Practical philosophy

“The naively metaphysical standpoint of sound bourgeois common sense considers thought independent of being and defines truth as the correspondence of thought to an object that is external to it and ‘mirrored’ by it. It is only this outlook that can sustain the view that all forms of economic consciousness (the economic conceptions of a pre-scientific and unscientific consciousness, as well as scientific economics itself) have an objective meaning because they correspond to a reality (the material relations of production which they comprehend)”

Karl Korsch, Marxism and Philosophy, 1923

I’m thinking of writing a textbook, perhaps called How to Learn Marx’s Theory and Apply it for Yourself to the Contemporary World. It would have to involve i) a short history of dialectics; ii) an outline of, perhaps, The Phenomenology of Spirit, The Philosophy of History and perhaps The Logic (if I could manage that); iii) a short history of political economy, focusing on labour theories of value; iv) an outline of Smith and Ricardo in respect to this question in particular v) Marx’s philosophy of the interaction of the subject and the object, as originally formulated in the Theses on Feuerbach vi) Marx’s philosophy in practice, as he applied to concrete analyses of historical and contemporary history and journalism; vii) Marx’s philosophy/ methodology in practice, as he applied it to economic analysis; viii) the relevance or otherwise of any of his tools to understanding the contemporary world, especially the specific nature of contemporary imperialism and the ongoing crisis of global capitalism; ix) Marx’s theory of colonialism and Marxist theories of imperialism; x) the theoretical and organisational degeneration of anti-imperialism and the Western left as a large-scale modern socio-historical phenomenon, that can only be explained by a careful and judicious application of Marx’s philosophical and social scientific method of the interaction of the subject, ala Karl Korsh in Marxism and Philosophy; and xi) ongoing problems with Marxist philosophy, social theory and economics, and possible answers to them.

Some quick points about Marx's philosophy and economics.

 1. Objectivity is distinguished by Marx in two ways i) material objectivity (eg use-values and wealth) and ii) social objectivity (in economics, exchange-values, or the quantities of abstract or homogenised labour). So both use values and exchange values are, in Marx’s theory, supposed to be objective, but in different ways. Many mix up the two, and, with regard to marginalism, mix up the perception of values of goods and services (a subjective, individual-psychological question) with use values, which can never be subjective.

2. The subject-object thing runs right through Marx from beginning to end, from the architecture of Capital—which begins with the general abstract conclusions on the nature of wealth in the capitalist mode of production and descends to the concrete evidence from which the general categories are derived—down to the detailed concrete passages detailing, say, the process of increasing subordination of the worker amid the process of development of manufacture. This is because Marx knows that all theory is inescapably subjective—but not only in the sense of being individually subjective,but also socially subjective, from a group point of view. However, he believes that the objective position of wage-labour in opposition to capital (again, the two form an inseparable mutually defining "unity") gives it a unique vantage point in the social structure. Hence the crucial distinction between a class in itself (an objective social-structural position in relation to property [land, labour and capital]) and a class for itself (a subjective awareness of position, interests and capabilities that informs social and political action). One reason why "subjective" in Marxism is not synonymous with "bias" in the everyday sense is that, once the accumulation of capital is seen to result from the labour process, as the product of dead labour, the subjective view from the objective position of the working class—that it is the class responsible for wealth creation—is seen to be objectively correct. That is, the subject and the object re-emerge as a unified whole, a unity. And in fact, the same thing is right there in the Theses on Feuerbach, as it is in The 18th Brumaire and the Civil War in France. Because one of the things that Marx is saying (or rather illustrating) in the quote from the Critique of the Gotha Programme is that wealth has a passive as well as an active side, a material as well as a social, an objective as well as a subjective. It is not possible to be a Marxist and not grasp that Marx's methodology—which conceives of reality as sensuous human activity, as political and social practice—is at base a conception of social change as the mutually determining relation subjective and objective factors at various levels. Because this is the very core of Marx's innovation, his specific philosophical advance over both mechanical pre-Marxist materialism (say, of Holbach or Feuerbach), which conceives of reality as an external object, and idealism, for which reality and contemplation are one and the same. That's more or less point one in Marxism, and if you haven't got that, nothing else is really available to you, and you are forced merely to decry it as "pseudo philosophical claptrap", in the manner typical of today's anti-intellectualism—essentially revelling in its own ignorance. "The chief defect of all hitherto existing materialism—that of Feuerbach included—is that the thing, reality, sensuousness, is conceived only in the form of the object or of contemplation, but not as sensuous human activity, practice, not subjectively".

3. Marxist objectivity, Marx's version of realist method—and so Rosdolsky's version of realist method—is always an everywhere understood as a mutually determining process between subjective and objective factors.

4. Without use value, there can be no exchange value, because any labour that goes into a product that no one wants is socially unnecessary. 

5. Another reason why abstracting from use values can't mean excluding them from the value equation, or separating them from exchange value, in Marx's system: because the use value of labour power treated as a commodity is the source of fresh value when it is turned into labour during production. Therefore, the lines of manufactured trousers hung up for sale in Marks and Sparks imply the class struggle!

