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

Posted on January 19, 2014 by irishmarxism

Perhaps 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.

Why have the Irish not revolted? Part IV

Posted on December 1, 2013 by irishmarxism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lessons from the Grangemouth dispute

Posted on November 11, 2013 by irishmarxism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For example what does this mean? –

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

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

The article says –

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why have the Irish not Revolted? Part III

Posted on October 27, 2013 by irishmarxism

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 19^th 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 18^th 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 19^th 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.

What way forward for the Dublin Bus workers?

Posted on October 17, 2013 by irishmarxism

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

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

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

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

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

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

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

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

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

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

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

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

Do socialists have an alternative?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why have the Irish not revolted? Part II

Posted on October 6, 2013 by irishmarxism

In 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 1/20^th 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 4^th to 8^th 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?

Posted on September 24, 2013 by irishmarxism

The 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.

A new Left electoral campaign in Limerick

Posted on July 27, 2013 by irishmarxism

The Revolutionary Programme web site altered me recently to the latest electoral initiative of the Left – here. The programme of this initiative is the following:

No to the Property, Water & Septic Tank Taxes – No to Deduction at Source.
No to all Austerity – ordinary people have paid enough.
For a united movement of ordinary people affected by home taxes and austerity – no to divisions based on race or nationality.
Tax the Wealthy as the alternative to austerity: For progressive taxation on the wealthy and corporate sector.
End the bailouts of banks and bondholders, instead use the money to create real jobs through a programme of necessary public works.
Our candidates if elected would:
Fight against plans for Water Metering, Water Taxes and Water Privatisation.
Oppose all cuts in council services or erosion of workers conditions.
Make no deals on the Council with the austerity Parties (FF, FG, LP).
Oppose the gravy train – no participation in junkets. Demand local planning for the community, not for developers or vested interests.

What attitude should Marxists take to this electoral initiative?

Just like every other party standing in an election it must surely be judged by what it says – by its professed programme or set of policies, providing of course these are also what it truly represents.

Can and should it be supported?

The electoral slate is clearly not a party and was organised by the Campaign Against Property Tax and Austerity but the logic of standing in an election is to act like a party and even more so if elected. The failure of the Unite Left Alliance to do so has led to its demise.

The policies above are no way different from that of the ULA, except more limited. The Left has argued over the last number of years that elections and those elected are there to advance ‘real’ struggles outside of parliament and council chambers. The last few years have demonstrated conclusively however that it is the other way round – struggles in communities and estates have been means to advance electoral ambitions. Electoralism is a dirty word on the Left but nothing would appear to describe the method of organising so accurately.

This initiative, the promised first of many, must be judged firstly on its own terms.

The short summary of its aims says it is against austerity and the various taxes that have made up a large part of this agenda. The anti-property tax has failed so it will have to be explained how standing in elections will bring success. Otherwise voters are being asked to vote for good intentions. Councils can clearly not change the policy of central government so how will the taxes and austerity more generally be blocked and reversed? No concrete and practical way forward is put forward. Maybe it will be, but if it isn’t then it is purely propaganda.

If the reason for standing is to build the campaign this should be the main point of the programme but even here it should be explained how the campaign will achieve its aims. Is, or rather was, a mass boycott a road forward given deduction at source? If not what is the alternative – a mass political campaign aimed at persuading tax workers to refuse implementation of the tax?

What role is there for councils? Are enough candidates standing to win a majority? If so what would they do with such a majority? Can they unite with other similarly minded councils to campaign against the tax? What powers do councils have to frustrate or prevent this tax or austerity? Will the new council promote workers control or ownership of council services? What other steps will it take to promote the democratisation of local government?

If there is no possibility of winning a majority then what role would those elected take? Will they release all information currently withheld on council activities? How will they frustrate the local implementation of austerity?

If these questions aren’t put to the fore then, as I’ve said, what we are seeing is purely propaganda. This does not mean that this aspect should be underestimated. Even in periods of limited struggle, in fact particularly in such periods, the task of socialists is to try to educate as many workers as possible through propaganda. Given the very small size of the socialist movement in Ireland this is by far and away its biggest task. If it doesn’t get this right then the majority of what it is capable of doing is wasted if not positively harmful.

The thrust of the programme appears to be anti-austerity with the alternative being taxation of the wealthy – “for progressive taxation on the wealthy and corporate sector.” It is also proposed to “End the bailouts of banks and bondholders, instead use the money to create real jobs through a programme of necessary public works.”

