The debate on socialist strategy and the Irish Left – Part 3

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“Marxists see the state as a form of class rule. It is not a free floating entity above the messy reality of class conflict but rather a tool for suppressing the exploited, that is, an organisational tool of those in control of the means of production. For much of history, this is essentially an accurate description and it remains fundamentally true to this day. In Ireland alone, the continuous and truly massive transfer of wealth from workers to capitalists arising from the latter’s losses in property speculation is a graphic illustration of the balance of class power.”

“. . . But modern society is more complicated than pre-capitalist social formations. The exploited are not as powerless and thus have gained a measure of influence over the state itself, the degree of which depends on the balance of class forces at any given juncture. The strength of the working class in Europe over the 20th century is reflected in the significant gains that it made, winning concessions on everything from maternity pay to lower retirement, from national health services to a reduction in militarism.”

“The western state is open to influence by other sectors. That is, it is dominated by capitalists and will, when push comes to shove, tend to favour their interests rather than those of other sectors. That tendency, however, demonstrates not that the state is intrinsically structured to deliver capitalism but that the social dominance of the capitalists manifests itself in the political choices made by those who control the state. Capitalist control of the investment process is key because most states are dependent on capitalists for a functioning economy, which itself is necessary to keep its population relatively satisfied and to generate income via taxation.”

“The state’s own capacity to reproduce itself, then, is dependent on capitalist investment but importantly it is not itself a capitalist formation as is proven by the existence of non-capitalist sovereign powers throughout history. The state, as a powerful entity with a distinct history and a degree of freedom regarding accruing resources, could attempt to usurp the capitalist position by supplanting its role in the investment process. Indeed, that is what we largely advocate. . . and a process of democratisation of the state is best seen as a parallel process to democratising the ownership of capital itself, rather than as either as a precursor or a successor to it. Until that balance of power is altered there is little reason to expect the state to escape its subservience to the needs of capitalists.”

“The state, in other words, does not operate on capitalist lines. It operates in a capitalist context. . .  The state is not, then, an eternal verity destined to contaminate all those who touch it but rather a site of struggle that reflects the balance of forces in wider society. It is a tool whose usefulness depends very much on who is wielding it and for what purpose. . . . but even if the premise of the state as an intrinsically capitalist one does not hold up, there is the further issue of whether its form in the advanced capitalist countries is so antithetical to socialism that it is of little use in the project of socialist transformation.”

These are the views of Gavin Mendel-Gleason and James O’Brien on the state.  In summary they say that the state has become more complicated, and so it has, and give its welfare functions as evidence of this.  The state has had a long history and has not always been capitalist and nor is it intrinsically capitalist now.  Rather it is open to pressure from forces in society, including the working class.  However the role of investment by capitalists, on which the state itself depends for functioning, means that the state tends towards supporting capitalism.  This however can be changed as both the state and capital is democratised with democratisation of the former being the means to democratise the latter.  So much so that it can be used to transform current society into a socialist one.

The view of Mendel-Gleason and O’Brien is essentially of a rather passive reflector of outside forces that has developed its own interests but which is a powerful mechanism that can be employed to revolutionise society.  Not altogether a very consistent or coherent analysis.

Let’s take the role of investment which Mendel-Gleason and O’Brien say is the key question.

Why is it that only the capitalists invest and so can influence the form of the state and how it operates?

This is because capitalism rests on the exclusion of the working class from ownership of the means of production.  When capitalists invest they also buy the labour power of workers and in order to make a profit, to extract surplus value in Marxist terms, they must pay workers less for the labour they perform than is included in what they produce.  The value of the labour performed by workers that they receive in wages is less than the value of the goods and services they produce.  This surplus value pays for the state among other things.

This arrangement seems natural and democratic since no one is compelled to work for any particular employer, can start their own business if they want and can ask for higher wages if they think they deserve more.  They enter into an employment contract voluntarily and as citizens with equal rights.  The state sets laws which reflect and guarantee this natural, democratic and equitable arrangement.

Mendel-Gleason and O’Brien can presumably see that the process of investment is but one part of an economic arrangement that places some with the ownership of capital and the many without and that this is neither natural or democratic nor equitable.  The role of the state is to protect this system so why can they not see that it too is neither natural or democratic or equitable but is rather intrinsically oppressive because it is based on the capitalist system itself?

If the state more and more took over the role of investment, i.e. took over the role of employing workers to produce surplus value, it would not be democratising capital but itself becoming the capitalist.

The apparent harmony of the capitalist system is exposed when  workers challenge the right of capital to exploit them either through strikes, occupations, pickets or pursuit of any restriction on capital that the owners of the means of production find unacceptable.  The state in these cases protects strike breakers, expels workers occupying workplaces, restricts or attacks pickets and allows sometimes the most egregious behaviour of capitalists to go unpunished.

The state will often sacrifice its own tax revenue to defend capitalists and in the case of the Irish state will see itself go bankrupt to bail out native and foreign bond holders and the banks.

What the state does not do, and has never done, anywhere and at any time – even in periods of mass working class pressure when Mendel-Gleason and O’Brien say it should – is organise strikes, attack strike breakers, plan occupations and pass laws that threaten the profitability of capitalism.  Sometimes, in extremis, it will nationalise capitalist concerns but since the state is itself capitalist this can easily be reversed, as it has been so many times.

The harmony of capitalism is therefore undermined by class struggle and the state exists to resolve this conflict.  Since this conflict can be resolved in ‘normal’ and peaceful periods through negotiation or compromise the state will support this.  In periods of crisis when it cannot be resolved the state will apply its force to defend capitalism.

In normal times the basic legitimacy and rules of capitalism are not contested so resolution means defending capitalism by default.  In periods of crisis workers break the rules and the state, as rule maker, must defend these rules or see its role destroyed so that defending itself is coincidental with defending the capitalist system on which the rules are based.

Since the rules apply to everyone and, as we have said, the economic system seems natural, democratic and equitable the rules and the state that defends them appear not to be defending any particular interest but the general interest, the national interest.  Workers who break the rules are charged with attacking the national interest, which is one reason why socialists are so opposed to nationalism since it binds workers to a state that defends and protects their exploitation.

So the state does indeed reflect class struggle but it is the means by which one class deploys the overwhelming power it disposes of in society, by virtue of its monopoly of the ownership of the means of production, to dominate and suppress the class of workers on whom it relies to expand its capital.

As law maker it sets rules which can only be consistent with the dominant mode of production and which are ultimately enforced by the most openly and patently reactionary arms of the state – the police, army, prisons and judicial system.  By these rules, as the old English saying goes:

They hang the man and flog the woman,

Who steals the goose from off the common,

Yet let the greater villain loose,

That steals the common from the goose.

The capitalist state therefore appears to be autonomous from any particular economic interest but the essential characteristic of the state is not its autonomy but its class character.  This autonomy is often exaggerated by Marxists and it is not uncommon for particular capitalist class interests to dominate to the detriment of others.  Political history is replete with conflicts between various sections of the capitalist class – industrial versus landed, large versus small, monopoly versus competitive, national versus comprador and foreign, declining versus growing, financial versus manufacturing.  This is why ideally the state does have autonomy.  But it cannot have it from the system as a whole.

How the state does this is a question of historical development but we must nail the argument that just because the state existed before capitalism and therefore could not then have been capitalist, it is not its class character which is its essential nature.  Before the capitalist state there was a feudal state and sometimes the bourgeoisie fought what is termed ‘bourgeois revolutions’ in order to make the state a capitalist one.

In these cases the transference of power was one from one exploiting class to another while socialism is the taking of power by the exploited majority.  That is why it cannot be achieved by simply taking over an oppressive and exploitative mechanism and developing it into a mechanism of liberation and freedom.  But we shall come back to that.

The debate on socialist strategy and the Irish Left – Part 2

detroit-industry--north-wall-diego-riveraIn the first post I looked at those aspects of the Mendel-Gleason and O’Brien argument that I thought were broadly correct.  In this part I want to look at their other criticisms of what they see as the revolutionary approach and what I see as valid in their criticisms of what passes for revolutionary Marxism but what I believe is not necessary to it.

They state of the revolutionary approach that “destruction of the state is the order of the day, with the point of note being the sequence: first, the state, as the godfather of capital, must be taken out of the equation; only then can the working class organise, through new forms such as workers’ councils, the mass participation in public life necessary to the complete the journey to socialism.”

“Until a revolutionary situation arises in which the state can be smashed there are limits to what can be achieved on a mass scale since it is the process of revolution itself that draws the masses into public life.”

“The party that revolutionaries seek to build interacts with the masses during the revolutionary process and is the repository of the historical mission in less propitious times. But the revolutionary party itself has a different role than the workers councils and remains separate from them and pre-revolutionary mass organisations.  By separate we mean institutionally distinct, not that they never try to influence them.  Although naturally a pro-insurrectionary party would like to grow, it doesn’t aim to win a majority support for itself. . .”

“If anything the creation of permanent mass institutions becomes a fetter which prevents a revolutionary overthrow of capitalism by the treacherous actions of its bureaucratised leadership when the hour strikes.”