6. It is some time since I studied the question, but some common objections to the LTV are as follows: i) scarcity is also a feature common to commodities that gives them value (Austrian School); ii) in an economy in which food or energy are commonly part of the production of commodities (whether as imputs for the worker or for production), then the same relation applies as it does for labour, and we have a food or energy theory of value (neo-Ricardians, the most important of whom is Sraffa); iii) even if there is then a food or energy theory of value, can we talk of exploitation of food or energy? Technically, yes; but morally, no. Marx aims for a dispassionate account of exploitation as a technical relation, but it has an irreducibly human-centred moral component: normative ethics vs scientific socialism. iv) Most of the classical economists, including Marx, assumed a falling rate of profit, but it is unclear whether there is strong empirical evidence for this on a worldwide scale over time. v) Marx's theory of the falling rate of profit is based on the idea that, because labour power is the sole source of fresh value, as the capitalist invests in new machinery (dead labour) to give them a competitive advantage, this may raise individual profits in the short run, but, as capitalists as a whole adopt the new technology, over the long run, the ratio of fresh value-creating labour (variable capital) to constant capital (machinery) falls, and with it surplus value (the relation between value and prices is that value is something like the long-term equilibrium price around which prices fluctuate because of variations in supply and demand), the source of profits. But what about new lines of industry, which are being developed all the time, will they not offset the overall declining tendency? But what if the productivity increase delivered by the new capital offsets the falling tendency? This development is not specified in detail, ie there is no integrated theory of it.

7. Only exchange vales can represent values, because they are the form that value takes in capitalist society and value is the content. In contrast, use values are the bearers of exchange value. Represent and bear do not mean the same thing.

8. A use value cannot be subjective. This is because it is the quality of the commodity that allows it to fulfil some socially mediated human need. It is the quality, the socially mediated human appeal, that allows it to enter exchange in the first place. Without it, no equivalence of, say 2 shirts for 1 exquisite tie, on the basis of their containing the same amount of abstract human labour, could take place.

9. The marginalists start with scarcity and find the explanation in variations in value in individual psychology, in individual tastes. For them the external world of material things and the subjective world of the mind (ie of individual tastes) are radically separate. For Marx, on the other hand, the two are inseparably part of the same whole, the same totality.

10. "It is in the various use values that value is expressed". No, value is expressed as exchange value. Use values are carriers of exchange value. These are two ideas that are fundamental to understanding the LVT, before you decide whether the the criticism of it are true or false.

11. The secret of Marx's analysis, as he used it, is that socially objective factors—such as exchange value—are themselves the outcome of previous clashes of subjective and objective factors. That's why the subject-object formulation holds. In practice, it is not a theoretical question, but a scholarly-practical question, the end result of scrupulous and detailed investigation at more and more concrete levels of social reality, at lower and lower levels of social reality, spiralling downwards to follow the inner relations (not causative relations!) of the mutually conditioning sides. Thus, even if the LTV aims at social scientific objectivity, it does not aim at class objectivity. On the contrary, it aims to punch a series of holes in classical political economy, in this way placing itself wholeheartedly in the service of achieving working class power.

12. On the Jewish Question.  Marx, in his argument with Bauer on the insufficiency of mere religious emancipation, adopts—mock-naively and for (heavy handed) satirical purposes—the characteristic denigrating epithets commonly heaped on Jews to suggest that they would be more appropriately heaped on the chief denigrators, the respectable bourgeoisie. Also, he's just emerging from pure Hegelianism (I think he's 25) so that the language makes it difficult for the casual reader to grasp what he's saying. He's saying social emancipation should be the revolutionary democratic goal.

13. The two basic point where today's "anti-imperialists" go wrong, is that, on some occasions, in relation to some kinds of regime, some forms of western Imperialism are relatively progressive; the partial advances in democratic and social control, though insufficient, are not illusory, but are real. This leads them into all kinds of reactionary contortions.

14. Marx never repudiates the idea that capitalism is progressive relative to some kinds of social formation. He certainly uses some of the (to us) loaded phrases of the day. He is also inevitably Eurocentric, despite his very serious attempts to get to grips with other cultures (on India, he probably read as much as was available in the day, even if this wasn't very much or very good). But "progressive" and "civilising" do not mean the same thing. The earlier passages on India merely note that, despite all the human horrors and destruction wreaked by colonial domination, at the same time the social basis of a stultifying social form, of "oriental despotism" is shattered. In a way, he is arguing against the romanticisation of social forms that severely check human development. The later passages on the Russian mir is not about changing his mind on the accidentally progressive aspect of colonialism (I don't think he had a fully-worked out view on what we would call imperialism, just hints here and there), but on there being the possibility of multiple trajectories towards social advance, rather than a single one suitable for all times and places.

