Monthly Archives: October 2012

Thoughts on the Class Struggle in Greece (Part 1)

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For many in Ireland the situation in Greece is one from which we can learn many lessons.  The United Left Alliance has just advertised a public meeting in Dublin with a speaker from the Greek left organisation Syriza.  A couple of months ago a debate on the Greek class struggle, on Syriza and the attitude of Marxists to this organisation was published here and here.  In this post I want to address some of the questions that have been raised on these issues.  I am not by any means an expert on Greece and the judgements I am making can only be tentative but I believe that the debate has illuminated the situation sufficiently to make some remarks.

Syriza is not a Marxist Party and is not committed to the revolutionary overthrow of capitalism.  It is not even a working class party with deep roots in the class or its organisations.  In fact the Greek participants in this debate have noted its mediocre rise in membership and its being mainly a reflection of a collective mood of opposition to the two traditional parties, the social democratic PASOK and conservative New Democracy.   The writers also observe its rightward trajectory.  Its economic policy is essentially Keynesian (a capitalist system but reduced austerity at least initially) and its main plank is debt reduction from the European Union, European Central Bank and International Monetary Fund – the Troika.  It supports fiscal consolidation (cuts and tax increases), as it must if the debt is not to grow larger again after some debt forgiveness, but says this must be “socially just and viable.”

It has grown rapidly in support and increased its vote in the most recent election to 26.9% from 16.8%.  In a situation of extreme hardship it is not unreasonable for workers to look for some respite and this is what Syriza offers.  The Greek Marxists also argue that the capitalist class in Greece and the Troika might at some point see Syriza as a mechanism to impose a new austerity in place of the current one, widely considered illegitimate.  In this situation, the leadership of the opposition to austerity, having no fundamental antagonism to the system, would agree to impose reduced austerity in return for support for the legitimacy of this austerity, putting the brakes on opposition and support for the continuation of Greek membership of the Euro.

The articles by the Greek Marxists are written by participants in Antarsya, which scored only 0.33% in the most recent elections, down 0.9%. They correctly emphasise the need to work with supporters of Syriza in order to win them to their politics and to defend the working class as a whole from the danger of fascism.  The difference between them and the supporter of Socialist Resistance in the debate is the insistence by the latter that their united front approach falls significantly short of what is required.  It is criticised for not being applied to the demand for governmental power, which crown the demands of Marxists and which frame the critical task of political power without which the crisis cannot be decisively solved in favour of workers.

Both sides appear to agree that there exists real revolutionary potential in the existing situation, although the Greek writers provide evidence that this is not in fact the case and we will look at this in a second post. The question of a governmental slogan in such a pre-revolutionary situation, if it exists, is therefore crucial.  If the left does not provide for such a political solution the right will. Socialist Resistance is right in my view if, and it’s a big if, there really is a pre-revolutionary situation but even if there is not the question still needs an answer. Do the Greek Marxists have one?

The argument of Socialist Resistance is that the partial solutions of Syriza, where they elected into government, would profoundly challenge the logic of capitalism and create a pre-revolutionary crisis.  Their electoral victory “would be a massive advance for the Greek working class” upon which Marxists would build with a revolutionary strategy, eventually to a “revolutionary outcome favourable to the working class.” It is acknowledged that Syriza may betray its programme but if this is so it may be that the working class has to go through this experience.

This is a formula with an alibi for when it doesn’t work. The Greek Marxists’ writings demonstrate a more concrete understanding of the problem. The first is that a government of Syriza may include nominally ‘left’ parties which drag the whole arrangement to the right. But worse, while the Greek working class invest their hopes in Syriza the latter and its electoral successes are not seen as a branch of its own struggle. If it is not a branch of the workers struggle, an organic part of it and not just an electoral reflection of it, then the tactic of the united front employed by Marxists in terms of supporting a Syriza Government will be much less productive.

Above all the Greek Marxists point to the real possibility that Syriza will actually keep to its programme and not actually betray it, which would mean continuing with austerity, betraying the Left in the eyes of the population and preparing the way for the fascists of Golden Dawn who may unfortunately not betray their programme.  In fact of course the programme of Syriza, negotiated debt reduction, is not within its gift, but requires the agreement and actions of the Troika.

The Greek Marxists point out that revolutionaries can delude themselves on the influence they can have on larger reformist bodies by supporting them in elections. Of course the point of such support is not so much to sway the organisation as to influence its members. Through supporting its campaign one can win the respect of Syriza’s supporters, showing your agreement that the debt burden should be reduced and austerity resisted, while explaining that Syriza does not go far enough and will not go far enough.  If or when this is proved to be the caes these supporters might acknowledge the correctness of Antarsya and be won to their perspectives.  Of course supporting an organisation in an election means taking a certain responsibility for that organisation and what it is standing for and this definitely should not be done by pretending its programme is more than it actually is.

