Free Trade and Socialism part 1

My last post on the potential effects of Brexit on Ireland or even worse, the effects of the Irish State leaving the EU, led to the following exchange of views on Facebook:

PF:  This piece could have been written by a not especially radical employee of whatever the Industrial Development Authority is now called. …… workers will suffer because their main trading partner is leaving the neo-liberal EU? At least the Sticky 1977(?) plan for Southern capitalism had the merit of claiming a class analysis.

Sráid Marx:  But is it true?

PF:  Depends!

Sráid Marx:  On what?

PF:  It depends on the standpoint. Our man on the Dublin omnibus views everything through the prism of Brexit. Right at the end he says the Brit ruling class is undermining itself. There is, no doubt an ongoing debate, with most of big capital (and their media) opposing BREXIT (the Economist looks forward to it being overturned) while more ‘domestic’ capital – about 90% of firms – in the main support it. Not much to do with intelligence; much more to do with class interests.

As far as the interests of workers go, he suggests that wages will fall, with the implication that if Britain remained, they wouldn’t. Real wages in Britain have fallen over the past period, well before the Referendum. So this is a bit of a dodgy argument anyway.

For the rest of the piece he speculates on tariffs, foreign direct investment, the benefits of WTO rules, migration between the 26 Counties and the UK, the value of trade between the EU, Britain and the Republic and finishes with a swipe at Corbyn, the most left wing leader of the LP – EVER.

All of the economic analysis can be seen in any broadsheet newspaper any day – but the main point is not its orthodoxy. That surely is a problem from someone whose tag line contains the word Marx? The problem is this: everything is viewed through the apparent stupidity of Brexit. He takes sides in an argument between two factions of the capitalist class and berates them for not really understanding their own interests. What’s Marxist about that?

Where does this orthodox analysis lead? To an attack on Corbyn. For not saving the British capitalist class from its apparent Brexit folly by mobilising more Labour voters to support Remain? The political conclusion is even more bizarre. Presumably, the LP should ditch Corbyn and would soar to electoral victory on the promise of the heavenly ‘single market’. Since when has ‘free trade’ been a socialist demand?

If he really wants to see where this leads he should look to ‘Open Labour’, the recent creation of O’Jones and others. In order to advance their ‘Left’ coup against Corbyn, they must shut out the Left. Jones’ diatribes against Stop the War and Stand Up to Racism are designed precisely for this purpose. If the coup from the ‘Left’ succeeds (Momentum, itself divided, has been far too timid in fighting the Right in the apparatus) the Corbyn project is a goner and we’ll be back to a soft left leadership kowtowing to the well funded Blairite right. And they’ll have the right line on Brexit, immigration controls and so on. But they’ll still lose – at least while workers remember what they were like.

Sráid Marx:  So it depends on your standpoint, does it? So barriers to trading the goods and services produced by workers won’t have any effect – is that what you are saying? Less investment won’t have any effect on employment?

In my series of posts on Europe I advance an argument that I think allows workers to take a standpoint independent of the small capital that seems mainly to want out of the EU and the big capital that doesn’t. As for the socialist standpoint on free trade, if you simply google ‘Marx and free trade’ you should get an answer to ponder.

And please don’t put words in my mouth about wanting Corbyn replaced by some soft left alternative that would inevitably pave the way for a Blairite. Some more familiarity with my blog would quickly disabuse you of that speculation. And finally, there really shouldn’t be a debate about whether Brexit will lower wages because it is already happening.

KH:  What about CETA and the Fiscal Compact – that effectively wipes out possibilities of reflation/deflation as well as ability to control inflation rates. It is a completely symbolic gesture if you cannot mandate your own Central Bank to carry out your own sovereign economic and monetary policies, which instead, will be set out entirely in the interests of German rather than Scottish economy.

Only a fool would voluntarily give away national control over fiscal and monetary policy. Six years of EU austerity policies and three structural adjustment programs brokered in a bid to save a massively dysfunctional currency as well as corporate and financial interests have probably guaranteed the election of at least two neo-fascist governments in the next few years.

Wages have been lowered to such an extent in the EU since 2008 that you are happy to accept the election of Wilders et al due entirely to the austerity policies imposed by your beloved ECB.