15. The point about Marx's earlier quote about India and the one about the mir is his ability to see alternative potential futures immanent in existing social structures—notwithstanding that, based on the inadequate sources of the day, his picture of pre-colonial India has since been superseded. In contrast, the dogmatist sees only one possible path—whether that be inevitably positive or negative. But both are attempts at "a general historico-philosophical theory, the supreme virtue of which consists in being super-historical", but neither are really much to do with Marx's Marxism—ie, Marxism at its most powerful. That's why the "bleeding dry" of the later Marx fits perfectly well with, and is not cancelled out by, the earlier argument of progressive potential of destruction of repressive social and or state structures—whether we wish to apply it to historical societies or Saddam's Iraq—because in between the two are the actions of the main actors, the oppressor and the oppressed, which fulfil or nullify possibilities that were previously present. That's why Marx's views on the mir wasn't cancelled, in this sense, by the actual history of the development of capitalism in Russia.

16. Just as he saw the potential for the break up from the outside of social relations restrictive of human developments—but perhaps thought this potential closed off following the Indian mutiny—so he saw the potential for social progress on the basis of the Russian commune in a context of globalising capitalism. Ie neither of the potentialities he thought he saw materialised and, in fact, both have had to undergo full scale capitalisation or recapitalisation—in India's case, in part owing not just to transfers of technology and knowhow, but more importantly to the transformation in social relations, of the dominant property form, the precise trajectory of which owes in part to the imperial inheritance.

17. No expurgation of the possibility of Indian agency from the dynamic political picture:
"All the English bourgeoisie may be forced to do will neither emancipate nor materially mend the social condition of the mass of the people, depending not only on the development of the productive powers, but on their appropriation by the people. But what they will not fail to do is to lay down the material premises for both. Has the bourgeoisie ever done more? Has it ever effected a progress without dragging individuals and people through blood and dirt, through misery and degradation? The Indians will not reap the fruits of the new elements of society scattered among them by the British bourgeoisie, till in Great Britain itself the now ruling classes shall have been supplanted by the industrial proletariat, or till the Hindoos themselves shall have grown strong enough to throw off the English yoke altogether. "
O yes, and tell us, clever clogs, by what processes do you propose might lead to the Indians being able to throw off the English yoke themselves?
"The political unity of India, more consolidated, and extending farther than it ever did under the Great Moguls, was the first condition of its regeneration. That unity, imposed by the British sword, will now be strengthened and perpetuated by the electric telegraph. The native army, organized and trained by the British drill-sergeant, was the sine qua non of Indian self-emancipation, and of India ceasing to be the prey of the first foreign intruder. The free press, introduced for the first time into Asiatic society, and managed principally by the common offspring of Hindoos and Europeans, is a new and powerful agent of reconstruction. The Zemindari and Ryotwar themselves, abominable as they are, involve two distinct forms of private property in land — the great desideratum of Asiatic society. From the Indian natives, reluctantly and sparingly educated at Calcutta, under English superintendence, a fresh class is springing up, endowed with the requirements for government and imbued with European science. Steam has brought India into regular and rapid communication with Europe, has connected its chief ports with those of the whole south-eastern ocean, and has revindicated it from the isolated position which was the prime law of its stagnation."

So: some historical errors on the nature of Indian property systems, owing to inadequate sources, but no “imperiocentric” siding with the English against the Indians, or denying that they would have to be the agents of the own political destiny if they were to enjoy the benefits of the destructive and self-serving interference of the imperialists.

Neither Islington nor Scunthorpe, but a few modest steps towards international socialism!

On Ed Miliband's alleged swerve to the right on budget policy, I find myself in between the "Blairite neo-liberals", if I can combine familiar insults, and the old Labour stalwarts. First, this is because the longer-term question isn't really about fiscal policy. Fiscal policy can offset a slump in demand to some extent and for some time. If you cut too far and too fast, you risk tipping the economy back into recession. If you don't make the right noises and some progress on cutting the budget deficit, at some point borrowing costs will soar: even more so in the febrile atmosphere of today's international financial markets. That is, both positions are true, depending on the specific circumstances. Also, the level of spending that was affordable in the 2000-07 bubble (the greatest bubble in human history) is affordable no longer now that the bubble has burst. The system of private ownership and generalised commodity production is not neutral between possible solutions: it favours making working people rather than property owners pay. These are really technical questions about how capitalism works now.

But I think where the unions and the old Labourites—and those on the left of the party more generally—miss a trick against the "Blairite neo-liberals" is over the longer-term and ultimately more important questions of the kind of society we would like to live in: What kinds economic and social structures? Are any of these are plausible? If so, how might we practically develop them?

On this second set of questions of practical social and moral philosophy—which will be at the heart of what the Labour Party becomes, assuming it is capable of change in time—the old Left seems to have very few, new positive creative proposals, which is unfortunate.

As for Ed, I think that, for practical short-term political purposes, to keep the two main halves of the party on side, he needs to stick to "fiscal conservatism" (if that means addressing the structural budget deficit over the longer term)—especially as 2012 could well be a very bumpy year economically around the globe—while at the same time offering the unions and the old Labourites something positive and attractive and big on the practical social and moral front that they can hold on to. What that might be, I'll try to make some concrete suggestions later.

Down with the so-called rebels!

