Trotsky and nationalisation

trotskyIn two previous posts I have looked at Leon Trotsky’s transitional programme and the general approach to a working class programme which it encapsulated at a particular point in time. In this final post on the question I want to look directly at what Trotsky’s views were on nationalisation. As I said at the start of these posts, many organisations claiming inspiration from his politics place calls for state ownership high up in their political programme. This conflicts directly with Marx’s views but we need to look at Trotsky to see if this is also true of him.

First we should note that in the transitional programme Trotsky explicitly counterposes ‘expropriation’ to “the muddleheaded reformist slogan of ‘nationalisation’”. He gives four reasons for doing so. The first is that he rejects ‘indemnification’, i.e. compensation to the capitalists. Secondly he does so as a warning against reformist socialists who, while also advancing this demand, nevertheless remain the agents of capitalism. Thirdly he says workers must rely on their own strength. As we have stressed, nationalisation relies on the state. Lastly he does so because he links the question of expropriation with the seizure of power by the workers. This latter point is crucial in his presentation while, because we live in less revolutionary conditions, I have laid greater emphasis on his third reason.

Thus in the very next section of the programme from that above, in which he argues the importance and the benefits of expropriation of the banks and statization of the credit system, he says that the latter will “produce these favourable results only if the state power itself passes completely from the hands of the exploiters into the hands of the toilers.”

When pushed, Trotsky accepts that ‘nationalisation’ may be accepted as a slogan but only in so far as it actually means expropriation and involves a workers’ government to achieve it. In other words reason four must apply.

It is possible to argue that the socialist programme must be taken as a whole and that therefore calls for nationalisation are perfectly valid when part of a comprehensive programme. There are several problems with such an argument but we will point out only two.

First – try finding the call for destroying the capitalist state or creation of a workers’ state in the programme of the left that might act as an alibi for demanding capitalist state ownership in the here and now.

Allied to this is the second reason. In every advanced capitalist country the working class is separated from conquest of state power by a huge gulf in social and political development and experience. The left might often be opportunistic but it is not immune to registering this fact, if only through avoidance of demanding overthrow of the state. In effect a link between nationalisation and a change in the character of the state is non-existent and the former becomes a simple call for the capitalist state to take ownership from private capitalists.

In other words the organ of the capitalist class as a collective, and its principal organ of defence of its system, is called upon to play a role in the destruction of this class and system.

For some on the left their understanding of Marxism and the working class political programme has degenerated so much that nationalisation of the economy is itself seen as the transformation of capitalism into socialism. In such circumstances however the relations of production remain unchanged; capitalism continues and the working class remains exploited, oppressed and separated from the means of production. It is precisely the establishment of this last condition that made for the creation of capitalism, and its ending that will signal capitalism’s overthrow, when the working class as the associated producers become owners of the means of production.

Trotsky was scathing about just such a belief in the socialist character of nationalisation. When talking about expropriating the banks he says that “of course this question must be indissolubly linked to the question of the conquest of power by the working class.” In the same article (Trotsky, Nationalised Industry and Workers Control, Writings , 1939) he writes that “It would, of course, be a disastrous error, an outright deception, to assert that the road to Socialism passes, not through the proletarian revolution, but through nationalisation by the bourgeois state of various branches of industry and their transfer, into the hands of the workers’ organisations.”

In many formulations of the call for nationalisation there is not even a call for nationalised property to be transferred to workers’ organisations, although the sometimes call for nationalisation under workers control is a nod in this direction.

We are thus left in the following position having reviewed Trotsky’s programme:
The socialist programme must be understood as a whole and it involves the destruction of the capitalist state and creation out of the working class itself of the new state.

In no country does the working class accept such a task or seek a way to achieve it. In no county is it subjectively revolutionary.

Trotsky seeks to adapt the working class and its political consciousness to its historical task but if it is not seeking revolution and has a very low level of political consciousness how do we proceed in a revolutionary way that does not address workers with politics that undermines the revolutionary goal?