I have shown what is wrong with the idea you can tax the wealthy here and here so I won’t repeat my arguments again in this post. The main problem is that it is not the wealth or high incomes of the rich that are the cause of austerity so even if it were possible to tax both effectively the cause of austerity would persist. This cause is the economic crisis. Because the economic system is a capitalist one the elementary task of a manifesto would be to state this and explain it. Explain exactly how the way the capitalist system works has given rise to this crisis and will create more in future. This would be necessary in order to argue that the alternative to austerity from a working class point of view is socialism. Explaining what this is would involve is an obvious next step – expropriation of capitalist ownership and workers ownership in its place and a workers’ state in place of the existing state.

Complaining that the programme does not mention socialism is not the problem since the programme is not a socialist one. If this is the way it is then it is better that it does not claim to be socialist.

The programme proposes ending the bailouts of banks but does not explain how this might be done, the consequences or the alternatives. Some of these issues are touched upon here, here and here. How is the debt to be repudiated? What debt is to be repudiated? How would credit be provided if the banks were allowed to fail?

Anyone who begins to think seriously about what “ending the bailouts” means will have these questions in their head and without an answer they will be open to accepting right wing claims that such proposals are not thought through , cannot be implemented or would be even more disastrous than what we already have. Dealing with such claims is the important task of propaganda and at this point in time elections are useful means of getting across the message.

In the absence of all this the message put across is a radical Keynesian one, that is a capitalist one. One that is temporarily more beneficial to working people but one, if followed,that would lead to inflation, wage cuts, unemployment, and calls for reducing budget deficits and tax increases later on. That’s if it worked in the meantime!

From a political point of view therefore the programme does not assert separate working class politics but, in so far as it puts forward an alternative, puts forward the benign actions of the capitalist state as the solution. It therefore doesn’t even get to first base in terms of a socialist alternative. It may therefore be reformist but it isn’t working class reformism because it seems to rely solely on pressurising the state.

In terms of the reformist/revolutionary dichotomy it isn’t even the former since it lacks the courage of its convictions and fails to propose a Left Government for the Dail that could tax the rich and the corporations; burn the bondholders and use the money to create jobs in the public (read – capitalist state) sector.

A socialist programme would explain that fighting austerity is required to defend our living conditions but that this will ultimately fail unless the system is replaced. Austerity can at best be ameliorated but such is the depth of the crisis it cannot be entirely halted and reversed under the present economic system.

Some will deny this and claim that austerity can be ended without changing the system; that the rich can be made to pay for their crisis and that policies of growth will ensure that this can happen.

On the other side will be those who will claim that austerity is an inevitable result of an economic crisis, which is caused by the capitalist system in its attempts to produce and accumulate capital beyond the conditions that allow it reproduce itself harmoniously. The excessive expansion of credit is always a feature of capitalist crisis and the bigger the boom the bigger the bust, unless even more credit is injected into the economy in which case the bigger the boom . . . No amount of regulation or honest government can prevent this without seriously gumming up the capitalist system, in which case you simply have a different sort of crisis with very much the same symptoms of unemployment etc.

On the first side of this debate will be the liberal defenders of Keynes, including their economists and leaders of the trade unions. On the second, socialists, who can only consistently defend their ideas by understanding and presenting the arguments of Karl Marx, which is the reason Marx wrote ‘Capital’.

A recent post on the Michael Roberts blog has a couple of interesting points to make about these arguments.

He points to research showing that inequality of income reduced between 1910 and 1950 across the OECD (most advanced) countries, which calls into question the idea that capitalist crisis is a result of inequality that progressive taxation could cure. This period, after all, covers the great depression of the 1930s.

He points to other research that:

“Credit booms mostly lead to financial crises, but inequality does not necessarily lead to credit booms. “Our paper looks for empirical evidence for the recent Kumhof/Rancière hypothesis attributing the US subprime mortgage crisis to rising inequality, redistributive government housing policy and a credit boom. Using data from a panel of 14 countries for over 120 years, we find strong evidence linking credit booms to banking crises, but no evidence that rising income concentration was a significant determinant of credit booms. Narrative evidence on the US experience in the 1920s, and that of other countries, casts further doubt on the role of rising inequality.“

The problem with left solutions that highlight (sometimes more or less exclusively) inequality of income and wealth is that their solutions do nothing to tackle the origin and cause of this inequality. The Michael Roberts blog points out that “in 2011, capital income constituted 60% of the top earner’s income compared to just 32% in the 1980s.”

