Ideas for change - an anti cap workshop

Rs 30

Ideas for change: An anti-capitalist workshop Corporate globalisation is destroying our world and revolution is once again in the air. But to win, we need clarity on how the system work and how we defeat it.

This is a new series of workshops to help activists develop their theoretical understanding.

Each workshop starts with a brief introduction to the general topic outlining the main ideas of Marxists within the anti-capitalist movement.

Unlike conventional education, however, most of the learning is done through discussion and debate. To gain the most from the workshop some reading is important as it gives you a chance to make your own input into the argument. We have kept the readings fairly short – and have sometimes added a few extra references so can follow up each session later.

We also want to ensure that the workshops have more immediate uses. So at the end of each general, there is a briefing session prepared by someone in the group on some current issues of concern for socialists.

How to Do the Reading: Almost all the readings are available on this page where you can download them yourself. We will also supply photocopies for a small cost to cover the printing bills – but you will need to order them in advance.

Once you get the reading, go over it and mark anything that you have a question about. You may not understand a particular point – or you may feel that you disagree with the point. In any event, make sure you raise it during the workshop Contact the SWP at (01) 8722682 for more information on the workshop THE PROGRAMME: Session 1: Free Your Mind: Myths of Human Nature and the Market.

Two main arguments are used to justify capitalism.. One comes from ‘rational choice theory’ and asserts that humans are selfish individuals who pursue their own interests.

The other suggests that the market is the only way to organise society efficiently and guarantee individual choice. We need to free our minds of both these myths.

Reading: Judy Cox: An Introduction to Marx’s Theory of Alienation Susan George: A short History of Neo-Liberalism

Session 2: All Change: Marx’s Theory of History Most people fight when there is some chance of winning. So how do we know if it is possible to overthrow capitalism? Marx gave one answer to this with his theory of historical materialism. He argued that history is a story of societies changing –even if few imagined at first that this was possible. It is a vital theoretical tool for understanding why there is a real possibility of getting rid of capitalism.

Reading: C. Harman: How Marxism Works Chapter 2 and Chapter 3 K. Marx and F. Engels: The Communist Manifesto

Sesson 3: The Return of Empire: Theories of Imperialism We are back to the day when the West brought ‘civilisation’ to poorer countries – only now they call it ‘democracy’. Here we look at the link between empire and corporate globalisation. Also what attitude should activists take to resistance movements – even if we do not agree with their politics. Arundhati Roy argues eloquently that we need to support such movements against the Empire – while Chris Harman looks at imperialism today Reading: Arundhati Roy: Public Power and Empire Chris Harman; Analysing Imperialism

Session 4: Racism: Where does it come from?

Ireland has a large migrant population who face institutional racism on a daily basis. Why is racism so deeply embedded in Western society even though there is much talk of a liberal culture? Why do we need so many immigration controls? Here we look at the experience of fighting racism in Ireland over the past number of years.

Reading: Kieran Allen: Citizenship and racism

Session 5: State and Revolution Do we try to reform the system gradually by working from the inside? Or must there be a revolution to bring real change? It is a classic debate and one we need to get to grips with.

2

Reading: Lenin: State and Revolution Venezuela: many steps to come

Session 6 : Learning to win: Tactics and Strategy We need to be organised – because our opponents certainly are. But once a revolutionary party exists, how does it set out to become the majority? This is the area that is covered by this session on tactics and strategy. If getting ridding of capitalism was only about moral denunciation, we would have won a long time ago. So we need to understand how our ideas our theories can make a link with practice.

Reading: Tony Cliff: Why We need a revolutionary party Duncan Hallas: Sectarianism

3

Session 1:

Free Your Mind: Myths of Human Nature and the Market.

4

Session 1: Free Your Mind: Myths of Human Nature and the Market.

WHY WE NEED MARXIST THEORY Chris Harman ‘WHAT DO we need theory for? We know there is a crisis. We know we are being robbed by our employers. We know we’re all angry. We know we need socialism. All the rest is just for the intellectuals.’

You often hear words such as these from militant socialists and trade unionists. Such views are strongly encouraged by anti-socialists, who try to give the impression that Marxism is an obscure, complicated and boring doctrine.

Socialist ideas, they say, are ‘abstract’. They may seem all right in theory, hut in real life common sense tells us something else entirely.

The trouble with these arguments is that the people who put them forward usually have a ‘theory’ of their own, even if they refuse to recognise it. Ask them any question about society, and they will try to answer it with some generalisation or other. A few examples…

‘People are naturally selfish.’

‘Anyone can get to the top if they try hard enough.’

‘If it weren’t for the rich there wouldn’t be any money to provide work for the rest of us.’

‘If only we could educate the workers, society would change.’