It is not that Mendel-Gleason and O’Brien are unaware of the dangers of bureaucratisation in the building of a socialist workers’ movement: “Clearly there is a danger that the day-to-day concerns force the grand vision into the background. Such is the risk of engaging with reality. But without being able to relate the day-to-day with the longterm project, the proponents of socialism will remain very isolated intellectuals.”

Mendel-Gleason and O’Brien also make criticisms of what they see as the anti-party and anti-political mindset of those who advocate workers’ councils but since I think this criticism is aimed mainly at anarchism and perhaps council communists I won’t take these arguments up.

If we work our way backwards through the criticisms above the first is the danger of bureaucratisation of workers’ organisations, especially through the long years (decades!) of non-revolutionary circumstances.  They are right to say that to try to seek to protect against this by avoiding the day-to-day concerns and small struggles of working people is failing to engage with reality.

We must start from where we are and not where we might want to be.  This might seem so obvious as to hardly require saying but take this from the British Socialist Workers’ Party article referred to in my last post:

“Who, after all, thinks that ‘in the present situation’ in France (or anywhere else) workers are going to try to centralise the power of their workers’ councils? The very precondition of such a development is that the ‘present situation’ has changed. The idea of revolution in a non-revolutionary situation is absurd. Every revolutionary situation has involved a split within the existing state apparatus and the existing ruling class. A revolutionary situation involves a crisis for the state, a loss of effectiveness. Without such a crisis there can be no revolution: that is part of the ABC of Marxism. It is precisely the crisis in the state which permits the emergence of a situation of ‘dual power’ and the possibility of a new form of state power conquering.”

The reformist approach to socialism is criticised by this writer for believing “the transition to socialism is to occur from the ‘present situation’ and without ‘economic collapse’.  In practice . . .  all reformists—seek(s) to construe a transition to socialism from the ‘present situation’.”

In other words revolutionary politics comes into its own when there is a revolutionary situation.  But of course how we get to this situation, how the working class is ready for it, how it has built its power and consciousness to the point where it can successfully challenge for power – all this has to be done precisely from the present situation.   After what has been decades in which there has patently not been revolutionary crises in the advanced capitalist states it is manifestly not enough to say that when such crises eventually erupt – although they will not even erupt without a prior revolutionising of working class consciousness, organisation and social power – we need to smash the capitalist state to effectively respond to the needs of such events.

Without a prior strategy to build up the power of the working class it will in all likelihood not be in a position to effectively challenge for power no matter what objective crisis capitalism undergoes.  The merit of the Mendel-Gleason and O’Brien argument is that they present this problem and it is the responsibility of Marxists to address it even if these authors use it as an argument against revolutionary destruction of the capitalist state.

There are other less crass ways of Marxists failing to engage with reality, such as demanding that campaigns or activity must meet some level of demands and therefore class consciousness that workers patently cannot rise to, at least not in current conditions or with the current level of political consciousness.  Some sections of the Left can then turn political demands not into bridges to advancing political consciousness but obstacles to action and subsequent rise in consciousness.

It is no doubt true that part of the reason for this is a belief by Marxists that the purpose of Marxism is to promote a revolutionary rupture and so seek to further this by advancing demands associated with partial struggles that if accepted by workers in such struggles can more or less quickly objectively clash with the logic of the capitalist system and therefore lead to revolutionary crisis.  The only problem of course is, as we have said above, it should be obvious that workers are many years from being in a position to perform such a role.  That many, many struggles cannot have a perspective of more or less raising the question of state power is hard to accept.

But it must be accepted because without being with the workers, no matter how backward their consciousness, socialism, real socialism, the socialism which is about the power of workers and not of the state, can by definition achieve nothing.

There are no formulas that guarantee this but it is important to dismiss formulas that guarantee against it.

Of course most left organisations claiming to be Marxist make the opposite mistake of dumbing down socialism so that it becomes an appeal to the state to accomplish what the working class is not yet willing or able to accomplish itself.

It is my view however that revolutionary politics not only exists in periods of relative class peace but must exist in such periods, if only because we have lived through decades of non-revolutionary conditions and the level of working class organisation and consciousness is now such that we cannot expect that this will be changed quickly.

Mendel-Gleason and O’Brien put forward similar ideas, without the view that revolution is necessary, but their argument is not always consistent.

Speaking of the tasks of the socialist movement now they say that: “We want to merge the socialists into mass organisations so that ideologically socialist parties exist on a truly large basis over a prolonged period of time, for decades at least, for centuries if necessary.”

But this sits uneasily with recognition of the dangers of bureaucratisation of the workers’ movement and how this weakens their case for a long term strategy of attrition: “The pressure of the wider pro-capitalist culture combined with the tendency towards increasing conservative apparatus makes the strategy of attrition a risky one. There is a race on between the socialist organisations aiming to transform capitalist society before capitalist society transforms them.”  A race lasting centuries?

Part of the problem Mendel-Gleason and O’Brien have is expressed in their description of their own strategy:

“The strategy of attrition is, therefore, compatible with a type of politics that is close to where many people already are. Its radicalism lies in its goals, not in its practice and this makes it easier to interact with non-socialists on an open basis. There is no need to hide its insurrectionary orientation because it doesn’t have one.”

The separation of goals and the practice of getting there inevitably means a failure to achieve the goals or leads to a different practice.  The view that socialism can be delivered by the state taking ownership of the economy, or redistributing wealth, does not lead to the working class achieving power but the extension of the power of the state.

Revolutionary politics therefore involves workers achieving what they can achieve by themselves.  The revolutionary content in any demand, or action or programme is the growth in the independent power and consciousness of the working class.  This obviously achieves its fullest extent when workers challenge for state power by attempting to destroy the state power wielded by the capitalist class and by creating its own.  But this does not prevent, rather it requires, years of workers learning that it is their own action that will deliver them what they want and what they need.

Building an independent trade union is more revolutionary than calling for increased taxation of the rich by the state even if some success attends the latter.  Creating a workers’ cooperative is more revolutionary than calling for the nationalisation of the banks even if banks, as they have been, are nationalised.  Workers fighting to control their own pension funds and taking them out of the hands of the bankers is more revolutionary than demanding that the state jail the corrupt bankers.  The latter happens in the US and the trial of the Anglo Irish bankers has begun.  They get jailed?  How does this advance the independent power of the working class?

We are now able to see how revolutionary politics is compatible with the long years of relative class peace as well as revolutionary crises.  We can evaluate political programmes as more or less revolutionary or reformist without being obliged to speculate on near-hand revolutionary crises.

We can say with Marx that:

“It is not a question of what this or that proletarian, or even the whole proletariat, at the moment regards as its aim. It is a question of what the proletariat is, and what, in accordance with this being, it will historically be compelled to do.”

But what the working class is and what it therefore does depends on its own existence, its own struggles and not on the actions of the state and those who inhabit it.

Much of the ‘transitional’ character of Trotsky’s transitional programme, upon which for many revolutionary politics must rest, does not connect the class struggle to the creation of an entirely new socialist mode of production.  This was something we saw in the first post and taken up in the comment to it.

That which does, the expropriation of capitalist enterprises, is wrongly bastardised into nationalisation by the capitalist state, see my earlier post.

We can now therefore look again at the description of revolutionary politics from Mendel-Gleason and O’Brien which we quoted earlier.

It is not necessary for revolutionary politics to claim that only revolution that can bring the working class into mass participation in politics.  Building workers cooperatives, trade unions and a workers’ political party are all necessary to stimulate and develop working class consciousness and organisation.  A revolution is not necessary for any of them.

It is a truism to say that only revolution expresses this participation to its fullest extent but even here the prior establishment, development and political defense of workers ownership requires certain levels and type of workers activity that political revolution is not a substitute for.  Cooperative production involves the working class learning the skills and experience of the future mode of production.

Revolutionaries do have to separately organise but this does not necessitate institutional separation in terms of a completely separate party.  Revolutionaries can seek to win a majority of the working class prior to a revolutionary situation.  It is not a fetter to win the majority of the working class to socialism; even if the majority of the working class did not actually support a revolutionary perspective.

The dangers of bureaucratisation and conservatism are real but deliberate minority status of the revolutionaries doesn’t protect either this minority or do anything to win a reformist majority.  Often of course reformist leaders will not give revolutionaries the choice of working within a larger reformist working class party but it is no answer to seek separation if revolutionaries are otherwise free to organise.

Revolutionaries do not believe that it is only after the working class has smashed the capitalist state that it can organise or we would have a classic chicken and egg situation – we can’t destroy the capitalist state until we are organised and can’t organise until we have destroyed the state.

It is in fact my argument that it is precisely the view of Mendel-Gleason and O’Brien, of attempting to use the existing state to create socialism and to organise primarily through electoralism, that restricts and limits the participation of workers in political activity and heightens the bureaucratisation of the workers’ movement.

It is obviously true that socialist revolution has not succeeded during the twentieth century but it is also true that this has been partly because the workers’ movement has been bureaucratised by and through the capitalist state that Mendel-Gleason and O’Brien think is the answer to the former failure.  And the strategy that produced this bureaucratisation was one of seeking election to office within the capitalist state when the working class was in a position only to administer capitalism not overthrow it.

In the next post I will look at the Mendel-Gleason and O’Brien view of the capitalist state some more.