There may also be the issue that this writer has come across often. Small organisations say they are adopting a united front approach and declare support for a much larger reformist party in an election but don’t actually support it in any way that anyone could recognise. The support is often a purely verbal statement of position but does not involve actual campaigning. It must also be recognised that the latter activity can take a long time to have an effect through establishing the seriousness and credibility of the support that is given. The applicability of these latter remarks to the Greek situation is one for Greek Marxist to determine.

On the other hand the Socialist Resistance article admits ignorance of the most recent developments in Syriza’s political practice and programme including setting to the side the unity of Greek workers with immigrant workers, which is understandable given that Socialist Resistance is British, but the article goes on to blithely assert that “Syriza has withstood the bourgeois onslaught without bending.”

Both are grappling with the simple fact that the balance of forces does not yet admit of a working class solution and that this becomes evident when it comes to framing a governmental slogan. The writer from Socialist Resistance covers this up by prettifying Syriza as in some way representing an (impaired) working class programme when this is not the case. The Greeks on the other hand, perfectly aware of the severe limits of Syriza as an alternative and the real role they play in the workers movement and struggle are forced into downplaying the importance of the governmental slogan and present the question in a way that allows the Socialist Resistance article to describe it as abstract, which it appears to me to be the case.

Being in the midst of the action it is my view that the Greek Marxists more accurately describe the real class struggle in their country and the political character of Syriza. If their proposals for a governmental solution to the crisis, which acts as the proxy for the question of which class will impose a solution, is abstract this simply reflects the fact that the working class is not unfortunately currently in a position to put forward its own solution. This is primarily because the Greek working class does not support a solution in which it rules as a class and capitalism and its state are removed in the process. If a significant section of the Greek working class did believe this organisations like Antarsya would not be getting less than half of one per cent of the vote. It is to this fundamental problem that we will turn to in the next post.

The Bedroom Tax and the Inevitability of Civil Disobedience by ‘Belfast Plebian’

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By now most people will have heard something about the new welfare regime due to kick in next year. The range of the welfare bill is so vast that it almost defies summary. The implications for the whole of the working class are very profound. To the unwary the welfare changes are of little importance because they think it will not impact on them, after all they are in steady employment.  Yet the changes will impact on the whole of the working class.  First of all steady employment cannot be guaranteed in the long-run recessionary economic cycle that we are certainly in and second because most workers have family circles especially parents and children that will be severely impacted. It should be stated at once that the number of unemployed in receipt of welfare benefits are in fact the minority, just over 60% of those in receipt of significant welfare benefits are in fact not unemployed.

Let’s pick out just one item that has gone largely unrecognised, changes to housing benefit and let’s be specific about it. In the north of Ireland there are currently 63,000 people registered as unemployed, however there are a lot more, 161,634 homes to be exact, in receipt of essential housing benefit, in fact 67,500 out of a total of 90,000 of Housing Executive households get the benefit, another 23,600 with Housing Associations and then another 70,000 renting in the private sector. In additions there are another 34,800 on the social need waiting list, 20,000 classified as emergency need. It is a reasonable assumption to make that most on that list would be in receipt of housing benefit if they could find a place to live.

Life is about to get a lot more difficult for many of those in receipt of housing benefit. For a start if you are single and under 35 you will only be allowed enough benefit to cover the cost of only one bedroom in a shared property. Where are you going to go to find this prized one bedroom?  Certainly not to the Housing Executive with its ever growing waiting list and reducing building programme, down to less than 2,000 planned properties. What then of the private rented sector?  Here rents are rising due to the mortgage crash – people who in the recent past could expect to get a mortgage are now no longer able get one.

The typical rent on a small house starts at about £600 per month, fine for some who have only just missed out on the mortgage bonanza but not for the poor benefit claimant who is facing a £400 cap which can only get progressively worse in relation to non-benefit tenants, the likely outcome being private landlords refusing to rent to the poor and a steady increase in homelessness.

Let’s move on now to the bedroom tax or as the government calls it, the over occupancy charge. From April next year those in receipt of Housing Benefit will have to pay a charge of 14% relative to the cost of rent for the audacity of having too much living space i.e. having an extra bedroom and others a stiffer 25% charge for having two extra rooms. You see the new welfare orthodoxy says that the working class have way too much spare capacity in their council homes.  So from April 2012 only one bedroom in a council property will be covered by housing benefit per person or per couple. If you have anything extra you will have to pay for it out of your universal credit. You see the new regime has moved on from merely targeting single people for penalty, it now reaches right into the working class family itself. If the person or couple have children the following rules will be applied.

