Employee ownership and socialism

coop-klBeyond the Corporation: Humanity Working, David Erdal, The Bodley Head, London, 2011.

The author of this book is clearly not a Marxist and he approves of arguments for workers’ cooperatives that encapsulate ‘good, basic, capitalist thinking.’  He puts forward the view that what he is proposing is, far from being woolly and utopian, not only immensely practical but has been implemented many, many times in many, many places.  It’s sheer practicality is one of its attractions and let’s be clear – the practicality of something is an attraction.  It is a clear advantage for any option that it can actually be implemented.

Much of the Left however recoils in horror at the ideas proposed in this book.  Nevertheless the impulse and development as well as the ideological case for workers’ ownership are forceful reflections of the analysis of Marx, which posits the growing contradiction between the socialisation of production and the private appropriation of this production by capital.

Ironically the author gives an illustration of this contradiction.  He compares the electronics industry in Silicon Valley favourably to that of Boston and accounts for the relative success of the former as a result of the fluidity of the movement of people involved in the industry, lack of proprietorial authority in many of the industries’ firms  and the inability of owners and managers to contain the flow of information within individual companies; all contributing to creative development of products and production.

It is notable, he says, that there is less of a top-down culture in Silicon Valley and that employee ownership has been a major driver in business development.  Companies could not attract good people simply by cash so instead used share options, a form of ownership, to get them to come, work for them and stay in the firm.  This together with the excitement of the work itself became the greatest motivating factors for employees.

The socialisation of production is evidenced by the increasing division of labour in which thousands, if not millions, of products are separately produced across the globe in order to come together as one combined product.  The necessity for this production to take place in a balanced and proportionate way, so that the final product can be efficiently produced, requires co-ordination and planning within and across hundreds and thousands of companies.

In April two years ago the BBC reported that a fire in a factory in the small town of Marl in western Germany had killed two people and affected the production of a resin called P-12, used in car braking and fuel  systems. This threatened car production across the world so that “Earlier this week, more than 200 executives from companies including General Motors, Volkswagen, Toyota and Ford met in Michigan. -. . . The group said that it was clear that “a significant portion of the global production capacity” had been compromised.  After the meeting, the big car companies were saying nothing on the record.  But some sources now say there is a real worry that the potential impact could be serious, including a slow-down in production.”

Such cooperation is planned but insufficiently so.  The inevitable disproportions in production lead not to conscious alterations in levels of production in order to seek balance in the myriad locations but to individual crises of cash-flow or profitability in individual firms and production units, leading to crises and disruption.  Economic and production efficiency is calculated at the individual firm level without regard to the overall system of production, the cooperative system of labour, which is in place.

We saw this through the recent dispute at the Grangemouth refinery and petro-chemical works, on which much of the British chemical industry was apparently dependent.  The economic calculation that was carried out rested solely on the relative profitability of the Grangemouth plant and not on an assessment of the industry as a whole.

Both examples illustrate the contradiction between private ownership of the means of production and the increasingly socialised system of production on which it is based.

An even more dramatic illustration of this contradiction is shown by the following two graphs.  They show the falls in world trade and industrial production following the credit crunch in 2008 compared to the impact of the great Depression of 1929:

World Trade

eo fig 2 eichengreen_2ndupdate_fig1

World Industrial Production

What these show is the dramatic falls in economic activity consequent on the decisions of individual banks and financial institutions not to lend because they did not trust each other to be in a position to pay the loans back.  The huge socialisation of resources that is carried out through the credit system became a prisoner of the private ownership of these credit institutions.  Each feared that the other might be fatally insolvent due to speculation in sub-prime mortgages or old-fashioned overproduction of houses and offices as in the case of Ireland.

What has this to do with the growth of workers cooperatives?  Well, if we  understand that capitalism is characterised by the separation of workers from the ownership of the means of production (including credit) and the ownership and control of these means in a separate class, the class of capitalists, we can see that such a system can exist only by workers gaining their livelihoods by selling their capacity to work on the labour market and using the money received to purchase the means of subsistence that they have just produced (but which are owned by the capitalists for whom they work).  The sale and purchase of these two types of commodities, labour power and means of subsistence, takes place in the market and the economics profession attempts to analyse how the economy works by focusing on how these markets work – without previously understanding or analysing why there is a need for these markets in the first place.

The explanation for this is that workers do not own the means of production and therefore cannot allocate these means or the output derived from them directly, through conscious planning, to satisfy the needs and wants that they have themselves previously identified.  They do not set the priorities for what has to be produced, how and where it is to be produced or consciously regulate the effects of what they produce so that any relative over-production does not lead to a closure of workplaces but to a planned decrease in capacity and switch to other desirable production.

The creation of workers cooperatives is a step in overcoming the separation of workers from the ownership of the means of production and therefore of overcoming capitalism.

Many on the left advance fears that workers will become their own capitalists and because the author of this book is not a socialist he quotes approvingly the view that while capitalism is good at creating capital it is not good at creating capitalists. The fear is that the competition involved in the Market will lead workers, even those owning their own businesses, to compete with each other in a way that simply replicates the exploitation involved in private capitalist ownership.  The drive to produce cheapest will lower wages and increase work effort.  In effect workers will exploit themselves.

What this view does in effect is give priority to the Market in analysing capitalism in just the same way as do the mainstream economists.  What they don’t see is the potential of workers cooperatives to overcome the separation of workers from ownership of the means of production and through ending this separation threaten the monopoly of the capitalist class, in doing so undermining the existence of the market as a regulator of economic life.

This can be done through the simple expedient of individual workers’ cooperatives cooperating!  The immediate objection to workers cooperatives is that they will have to compete with each other, or at least with private capital, and while the latter may be true the former is not.  Workers cooperatives can cooperate with each other.

Will workers cooperatives still exist within a society that is capitalist?  Yes, which is why books like the one reviewed see no contradiction between capitalism as a system and workers ownership.  Will this involve competition and will this not involve unwanted and unpleasant features and decisions? Yes, but Marx explained that the new society would not be born except on the basis of the old one and not on one that we could choose.

The sometimes contradictory arguments of this book reflect this contradiction existing in real life.  No more so than the argument about how the transition to workers cooperatives can come about.  Here it is argued, obviously on the basis that there is no contradiction between cooperative production and capitalism, that the capitalists themselves should simply transform their companies into cooperatives.  ‘The powerful need a change of heart’; senior managers will have to ‘make do with a smaller proportion of the wealth’; managers will ‘certainly have to learn how to exercise their power differently’ and ‘advisors will need a change of outlook’.  The book has explained why this should happen but not why it is in the interests of these people that it should happen.

The author calls on Government to prefer cooperatives and points out that this will increase prosperity, boost tax receipts, reduce social problems, increase citizen welfare and reduce social expenditure.  This makes sense only if you think the State is there for all citizens and not just for a few.

It calls on trade union leaders to realise the importance of workers gaining ownership rights and the potential it has for higher earnings, enhancing workers’ rights to information and their power to influence company decisions.  On this score it might appear that the author is on more secure ground since trade unions claim to represent workers and their interests.  Unfortunately it is just for this reason that many do not support worker ownership since such ownership would undermine claims that they exclusively represent workers in a particular workplace.  Normally union leaders prefer state ownership because the state will often guarantee union recognition, and therefore the dues income that pays the salaries of the union officials, while it allows these same officials the ability and right to claim exclusive representation rights.

The alternative perspective of some of the Left – of a once and for all take-over of all capitalist production by a workers’ state – has its own problems.  It leaves no role for the accumulation of prior social power and experience by the working class or of the potential radicalising effect of prior widespread workers ownership.  Such ownership would allow a ready reply to the accurate critique we now hear – where is your workers’ and socialist alternative?

Through many posts we have pointed out the fact that this has disarmed workers in fighting austerity, debt bondage and workplace closures.  Keynesianism – increases in state expenditure – is usually put forward as the only alternative to austerity but it is not an alternative that belongs to the working class.  The perspective of a workers’ economy can take root as a concrete alternative, at least in part to the degree that workers already own and control production.