The debate on socialist strategy and the Irish Left – Part 1

revolutionA couple of leading figures in the Irish Left Forum , Gavin Mendel-Gleason and James O’Brien, have written an extended piece on socialist strategy published here.   This has been subject to a ‘health warning’ and a critique on the Revolutionary Programme site here.  The latter is carried out mainly by simple reference to large quotations from Marx, Lenin and Trotsky.  The author gets away with this approach because these quotations are so apposite.

I welcome the intervention from the members of the Left Forum for the following reasons: They propose a strategy and practice that is already that of the Left groups in Ireland who claim to be Marxist.  The latter’s arguments are that the capitalist state can play a progressive role in the movement to socialism and that the main activity that workers and socialists should engage in is electoral intervention.  The left groups demands for nationalisation, increased state expenditure and taxation of the rich plus activity geared excessively to elections are evidence of this.

The difference between these groups and the Left Forum authors is that the latter put up an argument for such an approach.  Since it is common on the Left not to bother with such things this is to be welcomed.

The second reason is that the arguments put forward are important and some of them are correct.  These are not addressed in the reply noted above so I believe that some of the most important issues which they raise have not been adequately answered.

The third reason is that a debate on strategy is to be welcomed and if there is to be a debate there will be differences.  We should develop an ability to discuss them.  If we don’t or can’t then future initiatives at uniting socialists will be as unsuccessful as those in the past.

So what are the arguments and issues raised that are important and by and large correct? These are made mostly in the second part of the Mendel-Gleason and O’Brien piece.

The authors make the entirely valid point that “when capitalism tottered in September 2008 there wasn’t the slightest question that there was an alternative economic system that could step in and immediately take over.”  What this means is that we do not have an alternative, to be exact – an alternative that is both global and immediate.  We do have one that can grow and develop but not one that can challenge the capitalist system now.

It was lack of an alternative that explains why workers accepted, some even voted for, the imposition of manifestly unfair and hurtful measures in the EU referendum in Ireland in 2012.  In the post after the referendum I argued that it was precisely this lack of an alternative that was the main reason for the defeat in the austerity Treaty referendum, despite workers’ anger and frustration at what they were being asked to endorse.

is an expression of the weakness of the workers’ and socialist movement existing more or less everywhere, which Gavin Mendel-Gleason and James O’Brien also note. Their argument is that the perspective of a workers’ revolution to overthrow the capitalist state and usher in socialism is mistaken.

In making this argument they make some valid observations. They finish their analysis by saying, although they could have started it from here, that “Our short-term tasks do not involve overthrowing capitalism — a mode of production cannot even be overthrown. . .”  By this I assume that they mean that the capitalist mode of production cannot be overthrown without it being replaced (unless we envisage ruination as Marx put it in The Communist Manifesto) and it is the latter that is important, which might seem an obvious point except the question arises – replaced by what?

In the model of socialist revolution this is usually thought to mean replaced by ownership of the means of production by a workers’ state.  But states are just people organised in a certain way so how is this group of people to know how to run an economy and do so better than the capitalists if they have never done it before, have no practice and no plan to do so?

They have no plan to do so because the typical scenario for revolution is that it is a revolt against attacks on workers’ rights and not a conscious offensive to change the mode of production, which rather simply appears as a by-product of the need to smash the capitalist state through a mass strike and the creation of workers’ councils.

Some advocates of revolution accept this argument and therefore accept that socialist revolution will lead to economic collapse.  And although of course this is only temporary, a bit like a loss of form where your football team drops a few points – before going on to win the league, the prospect seems far from one that will sell socialism to most workers.  In fact it sometimes seems entirely light-headed and the product of a mentality entirely alien to most workers.

Take this example from the Socialist Workers Party in Britain. The writer says this – “we must be clear: a transition to socialism, to the complete reorganisation of society by the working class, cannot occur without ‘economic collapse’.  A socialist revolution involves ‘economic collapse’: the problem is to carry it through, decisively, so that economic recovery on a new basis can be started immediately.”

Let’s be very clear – if the socialist revolution leads to economic collapse it calls into question the readiness of the working class to be the new ruling class in the first place since it obviously lacks the power to prevent collapse and if this is the case what guarantees can there be that it would be capable of reversing it?  Especially “immediately”.

Mendel-Gleason and O’Brien state correctly that “getting past capitalism is an incredibly difficult problem,”  “At the outbreak of mass protest or revolution this is not a problem since the issue presents itself to the opposition in a simple way, e.g. “down with the regime”, “against the 1%”, “they all must go” (Argentina 2001). Sooner or later, however, it becomes necessary to move beyond a simple formulation of the problem and to advance structural solutions. “

“This transformation to socialism can only come from the working class having a pre-existing organisational capacity to take advantage of these developments, especially in the most advanced countries, of which the United States is currently the most important. That capacity takes decades to build up and it’s not a process that can be rushed or circumvented by some clever shortcuts and nor should it be.” “Unfortunately, it’s simply not possible to get big and capable institutions in one go.”

This seems obviously true and it is the necessity to build up the working class movement to such a position to effect revolution that is the task. Unfortunately this is not the task that Mendel-Gleason and O’Brien seek to solve by the strategy of increasing the power of the working class for they see the above problem as one that means that a revolutionary strategy is not appropriate.

One reason they posit for this is that the division of labour within modern economies has so developed that the intricate coordination necessary cannot arise from what is an essentially spontaneous process of revolution.  This view might therefore legitimately say that simply trying to make a virtue of this fact by admitting the inevitability of economic collapse also involves tacit admission of the dangers they see in revolution.

These include diminishing enthusiasm of the masses, because their revolutionary fervour is of recent, and therefore limited, vintage  since otherwise we would have had decades of a revolutionary situation, which is hardly credible.  This would be exacerbated by the drop in living standards consequent on ‘economic collapse’ and a similar consequential fall in political support for the revolutionary process.

These seem reasonable objections and it is up to those who defend and argue positively for the revolutionary overthrow of the capitalist state to present their strategy in such way that it plausibly answers this criticism. Before we look at this aspect however we should note other correct arguments advanced by Mendel-Gleason and O’Brien.

They rightly argue that there is “no shortcut to building up mass, popular organisations” and they are guilty only of exaggeration when they say that “in the absence of mass socialist-labour institutions workers’ capacity for action is restricted to protest and destruction.”

Protest demonstrations are the staple of left group activity and their electoral interventions are also a pure protest since they nowhere claim that they will form part of a government if elected. Mendel-Gleason and O’Brien argue that this is not enough “for the project of raising a socialist mode of production to dominance, via co-ops and labour unions.”

It is on building up this alternative that they concentrate their argument, pointing out the need to build specifically working class organisations , as the socialist movement used to do before the functions these organisations performed were taken over by the state and the majority of socialists took to believing that state action was somehow equivalent or substitute for working class self-activity. They point out the need for working class mass media and to the early history of the German Social Democratic Party and its ‘eco-system’ of social clubs, publications and summer camps etc.

They point out the failures of the Left’s favourite tactic of ‘single-issue’ campaigns which, besides usually being sectarian and right-ward looking fronts of one particular organisation, are incapable of getting beyond a single issue, incapable of broader radicalisation “so that when that campaign is over, irrespective of whether it has ended in victory or defeat, the next campaign must start from the same low basis.” These campaigns are structurally incapable of persisting through time and of achieving the cumulative growth of membership, organisation and consciousness on which alone a truly mass socialist working class movement can be developed

Some remarks on the internal organisation of the socialist movement are also in my view correct although not because of any original insight by Mendel-Gleason and O’Brien or myself.  Thus there is a need to fight for socialism within the working class movement of party, unions and cooperatives using the weapon of “freedom to organise and the freedom to articulate criticism and dissent.”  The petty bourgeois character of much of the left organisations is revealed by their inability to organise democratically.

So what is essentially valid in the argument is that while destruction of the capitalist state might solve the problem of armed reaction by that state (which is no small issue!) “it doesn’t . . . solve the problem of being able to transition to a socialist mode of production.” In the next part of this post I will look at what Mendel-Gleason and O’Brien have to say about the state itself.

Arguments against workers’ cooperatives: the Myth of Mondragon Part 1

9780791430040Perhaps the most well-known workers’ cooperative is the Mondragon Group based in the Basque country, famous not only because of its success and longevity but because of its involvement in manufacturing.  Its approach has been recognised by many around the world as an alternative to the capitalist corporation, resulting in numerous visits and studies of its performance and operation from those keen to learn its lessons and apply them at home.  For Marxists it would seem practical demonstration of the claim that capitalists aren’t needed and workers can successfully organise production in a fairer and more equitable way and without abandoning efficiency or the making of goods that other workers would like to buy.  I therefore want to look at the arguments in a book that says that this view is wrong and is based on an understanding of the Mondragon story that is mistaken because that story is a myth.[i]

The myth arises, says the author, by de-contextualising the cooperative from its social and political environment and from its historical origins and development.  The workers of Mondragon are not more class conscious but less.  She quotes approvingly the view, expressed in a separate study of a particular group of workers’ class position, that political and ideological dimensions are often more significant for actual class position than are strict property relations.  When we adopt this perspective things look quite different.  The author presents general arguments around the question of workers’ cooperatives and a particular analysis of Mondragon.  She does so ‘from a working-class perspective.’