The origin and cause is capitalist ownership of the means of production, including its purchase of labour power, its ownership of capital and the money and power this involves. It is the relations of production in which workers have to sell their ability to work to a class of owners of the means of production that produces the gross inequalities in society. Redistributing what is already produced, even were it possible, would not overturn this power relationship or the exploitation and oppression involved because it does not get to the heart of the matter.

In a country where little or nothing of this is understood the elementary task of socialists is to explain this to as wide a number of workers as possible and elections should be taken as an opportunity to do so.

So we are back to our question – should this electoral initiative be supported?

To the extent it has been judged as a more or less adequate immediate guide to action or corresponds to the educational needs of the working class the verdict would appear to be no.

Perhaps unity could not be agreed between the participants on any other basis and what we see is a campaign standing in an election not a party. But was any other basis proposed or offered? Was any discussed or do the participants see no problem in the platform of a campaign being adequate to a programme for an election?

It might truthfully be said that the low level of the programme reflects the low level of Irish workers’ class consciousness but this is not a way out of objections to it, for there is nothing in it to advance Irish workers’ understanding of the cause of the austerity they face or the great changes that are required to defeat it and establish a new society.

The only conditions upon which it would be possible to support this initiative is if it went further in arguing the socialist case or if it raised the prospect of invigorating a section of workers into activity, in which case through this activity they may learn about the roots of their predicament and themselves go beyond the timidity of the anti-austerity campaign. To do the latter they may have to go beyond the existing Left groups who save what they think is socialism for potential recruits while the broader class of workers they address in electoral material, the purported agent of revolution, are fed re-heated capitalist reforms.

Workers’ control of production Part 2

Posted on July 11, 2013 by irishmarxism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workers’ control of production

Posted on June 4, 2013 by irishmarxism

In my review of the programme put forward by the left in Ireland, generally no different from other countries across Europe and further afield, I have argued that while it may be better for workers than the current austerity policies it is not socialist. By this I mean that it does not involve a class alternative, an alternative to capitalism, one that involves ownership of the means of production moving to the working class.

Only in one area is this not the case: the Left’s occasional demand for workers’ control. Even in these cases I have argued that the proposals are not put forward within any real practical perspective but put forward in such a way that they must assume a near revolutionary situation. Demands for widespread workers’ control are only a practical proposition in such circumstances.

In current conditions demands for workers’ control simply demonstrate a lack of seriousness by those proposing them. In the article by Trotsky previously quoted, he states that “before this highly responsible fighting slogan is raised, the situation must be read well and the ground prepared. We must begin from below, from the factory, from the workshop.”

This is to be done by revolutionaries gauging the moods of other workers – “to what extent they would be ready to accept the demand to abrogate business secrecy and to establish workers’ control of production. . . . Only in the course of this preparatory work, that is the degree of success, can (we) show at what moment the party can pass over from propaganda to further agitation and to direct practical action under the slogan of workers’ control.”

“It is a question in the first period of propaganda for the correct principled way of putting the question and at the same time of the study of the concrete conditions of the struggle for workers’ control.”

One small means of doing this recently was, when the banking crisis erupted, members of Socialist Democracy leafleted bank workers in Dublin asking them to let other workers know what was going on in the banks through leaking internal emails etc. This small step abrogating business secrecy is a first step to workers’ control. The poor response showed that the preparatory work described by Trotsky had yet to begin.

In this post I want to look at what is meant by workers’ control and how this is a result of the working class’s historical experience of this means of struggle. The experience shows that it inevitably arises as a result of a crisis, and crises are by their nature temporary, occasioned by a society-wide political crisis or by the threatened closure of a particular factory that is producing unnecessary products, is working in an obsolete manner or is otherwise failing to compete successfully in the capitalist market.

How to institutionalise such control in periods of relative calm is a central problem we will look at in future. Relying on temporary crises to quickly provide workers with answers to the problems posed by their taking control has not resulted in success. Revolutions of themselves do not give all the answers to the problems posed by revolution, at least not unless they are prepared for and prepared for well. Since revolution is the task of workers themselves we are talking about how they can be prepared to take on the tasks of control. Such preparation involves convincing at least some of them them that they should want to control or manage their own places of work as well as how they might be able to do so. Only in this way can the superiority of worker owned and managed production be demonstrated.