PF: “So barriers to trading the goods and services produced by workers won’t have any effect – is that what you are saying?” Nation states, including the South of Ireland, used such barriers to protect the economy up to about 1960’s. And the majority of the 26 County working class supported Fianna Fail for exactly the same reason. It only ended when the US ruling class decided post-War that they wanted to muscle in on the pickings of the British Empire (Commonwealth). ‘Free trade’ (one of the reasons the Democrats lost and the AFL-CIO sit on Trump’s Economic Advisory Council) is no more socialist than protectionism.

*           *          *

There are a number of obiter dicta that could be made about the objections to my post on Brexit and Ireland including exhibition of a left-wing variant of ‘Gove’s disease’; that is an aversion to ‘experts’; a reincarnation of that other pathology – ‘project fear’ – which seemed to be a Pavlovian aversion to some variant of capitalist arguments, but in this particular case capitalist arguments you don’t have a convincing response to.

The left-wing Gove’s disease consists of an ability to dismiss argument or evidence that comes from bourgeois experts or those who place some reliance on the argument and evidence they present because:

  1. You don’t like them,
  2. No one on the left should employ them and
  3. You don’t have answer to them (or not one that addresses the point).

Unfortunately, workers are often impressed, confused or frustrated by these arguments and only rarely simply dismiss them, as we have been invited to do.  Socialists therefore need to understand and respond to them, extracting what is of value from them for the benefit of our class.  By analogy – much like Marx did with all those hours in the British library, where he didn’t spend his time simply reading socialist writers.

We have, then, an allegation of bourgeois ‘orthodoxy’ and then an assertion that what we need is “reflation as well as ability to control inflation rates.”  You must be able to “mandate your own Central Bank to carry out your own sovereign economic and monetary policies, which instead, will be set out entirely in the interests of German rather than Scottish economy.”

So, what we have is not an alternative to some sort of bourgeois orthodoxy but a different sort of bourgeois orthodoxy, one that is false.  It is orthodox because what it asserts is state (‘national’) intervention – presumably on behalf of workers – which is nothing to do with socialism since socialism is based on the power of the working class, including the power to destroy and supplant the capitalist state.

The only assumption that could make the demand for different orthodox capitalist economic policies legitimate is that some capitalist policies provide better conditions upon which workers can fight for their own interests, although never forgetting that the bourgeois alternative is ultimately to the benefit of capitalist system and cannot suspend forever its contradictions.

But I am criticised for wanting to take one side in an inter-capitalist dispute (a charge I reject) while it is asserted that socialists should fight for “your own sovereign economic and monetary policies, which instead [in the EU], will be set out entirely in the interests of German rather than Scottish economy”.  Now this really is taking sides on an inter-capitalist dispute.

It is false because, if the capitalist state could, through monetary policy, control the price of money capital, it would equally be able to control the price of all commodities, and why would this not include the value of labour power?  Being able to do so, why could it not plan the operation of the capitalist system through suitable prices so that it could avoid austerity, allow ‘sovereign’ control in the interest of ‘our’ economy (Scottish, Irish, insert country of choice) and in doing so provide well-paid and secure employment, welfare and public services for everyone?

But these are digressions.  The main point is that the original post argued that the disruption to existing free trade arrangements etc. would be bad for the working class and that there is a socialist position on this development.

So what then is the socialist position on free trade and is it one of ‘depends’?

Contd.

The 2016 election – a victory for social democracy?

27/2/2016. General Election 2016 - Counting of Votes. Scenes from the counting of votes for the Dublin West Constituency, at the Phibblestown Communmity Hall Count Centre in Blanchardstown, Dublin. Photo shows Anti Austerity Alliance candidate Ruth Coppinger after winning a seat in her constituency. Photo:RollingNews.ie

27/2/2016. General Election 2016 – Counting of Votes. Scenes from the counting of votes for the Dublin West Constituency, at the Phibblestown Communmity Hall Count Centre in Blanchardstown, Dublin. Photo shows Anti Austerity Alliance candidate Ruth Coppinger after winning a seat in her constituency. Photo:RollingNews.ie

The 2016 general election has been hailed as delivering a ‘sensational’ result, although this is disputed, and has led to some difficulty in forming a new Government.  Apparently only one party, Fine Gael, wants to be part of one, partly as a result of the horrendous results for the governing parties in the last two contests.