I am not knowledgeable enough to make judgements on the particular arguments about the Basque country but I will comment on the evidence for her claims that she presents and the general arguments presented on workers’ ownership within capitalism.

In my view her first mistake is to identify workers cooperatives as part of a spectrum of labour-management cooperation, ranging from quality circles, team organisation, works councils and employee share ownership programmes all the way to workers’ ownership.  All are designed not only to make workers obey management but to make them want to obey.  They involve various mechanisms of labour management cooperation and compare unfavourably with the conflict model that involves militant trade unions facing up to management and representing the workers.

Her mistake is to see workers’ ownership as a model of capital-labour cooperation.  Far from a mechanism for cooperation with management and capitalists it is a model for workers cooperating with each other and in which capitalists, at least within the firm, do not exist.  Its logic is to extend cooperation among the working class and in so doing create the grounds on which a new socialist society can be built and there are no capitalists anywhere.

Of course there is still a management within the cooperative and the model involves various mechanisms for shop-floor worker and management cooperation but it is the workers themselves who can appoint, and if so devised, replace management because it is the workers who are the owners.  Management is accountable to the owners who are the workers.  In a capitalist firm workers are accountable to management.

Of course Kasmir is aware of this but at places within her book she presents the management of Mondragon as virtually a separate class from workers on the shop floor.  As an anthropologist she is sensitive to the differences between the daily lives of workers and managers even where the income differences are relatively small compared to most capitalist enterprises. She sees these relatively small but significant differences in income reflected outside the workplace also reflected in knowledge, responsibility and power within the cooperative.  She notes that it is the cooperative’s managers who are most enthusiastic about the cooperative and that it is they who invariably welcome visitors and present the views of the cooperative’s members to outsiders.

It is undoubtedly true that workers are sensitive to even relatively small differences in income, especially in contexts in which equality is held as a primary virtue and objective.  It was just such dissonance between claims and reality that led to such cynicism among workers in the Stalinist regimes in Eastern Europe.  While workers were supposed to be in power and equality reigned, in the reality that everyone lived and saw the bureaucracy maintained exclusive power and defended all the material privileges that went with it.

It is not the case however that Mondragon is a little bit of Stalinism in the Basque country or economy of the Spanish State.  There is no attempt made to claim this in the book.  In fact the book records that repeated attempts by management to increase the allowed differential between management and shop floor pay have been repeatedly voted down by workers.  Workers have the power to limit the pay of management.  What capitalist firm allows that?  Read the financial press and it is full of complaints that even capitalist shareholders have difficulty doing this in big corporations.  How many votes did the Stalinist bureaucracies in Eastern Europe ever allow themselves to lose?  Unlike in these states the Mondragon cooperative does not outlaw political activity and the author records the actions of a small group of politicised workers who campaigned actively against the management proposal and succeeded.

The author however also reports that workers do not feel the strong identification with the cooperative that might be assumed.  She demonstrates this through a survey in which she is able to compare the attitudes of workers in a factory within the Mondragon Group to those in a similar privately owned one.  These results have been referred to on a number of occasions by people on the Left as justification for opposition to cooperatives, here for example.

Asked in the Clima cooperative whether ‘in your job, do you feel that you are working as if the firm is yours?’ 23 said yes (40 per cent) and 33 said no while in the privately owned Mayc 10 said yes (28 per cent) and 25 said no.  If technicians and managers are excluded the difference between the two almost disappears with 6 in Clima and 5 in Mayc agreeing.  In both therefore the majority denied feeling that they were working as if the firm was theirs.

Asked if they ‘feel that you are part of the firm?’ 34 agreed in Clima and 21 said no while 23 in Mayc said yes and 13 said no.  While a majority in both therefore agreed that they felt part of the firm a higher percentage agreed in the privately owned firm (64 per cent) than in the cooperative (59 per cent).  Again the feeling was stronger among managers within the cooperative.

Cooperative workers did however report that they felt solidarity with their co-workers, 97 per cent in Clima compared to 86 per cent in privately owned Mayc, while 53 per cent of Clima workers compared to 56 per cent of the private Mayc reported that they had participated in a solidarity strike.  The total for the Clima cooperative included 14 managers at all levels.  The author notes that age played a big part in the answer given the decline of such strikes.

To the question ‘is there any competition over salaries/job indexes?’ (indexes denote salary, responsibility and skill levels) 72 per cent in the cooperative said yes while 56 per cent in the private firm said yes.  When asked ‘is there competition for jobs?’ 79 per cent in the cooperative Clima said yes while 56 per cent in privately owned Mayc also said yes.

The author reports that in neither firms did the workers express strong confidence in the organs that represented them – the social council in the Clima cooperative and the workers’ council in Mayc.  Managers voiced stronger confidence in Clima.  Asked if trade union syndicates should play a role in the cooperative 13 manual workers said yes and 11 said no.  Asked if they needed them to support them and assist in getting expert advice to feed into alternative production and business plans 15 manual workers agreed.  Nevertheless though half of the sample agreed to trade union syndicates playing a role, and although individual membership was allowed while syndicate activity was not, only a handful of workers in 1990 were actually members.

Only six co-operators said they would prefer to work in a private firm.  Of those who did not want to change one said “but I would like it if things changed a lot in the cooperatives.”   Another, explaining his preference for a cooperative, said “because in theory we are worker-owners and the decisions are made by the manager as well as the guy who sweeps the floor.”

Finally asked ‘what social class are you?’ 25 per cent of manual workers in the private Mayc said they were middle class while 70 per cent in the Clima cooperative said they were middle class.  It is an argument of Kasmir that there is a tendency for cooperative workers to see themselves as middle class although she says that while this may be the case these workers see clear distinctions between themselves and their cooperative managers.

So what are we to make of these responses?  First we should note that the evidence is not clear cut and sometimes appears contradictory.  So more co-operators than private sector employees felt that they were working as if the firm was theirs, while a higher percentage of workers in the private firm agreed that they felt part of the firm.  More co-operators viewed themselves as middle class – 70 per cent -yet 97 per cent felt solidarity with their fellow workers.  Like all surveys we might not interpret the questions correctly never mind the answers.  Is there more competition for jobs in the cooperative and if there was was this a good thing rather than a bad thing – a sign of the openness to individual progress and a less rigid and restrictive job structure?

The most immediate problem however is that the survey was not representative.  In other words no robust conclusions can be drawn from it.  Only 58 cooperative workers answered the survey, which was only 19 per cent of the workforce.  Only 36 or 6 per cent of the private firm answered the survey.  The cooperative survey was also not representative because it contained a higher number of new recruits to the Clima cooperative, which might explain a lower identification with it.  Cooperative workers were also more likely to skip questions and write in their own answers and the author speculates that this might be evidence of the ‘culture of dialogue’ which exists in the cooperative.

The author is keen to point to the differences of response from manual workers and the technicians and managers, with the latter being more positive about the cooperative.  As we have seen, she endorses the view that ideological and political views might be more important than class position defined by the relations of production.  It is more than probable however, given the income differentials permitted in the cooperative, that these technicians and most managers were simply better paid workers and their views cannot be reduced on that account.  In the present context it would be rather circular to claim that particular ideological views are working class (less enthusiasm for cooperatives) than others (endorsement of workers’ ownership) without some argument as to why objectively cooperatives are not an expression of working class power inimical to capitalism.  To make such a case one would inevitably have to refer to relations of production but this is the approach the author appears to reject.

It would be a mistake however to simply reject and ignore the finding s of the survey because it is unrepresentative, although one could quite legitimately do this.  The author considers the survey important because its findings are consistent with the more informal and anecdotal evidence she has collected in her stays in Mondragon, including her conversations with some of the local people and review of the political debate among the left on the Mondragon experience.

But the same sort of criticism can be made of her evidence here as well.  So she refers to a demonstration in Mondragon over the annual province-wide labour contract for the metal sector.  This involved a ritualistic demonstration and a short strike as sometimes both the workers and business owners “simply go through the motions so that the structure of the contest does not break down.  Thus the strike is not always a genuine struggle between labour and owners but a ritual of class solidarity.”(page 169)

However this year, 1990, only 60 people turned up; many workers did not vote on whether to have a strike; many who did vote voted against one; the demonstration was short, was over in half an hour and “was disappointing for all who participated.”  It obviously graphically demonstrated the overall decline in workers’ struggle in the town and more widely in the Basque country and the Spanish State.  Given all this there is no big point to be made in noting that not one cooperative worker took part in the demonstration (and the metal contract only indirectly impacted on cooperative workers’ pay).  The author notes that co-operators always made some showing in the past.

The argument of the author however is that the cooperative model was a conscious stratagem to weaken the class combativity of the Mondragon working class – this argument, and that the cooperatives divide the working class, will be reviewed in the next post.  At this point however it is worthwhile accepting the possibility that the workers in Mondragon are not fully engaged in the management of the cooperative, might be apathetic and might not have the enthusiasm that we would wish for.

All this could be true and it would not at all invalidate the struggle for workers’ ownership as a crucial and central part of the struggle against capitalism and for a new socialist society.  Only if one believed that the weight of capitalist society could be lifted from workers’ shoulders by the still limited development of cooperatives could it be possible to be either surprised or deflated that the class consciousness of cooperatives workers has not risen to the requirements of socialist revolution.