I'm not saying there aren't any good arguments against intervention in Libya, but here, the author's self-identification with the left seems to me misplaced. This is because the "our-poor-vs-their-oppressed" routine tends to be the standard, unprincipled line of a nationalist reactionary. If only the West had allowed Gadaffi to kill a few more Libyans, a few more Americans could have had their teeth pulled for free—such is the noble logic of this article, only slightly exaggerated.
Posing as clued-up and streetwise, the argument simply reinforces the conventions of a system of production and distribution in which we are told that we can't have both—in this case, help foreigners and help ourselves—but must choose between them. In a world of great material abundance, however, in which economic textbook "scarcity" is, in some sense, socially created and imposed (which is one of the things that Marx means when he says that capitalist social relations have become a fetter on social progress), this appeal to greed and selfishness—exactly the human traits that capitalist social relations tap into and amplify—merely binds us more closely to that system. At the same time, it conspicuously fails to point the finger at a ruling ideology that carefully places outside of the jurisdiction of social policy the vastly lopsided income distributions which it conceals and protects, portraying them instead as an unalterable feature of the natural landscape, unquestionable, dangerous to tinker with, beyond choice. And this is the crux of the problem.
Also: nice scare-quotes sneer at the Libyan "rebels" (=not really rebels, not really worthy of our solidarity?) fighting for their freedom.

A modest proposal 2

Whereas the post below is a sort of starting point for investigation, this is a shorter version, for a Labour Party meeting.

An amendment to resolution 2, in context:
I want to place my proposed amended resolution 2 in the context of a constructive alternative proposal for a viable short- and medium-term policy strategy for the party. Point 8 addresses directly the content of the original resolution. My amended version follows.

1. New Labour applied the social democratic principle of trying to make capitalism fairer by adapting to the dominant political-economic ideology of the day so as to channel more resources to social projects.
2. The global economic and financial crisis of 2007-09 has changed the political, economic and intellectual terrain dramatically and for good, shaking the dominant ideological edifice in place over the past 30 years—namely, the idea that there is no alternative to unrestrained free-market capitalism—as it was in large part the unforeseen by-product of untrammelled deregulation.
3. As a consequence, the raison d'être of New Labour has fallen away.
4. It is unsurprising that the right reacts according to the dictates of its shop-worn worldview. The left must not do the same. It must create a new policy framework to make Labour values relevant anew to the changed national and global situations.
5. May 2010 saw the defeat for social democracy in one of its incarnations. There is now an opportunity for a thoroughgoing rethink. Ed Miliband’s “slow start” as Labour leader shows that he has rightly decided to take time to reforge strategy and policies for the new era.
6. It would be premature to imagine that the discrediting of the unrestrained free-market yet augurs the decline or transcendence of capitalism itself, not least because…
7. Realistic alternative socio-economic mechanisms that will provide dynamic innovation and which are ready to put to in place straight away are at best embryonic.
8. In the short term, Labour’s priority must be to expose the ideological, class character of the government’s cuts agenda, which could yet endanger Britain’s faltering economic recovery. It must also offer a clear, alternative policy approach to the problems of weak growth, a large fiscal deficit and burgeoning of inflation that shows that it grasps the way in which a national capitalist economy currently works in an international context.
9. Over the medium to longer term, more promising prospects arise. It should be possible to sketch a strategy that pursues two broad policy paths at once. The first path would be pro-market and pro-globalisation, to maximise state resources available for pursuing the second, more radical path, using the economic tool-kit at hand. The second path involves a commitment, not just to the redistribution of state funds, but also to substantial and sustained material and practical support, within civil society, for experimental political and economic institution-building, with the goal of addressing the well-known shortcomings of capitalist production, of extending social control over political and economic life, and of developing alternative socio-economic mechanisms that could open up economic opportunity and unleash the creative capabilities of all.
10. Thus, although capitalism might not automatically equip its own gravediggers as fast as some of us might like, we should try to ensure that it supplies sufficient taxes to pay for the gravediggers’ advanced vocational training.

Amended resolution: That the party should continue to expose the ideological, class character of the government’s cuts agenda, which hits the worst-off disproportionately and could yet endanger Britain’s faltering recovery. It should offer voters an economically credible, pro-growth and pro-employment policy, making use of efficiency savings, as the main means of reducing the fiscal deficit and the national debt. Any spending cuts that are necessary because of the mismatch between expectations about government income before and after the crisis—as the economy enters a lower average growth path—will thus be clearly distinguished from those of the Tories in terms of timing, scale and targeting.

A modest proposal

A suggestion for Labour’s broad strategy after the global economic crisis and the demise of New Labour.