Instead the ideal of a revolution, that in one blow achieves the requirements of decades of class struggle and experience, slides into the view that this comprehensive creation of socialised property becomes a single task of a country wide mechanism, usually the state.  So the State which is the protector of private ownership is wrongly held up as the means of overcoming it, through nationalisation etc.

Even those who see the creation of workers’ ownership as a task only for a workers’ state do not appreciate that this workers’ state itself must be based on workers ownership of production and of society.  How else do we prevent the bureaucratic degeneration experienced after the Russian revolution or expect the state to ‘wither away’ after revolution, which is the goal of Marxists and which was proclaimed by Lenin after the revolution?

The fight for workers cooperatives is a transitional one in that it contains the seeds of future society within the old.  It therefore contains elements of the old and those of the new but to condemn it for the former while ignoring the latter is a mistake.  In the next post I will look at criticisms of the idea of workers cooperatives as a means of achieving working class liberation and socialism.

Reforming the Northern Ireland Economy – A job for the State

No_Entry_to_Joy_Street_in_Belfast,_Northern_Ireland,_1974The following two articles originally appeared in the newspaper of the Irish Socialist Network.

CHANGING THE NORTH’S PUBLIC SECTOR

Northern Ireland got a new Finance Minister in August, Simon Hamilton from the DUP, and he made a bit of a splash in his first major speech.

He noted the well known facts that around one third of the workforce is in the public sector and two thirds of economic output is in the State’s hands.  However, instead of simply deploring these figures and blaming an inefficient and bloated public sector he said that the public sector can help the economy grow and not simply hold it back.  He said that what was needed was a reformed public sector that was more efficient.  And who could disagree with that?

Let’s skip for the moment what he means by reform and efficiency.  Surely socialists are in favour of reforms and efficiency? Aren’t we?

Well, the answer has to be yes.  Socialists are in favour of change.  In fact we want so much change that this requires not only reforms, not only radical change, but revolutionary change.  Of course we know the DUP aren’t advocating this but that doesn’t mean we don’t welcome change that involves genuine reform that, for example, improves efficiency.  And yes, we are in favour of increased efficiency.

In fact we are socialists because we believe a socialist society is a higher form of society than capitalism and is higher because, among many other things, it is more efficient.  Such efficiency could eliminate the need for unnecessary work, reduce the burden of work that does need to be done and create enough wealth so that poverty is eliminated and everyone has a standard of living that can satisfy our reasonable needs.

Simon Hamilton also said that he is in favour of alternative models of service delivery – like mutuals, cooperatives and social enterprises.  In other words public sector organisations or companies run or owned by the people who work in them.  What could be more socialist than firms or state bodies owned and controlled by workers?

Some might think this is a very naive approach to what Simon Hamilton is saying.  Surely he isn’t advocating the sort of reforms we would want?  Since when did the DUP become socialist and advocate workers’ ownership as a solution to economic underdevelopment?

Well there is a reason for the above approach and we can appreciate this reason when we compare it to the reaction of the trade unions to his speech.

I got a copy of the speech through a circular by my trade union NIPSA.  The letter from the General Secretary of NIPSA, Brian Campfield, noted the references to different models of public service delivery but said only that the view of NIPSA is that these would be detrimental to the interests of the union’s members and to the general community.

Of course Hamilton referred not only to cooperatives but also to ‘partnering with the private sector’, which is code for privatisation.  (You see! I’m not so naive!)  But this is only part of the story and not the most important part either.

Sticking only to the question of privatisation, which of course we should vigorously oppose, presents only a negative answer.  When our class enemies propose change our answer isn’t that things should stay as they are, but just be funded better.  We don’t defend the current state – or public sector as many call it – we want it changed just as much as we want the private sector changed.  We want the whole capitalist system changed, not just big private corporations but the bureaucratic state that supports and defends the corporations.

Socialists don’t look at the current state as a model for socialism. It’s bureaucratic and undemocratic.  I’ve worked in various bits of it for nearly 30 years and I haven’t had any meaningful say about how I do my work in all that time.  I have a boss, in fact I have loads of bosses, and I don’t have any say over who they are or what decisions they make.  How could this be any sort of socialism?

Socialists are socialists not only because are we against the present set-up but because we actually have an alternative – something positive to say.   So when the DUP says the present state is in need of change the first thing we should say is yes – and here is what it should look like.

It is much easier to be against things but much harder to say what you are for; even harder to explain what the alternative is and harder again to put it into practice.  That’s why when we see an opportunity to say we have an alternative and explain what it is we should grab it.

Part of the current weakness of socialism is that we, like the majority of people, are against how things currently are – with unemployment, inequality, crap jobs and the stress of everyday life – but we haven’t fought for the socialist answer that demonstrates the alternative.

Instead socialists have often been seen as defenders of the status quo – opposing privatisation but not offering any alternative to how the state delivers services, except to demand that it gets more money to do it.  Instead we are often seen as demanding solutions that don’t offer any radical change to the present system.  A better funded and bigger state is often how our alternative is presented, not just by our enemies but by ourselves!

The economy in the North of Ireland is well know as a bit of a basket case and the big size of the state sector is not the cause of it but is an expression of it.  This is also pretty well known by many.  It should be a big clue that a big state is not the answer.

Simon Hamilton thinks the public sector can be a vehicle for changing this situation and ironically the trade unions agree with him.  They just have slightly different ideas about how this can be done.

Socialist don’t agree with this and so don’t agree with Simon Hamilton or the standard trade union view.  In my next article I’ll explain this a bit more by looking at what else Hamilton said in his speech and what the standard left response has been.

STATE LED DEVELOPMENT?

When the new Finance Minister in the North said that the public sector could be a vehicle for developing the North’s economy, instead of being simply a drag, this was welcomed.  But with suspicion that this might mean privatisation.  There was also concern that he was continuing to boast of his party’s record of supporting low taxation.  In response the NEVIN economic think tank, sponsored by the trade unions, called for adequate levels of taxation; that is it was calling for increases in taxes.

What attitude should socialists take to this argument?

First of all we should recognise that states all over the world have involved themselves in promoting economic development, some more successfully than others.  Nationalists of all types are in favour of the nation state promoting its own economy in competition with other states.  For much of the last century this type of political programme was held up as ‘national liberation’. More and more state ownership was and still is presented as socialism.

It is very hard to see how the Northern state could ever be one of the successes.  State led economic development elsewhere has been successful to a point but the Northern State is dysfunctional.  Behind the rhetoric what is being proposed is not state led development but state enablement and facilitation of growth, but it is doubtful if the Northern State could even make progress with this.  Instead it will at best be reduced to attempting to lower taxes and entice a few footloose multinational companies to invest, based on a bucket of state hand-outs.

How desperate this has become was illustrated at the beginning of October when £3.3 million was given to a call centre company to promote nearly 1,000 jobs.  Half already existed, no capital investment was being made by the company and it had previously closed in Derry two years ago with the loss of 1,000 jobs.

The Northern Ireland Assembly hardly meets, it discusses things it can do nothing about and hasn’t a clue about what to do about things it can influence.  The Executive meets but has nothing to talk about since the DUP and Sinn Fein can agree nothing except to give hand-outs to multinationals.  But state led economic development requires much more than this.

It is doubtful if this is understood.  The DUP is a party of small businessmen who see the state and taxation purely as red tape and expense.  The need for the state to provide high class infrastructure and a well-educated and healthy workforce is all far removed from their immediate concerns with ‘how much tax do I have to pay?’

However a recent report by the Organisation for Economic Cooperation and Development records that in Northern Ireland (and England), 16 to 24-year-olds scored  266 on average in a literacy test, which put them third from bottom in a 24-nation league table.  In numeracy, 16 to 24-year-olds scored 257 – putting them fourth from the bottom.