A child aged 15 or under will be expected to share a single bedroom with another child of the same sex.

A child aged 9 and under will be expected to share with another child regardless of their sex.

You will be deemed to be over occupying your home if for example you are a single parent family living in a three bedroom council house with two teenage sons below the age of 15, or if you are a couple without children living in a two bedroom council flat, or again you will be deemed to be over occupying if you are a couple who have to sleep in separate bedrooms due to disability or sickness needs, or again you are a divorced or separated parent living in a two or three bedroom property who needs the rooms for children who only stay at weekends and holiday periods. There are just too numerous variations on this simple over occupancy theme to cover here. The above is just a sample.

How many people in the north of Ireland are to be classified by the Daily Mail mind-set as ‘wicked over occupiers?’ We don’t yet know; when Lord Freud was asked in the House of Commons about the likely outcome for the UK as a whole he confessed that the family friendly ConDem government had not bothered to commission any proper research. It has been left to charities to come up with some statistics; Shelter reckons there are probably about 800,000 miscreants in GB.  In respect of the north of Ireland all the housing charities think that the region will be affected the most, the minimal estimate I have seen is 7,000, but a web site in sympathy with the measure put it as high as two thirds of the current social housing tenants.

How much you pay will depend on your situation. The average council rent is approx. £72 per week, meaning an over occupier stands to lose at least £10 and maybe £18 from their living expenditure. To take one pertinent example, the current job seeker who is under 25 receives just £56.25 per week to live on; those over 25 receive £71. How many of those facing the over occupation charge will be able afford to keep the roof over their heads? Some will try and succeed, others will fail and will sooner or later be up for eviction. But for those scrimpers and savers who manage to make the payments there is a looming threat to their existence; the impending bedroom charge is not a final instalment, rather it is only a first instalment.

Just a year ago it was only the under 25s who were forced into one bedroom accommodation in the private sector, this has already changed to the over 35s. The Prime Minister is on record as saying that nobody has a social right to a home financed by the taxpayer, having a council home is a privilege he says not a right; he also says that he wants to dispense with what remains of social housing.

George Osborne recently proclaimed that he wants another £10 billion worth of cuts on welfare spending. In other words it won’t be very long before the charge is increased and more fall prey to the eviction notice. By the way, the small number of people who know about the new charges think that those who may fall into the classification scheme will be offered an alternative home if they can’t pay the charge, they are mistaken; there is no legal obligation on the housing authority to offer you something more suitable, this may be because these homes don’t actually exist.

What then has been the reaction of the local politicians who say they oppose the new reforms?  Answer – bluff and evasion? Well they have passed the welfare bill, so far without amendment, the so called concessions they are championing are entirely procedural. Are they preparing to drop the over occupancy charges? No sign of it. They play the evasion game by not talking about the housing benefit part of the welfare reform bill, hoping that nobody of any importance will notice it. It is to be revealed to the unsuspecting working class voter, Cilla Black style surprise! Surprise!

Come April next year people will suddenly find out about it and it will be too late for them to turn to the local politicians for some sort of protection. The politics of this whole affair needs to be discussed now. Why are the Tories attacking the living conditions of the working class in the home and not just in the workplace? They will not even save any money on housing benefit at least in the first instalment.  It makes no macroeconomic sense and looks more like a very nasty political stoke of class divide and rule than an attempt to solve the chronic housing crisis.  Perhaps they believe that it will destroy what little remains of working class social solidarity. We know that GB has a horrendous housing crisis, those who are desperate to find a home will now be ‘educated’ by the pernicious right wing press to blame those wicked over occupiers for their unfortunate condition.

One of the splendid ironies of the impending social disaster is that the seniors of both nationalists political parties swear that they were indeed the very the people who fashioned the civil rights movement that began life as a protest and even a disobedience campaign against the Orange States’ grossly unfair housing policy. If things are programmed by Stormont to follow the requisite course set by the Welfare Bill they will have to oversee a new set of grievances in respect of housing policy of even graver consequence than went before.

Untold numbers of working class people will not be able to meet the new rent charges out of living expenditure. Not being able to find alternative smaller homes when the eviction notices start to fly; they will inevitably opt to refuse to pack up and leave their existing homes. The nationalist politicians sitting in Stormont will have to persuade them that it is a bad idea to ‘squat’ in a house that they believed falsely was theirs by right.  They will have to tell them that the incomes of the hard pressed British ‘middle class’ taxpayer must take precedence over their own voters social need. They will have to appeal ever more to sectarian instincts rather than to definite social progress to keep the party vote in place. Long live the nationalist political class! Long live the unionist political class! Long live the new dispensation!