It should be recalled that socialist revolution is not just the product of such consciousness but its creation and realisation.  Neither is such revolution reducible or possible as a one-off event but is the culmination of long and varied experience.  Since workers ownership and control of the whole of the productive powers of society is central to socialism it should not be a surprise that relatively early and limited steps towards this do not reflect in purity the future that socialists seek.

The Mondragon experience proves that cooperative workers and their political consciousness might not leap beyond that of their fellow workers.  The evidence of the book under review however is that the class consciousness and combativity of the Mondragon workers was not the cause of the downturn in class struggle in the Basque country and Spain but was simply a reflection of it.

Unlike workers in private firms however cooperative workers maintain ownership of their workplace even during such a downturn.  They therefore maintain an economic and social power which they can build upon in the future.  Their example lives on and they have at hand much greater resources to call upon when it is a more opportune time to advance.  All this compares very favourably with the more or less unrestricted powers of private owners and managers in firms stripped of trade unions or in which unions are weaker, thoroughly bureaucratised or in which they have become company poodles.  None of these rather common scenarios invalidates the correctness of continuing to fight for union organisation as part of the fight for socialism.

Perhaps the evidence of this book illustrates that greater trade union involvement might help raise the participation of workers in running the cooperative or that more open and structured involvement of political groups might achieve the same.  The point is that the possibility of this only arises where workers already own their workplace.

 Forward to part 2


[i] ‘The Myth of Mondragon. Cooperatives, Politics, and Working-Class Life in a Basque Town’, Sharryn Kasmir, State University of New York Press.

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

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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.

Employee ownership and capitalism

{3E6643C4-0E2F-4C4C-B00C-DB42B68D2316}Img100Beyond the Corporation: Humanity Working, David Erdal, The Bodley Head, London, 2011.

The author of this book has an unusual pedigree.  He was born into a family which owned its own business from the year Charles Darwin was born, in 1809.  As a child he did not lack for money and joined the firm in 1977, at which time 1,500 people were employed in the company.  In 1985 he became its effective Chief Executive Officer.  In between he had led a rather different life, getting a job as an unskilled labourer on a London building site after leaving university

Through this real life experience he leant what thousands of Professors of economics are not – that it is employee’s work that creates wealth – and that the key to a company’s performance is leadership and commitment; leadership and commitment from everyone in the organisation.  That leadership is important should be readily understood by socialists.

He is therefore a strong advocate of employee ownership and the book presents his own experience of turning his family business into a workers’ cooperative and his own views on the benefits of such ownership.  He notes that because workers are so used to being ignored and exploited even the most minimal change, such as being allowed to own shares in the company, have positive effects in boosting productivity and performance.  He also notes however that such schemes transfer no real influence.  He is therefore clear that what is necessary is ownership because without ownership there is no real control.

Employee owned businesses do better because their workers are better trained, contribute more to the business and are more adaptable to change.  They generally do not suffer from underinvestment, do not lack ‘entrepreneurial’ spirit and do not exhibit shirking as workers monitor each other’s work effort.  Academic studies show them to be more productive and, while business problems are not solved by employee ownership in itself, or prevent strategic mistakes that may threaten the company’s existence, employee ownership will help the company survive longer.  If you own something you will look after it better.

He contrasts this with the views of traditional economists who, with no evidence, in fact against the evidence, claim that employee ownership will witness workers extract cash at the expense of the long term health of the business, take too long to make decisions, will see them avoid difficult decisions and witness the performance of  their business decline

In contrast he claims that the participation of everyone in decision making, and everyone being equally affected by the decisions made, makes for better decisions.

In his quest to turn the family company into a workers’ cooperative he was repeatedly told by finance advisors and other professionals that this was not a good idea.  The Market is always right – by definition.

He quotes one supporter of employee ownership who complains that workers normally have none of the rights associated with ownership, such as information, participation and control, and that while capitalism is good at creating capital, it is lousy at creating capitalists.

The view that cooperatives make capitalists of workers is one also heard from trade unions and argued as a reason to oppose workers’ ownership.  The author provides many examples of real employee ownership where workers have struggled with issues of productivity and competitiveness and where jobs have had to be cut because of threats of wholesale closure.

However the view that the Market is inimical to workers’ cooperatives is interesting because  in strict logic this is obviously not the case while it is also not the view most widespread on the Left, which is that workers’ cooperatives are simply not an alternative to capitalism because the market does not disappear and therefore capitalism does not disappear.

But it is not at all that simple and the hostility of some defenders of the market to worker owned companies is perfectly rational.

Irrespective of this the author notes that every generation throws up experiments with workers’ ownership but that most often this is not the result of the initiative of the workers themselves but arises from existing owners, from unusual individuals who stand against prevailing orthodoxy.  Who, from ideals of fairness, from appreciation of the contribution made to the company by workers, or realisation that the company can do better under their ownership, seek to transform ownership of their business.

Among the many issues arising from the idea of employee ownership, access to finance is often held up as the insuperable barrier to a business owned by those who work in it.  However the author notes that millions of small businesses do get access to finance, that most companies finance themselves from their own resources or can get started on the basis of the business itself, with funding based on sound business plans or backed by existing assets.  Or, in the case of the Mondragon cooperative in the Basque country, the workers can set up their own bank to finance their other cooperative initiatives.

This he contrasts favourably with the massive funding of mergers and acquisitions by private companies, which have a consistent record of failure, and the funding of property and other asset bubbles.  Mainstream dismissals of the viability and efficiency of workers’ cooperatives ignore the actual history and experience of capitalism as opposed to the mythical equilibrium properties of mathematical models of the market that exist nowhere outside of the models.

The massive increase of executive pay is ridiculed as an example that explodes the glib justifications of the market – that high pay for those at the top is simply the outcome of the interplay of supply and demand.  The demand for executives has not increased exponentially in line with pay but demand, fuelled by the cult of the capitalist exhibited in the growth of business schools and the MBA, alongside TV programmes such as ‘Dragon’s Den’ and ‘The Apprentice’, has seen supply multiply.  So why has the price risen?

Even if it could be argued that the demand for executives lies behind massive increased remuneration (to use the prevailing argot) the market is then supposed to increase supply to drive down prices to an efficient level.  Why hasn’t it?  Is it not working or is it rather that this is not how it actually works?

In the race to justify the rampant growth of inequality we now read about the ‘winner-takes-all’ society, which states baldly that market competition rewards those who win not those who come second or third or the rest.  The problem with this of course is that it is contradicted by the reality in which executive failure is still handsomely rewarded.  More worryingly for its proponents it contradicts the claim that the market rewards efficiency and is fair even minimally.

The author rejects many of the fashionable corporate claims.  For him employee ownership makes companies work better and their workers lead happier lives.  The contract of employment, which a worker signs, removes his right to his own product and pretends that he or she is a thing that can be rented.  Through case studies he argues that ownership make workers feel different – just as capitalism says it is supposed to!  But, he asks, why should such an effect be restricted to a few?

He has had enough experience to acknowledge the difficulties, not just of creating cooperatives but of running them.  How do you ensure workers’ actual as opposed to nominal participation and how do you deal with sometimes unrealistic expectations?  How do you overcome apathy among the workers?  After all, it is necessary not just to limit and control power exercised at the top but also necessary to ensure that it is wielded to effect at the bottom.

He addresses these questions and gives some practical answers, such as ownership being held collectively and not individually by particular workers.  This, he claims, has been the mechanism that ensures longevity of cooperative enterprises and obstructs private capital inserting itself and gaining control.  He acknowledges however that there is no obvious answer to what he calls the corporate governance problem.

It is exactly this question that is addressed by this recent blog post.  It is also only a Marxist approach that can address some of the apparently incongruous workings of capitalism that the author points up, such as why does it limit ownership of capital and not spread it around?

For a Marxist the obvious reason that capitalism does not encourage workers’ ownership is that by restricting such ownership capital compels workers to sell their labour power to those that do own capital and impels them to work on their behalf.  If all production was owned by workers then clearly an individual capitalist would be unable to compel anyone to work for them.

If all production was owned by the workers then equally clearly such production would be geared to what the workers wanted to produce and not to what capitalists believe would make them the most profit.  On both accounts production for profit would end.  Capitalists could find no one to provide the unpaid labour on which profit is based and the enterprises owned by the workers would have no incentive to pursue wasteful or aggressive competition aimed at forcing other enterprises out of business.  In fact they would have every incentive to collaborate in order produce in a way that met their collective needs.

When ownership becomes collective workers will feel differently but this simply demonstrates the truth of Marx’s claim that capital is not a thing but a relationship between capitalists and workers in which the unpaid labour of the latter expands the capital belonging to the former.  When workers own all the so-called capital it ceases to be a relationship between an owner and a worker, between an exploiter and exploited, and ceases to be capital.  When ‘capital’ is owned by everyone it ceases to be owned by anyone in particular so ceases to be capital.  This is why, unrealised by the author, the extension of workers ownership would spell not the expansion of capitalism but its ending.