Sinn Fein thinks the economy would be great if there were only one Irish economy rather than two but there is not even an inkling that a united economic state might result in benefits for the larger Southern bit to the detriment of the smaller Northern bit.  It’s called uneven development.

A policy of relying on the state in the north for economic development looks hopelessly improbable not least because the state hasn’t been able to modernise itself never mind anything else.  The new minister, Simon Hamilton, announced the creation of a new Public Sector Reform Division but there is no strategy.

It is recognised that innovation comes from people but in his speech all he can do is ask the question – “and how do we motivate our public servants and unlock their ability to innovate?”

Don’t expect an answer.  Workers won’t get paid any more and they won’t be trusted with ownership or control over their own workplace or job.  And if you’re not trusted to control your own job how could you be trusted to make truly transformative changes to society?

One ideological supporter of capitalism once wrote a book with the interesting title ‘Why most things Fail’.  It noted that most companies fail sooner or later.  While the capitalist state will accept that this or that capitalist enterprises can fail there is one capitalist undertaking that cannot be allowed to fail, ever, because it protects the rest.  That is the state itself. Only the most trustworthy can be entrusted with state power which is why the DUP and Sinn Fein don’t really have it.  What they have are the powers of a glorified council and they don’t even exercise the powers they have.

If workers were really to be given the power to develop a new economy there would still be many failures but the powers unleashed would ultimately lead to a new society.

This however isn’t the model of state economic development on offer or championed by any nationalist party.

The Northern state has failed but unfortunately for Sinn Fein so has the Southern State.  The nature of the capitalist state everywhere is that it cannot give workers the autonomy or freedom to take risks, innovate and try to change society, for example by promoting workers’ cooperatives.  Such economic power might sooner or later form the basis of a rival political power.

In other words state led economic development is nothing to do with socialism, which is the power of the working class.  And ‘national liberation’ tells us that the key problem is liberating a state in the oppressed nation instead of liberating the working class of the oppressed nation from the state – foreign and domestic.

This means workers have no interest in supporting many of the measures usually associated with such a programme, including tax increases, which will inevitably hit them hardest, or supporting local industry against foreign as if it was somehow ‘ours’.  Socialism is not the growth of the existing state or its accretion of more and more powers.

Simon Hamilton’s proposals on privatisation are widely recognised as bad news but the bureaucratic state is not the alternative.  If the Northern economy shows one thing it shows this.

Why have the Irish not revolted? Part IV

gustave_dore_fourth_circle_dante_infernoIn much of Europe the workers movement developed in the latter half of the 19th century and first half of the 20th through industrialisation, the growth of trade unions and socialist parties and the radicalisation caused by two world wars, in particular by the first.  The socialist movement often led the struggle for democratic rights and freedoms and gained support as a result.

The Irish experience has been different, leading to a working class with a lower level of class consciousness.  While Ireland started to industrialise early it was thrown back by the development of superior industrial development in Britain.  What industrialisation did occur was small and mainly concentrated in the north east of the country.  Defeat and brutal repression of Ireland’s bourgeois revolution in 1798 led to a bitterly divided working class with the most extreme reactionary ideology dominating the most advanced industrial area.

The land question was denuded of its radical potential by this counter revolution and by the effects of the catastrophic famine in the middle of the19th century when, in a population of over 8 million, around a million died and a million emigrated and the population began a decline that did not reverse until the 1970s.  The number of agricultural labourers fell by 700,000 from 1845 to the early twentieth century, the number of small farmers was halved and the cottier class almost wiped out.  All this could only but weaken the potential base for a radicalised land movement.

The result of all this was that when the national movement erupted in the first decades of the twentieth century in a battle for an independent state it was dominated by middle class revolutionaries who subordinated workers’ interests with the demand that ‘labour must wait’, which has been pretty much the policy of Irish republicanism since.

The new truncated statelet these most conservative of revolutionaries created was dominated by the same economic subordination as that which preceded nominal independence, resulting in economic growth after foundation of the new state at very much the same rate as before its creation; and a polity not much different than before except for the role of the new Irish bourgeoisie that often proclaimed its Catholicism more than its nationality.

The working class in its majority never broke from this political class and the socialist movement has been small and peripheral.  The Second World War passed the Irish State by and during the 1950s emigration was higher relatively than it had been almost 100 years earlier, sapping all social classes of vitality and energy.

The Irish State caught the tail end of the world-wide post war economic boom and the workforce in industry increased from 259,000 in 1961 to 363,000 in 1981.  Overall however there was little increase as the numbers employed as agriculture continued to decline.  This growth in the working class led to some limited revival in socialism reflected in the Labour Party claiming ‘the 70s will be socialist’ before that decade came and went  and republicanism being genuinely influenced by socialist ideas, although of a Stalinist-type that did not offer any real alternative.

This period saw a large growth in the number of strikes so that at one point the Irish State had the highest number in Europe (see below).

strikestats

It also witnessed huge demonstrations against the high taxes imposed by the State on the working class, which amounted to 87 per cent of all income taxes in 1978. In 1979 over 150,000 workers demonstrated in Dublin with many thousands in thirty other towns including 40,000 in Cork.

At this point the Irish State’s model of economic development began to collapse. World-wide economic crisis, a weakening of foreign investment and bankruptcy of indigenous industry led to massive unemployment, renewed emigration and a ballooning State debt.  That the Irish working class and small socialist movement were unable to offer an alternative to the resulting capitalist restructuring and political offensive should not surprise.  There was no successful resistance and alternative created anywhere else.

The defeat of the tax struggles in the late seventies and early eighties and the inability to take advantage of ruling class political disarray, evidenced by repeated general elections in the first few years of the decade, plus the mass unemployment and emigration during the decade, weakened the working class both materially and politically.  The graph of strike activity above clearly shows a steep decline from the 1970s from which there has been no recovery.  It was in these circumstances that social partnership was imposed in the late 1980s.

Partnership signalled the move away from bargaining with the employers and State through militant action and acceptance that when the solvency of the State was in question this took priority.  Beginning in 1987 a series of deals were negotiated that meant accepting major cuts in pay and state services in order to reduce the massive State debt.  The parallels with today are obvious.

There was resistance to social partnership but it came in its most militant form from outside the trade unions and the trade union leaders were decisive in its relatively smooth introduction.  This defeat of militant workers action and acceptance of the prerogatives of capitalism was, as we have said, not at all unique to Ireland.

Across the world the ability and willingness of the working class to fight back in defence of its interests was set back.  Strike statistics are only the most graphic measure of this development.  Taking 42 countries and looking at the period between 1981-85 and 1996-2000 the number of countries in which strikes increased was 8 while there were 34 countries in which they declined.  In the group of countries in which strikes had risen the increase was only 5,183 while the reduction in strike numbers was 63,657 in the group of countries in which there was a decline.

In the Irish State the annual number of days lost in strikes fell from over 580,000 in the 1970s to 26,650 in 2005.  In the latter year there were only 15 strikes and only 10 in 2006, in which only 7,352 working days were lost, the lowest since records began in 1923.  In 2007, the last year of the boom, there were only 6.

As a percentage of the employed workforce trade union membership fell from 56.2% in 1987 to 42% in 1998.  Separate figures record a reduction from 46% in 1994 to 35% in 2004 while the Irish Congress of Trade Unions has admitted that density continued to fall, being lowest among young workers.  Where unions did exist member participation dropped and some of the features of bureaucratisation long normal at higher levels of trade unions infected union representatives further down the ranks.

All this occurred during an unprecedented boom in the economy, the period of the Celtic Tiger, when GDP growth ranged between 7.8% and 11.5% from 1995 to 2000 and between 4.4% and 6.5% from 2001 to 2007.  From 1990 to 2007 total employment grew from 1.160m to 2.112m, an increase of over 80%.  While incomes fell during the 1980s they grew rapidly during the Celtic Tiger.  The historical working class was recreated in many ways as a result of rapid economic growth both quantitatively as a result of falling unemployment, immigration and increased labour force participation rates and qualitatively as a result of the increased employment of women (whose number grew by over 125% from 1990 to 2007) and an influx of foreign workers.