The historical understanding of what workers’ control means derives mainly from the experience of the Russian revolution in 1917; the only successful workers led revolution. Yet the goal of this revolution was initially a democratic republic, not a workers’ state, with the result that only a ‘transitional’ social and economic programme was on the agenda. A decision to seize power by the Bolshevik Party could not change the level of economic and social development in itself. We can see from an earlier post that this informed Lenin’s view that the immediate economic programme was one more akin to state capitalism than complete working class ownership and power over the economy.

This is decisive in understanding the development of the revolution. The workers could seize state power in order to stop the war, support distribution of land to the peasantry and attempt to put some organisation on production but workers could not by an act of will develop the Russian economy under their own control and management, at least not outside of a successful international revolution, and this never came.

Workers’ control in such a situation did not, and at least initially could not, equate to complete management. In Russian ‘kontrol’ means oversight; a “very timid and modest” socialism, as the left Menshevik Sukhanov put it. The Bolsheviks understood that workers’ control was not socialism but a transitional measure towards it. Capitalists would and did continue to manage their enterprises. (The historian E H Carr reported that in some towns workers who had driven out their bosses were forced to seek their return.)

This approach was supported by the factory committees created by the workers during the revolution. These committees initially hardly went beyond militant trade unionism but did not accept management prerogatives as inevitable and, as the bosses increasingly sabotaged production, they increased their interventions to take more radical measures of control.

The workers nevertheless saw the solution to their problems as soviet power and state regulation, evidence by their acceptance of a purely consultative voice in state-owned (as opposed to privately owned)enterprises. This reflected the worker’s weakness, expressed by one shipyard worker on the eve of the October revolution at a factory committee conference: “often the factory committees turn out to be helpless . . . Only a reorganisation of state power can make it possible to develop our activity.” Thus much of the activity of the factory committees was attempting to find fuel, raw materials and money simply to keep factories going and real management was sometimes consciously avoided.

Trade union leaders criticised the factory committees for only looking after the interests of their own plants and for not being independent of the capitalists who owned them. The workers in the committees were themselves keenly aware of being compromised by the capitalist owners, of being given responsibility without effective power.

While the revolution was supposed to have a transitional character in economic terms, workers were faced with greater and greater sabotage and recognised that the worsening crisis required a solution that could only come from the state, which would provide the centralised control that would combat economic dislocation. The weakness of the workers themselves can be quantified by the decline in their number. In 1917 the industrial workforce in Petrograd was 406,312 but fell to 339,641 by the start of 1918 and only 143,915 by May of that year.

Although more active forms of workers’ control were sanctioned after the revolution, it had been increasing anyway, the steps towards the central state regulation that had been championed were constrained by the lack of an “organised technical apparatus, corresponding to the interests of the proletariat”, as the resolution unanimously adopted by the January 1918 Factory Committee conference put it. Nevertheless the conference called for the immediate nationalisation of factories in a good physical and financial situation.

The economic situation however was desperate as the new state faced immediate armed attack. The Factory Committee conference noted that: “Every one of us knows that our industrial life is coming to a standstill and that the moment is fast approaching when it will die. We are now living through its death spasms. Here the question of control is no longer relevant. You can control only when you have something to control.”

Widespread nationalisation was introduced but it was viewed as a necessity compelled by circumstances, not a positive choice and not one driven by socialist ideology. Alongside this nationalisation was increasing centralisation of economic decision making, which was imposed on the factories.

But of course if the workers were unable to run the factories how could they run the state? Complaining that the factory committees were ignoring everything but their own local interests and themselves disorganising production one section of the state’s economic organisation stated that reorganisation would not happen “without a struggle of the worker’s government against the workers’ organisations.”

All these quotes are taken from the article by David Mandel in the collection of articles on workers’ control in the book ‘Ours to Master and to Own: Workers control from the Commune to the Present.’ In this he states that the contradiction between planning and workers self-management can be resolved if there are conditions allowing for significant limitations on central control and these conditions also provide workers with security and a decent standard of living. Both, he says, were absent in Russia. More important for the argument here is his view that there must be a working class capable of defending self-management.

This too did not exist in Russia and our very brief review shows this. The Bolsheviks were acutely aware of the low cultural development of Russian workers, evidenced through their lack of education, high levels of illiteracy, lack of technical skills and lack of experience in the tasks of economic administration and management. That their numbers declined dramatically, not least because of the demands of the Red Army, leaves no grounds for surprise that this experiment in workers’ control did not prove successful.