Again and again the author reflects on how difficult it can sometimes be to get workers to think and act as owners of the enterprises they work in.   For Marxists this is indeed a big problem and is what we mean by saying that we need a revolution to change things, including changing the workers themselves.  Because a revolution is about transforming the lives of the working majority, which they can only do themselves, this includes transforming the vast amount of their lives they spend at work.  Probably unlike the author, we believe there are all sorts of obstacles and impediments put in workers way to gaining control of production, impediments that require workers taking political action to remove.

Production is only one aspect of how society works and attempting to take control of it requires ultimately taking control of the rest of society as well.  Taking control of society as a whole also reinforces the activity of workers control within the workplace.  It is also the Marxist case that ultimately no permanent and stable workers ownership or control can succeed unless the workers also control the state to defend such ownership.

There is therefore a real contradiction between workers cooperatives and capitalism, pace the author of this book, and equally no contradiction between cooperative production and revolution, pace the left opponents of workers’ ownership.

To be continued

Russell Brand and Revolution

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I was listening to BBC Radio 4 on the headphones on my way home from work last night when three Westminster politicians were asked about Russell Brand’s interview with Jeremy Paxman.  The link shows it has had nearly 9 million hits, just a few million more than this blog.  This is why Radio 4 was covering it and why it is important.

Is it another illustration of the celebrity culture that colonises everything?  This is the claim of some of the derisive dismissal of Brand’s rantings by the rest of the media who, at least the ones I’ve read, have slagged him off as a hypocrite.  An obvious example of ad hominem argument or shooting the messenger, not that it’s always wrong to shoot the messenger when the message is intolerable.  In this respect I’m reminded of the opening scene of Gladiator when the Germanic tribes respond to the demand to surrender by the Roman legions by throwing the severed head of the messenger on the ground in front of their massed ranks.

The problem of course is that shooting the messenger doesn’t deal with the message as the Germanic tribes discovered.  It might be claimed Brand doesn’t have an argument.  But read his New Statesman article and he does.

It might be dismissed as primitive or naïve but a better word is elemental and he does have more than a few good lines.  He makes a case.  It’s not the sort you will read on this blog but this blog doesn’t pretend to have the only or the best or the most effective voice for revolutionary change.  It aspires to encourage the recovery of Marxism and its application to the practical political programme of socialists.  It hopes that whoever thinks this is a reasonable objective to pursue will contribute to it and write their own posts.

So what if Brand’s surprising political commitment lights up the sky like a meteor and crashes and burns to earth?  What if he is a one-hit wonder?  When the rest of us are unable to get a gig a one-hit wonder is something to be.

Has his outburst reduced the credibility of our cause?  Or given it a little more light? Perhaps one more point of departure to argue for it and to advance it?

He is obviously very aware of the brickbats he would get for his ‘champagne socialist’ position and his trenchant, and in some ways reasonable, response to this is itself rather honest compared to the carefully constructed insincerity of politician’s continual hypocrisy.  It’s not as if he’s a champagne socialist in the way that that other celebrity in the new is – ‘Sir’ Alex Ferguson – with his Icumfigovan sign in his office, his hobnobbing with millionaires and his advice on man management to Tony Bliar. Nevertheless Brand has a brand problem – for example my partner thinks he’s a prat and she is very rarely wrong in such judgements.

russell brand revolution header

Brand can be criticised as anti-political, with his calls for people not to vote, but he is not stupid and he puts forward a case why we ‘should not encourage them’.  He also puts well the idea that apathy is more accessible than anger to all the shit that people have to put up with from politicians and the system they pimp.  Compared to many on the left, who claim there is a crisis of working class representation, that is we don’t have the right politicians in parliament to represent us, the radical critique of all politicians who do represent us is refreshing.

Not because we haven’t heard it before, in fact as Marxists we invented the revolutionary critique of bureaucratic ‘representation’ of the working class, but because we never see it on television.  We are extremists who never get heard but a little bit of a hearing for revolution makes us a little bit less extreme in the sense we are able to register in political debate a little bit more.

Listening to the feeble and self-serving helpings of cant from the Tory, Labour and Liberal politicians last night on the radio shows how even such a minor assault on their system from someone with a shred of credibility can so easily expose the defenders of the status quo.  Now Radio 4 reports the disillusionment of Paxman himself with the politics on offer in Britain. For Ireland multiply that lack of alternative by the number of Euros given to bailout the banks.

Above all, when pressed for what he wants as an alternative Brand calls for socialism and for revolution.  This is a darned sight more than some on the left do when faced with such a question.  The next question is that of the child – but how do we get a revolution?  You can ague all you like that Brand hasn’t much to say about this that seems practical but what is the message of the so-called revolutionary left?

As I have posted many times, the left that claims to be Marxist asks the state to extend its power through extra spending, taxation and through nationalisation while simultaneously believing, but not having the courage to say so in front of the workers, that this same state should be smashed in a revolution.

Let’s not pretend Brand is an advanced political thinker whose views we should instantly embrace.  He may be on a ‘messiah world tour’ but he’s still more a very naughty boy than a genuine Messiah.

Brandism is hardly going to succeed Marxism, Leninism and Trotskyism.  It’s not a practical guide but an emotional and reasoned outburst.  It’s not even an inarticulate expression of youth rebellion.  He’s 38 and very articulate.  We’re not obliged to defend his every word or even every tenth one but his avalanche of words creates an impression – there is something radically wrong with the world we inhabit.  Very, very wrong.

It would be easy to criticise what he says for all sorts of reasons, from his apparent attitude to women to his lack of political strategy.  But it is precisely his political limits that creates a focus on the key message that he is held to be delivering – opposition to the venality of the present system, the need for a revolution.

I’ve just finished reading a book – ‘A Marxist History of the World’, written by a member of a British left organisation.  It also makes the argument that what is needed is a socialist revolution.  The French revolution of 1789, the revolutions of 1830 and 1848; the 1917 revolution in Russia and revolutionary wave in Europe up to 1923, the Spanish revolution in 1936, the Hungarian revolution of 1956; the French general strike in 1968; the Iranian revolution of 1979; the overthrow of Stalinism after 1989 and the recent Arab revolutions, are all held up to show its possibility.  The last 100 years has been ‘pregnant with revolution’ readers are told.  We face Armageddon reminiscent of that foretold by the bible –with the appearance of the four horsemen of the apocalypse.  The stakes have never been higher with a crisis of capitalism the deepest and most intractable ever.

This to me is no more coherent than Russell Brand’s interview but without a few of the redeeming features of the latter.

The list of revolutions includes only one successful socialist one – 1917 – and it was strangled into Stalinism relatively quickly.  We will, rather shortly, be commemorating the 100th anniversary of this revolution.

The point is not that the objective of revolution should be abandoned.  Revolution is not required to achieve a certain state of affairs – socialism – revolution is that state of affairs, which is the ruling of society by its majority.

Revolution on the other hand is seen by many on the left as one strategy to achieve something as opposed to alternative reformist ones – such as voting and elections to parliament – which are said not to be realistic.  Revolution is therefore seen as a cataclysmic single event rather than as a process, one that begins and grows and that moves towards a qualitative rupture that destroys the old state and creates a new one based on the working majority of society.

The road to socialism is not growing state control but increasing workers’ control of every aspect of their lives through incrementally reducing the power of the capitalist class and its state in preparation for the final battle.  I have tried to explain this a little bit on this blog.

When a public intervention leads to Radio 4 interviewers pursuing their politician guests with the question “but why not revolution?” this intervention deserves some support.

Why have the Irish not Revolted? Part III

1913_LOCKOUT_ADVERT-1

The weakness of Irish workers resistance to austerity cannot be explained as a supposed result of this austerity having less effect than in other countries.  We have just witnessed the eighth austerity budget, the previous seven having cumulatively accounted for 17 per cent of current Gross Domestic Product.

The budget deficit in 2013 is higher than that of Spain, Portugal or Greece; there is at least another austerity budget pencilled in and the State debt is continuing to rise.  Next to nothing of the debt taken on in order to bail out the banks has been paid back and these banks are still saddled with mortgage customers who can’t pay their loans back.  Were the much trumpeted rebound of the property market to be anything substantial the banks would be repossessing and selling the vacated properties.  They’re not.

In other words the crisis isn’t over and neither is austerity, although faint hope that it is coming to an end plays one part in explaining latterly the weakness of protest and resistance.

The answer to the problem lies in the weakness of the Irish working class itself.  For Marx capitalism, in creating the working class, created its grave digger.  The nature of a particular capitalism goes a long way to explaining the nature of a particular working class and the weakness of the Irish working class is a reflection of the weakness of Irish capitalism.

An objection might be made to this that the Russian working class was the most ideologically advanced working class a century ago while Russian capitalism was weak. On the other hand capitalism in the United States has been the most advanced for a century or more but its working class is a byword for exceptional weakness.

The uneven and combined development of both societies has gone a long way to explaining this apparent anomaly and it is beyond the scope of this post to compare and contrast the development of the US and Russian socialist movements.  Over 100 years ago Karl Kautsky wrote on this question in ‘The American Worker’, relatively recently republished as part of a symposium in the journal ‘Historical Materialism’.

What we can say here in respect of Ireland is that its uneven historical development both inside the country, and as a region within the wider British economy, mainly as a reserve of agricultural production and labour power, has accounted for its historical weakness.