The Irish working class was recreated as a result of a boom fuelled primarily by foreign investment, which excluded unions from its workplaces, increasing corporatism and bureaucratisation of the unions that did exist.  This within a world in which the historic goals of the working class movement – from progressive reform of the capitalist system to the view that it could be replaced – was increasingly discredited through the fall of Stalinism and defeat and retreat of workers struggles and the claims of social democracy.

The boom saw no political strengthening of the workers’ movement even as unemployment fell and the class objectively, at least in numbers, grew enormously.  As we said at the end of Part 3 capitalism is a revolutionary mode of production that recreates the working class.  In the Irish State it did so in a way and in circumstances that did nothing to overcome the historic political weaknesses of the class.  Indeed the trade unions became weaker as they bought into social partnership and the view that the interests of workers, State and bosses were best aligned.  Even the historic nationalist politics that has been hegemonic became encapsulated in the need to have a low corporation tax for US multinationals.

Lack of a strategic alternative, among other things, brought about defeat of the large struggles of the 1970s.  Unemployment, emigration and prolonged economic crisis brought an assault by the State on working class living standards and did so in such a way that it survived, even prospered, when the economy recovered and entered into a boom.  Social partnership sold the working class into sacrifices to bail out the State from bankruptcy and made the workers subordinate even when the boom gave them the conditions in which they could have recovered their strength and learnt to advance their own interests.  Instead, in so far as social partnership was later abandoned it was abandoned by the State.

The nationalist politics of the working class, the partnership with the state and the agreement of workers to sacrifice themselves on its alter came together in the reluctant acceptance of workers that they must bail out the banks and accept austerity when the economic crisis finally broke.  This dependence on the State can be seen in two other ways.

In Part 2 we noted that the left wing economist Michael Taft has claimed that the ‘squeezed middle’, the 4th to 8th deciles of income earners, suffered declines in direct income in the five years leading up to the crash, gaining only as a result of social transfers.  Social partnership involved a deal between the trade union leaders and the State/bosses in which workers refrained from industrial action and accepted lower than potential pay rises in favour of tax cuts.  This was not just the case in the final years of the boom but was the line pushed almost from the start – a policy that became more and more explicit as the partnership deals were negotiated.

Thus not only did the workers movement become denuded of any militant initiative but it became more and more dependent on the state, and this was true not only of public sector workers but of workers in the private sector as well.  Gross average industrial earnings grew by 25% in real terms in the 15 years between 1987 and 2000 but take home pay rose by 60% for a single person and 58% for married because taxation was cut.

Mainstream economists, in 2000, also reckoned that these tax cuts were regressive because they were largely achieved through reductions in tax rates, which favoured those on higher incomes.   It is well known that the State became excessively reliant on revenues from a credit boom but what this shows is that social partnership, and the whole strategy of the trade union leaders, was just as reliant.  But really, how could it be otherwise?

The second way this dependence increased can be seen in the simple growth of the state itself, true in all countries and not just of Ireland.  ‘The Economist’ reported that the average size of the state had grown from 12.7% of GDP in 1913 to 47.7% in 2009.  Even in the UK after decades of Thatcher and New Labour the size of the state remained around 44% from 1980 to 2005.  This translates into widespread and increasing dependence of the population on the state, which has become the supposed solution to every and all sorts of problems.

Such massive growth could not fail to have deep impacts on society at the ideological level and the ruling ideas that infect the working class.  Neoliberalism hasn’t done away with the State and neither has it weakened illusions in it.  The Irish State now presides over the world’s biggest property company (NAMA) after private capital made a mess of it.  The State is now the means by which the debts created by this private capital are made good by the working and middle class.

One business journalist has quantified some of the ways in which this dependency is transmitted:

“Irish Budget 2014: Half of Ireland’s population is on welfare and when recipients of child benefit, farmers dependent on public subsidies which are effectively welfare, accounting for 81% of average farm income in 2012; legal services costing the state about a half billion euros annually; public payments to doctors; a raft of corporate welfare schemes and the public service itself, at least while Karl Marx is likely to be disappointed that a few remnants of the failed communism experiment only remain, in Ireland there is a shining example of the halfway house known as socialism or to put it in non-ideological terms, dependency on the State.”

As we can see, he paints the growth of the capitalist state as somehow a practical example the ideas of Marx, and who can blame him?  It’s the view of most of the Left as well, who constantly call not on the working class to solve its own oppression but for the state to do it for them.

The journalist gives a host of facts that demonstrate the growth of dependency on the state -from the growth of social welfare expenditure from €9.5m in 2002 to €15.5m in 2007 when the crash came and to €20.7m in 2012.  The number of social welfare beneficiaries rose from 1.5m in 2002 to 1.6m in 2007 and 2.3m in 2012.  Of these 486,000 were on the Live Register.

He notes the increased number holding medical cards; the direct subsidies to private industry and agriculture – mostly to the biggest operators; the tax breaks for business and the direct procurement of goods and services from private capital.

However the bottom line with the austerity offensive is that the Irish State became bankrupt and could not afford to continue this, so introducing harsh cuts and tax increases.  The question we have sought to address is why Irish workers have not resisted, or resisted so little and to so little effect.

We have seen numerous reasons for this – from the historic weakness of the class; the recreation of such weakness in the defeats of the last few decades; international developments that have demonstrated the hardly unique character of the experience of Irish workers in this respect, and the particular role of trade union and political leaders, which again is far from unique to Ireland.  Only a few weeks ago I listened on the radio while a professor of economics in Madrid noted that commentators in Spain were wondering why Spanish workers were not reacting more angrily to austerity compared to their Portuguese neighbours.

The experience of Irish workers reflects the weakness of indigenous capitalism which the growth of foreign direct investment has not significantly altered.  The latter has only reinforced the weakness of Irish workers – they have hardly even attempted to unionise in the multinational sector and appear to have bought into the view that they must live through nine circles of hell before the proud Irish race will ever succumb to a headline corporation tax rate higher than 12.5 per cent.

Finally we have seen the very direct dependency of so many on the State that has just bankrupted itself bailing out the banks.  Unable to stop them doing so, in fact not even being asked if they agreed, and fed crap about the ‘cheapest bailout in history’, the working class was left with a choice – bail out the state it depended on for jobs and welfare or default when the only people in place who could carry out this policy was the same State that was demanding they pay up.  Without a mechanism to enforce default, even if that is what they wanted, and without an economic and political power base outside of dependency on the State, the choice was pretty clear, even if there could have been struggles that could have made it messy.

Put simply – how could workers tell the State to get stuffed when it relied on it so much?  The Left has peddled nonsense that the State can be made a means to redistribute wealth such that only the rich pay for capitalist crises but the workers haven’t bought this and some of the Left that calls itself Marxist is not actually supposed to believe it either.

The defeat inflicted on workers in the last five years should cause a rethink.  Renewed declarations of faith will not do.

Lessons from the Grangemouth dispute

GRANGEMOUTH_2700282bI received an email from Socialist Democracy inviting me to contribute to a discussion based on an article they have written on the lessons of the Grangemouth dispute in Scotland. This article sets out the devastating scale of the defeat – the freeze in pay, butchery of pension entitlement and castration of union organisation.  Many in the media called it an old fashioned battle of labour against capital, such was the unvarnished clarity of what was involved.

The questions to be answered are whether there could have been a different result and what lessons can be learnt?

The article does not say whether the result could have been different.  Given the circumstances I think not, but this means we must be clear what the circumstance were that lead to this conclusion.