In this election the two Governing parties, holding a record majority, lost heavily: the Fine Gael vote fell from 36.1% to 25.5%, while the Labour Party was decimated, losing more than three quarter of its seats, its vote falling from 19.5% to 6.6%.  The biggest apparent gainers were Fianna Fail mainly because of a striking reversal of fortune, increasing its vote from 17.5% in 2011 to over 24.3%, and Sinn Fein, which increased its vote from 9.9% to over 13.8%.  This performance however will be seen as disappointing, coming nowhere near the 20% it recorded in polls beforehand.

The governing parties stood in the election on the basis that their painful austerity medicine had worked and that there was now a remarkable recovery, the fruits of which would allow tax cuts and improvement in public services.  And the truth is that there has indeed been a recovery; new austerity measures have generally ceased and for some people incomes are rising, either through getting a job or pay increases.

Unfortunately for the Governing parties their arrogant declarations of success rankled with a population fully appreciative of the slenderness of the improvement, which for some has been non-existent, while the more they declared the scale of the success the more it appeared to contrast with the experience of the majority.  The Government claimed credit for the improvement but it was a long time coming and the Irish people are aware enough of the vulnerability of their economic circumstances not to be inclined to credit the Government with creating it or of letting the possibility of a new recession escape their minds.

Above all, the accumulated austerity measures inflicted by the Government have not at all been reversed, the huge cuts and tax increases of the last seven or more years are still being felt, the price is still being paid, and smug and arrogant claims of achievement angered a population weary of austerity and aware of too recent and continuing attacks, including water charges.

Fine Gael won the previous election on the back of the then Government’s perceived responsibility for a disastrous economic collapse, a promise that its policy would be different and that the existing ‘no bondholder left behind’ approach would be challenged.  Labour campaigned on the grounds that there was a choice between Labour’s way and Frankfurt’s way.  Of course these promises were hollow and no coherent policy alternative was put forward, a more politically aware population would have understood this, but the immediate task was to punish the egregious Fianna Fail and a Fine Gael/Labour coalition has been its historic alternative. What this meant, as one commentator has put it, was that in that election they took the least radical option for change, just as they have almost done so again, while in between they voted to accept austerity in the 2012 EU referendum.

So the 2016 election has been hailed as a vote against austerity and an Irish reflection of the forces that have produced Syriza in Greece, Podemos in Spain, Jeremy Corbyn in Britain and Bernie Sanders in the US.

But the vote in 2011 was also in part a vote against austerity, although driven mainly by the desire for revenge through a massive vote against Fianna Fail, which rocked that traditional hegemonic party of the Irish State and led many to wonder whether it was finished.  It has now had something of a comeback in yet another anti-austerity election.  In the 2011 election the Labour Party did extremely well on an anti-austerity ticket, at one point believing it might end up the largest party.  So what exactly is the nature of a ‘new’ anti-austerity vote that sees the bounce-back of Fianna Fail and the continued development of Fianna Fail nua in the shape of Sinn Fein?

The general election has been characterised by some as a demand for social democracy, an anti-austerity alternative, that was reflected in Fianna Fail’s emphasis on the fruits of the recovery being spent on public services and not on tax cuts that disproportionately benefit the rich.  The claimed new consciousness is also supposed to be reflected in the increased vote for Sinn Fein, which emphasised that it was in favour of a ‘fair’ recovery in which the better off paid most, and in the showing of new formations such as the Social Democrats, which did moderately well arguing that US tax levels were not compatible with a European standard of public services.

There is therefore a case to be made that the election was a vote against austerity, a vote for some sort of social democracy and even a move towards a more conventional right/left political division, now that the more or less identical Fine Gael and Fianna Fail parties together have declined to just under half the vote.  There is also an obvious case to be made that this is a reflection in Ireland of a wider international phenomenon.  But it is more an Irish reflection of this phenomenon rather than a reflection of the phenomenon in Ireland.