Trotsky said that “comrades are absolutely right when they say we should tell the workers the truth, but that doesn’t signify that every moment, every place, we state the whole truth, starting with Euclid’s geometry and ending with socialist society. We do not have the right to lie to them, but we must present to them the truth in such form, at such time, in such place, that they can accept it.”

It would therefore be wrong to believe that because the complete programme of revolution cannot right now profitably be canvassed among the working class that the programme that must be fought for is less revolutionary. This is so only in degree but not in any qualitative sense. The revolutionary programme does not lose traction, does not cease to truly encapsulate the interests and immediate tasks of the workers because we cannot yet concretely and practically today propose the arming of the working class and destruction and replacement of the capitalist state.

What is also not involved is shying away from arguing outright for a socialist society, a society run by workers, and nor is it necessary or desirable to run away from this vision to the refuge of an improved capitalism. The vision of a systemic alternative to capitalism must capture the working class for it to put it into practice. It cannot be the result of stumbling blindly into it through some disembodied ‘logic’ of class struggle. Not speaking the whole truth every time and everywhere does not mean renouncing the goal of socialism at any time.

The revolutionary programme in non-revolutionary conditions means first rejecting illusions in capitalism and in its state – encapsulated in the demand for nationalisation.

It involves rejecting the substitution of the state for tasks that must be accomplished by workers themselves and it means identifying the steps forward that workers must take to develop their political consciousness, through increasing their economic, social and political weight in existing capitalist society.

There is no shortage of demands which can do so. It involves the demand for workers’ cooperatives – production without capitalists, not just as an answer to failing enterprises but as the model for new ones, through employment of workers’ pension funds and sponsorship by existing workers organisations such as trade unions. This is a question to which we shall return.

It involves workers reclaiming their organisations from the bureaucracies which currently control them through challenging and defeating these bureaucracies. In Ireland one form this takes is opposition to the policy and practice of social partnership. This in turn may involve creation of new trade unions; whether this is so is a practical and tactical question involving judgments that must ensure socialists and other militants do not become isolated.

It means creation of a workers political party that does not become the creature of electoralist stratagems and of TDs, as in the dying ULA. Similarly it does not mean the erroneous view that declarations of revolutionary virtue can in themselves guarantee anything in the wider working class, within which lies the only promise of revolution. The working class will of necessity learn from its own mistakes just as in will be its own liberator.

A programme which proclaims that the emancipation of the working class will be the achievement of the working class itself would go a long way to providing such a programme, were awareness of the dangers of reliance on the capitalist state for solutions as strong as it should be. It is arguing against such illusions, at what might seem excessive length, that many of the posts on this blog have been directed.

It is therefore time to turn to alternatives.

Does the demand for workers control represent such an alternative and does its joining together with a call for nationalisation represent a positive overcoming of the reactionary character of the latter – nationalisation under workers control? (Hint – the answer is no).

Does the call for workers cooperatives represent a real working class alternative to capitalism? Not, it would appear, to the organisations in Ireland’s left. But are they right?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Marx described the alternative to capitalism this way:

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


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

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

Following the Beautiful Game

Capitalist ideology tells us that the consumer is king and that the decisions of millions of consumers decide what production takes place. If companies fail it is because they don’t sell goods or services that people want or at a price they are prepared to pay.

There is just enough truth in this to give it the credibility to make it widely accepted. What it leaves out, among other things, is that production also has to make a profit and that indeed this is the main reason any production takes place at all. Given the ownership of the means of production in the hands of only one group of people, these people thereby being called capitalists, and the exclusion of others, who must be required to provide workers for these owners, it is the relations of this production that, more than anything else, determines the wealth and income of the respective classes. This in turn determines to a large degree the pattern of consumption, which is further conditioned by advertising and monopoly suppliers etc.

The idea of consumer as king appears as a joke set beside the experience of recent bank failures to process even the simplest transactions on behalf of their customers, mis-selling of insurance and pension products, multiple products with safety problems, food that is positively harmful, the bottled water scam and simple, homogenous products like gas and electricity, which is sold in such a bewildering array of ‘choices’ that you can switch supplier and end up paying more. No wonder there also exists a consumer rights industry, which one could hardly imagine if what is claimed for capitalism were true.