Belfast Trade Unions demonstrate against Austerity

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Trade Unionists march against Austerity

As part of the trade union campaign against austerity across the UK the trade union movement in the North of Ireland organised a demonstration in Belfast to coincide with those in London and Glasgow.  It is difficult to estimate the size of the demonstration which appeared significant as it snaked its way through Belfast’s city centre but didn’t look impressive as it assembled and looked even less so at the final rally.  The latter however is a feature of trade union demonstrations. The notion that the purpose of a rally at the end is to explain what to do next and get everyone involved is as alien to most people at these things as little green men from Mars.  What happens next always depends on the decisions of the union leaders.  It is not for deciding by those involved.

Supporters of the United Left Alliance in the North correctly made this the subject of their leaflet and put forward the key task of the demonstration as one of creating a real permanent campaign against austerity:

“Last November saw 40,000 mobilised in Belfast in a general public sector strike  – but it was a one-off event and everyone went home again.  No further action was taken, there was no continuing campaign and the next public sector strike was much less successful.

Everyone is no less opposed to austerity and the Tories and Labour plans show the issue isn’t going away.

At the end of this demonstration we must make sure we don’t go away either.  To ensure that this doesn’t happen we need to come together to create an on-going cross-union permanent campaign that will oppose austerity.  Not one that pops up every six months but one that continues every week to campaign inside the trade unions, inside workplaces and inside communities to unite them all in a way that each of them cannot do by themselves.”

I overheard one of the trade union leaders responsible for the demonstration express her delight at the size of the turnout.  The demonstration was successful in so far as it confirmed that a basis exists for starting to build a wider and potentially successful campaign but one should not underestimate the obstacles.

The first is that the demonstration was no more than a few thousand at the very, very most.  It was dwarfed by the very, very large sectarian demonstration three weeks before, which commemorated the signing of the Ulster Covenant that led to partition.  This was celebrated by the participation of dozens of ‘kick the pope’ flute bands.  A prominent organiser of it was Nelson McCausland of the Democratic Unionist Party who has led the introduction of the Welfare Reform Bill in the Stormont Assembly, which imposes in Northern Ireland the cuts decided by the Tory Government in London.   It is ironic that many of the marchers in the Ulster Covenant commemoration will be shafted by these cuts.

The welfare changes introduce the biggest assault on entitlement in decades and were also supported by Sinn Fein.  The latter bring their own ironic aspect to its passage.  The back bone of Sinn Fein’s political machine is a network of advice centres at which Sinn Fein activists help those on welfare get as much as they can.  It is what they called ‘screwing the system’ when they first started doing it.  Now of course Sinn Fein has joined the system and the only people getting screwed are their constituents.  The first many of them will know about the changes will be when their benefits get cut.   They will then run to the advice centres where Sinn Fein will tell them ‘sorry but these are the new rules’.  What they won’t tell them is that Sinn Fein voted for them and had the power to stop them but didn’t.  While welfare is cut along with public sector pay Martin McGuinness will continue to complain that the British won’t let Sinn Fein and the DUP cut corporation tax.  Sinn Fein posturing has been particularly vacuous – they have said they ‘might’ make an issue of monthly payments of benefits and demand that they are paid fortnightly instead.

The third obstacle is reflected by the fact that so many walked away from the demonstration with no demand to those on the platform that they provide them with a strategy promising success.  The demonstrators were activists in their various trade unions and community groups but there is no understanding of the need for wider organisation.  They were there to protest and no more.

A protest is an expression of disapproval, summed up in the slogan ‘not in my name’.  It is not an alternative and it ultimately receives the following answer by the Government and State – ‘yeah, so what?’  Sinn Fein and the DUP live and breathe as defenders of their respective community against the other even as together they fillet both.  The limits of the trade union leaders’ challenge can be seen in the statement released before the demonstration:

“The devolved administrations must build a robust joint defence of the people who elected them.  Let this rally today send a message to our MLAs and our MPs from all political parties that we the people are firmly opposed to the failed policy of austerity which destroys lives and futures.”

An appeal to the political parties at Stormont and to Stormont itself is not a strategy.  It amounts to an appeal to the enemy.  The financial crisis exploded because of a property boom and the well-reported antics of the Developers’ Unionist Party and hidden ‘let’s get rich’ antics of the leaders of the Provisional Movement mean these people ae personally tied up with the system that is demanding the cuts.

The political sectarianism of the left means that it too is not an alternative.  It is unable to unite its tiny forces in an attempt to make a difference, although this is not the biggest problem.  The Left’s inability to organise in an open and democratic way means it cannot include the wider forces needed to create a real movement.  Were it to attempt to do so the Left group concerned would no longer retain control.  Since their absolute need for control is not just a rather unfortunate sectarian aberration in their practice but a foundation in principle of their existence- they all believe that they are the sole essential nucleus of the mass working class party of the future because of their particular approach to socialist politics -they are both practically and in theory sectarian.