I was reminded of this nearly a year ago when I received a United Left Alliance (ULA) email newsletter what presented a series of proposed meetings to be organised by the ULA against austerity.  These meetings were to deal with different aspects of the issue such as the economy, health services etc.  In Russia a noteworthy feature of political and intellectual life a hundred years ago was the strength, vibrancy and hegemony of Marxism such that it dominated even the thinking of Russian liberals.

How different a situation from Ireland!  The speakers proposed for the ULA list of meetings demonstrated the reverse – the domination of Irish socialism by liberalism.  We can see this in everything from the Left’s opportunist search for unity with organisations that are far from working class in political character, from the Greens to Sinn Fein and populist independents, to their Keynesian economic alternative that relies on the goodness of the liberal capitalist state –taxing the rich and nationalising industry.

This of course feeds into the mis-education of workers who, while they may not reject the ULA’s state-reformism from a revolutionary perspective, have a healthy distrust of the really existing bureaucratic state they know.  And they have a healthy scepticism that this state will create a new economy and tax the rich when the most widespread view of politics and government is that the politicians and the state mandarins are only in it for themselves.

Acquaintance with the occupational training by FÁS and the decades-long state attitude to tax dodging by the elite has convinced workers that the state is rotten; a source of corruption, incompetence and of patronage which moves according to who you know or who you can lobby or to whom you can provide supplication.  Meanwhile Irish liberals bemoan the population’s lack of civic virtue and the Left feeds it nonsense about the capitalist state as the solution to austerity and poverty.

Lack of a response to austerity is in small part a result of this but more significantly a long result of Irish economic development and the working class and its movement, which it has produced.  The weakness of the working class movement is therefore of long vintage in Ireland.  The outstanding figure of Connolly, who remains a giant of working class history, and the courage of the 1913 lock-out, are today appropriated by the bureaucrats of ICTU and the Labour Party wielders of the austerity knife.  Where is the movement that can legitimately claim this heritage?

Connolly and 1913 shine so brightly because the working class movement has for most of Irish history been subordinated to other forces.  While capitalist relations developed early in Ireland and industrialisation grew beside that in Britain it was much reduced by its greater development in the latter so that by and large it became limited to the north-east of the country.  There a relatively compact and developed working class developed but the fatal disease affecting it has long been known.  It could therefore play no wider progressive leadership role for the rest of the country

There the creation of a reserve of agricultural production for Britain created the conditions for the famine in the middle of the 19th century that devastated the country and led to reactionary social and political consequences everywhere.

First were the direct effects of death and emigration which robbed the country of a growing domestic market on which capitalist production could grow.

Then there was its effect on the land question that provided the social basis of Irish nationalism but which, because of the famine and its effects, including emigration, could be solved without a wider popular alliance of forces that included the working class.  The Irish nationalist movement was thus alternately dominated by reactionary bourgeois forces heavily influenced by the Catholic Church or a republican tradition that had its most democratic leadership in the United Irishmen ripped from it at the end of the 18th century through severe repression and sectarianism.  Republicanism became a petty bourgeois movement largely indifferent if not hostile to working class politics when at its strongest.

It did develop a wing which looked at the working class as ‘the men of no property’ but only so that they would help win national freedom.  This grew into a socialist republican tradition but this has also looked to the working class as the force for national freedom.  Where in other countries the socialist movement has grown through leading a fight for democracy, in Ireland this has never happened.  The left wing of the democratic movement has on the other hand appropriated radicalism that might in different circumstances have flowed into the working class movement.

Instead of a socialist movement that has taken on board the tasks highlighted by republicanism we have had a republican movement with left wing views tagged on but which has more often than not simply not understood what a socialist programme is, although sadly they are not alone in this.  Thus left wing opinions have abounded in this part of the republican movement but opinions have substituted for programme.  Marxism, genuine Marxism, and not its bastard imitation Stalinism, has been almost non-existent.  So many of the most radical spirits in Ireland have left the country or been absorbed in the dead end of republican politics.

The famine also resulted in the growth of the enormous power of the Catholic Church.  It is commonplace to at least partly account for the weakness of the working class movement in Ireland by pointing to the sectarian division of the class.  This division was hardened and strengthened tremendously by partition, creating an additional divide between workers in the North and those in the South, on top of the religious divide.

What is more and more apparent however is not simply the effects of the division itself, in preventing unity across state jurisdictions or in spite of sectarian identification, but the paralysing influence of the resulting political forces within the separate parts of the working class.

Sectarian division allowed the Catholic Church to engage in social repression involving sexual abuse, censorship and imposition of a reactionary ideological environment that was consciously and vehemently anti-socialist.  The more that is learned about this repression the more its class aspects become apparent.

The extreme reactionary monarchist ideology is perhaps less important in the North among some Protestant workers than the sheer ideology of division itself, i.e. sectarianism.

The strength of both Catholic and Orange movements have in no small part been due to the creation of the two states issuing from the division of the country.  Again and again even today we see the state protect the most reactionary elements in society both North and South – the Northern state facilitate loyalist paramilitaries and the Southern State finance the organisations found guilty of systematic child abuse.

National oppression has prevented the Irish working class from being an organic part of the growth of the British working class movement which means it has never availed of its strengths while it has on the other hand imported and copied all its weaknesses, including economism and trade union type politics.

Upon this weakness of the working class has been built its political subordination; its domination in the South until recently by the bourgeois Fianna Fail and its saturation by sectarian politics in the North.  Without a strong socialist tradition the periodic shifts away from the traditional parties can go in almost any direction.

In the last election the Left captured the vote of a small bit of this but the apolitical and clientelistic character of Irish politics affects the Left.  This and the state-centred nature of its politics is the basis for the chronic sectarianism that has shattered the alliance the Left had formed.

As Marx said the growth of sectarianism is in inverse proportion to the development of the class as a whole and the weakness of the class is the fertile ground on which the narrow and blinkered outlook of much of the Left has been established.

So what we have had is an historically weak working class.  During the key episode of political struggle around and after the First World War it was subordinated and subordinated itself to bourgeois nationalist or sectarian forces.  The victory of the most reactionary of these forces combined with retarded economic development prevented the growth of a strong working class movement thereafter. The Irish state did not participate in the Second World War so its working class missed out in the radicalisation that accompanied it in many countries.

Marx however called capitalism a revolutionary mode of production that continually creates and recreates the working class.  While this historic political weakness weighs on today’s generations the system throws up new industries, new work relations, new circumstances enabling economic growth and new forms of working class development.  The historical development of the Irish working class during the 19th and much of the twentieth centuries cannot explain the current lack of combativity of the Irish working class because this combativity is capable of being changed and transformed.

The Irish working class continued to develop after the Second World War but this subsequent development did not create a break from its historic political weakness and to the extent it has not done so the weight of history continues to oppress.

 

Why have the Irish not revolted? Part II

imagesausterityIn my first post I qualified the view that there was something particularly weak in the resistance of Irish workers to austerity but argued that nevertheless an explanation is needed.  To develop this further we need to ask what this austerity has involved.

Some commentators would have a ready explanation.  In terms of the share of taxation in Gross Domestic Product (GDP), in terms of the share of Government spending in GDP and overall deficit as a percentage of annual value added there has not been ‘savage austerity’ so there has been nothing to rebel against.

Here unfortunately we have no choice but to enter the world of economic statistics where only the naive can expect clear objectivity and accuracy.

A post on the Irish Economy blog records that (adjusting the statistics for the well-known effect of foreign multinationals in the Irish State significantly overstating economic performance) living standards measured in GDP per person (in Purchasing Power Parity values) declined by 14 per cent from 2007 to 2011.  This is a bigger decline in living standards than in Portugal where the fall was only 1.6 per cent, in Spain where it was 4.9 per cent and Greece where it was 8 per cent.  In terms of national income (another measure) the drop was bigger – 20 per cent – and it will have fallen further since then.  It would appear that the relative quiescence of Irish workers needs additional explaining.

But does it?

Any Irish statistic that uses GDP is immediately suspect for the reason above but not only because of this.  GDP is a measure of value added which means the 2007 figure will include property produced at vastly over-inflated values.  Houses and offices built and priced at one value will have been shown subsequently to have been worth 50, 60 or 70 per cent less, or sometimes to be completely worthless.  A moment’s thought reveals that this is not a characteristic simply of Irish statistics but of measures of capitalist production everywhere.

When we think of the effects of the banking industry on measures of economic growth we again see that this measure is seriously distorting, not only because of the difficulties of capturing accurately what is happening, but because of the nature of capitalist production.  This takes place through the production of commodities whose real value is only realised after production. The value of these commodities is elaborated through the workings of the market which reveals the socially necessary value of output in a cyclical fashion.

For economists wedded to capitalism recessions are always the result of exogenous shocks outside the system or of purely irrational behaviour within it, which amount to the same thing.  For Marxists the cycle of boom and bust is how the values of commodities are established and then re-established in a constant process.  By nature therefore there can be no precise measure of value produced at any one point in time or over any one period.

In figures for GDP the distinction between use value and exchange value is absent never mind any accounting for how really ‘socially useful’ the use values produced are – ghost estates and weapons compared to commodities actually consumed by workers. This is to be considered on top of the well-known criticisms of measuring living standards by GDP.