As for the lessons the article posits two – that the entire strategy of the trade union leaders has been overthrown and that of union support for, and reliance on, the Labour Party is a mistake.  I believe that there is a third rather more basic one, which can be explained very much as the old fashioned relationship between labour and capital.  What is this relationship?

The relations of capitalist production are unequal as they involve capitalists as owners of the means of production, including oil refineries and petrochemical works, and workers separated from ownership of such means of production and dependent on employment by the capitalist for their livelihood.  In a struggle that does not threaten or weaken these foundations it is generally the case that the capitalists will be able to impose their wishes because these align with the power structures in society.

This does not mean each and every strike or struggle by workers is doomed to defeat but that in certain disputes this power of capital is fully deployed and the fundamental imbalance in power is cruelly demonstrated.  Were it otherwise capitalism might be able to find some stable compromise, some equilibrium between the two classes that would allow a ‘fairer’ distribution of resources.  No such stable equilibrium has been found.  Marxists have been confirmed in their view that the liberation of the majority of working people requires overturning the existing system and creation of one in which the monopoly of ownership of capital is destroyed. 

This is the basic case for socialism in opposition to all those who think a better world is possible while not overthrowing the fundamental structures of society.

It is not an all or nothing case.  It does not say that workers can do nothing to protect themselves short of socialism.  Struggles that do not threaten these fundamental relations can sometimes be victorious such as when the economy is booming, unemployment is low and workers can strike or otherwise bargain for higher wages without fear of being sacked and their place being taken by the unemployed.

Of course in an economic downturn the temporary leverage of workers and trade unions is undermined and the power of capitalists to do as they wish because of their ownership of capital is reasserted.

In the case of the Grangemouth dispute this means that no workers’ action no matter how brilliant, innovative or militant could prevent Jim Ratcliffe from using his ownership of capital to close the refinery and petrochemical works and throw thousands of workers onto the dole.

Of course if you were convinced he was lying about the profitability of the plant and convinced his threats to close were a bluff the solution is simple – call his bluff and tell him his demands will not be accepted.  Unfortunately his ownership means that only he and his management know the truth and his claims that the plant only had a future if he was able to put £300 million in investment into it were credible. The same system that decrees private ownership of a refinery also necessarily involves periodic overcapacity in production and this was held over the workers’ heads as the brute fact that required they surrender or face the sack.

Under such circumstances no one can be surprised the workers decided to accept the lesser evil.

The article is correct that simple strike action would not succeed.  It was the boss who went on strike – it’s called a lockout.  It is he who brought production to a halt and threatened to make this permanent.

Others called for widespread solidarity action perhaps secondary strikes.  Firstly these are illegal and related to this, workers have not yet the level of combativity to carry out such action, even those involved in the chemicals industry who would have lost their own jobs had Grangemouth closed.

If it is argued that this strategy is one we must argue for and attempt to build for the future then this is indeed an element of strategy.  In this situation however there is no reason to believe Ratcliffe gave a rat’s arse about the fate of the wider industry and of the other thousands of jobs that would have been lost.  If he was going to close Grangemouth then all these strikes would have made no difference to his plans.

A second possible answer was to call on the state to nationalise the refinery and works.  The problem with this is that neither the British State based in London nor that part that might go independent had no intention of doing so.  Both are ‘open for business’ only when it means private capitalism.  So who was going to nationalise the works?  If it is believed that strike action would compel such nationalisation then it would have had to be wider and deeper than that considered above and the first response of the State would have been to attempt to throttle it. Some people keep on forgetting the State is the protector of the enemy.

Some on the Scottish Left said the situation at Grangemouth showed the need for independence but this was not an immediate solution.  As we have just said, the Scottish National Party has no intention of nationalising private industry when private capitalists are prepared to invest if only the workers accept the necessary sacrifices.  Alex Salmond’s primary concern was with the exposure of his independence project, and the illustration of how weak the idea of a prosperous oil economy looks in light of this immediate threat to pull the plug.  Since the refinery provides fuel for northern England and Northern Ireland as well as Scotland the case for action to protect the service went beyond the border and thus implicitly provides the grounds for wide action to defend it.  It also undermines any case for a nationalist solution from the right or the left.

The article argues against the efficacy of such answers and proposes its own elements of a strategy.  Some of these are by no means very clear.

For example what does this mean? –

“The trade union and political fights have to be united around a movement that is willing to reject the claims of finance capital and to step in and expropriate capital where it is necessary to preserve the livelihood of workers.”

The only time a workers’ movement will be able on its own to expropriate capital is when there is a revolutionary situation. We’re not in one of those so it wasn’t and isn’t an answer.  (We’re also fighting industrial capital in this one.)

The article says –

“The Labour Party has promised a temporary freeze on prices, so a call could be made for a permanent cap . . .”

Just how are the laws of capitalism to be permanently abolished or even suspended when the system still exists?

They can’t.  The only way they can is if and when there is a revolution that creates the conditions for totally remodelling economic and social relations and even then prices will not be abolished for some considerable time.

The alternative proposed revolves around occupation and seeking an alternative to the Labour Party.

Once again however if the plant is really losing money and the threat of closure real then why would Ratcliffe not just let the workers occupy, sit in the refinery and – so far as he was concerned – rot away?  It would be just another way of closing the plant if he didn’t get the workers to accept his demands.

What the demand for occupation means is that workers take over ownership and run it themselves.  They cannot simply run it themselves without ownership.  No one would provide raw materials or other services without someone to contract with and you don’t form contracts with those in unlawful possession.  So the question is how would the workers take ownership?  How would they get the money to buy it and to invest perhaps the£300 million Ratcliffe says is needed?

Obviously this is much harder when pushed against a wall, with no preparation and no conception that this is the alternative.  Equally obviously if it is accepted that this is the road that workers in such situations should follow then it would be better to be prepared for such a challenge.  The challenge is precisely to the monopoly ownership of the means of production that we said at the start is the heart of the relationship between capital and labour and at the heart of capitalism.

The workers movement is big enough to fund research into the creation of worker owned businesses.  Workers might start to fight to gain control of their pension funds to invest in their own enterprises.  Money can be raised for investment from financial institutions or other funding means to be determined.    A network of employee owned cooperatives already exists.  What is involved is not utopian, in the sense it has never been done before, nor is it without rational calculation.

If workers could be ready for such an alternative the threats of closure would not be so conclusive.

In other words the alternative to capitalist ownership is workers’ ownership.  Not just in some indefinite future ‘after the revolution’ but now and not just for now but in order to build towards the future.

Finally the article criticises the unions’ support for the Labour Party.  It notes that organised workers continue to support their trade union and political leaders, although it only proposes that in order to fight both it is necessary to break from the Labour Party but not from the existing trade unions.  It calls for a ‘class struggle movement’ to be created across all the unions, which should call for a new working class party.

It obviously believes this fight can dismiss the Labour Party and need not go through it, although it does not explain how this can be achieved when it acknowledges workers continuing support for that Party.  Implicit is the view that a fight within that Party is not needed to convince workers to break from it.  This in my view is very doubtful.

It draws no lessons from its ridicule of the small socialist organisations which have attempted this road or what it correctly describes as the private character of their concerns; illustrated by their bizarre discussions and replication of policies that decades ago they excoriated the Labour Party for.  The articles’ own call for a revolutionary party is correct but of no help here since it is put forward, necessarily so, as an ideal future location.

Instead it states that – “there are many issues around which a fightback can be organised, but they cannot be organized by the current leadership of the working class . . . What it [Grangemouth] has shown up is the utter inability of the traditional leadership to defend workers and the demoralisation and lack of strategic vision on the part of the socialists.”

If what is being said is that a new leadership has to be created, and the existing one challenged, then this is correct.  If it is being said that this is a precondition for a fight-back then this is not correct. It is only in the course of struggle that existing leaderships can be defeated, as long as such objectives become part of the struggle by the mass of ordinary workers.

