This social formation brings, therefore, the prehistory of society to a close."

Why bother?

The main purpose of Labour politics is to help to develop social, economic, political and legal changes that give people a better chance to make the most of their lives. First, this means getting Labour candidates elected to public office, where they have the authority and resources to deal with both the grand overarching issues and the local nitty-gritty ones, from fixing the drains on Abbey Road or the parking in Nuxley Village to the great questions of national economy or foreign policy of the day. But it is also crucial that Labour members equip themselves with the ideas and skills so that the party becomes a self-renewing and effective organisation, a political force suited to society as it is now, in a drastically changed and continually changing global and ideological context.

What is the changed context?

The great crisis in global capitalism that had been bubbling up beneath the boom of the early 2000s—the greatest economic boom in human history—first surfaced in 2007 as a series of spectacular crashes in property markets around the world.

The scale of the wave of panic that ripped through world financial markets became too destructive to ignore just over a year later with the fall of several of the "ancient pillars" of investment banking—most visibly, the spectacular collapse of the US Lehman Brothers in September 2008. This led to a fall of around $10trn in equity values internationally, the large-scale withdrawal of investment across borders, the plummeting of national currencies, a steep contraction of demand, a boost to inflation and rising unemployment.

The lurch of the euro zone towards crisis in late 2011 was directly linked to the earlier great recession because of the legacy of debt that it left banks, businesses, households and governments. While these institutions are weighed down by debt, their spending or lending tends to be restrained, depressing both business investment and demand for household goods. In the early months of 2012, vast loans from the European Central Bank (ECB) to the European banks, valued at more or less the size of everything made in the British economy in a year, seemed to pull the euro area back from collapse. Such a collapse would probably have triggered a depression across the world at least on the scale—and with all the associated unpredictable social and political outcomes—of the disastrous socioeconomic convulsions that tore Europe to pieces in the 1930s.

But the fundamental issues that face European institutions—that they hold together a collection of economies with different structures, at different levels of development, with different business cycles and policy needs, with a wide spectrum of political cultures—have not been solved. And until they are, nervous financial markets could send the situation spinning out of control at any time—as in April 2012, when concerns rose again about Spanish budget policy and debt, or again in May following the elections in France and Greece.

Our political tasks

There is no escape for anyone from the consequences of these events, but, as it turns out, reports on the death of history—which is the same as saying the final and everlasting triumph of liberal capitalist democracy—have been greatly exaggerated.

What the Labour Party needs to do, what individual party members needs to do, is adapt to this enormous change of the international context in which British economic and political life takes place. We must always periodically, personally and as a political party, question and reinvent our political beliefs. We need both to adapt and to learn from the past, but not wholesale or uncritically from pre-existing models of socialism or social democracy—which is the essence of the mostly pointless skirmishes between Old and New Labours. Because this is not 1997, not least for the very positive reason that we no longer find ourselves submerged beneath the ideology that in Britain took the name of Thatcherism, but in Europe and the West more generally signalled a fight-back by owners against the infringements on property rights by the post-war welfare or social democratic consensus. This ideology finds itself in retreat—yet keeps going, zombie-like, in part from habit, and in part because of a lack of imagination on our side over what could plausibly be put in its place. That is, just as it is not 1997, we should also be aware that it is not 1945, marking the onset of the short-lived post-war social democratic consensus. Still less is it 1917.

Sometimes the lofty language and abstract concerns of political philosophy and political economy can seem a long way from everyday, practical issues. So why bother with any grand political ideas from the past? One answer is that by working out your own political goals and values, you can develop the confidence and the reference points to be able to weigh up—and so better tackle—unfamiliar political and social questions as they arise. This is especially important in our own times as, once more, eternal certainties about the way we live have begun to melt away. It should also improve the chances of making more coherent, and so more effective, policy.

And what is true?

Friday 8 February 2013

What should we do?