There are alternative measures we can review but before we leave behind this discussion we should appreciate that what we have been looking at is not simple mismeasurement of economic activity but one form of the appearance of real contradictions within the system.

From the point of view of our particular investigation we can make two points.  That a critical review of some of the figures means the boom was not as boomier (to quote Bertie Ahern) as some statistics might appear to show and the recession not as sudden and complete a reversal as might first appear.  The expectation of more or less immediate revolt might therefore be less justified?  Other evidence however might suggest that such a view should be considered a relatively minor factor.

Secondly, the constant reporting of such economic statistics plays an ideological role such that workers must accept real changes to their lives on the basis of these statistics.  Workers are subject to such pressures not just in the recession but also in the boom – encouraged to get into unsustainable debt for example.  To the extent that they do the latter they are then under ideological assault to accept that they, along with everyone else, ‘partied’ and went on a ‘mad borrowing’ frenzy, as Taoiseach Enda Kenny has put it.

Some commentators might argue that a recognition of ‘guilt’ has played a role in short-circuiting resistance but the existence of such undoubted views is as much a result of demoralisation as a cause of the lack of resistance.

There are other statistics we can look at to see if there are material reasons for the lack of opposition apart from this particular ideological one.

What appears a more relevant statistic is called Actual Individual Consumption which encompasses goods and services consumed by households including government services such as education and health provision.  This would appear to show that between 2008 and 2011 living standards in the Irish State fell more than in Spain and in Portugal but less than in Greece or Iceland.

Actual Individual Consumption

State

2008 index

2011 index

Percentage fall

Ireland

109

100

8.3

Spain

99

94

5.1

Greece

104

94

9.6

Portugal

84

82

2.4

UK

123

118

4.1

Iceland

122

107

12.3

 

This measure is made up of a component of GDP so is subject to some of the criticism above.  We have already seen that three different measurements of living standards result in reductions in living standards of 20 per cent, 14 per cent and over 8 per cent, depending on dates and the measurement adopted.

What we can say with certainty is that living standards fell abruptly and significantly due to the crisis and it is not obvious that the severity of the fall in any country determined the relative extent of opposition to austerity.  It is necessary before drawing any conclusions to look at what might be at least some of the components of the fall in living standards, not by any means only a result of the effects of Government austerity policies.

By one measure unemployment in the Irish State increased from 3.4 per cent in 2007 to 10.4 per cent in 2012, a tripling of the rate in only five years.  The economically inactive, which must contain many who have given up hope of getting a job, increased from 27.5 per cent of the population aged 15 to 64 to 30.8 per cent.

Using a different measurement unemployment in the Irish state was 13.5 per cent in January 2013 compared to 17.8 per cent in Portugal, 26.8 per cent in Spain and 27 per cent in Greece.  Clearly the crisis has hit the latter countries much harder than Ireland.  It is by no means clear that higher unemployment breeds resistance since its function under capitalism is to facilitate increased exploitation of the working class.  The mobilisation of the unemployed is not always for progressive reasons, which is one reason we have noted before that economic crises often breed reactionary movements.

Once unemployed some workers face the prospect of hardship and one measure of this defined as deprivation, or being without two or more basic items, has increased from 11.8 per cent of the population to 24.5 per cent in 2012.  The possibility of this is affected by the level of welfare an unemployed personmight rely upon and this is measured by the net replacement rate, or the payments due to the unemployed as a percentage of previous net income.  This obviously depends on whether the person has children or is married etc.

Net Replacement rates 2011

 

No children

2 children

Country Single person One earner

Married couple

Two-earner Married couple Lone Parent One-earner married couple Two-earner married couple
Republic of Ireland 50 81 75 64 75 81
Greece 49 54 75 58 63 80
Spain 79 76 90 77 75 89
Portugal 75 75 92 77 76 91

 

The table shows that Greece has significantly lower replacement rates than the other selected countries for most categories but that the Irish state’s is generally lower than Spain’s and Portugal’s.  It would not appear that the prospect of a more significant loss of income as a result of unemployment has spurred opposition in Ireland relative to that in Spain or Portugal.

The other obvious way workers cope with periods of unemployment is falling back on any savings that they have accumulated.  The following table shows the movement in net financial assets per person (€) in the various countries:

Country

2007

2011

Republic of Ireland

23,634

26,279

Spain

21,698

16,328

Portugal

19,950

19,750

Greece

19,681

10,105

Euro area (17 countries)

37,289

36,201

 

The table shows the Irish State to have the highest level of financial assets (though much below the Euro area average) and that this even increased between 2007 and 2011!  Since these figures say nothing about the unequal distribution of wealth and we know that many have suffered unemployment, cuts in wages or tax increases, it is clear that certain sections of Irish society are bearing up quite well.  In the other countries financial wealth fell and in Spain, but particularly in Greece, fell quite dramatically.

Such average figures hide as much as they reveal.  Average household disposable income in the Irish state fell from €49,043 in 2008 to €41,819 in 2011 but this was still significantly higher than in 2004 when it was €38,631.  Right wing commentators have often made the observation that incomes have often just gone back to such and such a date and we are all much better off than before the boom kicked off in the first half of the 1990s.  This is undoubtedly true for many but doesn’t provide an answer why as a class Irish workers have resisted austerity so weakly, unless the argument is that expectations have very quickly reduced.  Is this however another result of defeat or a contributing factor to it, or both?

Averages can obscure because it is precisely the unequal incidence of the effects of capitalist crisis that can have decisive political effects.

Unemployment has increased dramatically but its incidence is not uniform.  Employment in construction has collapsed, from 258,000 at the start of 2008 to 102,000 at the end of 2012, a fall of over 60 per cent.  Over the same period employment in the state sector fell from 417,000 to 381,000, a fall of 8.6 per cent.  The pitting of private sector workers against those in the public sector was a clear strategy of the Government, the employers and the media and it was quite successful.

But this has not been the only divisive effect of the crisis.  Rates of unemployment among young people in Ireland, just like other countries, have been much higher than the general rate.  In the Irish state the rate of unemployment among those less than 25 years old was 26.6 per cent in April this year while it was 42.5 per cent in Portugal, 56.4 per cent in Spain and 62.5 per cent in Greece.  These are truly staggering figures.  The rate of long term unemployment has increased from 29.2 per cent of total unemployment at the start of 2007 to 45.5 per cent at the end of 2012.  What this should remind us, is that unemployment is a divisive imposition of the effects of capitalist crisis that impacts not only on those without a job but also those in employment.  Emigration has returned and is continuing to increase, up from 87,100 in the year to April 2012 to 89,000 in the year to April 2013.

None of these figures illustrates the hardship caused by tax increases and public expenditure cuts that can affect the most vulnerable the most.  They do not include the effects on people’s experience of negative equity, the full effects of which have yet to hit home.  Here again it is younger people who are more likely to be in negative equity and to be in arrears in their mortgage payments.  And of course the figures do not tell us that the results of the crisis and austerity are to be here for a long time.

Over 32 people were unemployed for each job vacancy in 2012, while the figures for Spain and Portugal were 72.6 and 90.4 respectively.  The General Government Debt as a percentage of GDP was 117.6 per cent in 2012 while the 2012 EU Fiscal Compact stipulates that where this is above 60 per cent it must reduce by 1/20th per year.  In 2012 the in-year Government deficit was 7.5 per cent which means the debt was not getting smaller but getting bigger.  Normally optimistic forecasters are predicting that unemployment, as measured by the International Labour Organisation methodology, was only to reduce from 14.7 per cent in 2012 to 13.9 per cent in 2014.

So what are we to make of all these figures?

The fall in living standards has been significant even if not so sudden or large for some sectors of society as others and not on the same scale as some other countries such as Greece.  Certainly the disproportionate effects on young people and rise in emigration have blunted resistance but these factors exist on the same or greater scale in some other countries in Southern Europe where resistance has been greater.

It is not therefore the effects of the crisis themselves that explain the response even if these act to weaken certain social and political reactions.  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.

During the boom the level of trade union organisation fell relatively as union density dropped from 46 per cent of the workforce in 1994 to less than a third in 2007, and only 16 per cent in the private sector.

Thus even during the most favourable circumstances, when workers are best placed to protect and advance their living standards, they were unable to do so with their own strength.  During recession such weakness is exposed.

Now they are subject to the vicious laws of the capitalist market and, as we said in the first post, short of overturning the system there is a limited amount workers can do about this without challenging the system itself.

During this post I have said that workers have not resisted austerity but in truth the great mass of unemployment, insecurity caused by mortgage arrears and negative equity, and the drop in personal consumption are not so much the result of the austerity policies of the Government, which of course have made things worse, but of the capitalist crisis.  This crisis can in certain circumstances be postponed or ameliorated by the State but it cannot be suppressed and certainly not by a State in bankruptcy.

When even during the boom large number of workers dependency on this state increased rather reduced and rather than their developing their own independent power, it can be little surprise that when the state turns round and kicks them in the teeth they are unprepared.

Some socialists argued again and again during the boom that social partnership, the vehicle by which the Irish trade unions hitched themselves to the State, was to be opposed not mainly because it prevented workers making gains in their living standards that they should but because it rotted away their independent organisation.  This has not just organisational consequences but political and ideological ones and it is to these that I need to look at next.

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.