Old wine in new bottles?
1. When New Labour came to power in 1997 it had some reasonably radical proposals, but then drifted ever further to the right and away from the party’s traditional values, distancing itself from its core, working class supporters as it sucked up to globalising “neo-liberalism”.
This familiar narrative, by now somewhat tired and formulaic, nevertheless remains popular among some who identify themselves with the left. An alternative, minority reading—one which seems less stirring but closer to the mark—is that New Labour’s strategy and practice was simply the latest manifestation, and by no means the least successful, of the central social democratic principle of using state power to make capitalism a bit fairer through increased redistribution. In its case, this was done by adapting to the dominant political-economic ideology of the day so as to channel a larger share of economic resources to social projects such as healthcare improvements and school-building.
2. I’d better say right away that, although I’m a member of the Labour Party, I couldn't really be called a social democrat, and especially not one of the New Labour kind. Rather, I count myself as some sort of democratic socialist and/or Marxist. (I used to think the word “democratic” superfluous in this connection, since it seemed to me that it was already automatically included to the idea of "socialism", meaning the extension of popular political and economic control. Certain developments during the past decade have since convinced me, reluctantly and belatedly, that, even after the historic and welcome defeat of the Stalinist regimes, this is not always necessarily the case.) Freedom and egalitarianism are the other indispensable values of this strand of political belief. It does not denigrate or underplay the tangible achievements and benefits of liberal democracy; rather, it values highly the political space that liberal democracy affords, compared with other contemporary and historical options. At the same time, it is confident about the desirability of, and popular capacity for, developing political arrangements that not only incorporate liberal democratic achievements, but that also considerably augment and go beyond them. As a starting point on imperialism—in our day, roughly, the world institutional set up designed to facilitate the expansion and reproduction of capitalist power—it is opposed on principle. That said, it is not oblivious to the existence of other repressive and reactionary forces in contemporary international politics, forces that cannot be traced back wholly satisfactorily to the complex and ever-mutating structures of Western imperialism. This is one of the reasons that—dare I say it?—in some contexts imperialism has been, and probably could be again, relatively progressive. To state the obvious, the characteristic social relations of capitalism, though exploitative, are nevertheless superior to those of feudalism (because…), and parliamentary democracy, for all its shortcomings, is superior politically and morally both to fascism (because…) and violent Islamism. Perhaps I’d better add at this point for good measure that, although my political preferences are, in the main, far to the left of those of Tony Blair, the more he has come in for criticism from the mainstream liberal-left media, and the more this criticism has become merely reflexive, a genuflection to conventional wisdom, a badge of belonging, the more I have warmed to him. I don’t know if any of this is very bad, or if there is anyone else who shares this rough combination of view: I’m just describing.

The end of the affair
3. The global economic and financial crisis of 2007-09 has changed the political, economic and intellectual terrain dramatically and for good. Emerging out of the US property market in 2007 and reaching a peak of intensity in late 2008 and 2009, it was not only the most severe such crisis of world capitalism in 60 years, but also the most important world political event since the implosion of the Soviet Union almost 20 years ago.
Nevertheless, the impact of the crash was not the same everywhere. In 2009 the world economy contracted, weighed down by the very poor performance of the advanced Western economies. Although sharp falls in real output were concentrated in the economies of north America and western Europe, many countries in eastern Europe and the former Soviet Union were hit especially hard. Real GDP in Canada and the US shrank by around 2.5% in annual terms, on IMF figures. Of the leading countries in the EU, France saw economic activity wither just as much, whereas in Germany (the largest economy in the group) and in Italy, output dropped by around 5%. In central Europe, apart from Poland, output falls were of a similar magnitude or a bit worse (Hungary and Romania). Countries that had previously been involved in heavy foreign borrowing and/or were reliant on the vicissitudes of commodities markets, such as the small Baltic states and the relatively large Ukrainian economy, suffered much deeper recessions, of 15-18% annually, comparable in size to those seen in the chaotic aftermath of the fall of communism two decades before. Although not quite so traumatic, the crisis in Russia exposed the multiple fragilities of its economy, the most important in the Commonwealth of Independent States (CIS; an institution that takes in many of the former Soviet countries), where national production fell by almost 8%. Only nations with a relative lack of integration into the world financial system came through comparatively unscathed (Azerbaijan, Uzbekistan). In contrast, in other emerging-market regions—notably, those in Asia—the impact, though marked, was much less severe. In the same year, in a far-flung and obscure corner of the globe known as Britain, real GDP shrank by 5%, by far its most severe post-war slump. Without the massive boost in government spending and the rapid and substantial monetary loosening undertaken by Gordon Brown, it would have been much worse, probably leading to the return of mass unemployment (though he shouldn't hold his breath if he expects to get any credit for avoiding this). Without the unprecedentedly large, swift and co-ordinated actions internationally, it would have been worse still. Bringing things a little more up to date, at the beginning of 2011 the on-going troubles in the peripheral economies of the Euro zone indicate that the crisis has not yet run its course. Most recently, the inspiring and momentous popular uprisings against corrupt and authoritarian regimes in Arab North Africa and the Arabian Peninsula may be another of its after-shocks, as economic eruptions can interact over time with existing, underlying weaknesses to trigger social and political crises.
4. Probably the most important long-term consequence of the crisis is that it has seriously shaken the dominant intellectual and ideological edifice in place over the past 30 years—namely, the idea that no alternative to unrestrained free-market capitalism was possible—as the crisis was in large part the unforeseen by-product of untrammelled deregulation, as well as a specific and dogmatic-idealist view of the nature of capitalism. In the interim, however, the standing of this set of ideas was only enhanced by the collapse of the Soviet bloc.
5. Perhaps it is understandable that, with a definite phase of capitalist expansion and ideological dominance in effect over, greatly undermined by the scale of the global economic crisis, only its adherents and beneficiaries seem not so far to have noticed. This could just be a testament to the power of habitual thinking, or perhaps it is this in combination with the narrowness of the Anglo-American economic education syllabus, which means that, whatever happens, most insiders are left swinging on the bars of a cage that is tightly framed by the parameters of what they have been taught. There must also be some emotional resistance to loosening one’s hold of ideas that are in places moderately complicated and possibly hard to master. Whatever the reasons, having escaped the looming catastrophe of a wholesale breakdown of the international financial system and a rerun of the Great Depression, the City and its newspapers, its legions of commentators and economic journalists whose job is to tailor the news to suit businessmen, not to mention the multilateral organisations, seem almost immediately to have returned blithely to business as usual, intoning pretty much the same formulas about economic probity and reform, wheeling out the same tired and implausible texts about the necessity of rewarding investment bankers and CEOs with enormous bonuses if they are to continue to compete successfully in the international market by attracting “talented” staff. Presumably, among such staff are some of the geniuses who cleverly ignored every warning sign in the run-up to the crisis­—and, indeed, the bonus system may have been one of the factors that systematically incentivised them to do so.
In Britain, the social composition of the new government, made up of the parties of the landed aristocracy and their hangers on aligned with big finance and the spokesmen of the business class, of course predisposes it to try to take advantage of the crisis to push developments in the direction of the interests of its constituents, according to their overlapping world views and the familiar policy prescriptions that go with them. Hence the institution of a programme of cuts beyond the scale immediately required as a follow up to the UK’s stimulus package and the large cyclical (recession-induced) deficit, so as to make a permanent reduction in the size of the state. Hence also the necessary exaggeration of the dangers of a Greece-like financial destabilisation linked to the size of the fiscal deficit.
6. Another obvious consequence of the discrediting of the model of development with which it made its creative social democratic compromise is that the raison d'être of New Labour has fallen away beneath it, as a new and probably more timid, less self-confident phase of capitalist development gets under way. There is nothing surprising in the right reacting strictly according to the dictates of its shop-worn worldview. But one of the things that the left must be careful of, whether it is the old New Labour centrists or Old Labour in a new disguise, is that it doesn’t do the same—that is, react exclusively and unthinkingly from within the network of its pre-existing ideological and rhetorical reference points. Rather, it must react to create a new political machinery and policy framework that render Labour values appropriate and relevant to the changed national and global situations. Thus the difference for us, for the Labour Party, is that this presents a fresh and exciting opportunity, rather than, as for the right, a dead end, a chance to rerun the glory days of the 1980s, "the second time as farce".
So May 2010 saw a significant defeat for social democratic Labour in one of its incarnations. At the same time, there is now a genuine political opportunity, and, first of all, a genuine chance for a thoroughgoing rethink of what comes next. This is why I choose to read positively Ed Miliband’s alleged slow start as Labour leader (another media narrative that has quickly hardened into cliché) as him having decided to take time to try to reforge both strategy and policies for a new era, just as New Labour did before. I’m especially pleased to see the attempt to rethink policy with the goal of democratising the party still further, in part by eliciting greater input from and involvement of grassroots members, as well as from progressive groups and movements more broadly. If Labour can’t be the most democratic party, pushing the democratic agenda both internally and in society more widely, then it can’t possibly hope to represent effectively the interests of the majority of ordinary working Britons.