The leaflet of the supporters of the United Left Alliance correctly put forward the next step – creation of a permanent campaign that is organised across unions by rank and file members, in workplaces and in communities and their community campaigns.  This is not just the next step in a campaign against austerity.  Just as socialism is the creation of working people themselves so is the resistance to capitalism, one of the means by which the capitalist system will be superseded by the power of a new ruling class, made up for the first  time by the vast majority of society.

Can Ulster Unionism be left wing?

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Flags of the Left?

In this week’s Belfast nationalist paper ‘the Irish News’ their regular columnist Brian Feeney put forward the claim that Protestant unionist workers had been duped into believing that being left wing was also to be ‘disloyal’.  Presumably these workers can therefore be left wing and ‘loyal’.   Indeed this is the thinking behind recent proposals within the United Left Alliance to build a “new mass working-class party in Northern Ireland to unite the working class against sectarian division and against the right-wing austerity of the Assembly Executive.”

An obvious objection to the ULA proposal is that it claims to stand for workers unity while accepting the division of workers created by partition.  The only way this can be justified is by accepting unionist claims that such workers unity should not exist.

A smarter unionist might claim that the unity of Irish workers would break the unity of the workers in Northern Ireland with those in Britain.  The problem of course is that Irish workers unity is sacrificed for a unity that does not exist.  There is in reality no genuine UK workers unity because most British workers regard those from Belfast, Derry and Enniskillen as Irish.  No carnival of reaction predicted before, and confirmed afterwards, by partition is likely upon the separation of the North of Ireland from Britain.

So we are back to the repeated collapse of what often passes for socialism in Ireland before the veto on workers unity demanded by unionism.  If such unionism is inherently and unavoidably reactionary then it is clear that such a veto should be rejected.  It might only be accepted if it could be credibly claimed that Feeney is right – Protestant workers are merely duped into believing that being left wing is also to be ‘disloyal’.

Unfortunately Feeney gives enough examples of the reactionary character of real unionism, as opposed to the pretend hypothetical unionism that at no time and nowhere has existed, to demonstrate that a different sort will never exist.  He records the mass expulsions of Catholic workers from the shipyards by sectarian unionist mobs in 1912 and 1920 when around 2,000 were expelled in the former year and thousands more in the second.  Crucially he also notes that 500 Protestant workers were also expelled in 1912 and 1,800 in 1920.  These were ‘rotten Prods’ who failed to demonstrate their true credentials by not being bigots.

Feeney notes that these Protestant workers refused to put an ‘ethnic’ solidarity, in reality a sectarian solidarity, in front of any other.  Some supporters of the ULA are presumably content that Protestant workers can accept this sectarian solidarity while being ‘left wing’.  If they did not put this sort of sectarian solidarity first then there could in principle be no objection to proposals for the unity of the whole Irish working class.  Proposals within the ULA that avoid this conclusion are in practice accepting that sectarian identity must be accepted and accommodated.  In other words sectarianism must be accepted and accommodated.  Protestations to the contrary can in reality be dismissed.  Political positions have consequences and in this case these are quite clear.

Feeney records the words of Peter Robinson of the DUP that ‘the unionists of Ulster were a distinct people entitled to determine their own future.’  Since the most right wing forces will always be the most vigorous defenders of this position acceptance of it necessarily means acceptance of the leadership of Protestant workers by the most reactionary bigots.

As to the cogency of Robinson’s claims – the unionists of Ulster were happily the unionists of Ireland until they could no longer garrison it all whereupon they then demanded not that they determine their own future but that the imperialist power did.  This then amounted to the seizure of both more than the territory within which they were a comfortable majority and less than would include all the Ulster unionist people they claimed they were.  The character of the movement that expressed this people politically became evident when it came to determining not their own future but that of the large Catholic minority they took with them.  This minority was subject to sectarian pogroms and systematic discrimination for nearly half a century before a civil rights movement exposed the irreformibilty of this unionist movement.

We can go back to Feeney’s claim that Protestant workers have been duped into believing that being left wing is ‘disloyal’.  It is obvious that they have not.  For what is it that unionism claims that there must be loyalty to?  Loyalty to what?  Well – to Queen and country!  To a monarchy and an imperialist power.  To partition and division.  To a state based on a sectarian head count.  To the rights and privileges of Robinson’s ‘distinct people’.

How could you possibly be left wing without being disloyal to all that?