The workers at Grangemouth and, by extension, those beyond have suffered a cruel defeat.  One possible reaction is to be cowed by the power of capital to shatter livelihoods.  A second is to seek some magic bullet of a strategy that workers can employ to defeat such plans: a strike, secondary action or an occupation.

A third lesson is that very often workers are forcibly confronted with the reality that to secure a decent life they need to go beyond capitalism and that no amount of shifting it with militant action can change its fundamental nature.  This nature is one where capitalists own the means of production and they can open and close it when they want.  This is not a strong argument for capitalism but a powerful argument for changing society – for socialism.

As Marx said – “the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!

What way forward for the Dublin Bus workers?

482013-dublin-bus-strike-members-of-siptu-and-3-630x484In August drivers at Dublin Bus went on strike in opposition to yet another proposed cost cutting exercise in the company totaling €11m.  Subsequently a group comprising the Government, the Irish Congress of Trade Unions and the employers’ body IBEC, joined together to carry out an investigation into why Labour Court recommendations about cost cutting proposals had been consistently rejected.

From a workers’ point of view it is difficult to know where to start in responding to such an initiative.  ICTU joined with those seeking to cut terms and conditions in order to investigate why workers hadn’t done as they were told by management.  It might have been thought that unions were there to see how workers could defend conditions but the combination involved of bureaucrats, bosses and government have been engaged in a conspiracy against the decisions of the workers.

This is dressed up as concern for the drivers themselves –  the Minister for Transport Leo Varadkar and the Minister of State Alan Kelly have said that the investigators had worked independently “in an honest attempt to address the concerns of drivers”.  But addressing the concerns of drivers for these independent experts means that “We ask the drivers to agree to the final proposals.”  In other words the drivers are to do as they are told.

And if they don’t the workers are threatened – “We are clear, however, that the outlook for Dublin Bus and its employees is very stark if this final effort does not succeed.”

To appreciate what ICTU has done it is best to consider what it didn’t do.

ICTU didn’t commit itself to an investigation to ascertain if the claims by management about the financial position of Dublin Bus were correct.

ICTU didn’t investigate why the major concessions made by drivers in at least two previous productivity/cost-cutting agreements have failed to resolve the company’s financial crises despite management assurances to the contrary. Why are they threatened by yet another cost-cutting exercise?  Has management lied about the promised effects of previous cuts or has it just been incompetent in developing a robust plan for the company?

ICTU didn’t investigate whether the support of bus services by the State was comparable to that in other states, whether the Government had any coherent transport plan for the capital or had taken adequate account of the role that transport plays in providing the infrastructure necessary for an efficient and prosperous society.  Whether instead it had taken a narrow view of the company’s profitability without regard to wider benefits to society.

ICTU didn’t seek to collaborate with all the unions involved to determine a strategy that could assert and defend the bus drivers’ rights.

ICTU didn’t seek to rally together the bus unions, wider union movement and the users and potential users of the buses to initiate a campaign for an efficient, sustainable and decent bus service.

ICTU could have done lots of things and had plenty of alternatives but it decided to conspire with the bosses’ organisation and State to threaten the drivers. And it did it in plain sight.

When you think of it this way the actions of ICTU are shocking.  But they don’t shock and they don’t surprise and they don’t do these things because workers have long got used to the fact that this is the way ICTU behaves.  So registering anger and pointing out that ICTU are engaging in an act of betrayal is hardly enough.

Do socialists have an alternative?

The first and most important thing to understand is that socialists have no alternative unless workers decide to take matters into their own hands.  The first step is therefore that workers fight to win ownership and control of their own struggles through ownership and control of their own trade unions.

In so far as the steps that ICTU should have taken are political ones, workers need to create their own political party.  This of course is a longer term requirement only in the sense that it can realistically be achieved only over a number of years.  And while the building of a genuinely democratic and militant trade union movement is also not an immediate prospect it is one that is immediately posed.  In other words the fight to create it is always present, which means we must fight for it now.

These should be central tasks of Irish socialists and outside of them the debate about unity of the Left is pretty well irrelevant.  If the Left wants to unite to build itself, unless this is a task to be achieved through the organisation of the working class itself, it will be sectarian.  Left wing unity and political sectarianism are not mutually exclusive.

On the other hand genuine unity around such a task, achieved through democratic organisation, which alone can achieve it, would act as a beacon, however small, for workers in struggle.

In order to create it however we need to ask why we need such a movement.  Why is the current movement inadequate, even treacherous, and what would a new one do?  We need these answers in order to persuade workers to undertake the task of creating one.

So how do the ideas of socialism relate to the predicament facing Dublin’s bus workers?

First we should recognise that their repeated willingness to oppose management’s plans is the indispensable basis for any alternative.

Secondly we should inform workers that militant strike action by them will not be enough.  As Marx and Engels repeatedly stated, strikes are often provoked by bosses in order to facilitate their own plans.  Often they serve to save money, implement lock-outs and close workplaces.  In Dublin Bus they will undoubtedly be used to blame workers for the financial difficulties the company is in. Strike action is insufficient and is not the only action that can be taken.

Do workers have an alternative solution of their own that could be put forward?

The first step in creating such an alternative would be to establish the real financial position of the company, which is what ICTU should have done.  This would include an assessment of the support given to Dublin Bus by the state.

The second is to establish what sort of service should be provided and how it should be delivered.

The third is to determine whether the workers themselves can offer their own model of ownership to deliver this sort of service.  Privatisation and continued state ownership both offer the same prospect of cuts in workers’ conditions.  Reliance on state subsidy should be recognised as a weakness in the workers’ position.  Dependence on the state, the ally and protector of the bosses, is reliance on precisely those that are insistent that the cuts be implemented.  That these cuts must be made prior to privatisation is demonstration that both the bosses and state recognise that it is the latter which is best placed to reduce workers’ conditions.

The fourth is to publicise and win support among other workers and the travelling public.  Other forms of action could be considered to achieve this such as providing ‘free travel’ days.  Only a campaign structure going outside the confines of trade unionism could make such a campaign a reality.

It is no great feat of criticism to describe these steps as schematic or abstract.  Only a really existing movement could make them anything else.  Schemes, or plans, are there to be proposed and debated, discarded or modified as real, active workers determine.  They sometimes abstract from the concrete realities of the situation, which give abstractions content, and become simply propaganda, usually when those with ideas lack the power to implement them.  Propaganda however is almost everything when you have little else, which is where socialism in Ireland is at.  Ideas are critical when an idea of how to fight back is the element that is missing from struggle.

The point of the commentary above is to inform workers and socialists that a certain understanding, class consciousness, is required to see any way out of the struggle that the bus workers find themselves engaged in.

One thing is for sure; the answer to the bus workers needs has been proved not to reside with management, the state or with ICTU.  The second has yet to be proved – that it resides with the workers themselves and in the strength and solidarity that they can muster.

Why have the Irish not revolted?

Public-service-workers-st-006The defeat of the opposition to the property tax and the ability of the Government to impose a second Croke Park austerity deal might lead many to conclude that resistance to austerity has been defeated.  Even before this many have commented that while Greece has witnessed violent protests and numerous general strikes the absence of such events from Ireland is notable and remarkable.  General strikes have also taken place in Spain and Portugal but not in the Irish State.

The relative electoral success of the United Left Alliance appeared to blind some to this but the collapse of the ULA has simply confirmed what is more generally understood to be the case.  More and more it is acknowledged on the Left that we have to face the reality as opposed to perennial false claims that an upsurge is taking place or is just around the corner.

Realistic assessments of the state of workers’ action have often been drowned out by childish claims that this shows one is insufficiently revolutionary, underestimates the workers , their ability to change their ideas quickly or that such views will not encourage workers to take action.  Not in front of the children appears to be the motto.  Workers are always ‘angry’ and all it needs is the right campaign, so long as it is active enough, to stir them into action.

Reality is imposing itself and no sound bites along the lines of ‘the darkest hour is just before dawn’ can hide the fact that the economic crisis has resulted in the imposition of austerity on workers without effective resistance.  Why is this?