Down but not yet out
7. That said, to double back for a moment, although the economic crisis has raised considerable doubts about the Anglo-Saxon model of global economic development, it would be premature to imagine that it yet augurs the decline or transcendence of capitalism itself. There are good reasons for believing this. First, in many places in the world, capitalist social relations—the dynamic conjoining of private property with market competition, the handle and cord of the whip the drives firms on and keeps them innovating—are still “forms of development”, propelling rapid economic growth and increases in productivity. In the past two decades this has probably lifted hundreds of millions of people out of absolute poverty in large, populous countries such as China, India and Brazil. At the same time, in the advanced economies this arrangement has continued to generate all sorts of interesting technological innovations that are opening up new possibilities for the future all the time.
But its was never the dynamism of capitalism, its ability to force firms to constantly raise the productivity on pain of bankruptcy and extinction, that troubled us: it is its social and environmental destructiveness, the wasteful, uncertain and stunted lives that, even in the rich countries, it imposes on the majority, in part as a corollary of the division of labour, in jobs which, if they have them, are either too demanding physically, leaving little time for the development of a fuller range of human faculties, or too repetitious and undemanding mentally, presenting little challenge or prospect for self-development, leading to disengagement and withdrawal, the coasting through working life on autopilot. The structures which ensure this, the arbitrary and debilitating hierarchies at work just as much as the arbitrary life chances doled out by the underlying socio-economic patterns of property ownership and resource access, are the flip side of the cult of entrepreneurship, the narrow form into which a particular strand of creative human potential is selectively channelled in class society, stultifying and depressing the many so that the few might fly free and live.
Second, despite widespread pessimism on the left in the wake of the fall of the Soviet Union and the understandable phase of capitalist triumphalism that followed, and although some promising new developments are now starting to emerge, the left has not yet come close, as far as I know, to solving the central problem of what kinds of institutional arrangements might serve as the basis for an improved social set up in which a mechanism of innovation could become socially ingrained.
8. One positive long-term result of the fall of the Soviet bloc has been the gradual coming together—still nascent, still tentative—of the two broad sides of the left split asunder by the October Revolution of 1917: roughly, the social democrats and the Marxists. Potentially, this is a very positive development, even if it is unlikely, or desirable, that it leads to the seamless fusion of the two. It shows itself, at least among the more thoughtful elements on each side, as a slow diffusion of political concerns and suggestions in both directions, a focus on common problems, with each arriving at possible workable solutions using reference points from within their own tradition. Signs of this potentially productive cross-fertilisation can be seen in the common language and similar conceptualisations of certain problems and goals by representatives of the two sides. For example, something of this kind can bee seen in the similarity of the approaches of James Purnell, a former Labour minister, and Erik Olin-Wright, an old New Lefter, to the issue of real (as opposed to nominal) freedom, even though Purnell appeals in his analysis to thinkers, such as Tawney and Sen, who come firmly from within the social democratic tradition, whereas Olin-Wright addresses the issue from the perspective of creative and self-critical analytical Marxism. Trends of this kind should recognised and nurtured, as they could be very helpful in negotiating the uncharted waters ahead, now that the twin "inferior mirages" of the Soviet dictatorship and of unrestrained free-market capitalism have disappeared.
9. As a quick aside, I should have thought it obvious, but have not always found it so, that no socialist or social democrat should regret the fall of the Stalinist regimes, and neither should they defend or apologise for their disastrous records, in some sort of inept attempt to keep open a political alternative—any political alternative, no matter how bad—in the face of the encroachment of voracious neo-liberalism. As the societies of the Soviet bloc fell a long way short of socialist ideals of democracy, freedom and even egalitarianism, both in their methods and their results, they are inherently beyond any progressive defence. Indeed, the grim egalitarianism of Soviet life, such as it was, was conditioned by the failure to develop living mechanisms for social, political and, crucially, economic innovation. On the contrary, innovation, and the free and frank exchange of ideas necessary for it, was actively inhibited by the authoritarian political structures necessary, in the absence of a strong self-reproducing ideology of consent, to hold the social form together, to force it to cohere. That is, the so-called state socialist regimes failed even on basic Marxist terms, because the rigid and sclerotic socio-political form prevented the continuous revolutionising of the forces of production that would be necessary to pave the way for freer and more widely creative social form than capitalism. Neither should anyone on the left feel sorry for their passing, as they were an impediment to human progress, a historical blind alley. Of course, this is different from feeling sorry for the people who had to go though the capitalist retransformation of those societies, many of whom experienced it as a catastrophic loss—of income, status, security, purpose.