Apologists on the left for capitulation to unionism put forward the final argument that we must accept unionism because the vast majority of Protestant workers are unionists.  In fact it is this very fact that makes opposition to partition absolutely necessary.  Opposition to partition is not necessary despite the unionism of Protestant workers but because of it.  It is not possible to break their commitment to this reactionary political programme without defeating it and it can only be definitively defeated by destroying the state power on which it bases its power.

BBC ‘Masters of Money’ considers Karl Marx (Part 2)

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The BBC programme was called ‘Masters of Money’ and was ostensibly all about money but there was nothing said about Marx’s theory of money, which is fundamental to explaining the current economic crisis.

For mainstream economics money is essentially just paper that can be used to exchange commodities.  Provided it is not issued in too high a quantity it will maintain its value and is useful for this purpose.  Already we can see a problem.  What is the intrinsic value of pieces of paper or metal coins?  If it had an intrinsic value its issue would hardly be a problem. It becomes a problem because paper money cannot fulfil all the functions of money precisely because it does not have an intrinsic value.

The massive expansion of credit makes credit too look like money in that it is used to exchange commodities.  However at a certain point people want paid with money and not yet more credit.  When this happens credit stops being given to some people and we have a ‘credit crunch’ such as developed in the latest financial crisis when banks refused to lend to each other and Governments had to step in.

For Marx money is itself a commodity with an intrinsic value because it too is the product of human labour.  Historically it has taken the form of gold.  This is why commodity exchange is an exchange of equals because when money is exchanged for a commodity the money is either gold directly or indirectly if it is convertible into gold.  The end of such convertibility does not abolish exchange being one of equivalents.  Just as credit cannot become real money and this is proved during a credit crunch so paper money is exposed when it is over-issued and creates inflation and when in a crisis capitalist investors look to put their money into something that will preserve the real value of their wealth.

In fact this occurs during booms when speculation on one type of asset after another leads to bubbles – in high-tech company stocks, houses, commodities and now certain government bonds. The price of oil is one barometer of this activity.

Thus just as the massive expansion of credit is not a solution to the problem of capitalist crisis and the contradiction between a limited market and profitable production so also is the printing of money through quantitative easing not a solution.  Yet according to mainstream economics there is no reason why printing money should not be a solution.  The proof of the pudding is that while quantitative easing  has prevented collapse it has not abolished the crisis.

Many companies are sitting on piles of cash including US multinationals holding money outside the US and so evading US taxes.  There is an ‘investment strike’ because of the recession which has created unemployment, falling incomes, debt crises for many countries and austerity which promises not a recovery but continued recession.  All this is worse in Ireland because it is not mainly the policy of austerity which is the problem but a massive overhang of debt, which must otherwise be repaid, and shrinkage in demand due to lower wages, unemployment and emigration.

We are back to ‘solutions’ that are based on more investment and higher wagers but which ignore that it is the system based on profit which is the cause of the problems.

Two other issues occupied the last part of the BBC programme.  The first was whether capitalism would last more or less forever or would be temporary and replaced by something else. The programme accepted that Marx’s analysis of capitalism had a lot of sense to it but it did not, to no one’s surprise I am sure, think that he had any alternative.  In fact the very scarcity of his views on this was held up a number of times while recognising that no one else had much of a clue either.

This was more than a little disingenuous.  The programme started off with shots of the Berlin Wall being demolished and of pictures of Red Square in Moscow and of Stalin.  The presenter recalled that she was at university at the time the Berlin Wall came down and one thing she was aware of was that ‘communism’ had definitively failed. The programme she said would therefore not look at what Marx had to say about communism.  To return at the end of the programme and say that Marx had no alternative while excluding what he did say about an alternative is, well, not exactly fair.

Also unreasonable was the nonsense that Marx, although he had been poor, had towards the latter years of his life become a bit bourgeois.  This seemed to consist of such things as worrying over the future of his children and taking walks in the park in quite nice areas of London.  What a traitor!  He hadn’t even been down a coal mine, unlike the presenter who went down one for the programme.

That leaves me a bit conflicted as I worry over my children, like nice walks in the park (sometimes) but have been down a coal mine (once).

More importantly the programme argued that Marx had no alternative and implied that this explains the otherwise puzzling phenomenon, gleefully expressed by ex-Tory Chancellor of the Exchequer Nigel Lawson, that many people were not flocking to the banner of Marxism.  The latter is a fact, so is it the result of the former?

In an earlier post on the defeat of the opposition to the austerity referendum I asserted that the Left and the working class generally did not have a real alternative, as opposed to some theoretical one, and that this was fundamentally why many workers had voted for something that was against their interests and which some knew to be the case.  The programme actually expressed very well what is meant by an alternative, if I recall more or less accurately, it said that this would be when ‘a compelling alternative would appear.’  What is this ‘compelling alternative’?  If we are talking about the replacement of the political economy of capitalism we are also talking about its replacement by the political economy of the working class.  What is this?