The clash of human need with the demands of profit was analysed in detail, starting in its most simple commodity form, in Karl Marx’s Capital. Commodification and all its contradictions have since spread over an increasing variety of human activities. Sport has for some time become a global industry, more and more determined by the demand for profit.  Since the competition demanded in sport is not that trumpeted by capitalist ideology the clash is all the more ironic. Sport must have room for chance, accident, unexpected triumph and unexpected failure while sporting contest subject to the requirement for profitability more and more implies certainty and the elimination of the possibility of monetary loss.

In the recent Euro 2012 championship some things didn’t change, like England going out on penalties. But we also saw commercialisation right from the off with the child escorts entering the pitch dressed in the colours of McDonalds. How long before the kids are asked to hold a Big Mac in one hand while holding on to the player with the other?  We also saw the hypocrisy on display that goes with the increased politicisation of the game as team captains read out statements in support of diversity, opposition to racism and homophobia, support for the environment, world peace, healthy eating and helping old ladies across the road. (OK, I made some of this up.) The real priorities of UEFA were revealed when it fined the Croatian Football Federation €30,000 for the display of racist banners by their supporters at one game while imposing a fine of €100,000 on a Danish player for revealing the name of a bookmaker on his underpants while celebrating a goal.

Apart from the Euros the biggest football story of the summer has been the impending liquidation of Glasgow Rangers, claimed by its supporters to be the most successful club in the world, although I expect Real Madrid and about a couple of dozen others might find decent grounds to demure. This is not just a sporting story but involves many of the failings that have been played out in the wider economy. The collapse of Rangers is not so much analogous to the collapse of the banking system in 2008 as an integral part of it, as it boomed and bust propelled by the reckless lending of Bank of Scotland.

Allied to this was massive tax evasion and failure to stick by the rules of the national football association, which requires that the details of all payments to players for playing football are registered by the club with the Scottish Football Association (SFA). It is more or less clear that this did not happen. Failure to do so potentially renders most of the games involving these players 3 – 0 defeats. Cue potential loss of all those trophies achieved by cheating.

Regulatory failure, just like the banks, is on display as the footballing authorities, often headed by ex-Rangers Directors, failed to notice all this even though some had been responsible for it in their previous career with the club. Now one of these individuals, as President of the SFA, is nominally at the head of the organisation responsible for investigating these potential misdeeds and applying the appropriate punishment, though he availed of the tax scheme himself!

Corporate failure, greed, arrogance , criminality and cheating now join a long list of accusations against a club renowned for sectarian discrimination and violence, but which according to the Scottish First Minister is part of the fabric of Scottish society and should be saved.  At the end of the day however Rangers is just a football club. The State will not intervene to save it despite some of its supporters inflated sense of entitlement expecting and demanding it.  The Chairman of one club described it as a dead parrot or in the words of Monty Python – it is not resting or stunned, pining or sleeping, tired or shagged out; it is deceased, ex, finished, gone, and shuffled off its mortal coil.  Such is the ridicule now heaped upon the club.

Despite this Rangers were a huge club in Scotland and central to the whole professional game and to the money to be made from televising it by Sky and others.  The regulatory authorities thus threatened all other clubs with financial Armageddon if the new ‘Rangers’ company, which has apparently bought over the assets of Rangers, was not allowed to go straight into the Scottish Premier League, avoiding all those minor technicalities like winning football matches to get there.  The mainstream media, which feeds like a frenzy on the rivalry between Celtic and Rangers and the like of which simply does not exist in Ireland, dismissed the prospect of anything else as the ravings of ‘bampots’.