In the womb of the old society
10. In the short term, the Labour Party's priority must be to expose the ideological, class character of the government’s cuts agenda, which, masked by the inevitable “we’re all in it together” routine, could yet endanger Britain’s faltering economic recovery. We must also offer a clear, alternative policy approach to the problems of weak growth, a large fiscal deficit and the burgeoning of cost-push inflation internationally that is economically realistic—ie that shows that it grasps the way in which a national capitalist economy really works in an international context. So far, so social democratic.
Over the medium and longer term, however, more promising prospects arise. Drawing on some recent ideas, it is possible to sketch out a broad new strategic road-map for Labour. This approach differs from other sketches I have seen in the press or on left-leaning websites (such as from the centrist Compass organisation, or from so-called conservative social democrats or “Blue Labour” theorists). It adapts to the new, uncertain political territory we are entering, but less defensively, less passively, more positively, more excitingly and with greater ambition than its rivals, by means of a strategy that pursues two apparently contradictory policy paths at once.
The first path would follow policies that are almost as pro-market and pro-globalisation as New Labour (bear with me for a moment), although without shying away from the reforms needed to prevent a rapid repetition of the near-collapse of the financial system that was seen in 2008-09, which could again threaten millions with unemployment and poverty. In this way, state resources available for pursuing the second, more radical path are maximised, using a proven economic tool-kit (albeit one with known, significant limitations), while also pursuing traditional social democratic redistributive goals (which, however, have the drawback of being impermanent and reversible, as we are seeing with the current round of cuts in social welfare and support). In short, in lieu of a good idea of alternative, realistic and proven socio-economic mechanisms that can provide dynamic innovation and poverty-reduction, and which are ready to put to work straight away, at this stage the goal should be to improve the functioning of markets rather than to restrain them, to encourage conditions favourable to rapid economic growth as actively, though perhaps not as credulously, as New Labour. Similarly, it is of both practical and of pragmatic self-interest to remain in favour of globalisation, albeit a globalisation of a different kind than we have seen to date. For example, Labour and the unions should work together to promote vigorously an improvement in working conditions, wages and workers’ rights internationally, not least as a means of protecting living standards at home. We actively want people abroad to be better off, to have greater control over their own lives, but we don't necessarily think that this should be—or even that it is necessary that it should be—achieved at our expense. The aim should be to match the trend towards the ever-freer movement of large-scale capital flows across borders—which has characterised advanced capitalism over the past 20 years, but which was also one of the main factors that almost brought it to its knees—not just with the freer movement of labour, but also with the internationalisation of the labour movement and the “export” of advanced labour legislation and practices. Behind this stance, then, is a dual motivation that is both self-interested and internationalist.
The second path involves a commitment, over time, not just to the redistribution of state funds, but also to substantial and sustained material and practical support for experimental political and economic institution-building. The aim would be to deepen democratic involvement, to address the well-known shortcomings of capitalist production and, ultimately, to develop alternative methods of economic organisation capable of ingraining innovation systematically, within the social structure, so that creative economic opportunity is not in effect restricted to the few. Unhindered by capital restrictions, what we now call “free enterprise” would gradually be made a practical possibility for all, or almost all, with social relations that structure alternative drives and motivations for productive innovation encroaching more and more on the social relations of private property and wage labour, two halves of the socio-economic form currently dominant. This could be conceived as something like R&D investment, but in this case, what is being researched and developed need not be a technology or a product, but rather experimental institutions favouring alternative motivations for dynamic innovation as possible basis for a new, more sustainable, human-centred social form. So, state revenue would be distributed to schools and hospitals—Blair’s essential and, in its way, brilliant, if necessarily temporary compromise—but also to civil society to fund alternative, experimental institutions capable of extending social control over political and economic life, and of undertaking social production based on incentives other than just profit, but with the room to risk failure. I don't see why it couldn't be modelled something along the lines of arts funding, the purpose of which, ideally, is to afford space for the experimental exploration of meaning and beauty without the need to turn a profit, outside of any immediate commercial considerations and constraints. What might such alternative institutions look like? Luckily, a lot of work has been done on this in the past 20 years. To concretise this idea, I shall pinch a couple of examples from Olin-Wright’s recent book, Envisioning Real Utopias, one on deepening political democracy, one on extending economic democracy, as a means to achieving, among other things, what is sometimes called real freedom. [[EXAMPLES TO CHOOSE FROM AND ELABORATE A BIT, to concretise: social economy: wikipedia, Quebec; unconditional basic income; social capitalism; co-operative market econ, mondragon; market socialism; parecon]].
Of course, the choice of goals would have to recognise the political starting points, the processes of production and reproduction of British political culture as it is, which would condition their "sellability".
Thus, although capitalism might not automatically equip its own gravediggers as fast as some of us might hope, we could at least try to ensure that it supplies sufficient taxes to pay for the gravediggers’ advanced vocational training.