Marx described the alternative to capitalism this way:

“But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen’s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.”

(http://www.Marxists.org/archive/Marx/works/1864/10/27.htm)

The beginning of an alternative to capitalism arises only when the working class takes action, however small, and is not limited to creation of worker owned and controlled production.  The creation of its own organisations to defend itself against capitalism also foreshadows its future control over the whole of society.  The creation of its own workers party is the pinnacle of it being conscious of its tasks.  Many of the political organisations claiming the banner of the working class and the mantle of Marx replace the centrality of the working class itself with calls upon the state, the capitalist state, to take the action only the working class can take and only which if it does take, can it be considered any step towards socialism.

So the BBC programme on the alternative of Karl Marx got his essential teachings wrong but unfortunately, through empirical impressions, got the current weakness of the socialist alternative right.  The programme itself however is an indication that this alternative is as necessary as it ever was.

BBC ‘Masters of Money’ considers Karl Marx (Part 1)

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BBC Karl MarxAs part of its ‘Masters of Money’ series the BBC 2 programme, which looked at the ideas of John Maynard Keynes and Friedrich Hayek, finished by looking at the economic ideas of Karl Marx.  The overall verdict?  It could have been a lot worse.

There were of course huge simplifications that erased exactly what Marx was saying.  These could have been avoided, and the dismissal of communism and what Marx had to say about it was on a par with cold war contempt, but despite this there was a coherent argument through the programme.

It was very much the creature of a mainstream bourgeois economist albeit one who thought there were important insights to be found in Marx, particularly his perspective on the inequality of capitalism and its instability.  It avoided some cheap shots and pointed out that Marx appreciated the revolutionising of production achieved by capitalism and its dynamic development across the world.  The presenter Stephanie Flanders repeated the often made observation that Marx’s description of capitalism is more true now than when it was first made.  She also correctly observed that profit is the soul of capitalism and made some correct remarks about the compulsive nature of the drive for profit within the system.

There were some strange observations which tried to tie the relevance of Marx’s views to particular periods which excluded the post war boom and included the 19th century but excluded the great depression of the thirties.  The whole point of the programme however was to assert the relevance of his views today and if it did no more than this then it must be judged positively.

There were some problems that, had they been addressed, would have made for a much better exposition of Marx’s ideas.  The first is that the programme avoided what Marx thought was his greatest economic discovery – the nature of surplus value.  This is the discovery that the economic value created by capitalism is the result of human labour and can be measured by the labour time necessary for its production.  The source of capitalist profit is the result of the difference between what the capitalist pays for this capacity to labour and what this labour actually produces.  This explains how a surplus can be produced and a profit arise when the exchange of commodities, including labour power, is the exchange of equivalents. It is not a question of workers being cheated when they receive a wage in return for their labour power or of unequal exchange of commodities.

This is not a particularly difficult concept to explain but it does very clearly reveal the exploitation of the working class and exposes all the hypocritical justifications of the system.

The second problem is not what was left out but what was included, that Marx held that the absolute level of wages would be held down under capitalism.  This doesn’t sit well with the programme’s acknowledgment of Marx’s view that capitalism develops the forces of production.  Who did Marx believe would buy the goods created by the development of these productive forces?  This of course was the central tenet of the programme: that for Marx this was precisely the problem.

Marx’s argument was held to be that the tendency to lower wages reduced the ability of workers to buy the goods they produced.  Increasing wages would only reduce profits, the objective of the system, so this is not a solution.  As a temporary ‘fix’ the system expanded credit to make up the shortfall in wages and allow all the goods produced to be purchased.  The explosion of credit therefore explains the current economic crisis emanating within the financial services industry.  The programme was actually quite good when it cut to the right-wing talking heads who pooh-poohed the idea that low wages contributed in any way to the crisis.  They looked neither comfortable nor convincing, or maybe that was just me.

The programme argued that Marx’s criticism went much deeper than any other but actually the programme didn’t go deep enough.  Not altogether its fault since there is widespread debate among Marxists about the causes of the current crisis and even about the fundamental mechanisms of what might be called ‘classic’ capitalist crises.

What can be said however is that the description of the crisis given in the programme and the role of credit and wages is only how the crisis manifests itself, not how it is caused.  To explain the latter would require one to start with the idea ignored – surplus value.