First we must qualify the judgement that Irish workers are peculiarly useless.  Commentators have remarked in similar terms about the countries in southern Europe.  We have noted before that more or less spontaneous social explosions have not resulted in great advances by the working class.  Greek workers have been by far the most combative in terms of general strike action but in hardly anywhere has living standards plummeted so much.  I have also noted in one of my first posts that economic crises spurs growth in extreme reactionary forces and we have seen this is in Greece with the rise of the Golden Dawn movement.  So Greece is no model to seek to copy.

Secondly Irish workers have fought back albeit within very strict limits.  I can still remember the very large demonstration in November 2009 in Dublin, which had many working class people from outside the ranks of the trade unions taking part.  The following year public sector trade unions organised a successful strike.  At a local level in certain places and at certain times strong campaigns have developed against tax increases or hospital closures.  All this and more was reflected in the vote for ULA.

There is however an over-estimation about what workers can achieve within the limits of the capitalist system – a general misconception that workers’ struggles can overturn the laws of capitalism.    For example, if a company goes bust and attempts to close down, making all its workers redundant, it is pretty obvious that strike action will not achieve very much.

At this point many on the left propose that the capitalist state protect workers even though these same people have a part of their brain that tells them that the state is a weapon of the capitalist class that cannot be reformed and must be smashed.  They also believe that the emancipation of the working class must be achieved by workers themselves but usually object to the idea that, instead of the state, the workers should take over and own and run these workplaces as workers cooperatives.

It is a similar situation at the level of society as a whole and at an international level.  The Irish state was and still is bankrupt.  It needed a massive injection of money to save the banks and put itself in a position to start reducing its mushrooming debt.  Austerity is a means of doing this.  Again the Left argues that the state can adopt policies of taxing the rich and spending money on investment that will restore the capitalist economy to economic growth, which will then deal with the problem of the debt.

This is not however the view of socialists.  The socialist view, confirmed once again by recent events, is that capitalism inescapably produces economic crises which are dealt with and resolved by the laws by which the system works, including through unemployment and destruction of unsuccessful capital whose markets and sometimes businesses are picked up on the cheap by those remaining.  It is not possible for the capitalist system to prevent such crises by adopting policies of more investment, as for example argued by left followers of Keynes.

It is not therefore possible for workers no matter how well organised to prevent the laws of capitalism from working.  This at least was the view of Marx and the evidence of history would again confirm this.  So workers resistance against austerity may be able to ameliorate austerity but, in so far as they are necessary to lay the foundations of a new upturn, it is not possible for workers to prevent unemployment or wage cuts or tax increases in their entirety or even to a significant degree.  In other words it is not possible within the system to prevent capitalism periodically disrupting workers’ lives.  That’s why we oppose the system and why we propose a different one called socialism.  If we thought capitalism could work better without its nasty effects we wouldn’t be socialists would we?

Yet the left presents austerity as simply one policy option of the Government which it could choose to reject and replace with their own proposals.  But even the Keynesian alternative requires ‘counter cyclical’ state action.  In other words the austerity measures are simply postponed.  All the left’s proposals involve actions by the capitalist state in one way or another – tax changes, public investment, nationalisation etc.

The point in terms of the current argument is not that the Left is misleading workers into accepting reformist solutions that won’t work and this is a reason why resistance to austerity has been such a failure in Ireland.  These ideas are more widespread in southern Europe than they are here.  No, the issue is that, absent a socialist alternative being created, as long as capitalism exists the laws of capitalism will continue to work and impose themselves.  Resistance to austerity will therefore fail and this failure is bound in turn to lead to weakening of the resistance.

We must be careful however not to qualify the problem out of existence when it contains more than a grain of truth.  When Greek workers chanted “we are not Irish” on their May Day demonstration in Athens in 2010 they weren’t imagining the relative weakness of resistance in Ireland.

Nor can the question be dismissed by saying Irish workers did fight back – they did, but nowhere near to the extent required for success.

Nor is it credible to blame the poor politics or organisation of the Irish Left.

It is also not adequate to simply say that capitalism wins unless we create socialism. This is obviously true, although its logical implications for reformist strategies and policies are often ignored.  But it doesn’t come near explaining why the reformist strategies for resistance have elicited such weak workers’ action.  It’s hardly that Irish workers can see through such strategies and are ready for something more radical.

Socialism is not an event or a situation but a movement. Workers will only become capable of building a socialist movement and carrying out revolutionary change if they are also capable of mounting strong resistance to the ravages of capitalism.  In Ireland this hasn’t happened and there has been a retrogression of the small socialist movement, although this in itself is not particularly new.

So in Ireland the state has been able to pursue austerity policies that increase unemployment and wage restraint in order to restore its solvency in very much the same way capitalist crises work to   restore profitability in the private sector.  It has been able to do so without much of the resistance shown in other countries in a very similar situation.  This remains to be explained.

To be continued.

Workers’ control of production Part 2

0425.1974_Portugal-newspapeIn my last post on workers’ control I noted that it inevitably arose as a result of crisis, and crises are by their nature temporary, occasioned by society-wide political upheavals or by threatened closure of a particular workplace that is perhaps producing unnecessary products, is working in an obsolete manner or is otherwise failing to compete successfully in the capitalist market.

In Britain in the 1970s there were more than 260 occupations of workplaces by their work forces including, perhaps most famously, at Upper Clyde Shipbuilders in Glasgow, usually sparked off by closures, layoffs, redundancies, dismissals or threats of closure.  Such occupations were spontaneous, often acts of desperation and with no real planning.  If successful, the numbers occupying would be offered jobs by a new employer although this number would usually be less than when the occupation would have begun.  When no new owners would appear the occupations might attempt to become workers’ cooperatives but the motivation was normally a pragmatic search for a solution rather than something drawn from political commitment and ideology.

The occupations were often built by shop stewards and sometimes at odds with the official trade union movement, a situation we see again and again and a result of factors far from accidental.

The theme of ‘industrial democracy’ was very much alive and in 1974 the Conservative Government called a general election on the issue of “who governs Britain”, in direct reference to the miners who had engaged in successful strike action.  The Tories lost and the new Labour Party Government included Tony Benn, who wanted greater involvement of workers in their workplaces.  He also came into conflict with trade union leaders who opposed his dealings with rank and file groups of workers.  “The whole machine is against you” Benn told one supporter of an occupation at Imperial Typewriters.

Workers’ cooperatives received the support of Benn, who was in a position to do something as Minister at the Department of Industry, but his financial help was relatively small and most industrial aid continued to go towards private industry.  That which did go to the cooperatives was mainly for compensation to previous owners who were paid for obsolete plant.  This left the new cooperatives under-capitalised and without the necessary resources to carry out research and development.  They generally lasted only a short space of time but still sometimes produced radical, innovative and still exemplary struggles.  One such was as at Lucas Aerospace, where workers pioneered conversion plans to socially useful production, again opposed by the union leadership.

By the end of the decade however these types of struggles had declined dramatically.  Few of the experiments in workers’ ownership survived and as history is usually written by the winner the victory of Thatcher, built on the attacks on workers commenced by Labour, left a legacy of disappointment and nostalgia in some old enough to remember.  This has affected the Left up to today in so far as it is suspicious, if not actually hostile, to workers’ cooperatives.  This is a profound mistake as the willingness of workers to fight for ownership and control of their own workplaces is an instinctive impulse to go beyond capitalism.

The history of American workers organisation in the 1930s is perhaps more celebrated than this experience but in some ways was more limited.  Workers and trade union power grew during the decade not just because of the struggle of workers to organise, most famously in Minneapolis, but because of the strong growth of US manufacturing industry.  Between 1936 and 1939 workers occupied 583plants in sit-down strikes in defence of their terms and conditions, protection of wages, achievement of union recognition, or prevention of sell-outs where recognition already existed. These were often successful.