Comparative advantage
11. Unlike New Labour, therefore, the purpose isn’t just a temporary compromise, but rather the construction of viable economic and political alternatives, within the existing systems, to be tested and improved over time so that we may be surer of their effectiveness and durability. It contrasts also with the old left’s statism, in that, rather than emphasising state ownership, it favours public funding to support and develop social ownership, civil society ownership, the dispersal of economic and political power within civil society, heavily backed up by the state. In contrast to the old Marxist left, it does not think that violent revolutionary transformation is necessarily the best terrain on which to conduct the possibly longish phase of democratic economic and political experimentation needed to "unsheathe" or “declass” the “entrepreneurial spirit”—and thus unleash alternative incentives and drives as the basis for economic development—in the advanced capitalist countries, at least. In contrast with the Conservative’s Big Society concept—itself designed to clothe in vaguely centre-left-sounding terms a reactionary policy of reducing social provision—the absorption of economic activities into civil society is not only to be encouraged, but also heavily backed by the state by means of training and funding, perhaps first of all using a number of pilot schemes based on the most promising real examples from historical and contemporary experience.
12. There are several advantages to this approach. First, by synthesising aspects of New and Old Labours in a way that addresses the difficulties promising opportunities in period of regeneration ahead, following a phase of crisis and defeat, it has the potential to unite the two largest parts of the Labour Party. It could also draw the support of the disappointed left-wing of the Liberal Democrats, without scaring them, and appeal to progressive, liberal-left opinion more broadly—the elusive “progressive majority”. This will be necessary to beat the Tories. Second, this is not an attempt to reject Labour’s achievements and its traditional values, but rather to adapt them again to the specific intellectual, ideological and political terrain of the day. However, it is more forward-looking, less cringingly passive, less defeatist, less fearful, less insipid, and more inspirational than some of its alternatives (“conservative” social democracy, “Blue Labour”, Compass). And above all, at the moment Labour needs a broad programme that is credible, inspiring and easy to grasp. There’s nothing wrong with being passionate and angry about living in a country that is still incredibly unequal and wasteful of human potential, and there’s nothing wrong with being utopian, of aiming for the highest peaks of achievement. What’s wrong is if these qualities aren’t tempered with a heavy dose of learning from the past, and with realism, which means having a clear knowledge of your own political culture, of where you are starting from. Lastly, one of the most striking features of the global crisis was the absence of a coherent left-wing response to it. Instead, there was a certain paralysis, or the resort to the safe but windy rhetorical formulas of yesteryear. The approach outlined above could help to be better prepared when the next crisis hits.

13. Some terms in need of definition: neo-liberalism, democracy, socialism, nominal freedom, real freedom, egalitarianism, imperialism, liberal democracy, social democracy.