If low wages restricting the market were merely the problem the question would not be so acute.  The capitalists who had diddled the workers could simply purchase what the workers did not.  Everything would then be sold.  The problem is worse because the workers create added value over and above what they are paid, over and above what is required to maintain production and also above the conspicuous consumption of the capitalists, and this additional value produced must find a market.  Why can’t this too be solved by the capitalists buying the difference?

The answer is that it can but the question then is what is the result of this?  Additional value appropriated by capitalists can expand their luxurious lifestyles but the driving force of the system is not this but profit.  To increase this means expanding production both to garner extra profit and destroy competitors.  This means the capitalist must employ the additional value produced by the workers to further invest in more workers and also machinery, raw materials etc to expand output.  The problem is intensified as production increases, new markets are sought for the things that are produced and the amount of surplus value (unpaid labour) created is expanded.

In the longer term the rate of profit comes under pressure as the capitalists replace workers with machines in order to produce more cheaply or even to produce some goods at all (some high-tech ones for example).  However because profit comes from workers the value of production comprised of workers labour declines and so does the proportion made up of surplus value, from which profit comes.  Fewer workers will create proportionately less surplus value while the cost of machines and raw materials etc increases relatively, so reducing the rate of profit.  The capitalists with the lowest productivity and lowest profitability can be forced into bankruptcy.  Of course to some extent this too can be offset by lower wages but the increasing sophistication of production means that paying peanuts will not allow the ‘monkeys’ to engage in the skilled labour required.  This is a long term tendency but one we can see in operation through the economic history of the west and in the rapid economic development of Asia.  It implies that profit plays a smaller and smaller relative role in production which calls into question a system in which this is the whole purpose of its existence.

The regular periodic crisis, including the current crisis, is the route by which this longer term tendency operates.  The compulsion to produce more and more surplus value also produces these more regular booms and busts.  The drive to expand the creation of surplus value means increased accumulation of workers, machines and materials and the expansion of markets to purchase the additional production.  In an economy dedicated to the needs of the population such increased production can be consciously planned and coordinated and its limits set by society as a whole.  Under capitalism no such limits are acceptable.

The limits on production of surplus value are therefore not set by the needs of society or by the limits of the purchasing capacity of workers and capitalists.  To break from these limits credit is expanded to bridge the limitations on consumption that are the result of the limits of production.  Through credit capitalism seeks to satisfy the capitalist desire to expand production through the accumulation of more and more surplus value.  Credit expands the market for increased surplus value production.

This can produce fantastic economic booms of the sort we have seen in the last decade or so in Ireland and across much of the globe, from China to Brazil.  The attempt to expand real production and to create an even larger market for it must at some point necessarily collapse for the same reason that credit is originally introduced.  Just as increased credit is an attempt to increase profit so the collapse of credit is the result of credit no longer being able to expand profitable production.

Workers must pay back debt at some level and beyond a certain point this becomes impossible because of the limits to their real incomes determined by real production.  The same is true of the capitalists.  Ever more convoluted attempts to expand credit beyond the capacity to pay it back – through creation of yet more credit – is doomed to collapse as the ever expanding amount of debt requires greater and greater repayments to keep it going.  The fantastic expansion of the financial services industry is testament to how big such an exercise can become. A glance at the size of the balance sheets of the Irish banks in comparison to the size of the whole economy reveals the scale of the overproduction and credit expansion that can arise.

In Ireland and the US the limits were reached when workers could no longer pay for inflated housing or capitalists pay for inflated office and other building construction.  A surplus of such properties is eventually created, overproduction appears, prices collapse, capitalists cannot sell except at a loss and those who built the houses and offices go bankrupt, workers in construction are made unemployed and the banks which financed it all go bust.  At such points it can appear that the problem is that workers wages are not big enough to buy all that has been produced and that this is the problem.  Solutions are proffered by Keynesians who say that what is need is yet more investment to take the place of that which has just collapsed.  But as we see, these solutions do not address the underlying problem and provide a ‘solution’ only by postponing the collapse and stoking up a bigger tsunami when the boom busts later.

In these circumstances blame is also placed on the institutions which created the massive credit explosion – the banks – especially since such booms inevitably involve hugely speculative, criminal and stupid behaviour during a time when everyone thinks they should be getting rich quick.   No one needs regulation during a boom when money is being made and afterwards the call is made that we have to have stricter regulation when again, but for opposite reasons, no one needs regulation.  Regulation becomes the alibi for the systematic failures of the system.  Left wing critiques which focus on the banks play into the hands of those who want to ignore or are simply ignorant of the system itself being responsible for the bust.  That the bust is so spectacular is simply a result of earlier failure to burst the bubble.  For a longer and bigger boom the price paid has been a longer and bigger bust but either way capitalismproduces booms and crashes.  Keynesian solutions to extend the boom can simply create bigger crashes.

Forward to Part 2