Unfortunately there followed 70 years of union-management collaboration – no strike agreements during the second world war; the witch hunt and expulsion of socialist activists in the McCarthy period; mob penetration of the union movement and the turning of the union bureaucracy into a world-wide vehicle of the US state in its cold war with the Soviet Union.  The US union movement has now declined so much that in most of the private sector it is irrelevant, with unionisation accounting for only 7.5 per cent in the private sector in 2008.  In some workplaces where unions do ‘organise’ workers are not even aware there is a union!

The history of American workers’ militancy drives home a lesson to be  learnt from the British experience of the 1970s and 1980s – that politics are not only determined by workers militancy and their experiments with workers control but that politics can influence decisively the short and long-term success of these experiments.

In the end the question of politics is crucial, which is why Marxists believe that working class conquest of state power – revolution – is decisive.  It is important however not to telescope the path to this destination.  Revolution is decisive only if the material basis for working class rule is present.  This is not simply a question of the level of economic development but of the social and political development of the working class.  Without both of these the question of revolution is not posed practically i.e. in reality, no matter what more general ‘crisis of capitalism’ is evident.

The analysis of workers’ control in these posts is based on the belief that working class conquest of state power is necessary but that the immediate question is how to make that a widely shared goal given the low level of class consciousness and struggle than now pertains.

It is therefore important to attempt to draw lessons from the impact of political developments on workers attempts at independent organisation in the workplace.  In turn we can then look at the role of workers’ organisation in the workplace for its impact on wider political struggle.  This will reveal the limits as well as the strengths of a workplace-based strategy and what political demands should be raised as a result.  Such lessons informs the opposition to calls for nationalisation that have been argued in many earlier posts.

For example in the Spanish revolution in the 1930s it was the Republican state that strangled the workers’ and peasants’ collectives rather than the fascist counterrevolution.  Clearly in this case a call for this government to nationalise such collectives would not have made much sense.  Anarchists believed these collectives were a means of controlling the Republican authorities but clearly what was needed was an alternative Government and state – perhaps built on these bodies.

In Yugoslavia self-management was a means of mobilising the population against economic blockade and potential invasion, boosting production, minimising the power of the trade unions during a labour shortage and hoping that the workers would discipline themselves.  Unfortunately self-management as then practised led to accusations of workers’ neo-capitalism in which the enterprises were seen as the workers property, narrowly conceived, so that they competed with each other in a capitalist-like manner.  Self-management became not a means of workers self-realisation but a trade union-like bargaining system of clientelism and patronage.  Increased enterprise autonomy acted to dissolve wider working class solidarity leaving enterprise loyalty and territorial state loyalty as the alternative, one which ultimately descended into bitter and bloody nationalist war.  On the way to this dénouement it has been argued that enterprise autonomy became a mechanism to insert the Yugoslav economy directly into the capitalist world market.  Increased autonomy became the means of strengthening management power not workers’ autonomy.

Both Spain and Yugoslavia are testament to the fact that without real working class political and state power workers’ control can be subverted and/or crushed.  I have argued that it is the lack of workers’ economic power and experience before revolutionary crises that has weakened the struggle for their class rule thus making revolutionary success less likely in such crises.  But it is also true that such episodic economic power is doomed without a political project.  In Poland workers councils existed in 1945, 1956, 1970 and 1980-81 but revolution there became a restoration of capitalism.

In nationalist revolutions, such as in Indonesia, the most radical actions of workers are betrayed by a backward political consciousness; as when workers control is achieved and defended not as an extension of workers’ power as a class but as the property and achievement of the new independent (still capitalist) state.  This state can indulge in the wildest revolutionary rhetoric but as long as its power is not an extension of that of the workers it is just rhetoric, to be retracted when the new state feels itself more in control.  It succeeds in this as long as workers power is mistakenly seen by its holders as the gift of the newly independent state.  The examples of nationalism trumping the radical actions of workers are legion and proof again that revolutionary action does not automatically generate revolutionary socialist politics and consciousness.

What is clearly decisive is workers’ own consciousness and workers control, self-management or councils are not in themselves decisive in determining it.  This however is not the question and not the argument being put.  There is no ‘magic’ strategy guaranteeing a workers’ victory but there are more or less adequate roads and strategic conceptions.

The argument here is that workers’ control, and in the longer term, workers’ ownership can provide a more solid, permanent and robust material basis for the development of the necessary socialist consciousness than simple trade unionism, no matter how militant.  More realistic than reliance on spontaneous political revolutions to do all the work of consciousness raising in the necessarily short space of time in which they take place and certainly more than demands for nationalisation, which for example were obviously meaningless in both Yugoslavia and Poland.

What workers ownership should do is provide a basis and foundation for a political programme that seeks to extend and deepen this form of ownership and give it a political dimension, to make easier removal of the division between the political and the economic that characterises capitalism.  Workers’ collective control and ownership of the state can be more easily argued for on the basis of their wider ownership in the economy.

The argument is more easily advanced if there exists a successful worker owned and controlled sector of the economy that can be presented as an alternative to the capitalist owned sector or the illusion that a benevolent state can take ownership of the latter in order to benefit workers.  On this basis the socialist project can become a political one for which the ideal form to advance it is a mass workers’ party.  Such a project can begin to win the battle for hegemony within societies which are currently dominated by capitalist ideas despite the objective failures of that system.  A real material basis for an alternative is provided that can focus generalised discontent that now expresses itself in free-floating ethical concerns for justice and can find no more specific or concrete alternative than vague calls that ‘another world is possible.’  Instead through development of workers’ cooperatives and the wider labour movement another world is built in front of our eyes.

The absence of such hegemony of ideas, and its corollary – that no alternative to the capitalist system seems possible – results in the upheavals that returned societies to capitalism in Eastern Europe and the Soviet Union.  This wider and deeper lack of legitimacy of the socialist project weighs heavily on the spontaneous activity of workers even when they have engaged in the most radical activity.

In the Portuguese revolution in 1974 a movement within the army overthrew the dictatorship and between May and October of that year 4,000 workers’ commissions were established following mass meetings.  Not only factories but empty houses and apartments were occupied.

Within these commissions political competition developed between the Portuguese Communist Party and smaller revolutionary currents.  A failed right wing coup shifted events further to the Left.  Workers councils became not just organs of control in the workplace but organisations of struggle that could potentially threaten the power of the capitalist state.

In the end however they proved too weak and were unable to pose a political alternative to the quickly developing normal organisations of capitalist democracy – trade unions, political parties, parliament and the state.  In the end the Portuguese Socialist Party became the mechanism for a stabilisation of capitalist rule and bourgeois democracy.

Short-lived experiments in workers control and ownership were not in themselves capable of establishing hegemony for the project of workers’ state power.  A deeper and wider radicalisation was required.

The point is that this can take time and can only come about through the development of socialist consciousness in the working class over a more or less extended period and this must rest on a material base.  This can only be the development of the power of the workers in existing capitalist society, expressed in democratic trade unions, political parties, cultural organisations and workers cooperatives.

The opposite of this road is reliance on the state, expressed in the demand for nationalisation.  In Spain, Eastern Europe, Indonesia and Portugal it was the State which became the guarantor of capitalist ownership and power.

Today we are in circumstances where workers must not only defend themselves against the depredations of capitalism – battling against austerity – but socialists must also look to ways in which to advance a workers consciousness that seeks permanent expression of their needs and powers.  Not just defending immediate interests but looking and taking care of the future of the movement and workers’ position in society.

But it is not simply about the needs of the present as against the needs of the future because Marxism is the belief, confirmed by nearly two centuries of industrial capitalism, that it is not possible to satisfy the needs of workers today by only fighting today’s battles.  A socialist society is the future only because it is the answer to the challe-nges and problems of the present.  The demands for workers control and ownership express this view and are rejection of the clam that the existing capitalist state, by nationalisation etc, can provide the answer.