Then something extraordinary happened.  The requirement of ‘commercial reality’, of profit and the iron laws of capitalism came up against the force of sporting integrity, in other words football is a game where 22 men or women kick a ball and the team that scores the most goals wins.  It is not a consumer product in which the clubs that generate the biggest TV audiences get to dispense with this inconvenient requirement.  This force was embodied in the vast majority of ordinary fans of all the other clubs in the SPL who didn’t want to watch a version of wrestling, didn’t want to watch a rigged game and at bottom didn’t want to be treated as mugs.  A little respect for them was required when the footballing authorities, the old Rangers and the new company were displaying quite the opposite.

Through well informed blogs, such as The Guardian’s Orwell Prize winning Rangers Tax Case, the truth about what was happening at Rangers was revealed, and through on-line polls organised by fans, polls by clubs themselves, newspaper polls, supporters associations’ meetings and other consultations by the clubs made it clear that the vast majority of football supporters simply would not accept the new company in the SPL.  The way had looked clear for the new company to be voted in by the other clubs’ Chairmen but by the time the vote was taken on Wednesday this week all but the new company voted yes, with ten voting no and only one abstaining, much to the anger of its own supporters.  Not only had the authorities been thwarted but Sky and its owner had been told that there is something more important than its profits.

All this has been an almighty shock to the remnants of the establishment club, the authorities, mainstream media and many commentators.  It has been achieved by the spontaneous action of supporters across Scotland and beyond but the battle is not yet over.  Having failed to shoe-horn the new company into the SPL the footballing authorities are trying the same strong-arm tactics on the clubs in the 2nd, 3rd and 4th tiers of the league structure, organised in the Scottish Football League, in order to put the successor to the disgraced club into the 1st Division of the SFL.  Will the fans of these clubs prevent this as well? We shall see.

This display of power by fans has given everyone a glimpse of what can be achieved but so much more can be done.  The various supporters associations of all the clubs must find a way of meeting, discussing and acting together to continue to exert their collective will.  A permanent vehicle for their organisation must be created to develop the game in the future to the benefit of everyone involved.  The demise of Rangers has demonstrated the current bankruptcy of the whole organisation of the game in Scotland.

Clubs such as Motherwell and St. Mirren are moving to refound themselves as community clubs owned at least partly by their supporters.  At the end of the day this is the only way that the fans can assure themselves that the game they love will retain its integrity and not become the plaything of rich tycoons from the other side of the world.

Coincidentally the ‘Financial Times’ this week had a pull-out section on Co-operatives and employee-owned businesses.  This is just the alternative required so that the working people who support and participate in football can run their own sport.  The FT pull out demonstrates the practicality and benefits of such a model.  It reports that the UK has 5,900 co-operative businesses; compared to 4,800 three years ago and these businesses are more resilient, with 98 per cent still in operation after three years compared to 65 per cent of others.

It gives the example of how such companies can be run, by reinvesting into the business, sharing revenue and helping other co-operatives.  It reports on one company in the North of England in which there is no Chief Executive – “big jobs are split into teams of people”, there is a good pension, job security and flexible hours and plans for regular pay increases.  The books are open to all (which would have prevented the Rangers disaster).  “The general secretary can get to every Blackburn Rovers game.  He works in credit control two days a week, drives a forklift on Thursdays and catches up on paperwork on Fridays.  Everyone has stints in manual and office work.”  This company has been around for 35 years and the model could be easily adapted to involve fans in the ownership and running of the clubs and of the league.

Behind all the threats of financial collapse lies the reality that Scottish Football must change.  This does not require selling out on the vey fundamentals of the game but nor does it mean turning inwards.  One football blog has proposed that Scottish teams join the English league and that each club finds its level within it.  This at first sight might seem the very antithesis of the alternative above.  I believe it is not.  The rebuilding of Scottish Football on the foundations of worker and supporter ownership and control could seek to export and demonstrate this model to fans in England and further afield.

The late, great Scottish manager Jock Stein said that “football without fans is nothing” and the fans have just proved it.  That other great Scottish manager Bill Shankly, who plied his trade in England, said that “the socialism I believe in is everyone working for each other, everyone having a share of the rewards. It’s the way I see football, the way I see life.”  The ordinary fan in Scotland has set a tremendous example of challenging authority and winning; a small battle in a very large war, but most importantly – a victory!