The limited character of the initial steps in control and the awareness workers had of their lack of skills were revealed in their calls for the state to reorganise production. While certain centralised controls over the economy are a necessity, and this is doubly so in order to destroy the power of the ruling classes, the socialist revolution is not about workers looking to any separate body of people to complete tasks that it must carry out.

If workers could not control production they could not be expected to control state power. This was to turn out to be the experience of the revolution and in its destruction by Stalinism the state turned into the ideal personification of socialism.

This identification of socialism with the state in the minds of millions of workers across the world continues, a product of Stalinism and of social democracy but gleefully seized on by the right. Since the state is organised on a national basis this also entailed socialism’s corruption by nationalism.

The path required to developing and deepening a genuine workers’ revolution lay not in seeking salvation in the state but in workers creation of this state themselves out of their own activity in the factory committees and soviets. The coordination, centralisation and extension of the functions of these bodies would ideally have been the means to build a new state power that could destroy and replace the old. It would also have been the organisation that would have combatted economic dislocation and provided the means for cooperative planning of production and trade with the independent peasantry.

In this sense the Russian revolution is not a model for today. While workers control came to the fore in this revolution its limitations must be recognised and a way looked to that would overcome them in future.

It might be argued that the backward cultural level of the Russian working class, while acknowledging its high class consciousness, is not a problem today. After all the working class in Ireland, Britain and further afield is literate, educated and with a large number educated to third level education. The working class is the vast majority of society, which it was not in Russia in 1917. Many workers are now highly skilled albeit specialised. This however is a one sided way of looking at things.

Firstly on the technical side the very specialisation that makes some workers skilled reflects an increased division of labour that in so far as it is deep, widespread and reflected also in a division of social roles militates against the widespread accumulation of the skills and experience of management and control.

Many workers reflect their specialisation in a narrowing of outlook but illustrates that the increased division of labour is foremost a question of political class consciousness which is at least in part a reflection of social and economic stratification of the class. Thus some workers see themselves as professionals – engineers, accountants, managers etc. and regard themselves as middle class. Just like white collar workers and state civil servants in the Russian revolution they do not identify themselves as workers with separate political interests along with other workers slightly below them in the social hierarchy. They do not identify with socialism.

Modern society in this way reflects early twentieth century Russia: the working class does not rule society, even at the behest of the capitalist class, but there are numerous social layers (the middle classes) who help the capitalist class to do so, and they imbue into themselves and others the political outlook of their masters.

Because the division of labour is increasingly an international phenomenon the road of revolution at initially the national level poses even bigger problems for workers management of production than existed in Russia in 1917. Especially in Ireland production is often a minor part of an internationally dispersed process so that control of the whole is exercised elsewhere. How then do workers take control of such production in any one country especially one lower down the value chain?

For these reasons revolution needs to be prepared. It needs prepared in the sense that workers must be won to a fully conscious commitment to their becoming the ruling class of society; a rule based on their ownership and management of the forces of production. In order to achieve this, the force of example rather than simply the power of argument is necessary. In other words workers must have seen and experienced ownership and management. This can provide many with the experience and knowledge necessary to lead the whole class to own and manage the whole economy when such control is the basis for their own state power, after capitalist state power has been destroyed.

The best, in fact only way, to prepare for socialism is through practice, practice in asserting the interests of the working class as the potential new dominant class of society. Demands for nationalisation are demands that someone else, the state – because the state is a group of people – create the good society. And when anyone is asked to create the good society it is always what is good for them.

Such dominance is more than simple resistance to the exploitation of the old society but must in some way herald the new. Opposition to austerity for example can only ameliorate the effects of capitalism and does not provide panaceas – not even ‘taxing the rich.’ The real importance of fighting austerity therefore lies in the building of the organisation and class consciousness of the working class. This is what Marx meant when he wrote in ‘The Communist Manifesto that:

“the Communists fight for the attainment of the immediate aims, for the enforcement of the momentary interests of the working class; but in the movement of the present, they also represent and take care of the future of that movement.” The future is that in its “support (for) every revolutionary movement against the existing social and political order of things” communists “in all these movements, (they) bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time.”

This then is the importance of workers’ control and workers ownership. It is the question of the future of the movement of the working class because it brings to the fore “the property question.”

I shall look at it some more in future posts.

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