So we have an initial clear problem that the recovery in the vote for Fianna Fail is evidence of the move towards social democracy while its savaging in 2011 was also such an example.   We have a move to a left/right divide while the historically largest civil war party made a strong recovery.

This does not invalidate the argument but simply demonstrates its limitations and the weakness of the shift.  But that a shift is taking place is nevertheless still the case.  The long term decline of the civil war parties continues, as recently as 1997 they received 78% of the vote and in 2011 73%.  The 2016 vote was a vote against austerity, but not yet a vote for an alternative, at least not a real alternative because neither Fianna Fail nor Sinn Fein are a real alternative and neither are the majority of right wing independents coming, as they say, from the Fianna Fail or Fine Gael gene pool.

The social democratic tone of the likes of Fianna Fail reflects more an improved economy and not any more basic shift in economic policy.  Fianna Fail is still widely blamed for sharing a large degree of responsibility for the economic crisis while Sinn Fein voted to bail out the bankers and bondholders.  Fianna Fail has a long history of populist rhetoric and actions, which may be called social democratic in a broad sense, but which has been successfully employed to prevent the development of a left/right divide in Irish politics.  Without such a divide we have simply had a right/right division.

The case for a growing right/left split rests partly on the policy proposals of Fianna Fail and Sinn Fein, and their success, and partly on the pressure on Fine Gael and Fianna Fail to collaborate in order to allow creation of a new Government.  There are no credible alternatives as the forces of ‘the left’ are too disparate and divided.  Some informed commentary is that Fianna Fail will not allow such an alliance to happen partly to frustrate the development of such a divide, which would threaten its traditional role and base inside the working class.

The argument for the development of a left/right demarcation however mainly rests on the rise of Sinn Fein, understood broadly as a ‘left’ party, and the fortunes of the Social Democrats and some left independents.  It also rests on the progress of the genuine left, most visibly in the shape of the Anti Austerity Alliance/People before Profit (AAA/PbP) alliance, the creation of the Socialist Party and Socialist Workers Party.

But Sinn Fein is not, it must be repeated again and again, a genuine left party.  Have a look at austerity in the North if you find this hard to accept. Only by the most expansive definition can it be considered left wing, which might be useful as some sort of catch-all description in some circumstances but is misleading when it comes to any analysis.

Having a predominantly working class support does not make a working class party; Fianna Fail has had the largest support of any party within the working class for many decades until relatively recently.  A working class party is one that not only is supported by the working class or part of it, but is composed of workers, is organised from within its ranks and in some way represents its separate interests to a greater or lesser degree.

So what constitutes ‘the left’ and how has it performed in this election?  One commentator has argued that, if we include one third of the large number of independents elected, the left has hardly increased, amounting to about a third now compared to 35% in the outgoing Dail, although the composition of this left may be said to be more ‘left wing’.  A second analysis defines Labour, Sinn Fein and United Left Alliance as the left in 2011, together receiving 31.5%, while Labour, Sinn Fein, AAA/PbP and Social Democrats are defined as left for the purposes of the 2016 election, receiving 27%.  Another perspective groups the AAA/PbP and explicitly left independents together to arrive at a total of 141,890 votes, not very different from the Labour Party’s 140,898 – which is supposed to have had disastrous election.  A narrower definition could take the TDs from the United left Alliance that went into the 2011 election and compare their performance in 2016 (while including the gains of the AAA/PbP) and arrive at a total of over 5%.

None of these show any dramatically increased vote for the left, however defined, and are certainly more convincing than some comments from the AAA/PbP, who have not unnaturally looked firstly at their own results.  Richard Boyd Barrett has been quoted as stating that “we went from being newly formed to almost 4 per cent.”

However one delineates the left it is clear that the only consistent social democratic alternative offered has come from the AAA/PbP and the candidates who used to belong to the United Left Alliance and perhaps a handful of others.

There has therefore been no qualitative radicalisation but instead a longer irregular evolution of rejection of the traditional right wing parties but without an embrace of any consistently thought out alternative.  This is therefore expressed in illusions in parties which peddle familiar solutions that may appear to a greater or lesser degree to be social democratic.  When we see these include the Labour Party, Sinn Fein and even Fianna Fail what we don’t see is any sort of consistent social democracy.

to part 2