‘Declining morals have brought the country to its present state.’

Listen to any argument in the street, on the bus, in the canteen. You’ll hear dozens of such sayings. Each and every one contains a view of why society is like it is and of how people can improve their condition. Such views are all ‘theories’ of society.

When people say they do not have a theory, all they really mean is they have not clarified their views.

This is particularly dangerous for anyone who is trying to change society. For the newspapers, the radio, the TV, are all continually filling our minds with attempted explanations for the mess society is in. They hope we will accept what they say without thinking more about the issues.

But you cannot fight effectively to change society unless you recognise what is false in all these different arguments.

This was first shown 150 years ago. In the 1830s and 1840s the development of industry in areas such as the north west of England drew hundreds of thousands of men, women and children into miserably paid jobs. They were forced to endure living conditions of unbelievable squalor.

They began to fight back against this with the first mass workers’ organisations — the first trade unions, and in Britain the first movement for political rights for workers, Chartism. Alongside these movements were the first small groups of people dedicated to winning socialism.

Immediately the problem arose as to how the workers’ movement could achieve its aim.

Some people said it was possible to persuade society’s rulers to change things through peaceful means. The ‘moral force’ of a mass, peaceful movement would ensure that benefits were given to the workers. Hundreds of thousands of people organised, demonstrated, worked to build a movement on the basis of such views—only to end defeated and demoralised.

Others recognised the need to use ‘physical force’, but thought this could he achieved by fairly small, conspiratorial groups cut off from the rest of society. These too led tens of thousands of workers into struggles that ended in defeat and demoralisation.

Still others believed the workers could achieve their goals by economic action, without confronting the army and the police. Again, their arguments led to mass actions. In England in 1842 the world’s first general strike took place in the industrial areas of the north, with tens of thousands of workers holding out for four weeks until forced back to work by hunger and privation.

5

It was towards the end of the first stage of defeated workers’ struggles, in 1848, that the German socialist, Karl Marx, spelt out his own ideas fully, in his pamphlet The Communist Manifesto.

His ideas were not pulled out of thin air. They attempted to provide a basis for dealing with all the questions that had been brought up by the workers’ movement of the time.

The ideas Marx developed are still relevant today. It is stupid to say, as some people do, that they must be out of date because Marx first wrote them down 130 years ago. In fact, all the notions of society that Marx argued with are still very widespread. Just as the Chartists argued about ‘moral force’ or ‘physical force’, socialists today argue about the ‘parliamentary road’ or the ‘revolutionary road’. Among those who are revolutionaries the argument for and against ‘terrorism’ is as alive as it was in 1848.

The Idealists Marx was not the first person to try to describe what was wrong with society. At the time he was writing, new inventions in factories were turning out wealth on a scale undreamt of by previous generations. For the first time it seemed humanity had the means to defend itself against the natural calamities that had been the scourge of previous ages.

Yet this did not mean any improvement in the lives of the majority the people. Quite the opposite. The men, women and children who manned the new factories led lives much worse that those led by their grandparents who had toiled the land. Their wages barely kept them above the bread line; periodic bouts of mass unemployment thrust them well below it. They were crammed into miserable, squalid slums, without proper sanitation, subjected to monstrous epidemics.

Instead of the development of civilisation bringing general happiness and well-being, it was giving rise to greater misery.

This was noted, not just by Marx, but by some of the other great thinkers of the period — men such as the English poets Blake and Shelley, the Frenchmen Fourier and Proudhon, the German philosophers Hegel and Feuerbach.

Hegel and Feuerbach called the unhappy state in which humanity found itself ‘alienation’ – a term you still often hear. By alienation, Hegel and Feuerbach meant that men and women continually found that they were dominated and oppressed by what they themselves had done in the past. So, Feuerbach pointed out, men had developed the idea of God – and then had bowed down before it, feeling miserable because they could not live up to something they themselves had made. The more society advanced, the more miserable, ‘alienated’ people became.

In his own earliest writings Marx took this notion of ‘alienation’ and applied it to the life of those who created the wealth of society.

‘The worker becomes poorer the more wealth he produces, the more his production increases in power and range . . . With the increasing value of the world of things proceeds in direct proportion the devaluation of the world of men … The object which labour produces confronts it as something alien, as a power independent of the producer . . .’

In Marx’s time the most popular explanations of what was wrong with society were still of a religious kind. The misery of society, it was said, was because of the failure of people to do what God wanted them to. If only we were all to ‘renounce sin’ everything would turn out all right.

A similar view is often heard today, although it usually purports to be non-religious. This is the claim that ‘to change society, you must first change yourself.’ If only individual men and women would cure themselves of ‘selfishness’ or ‘materialism’ (or occasionally ‘hang-ups’) then society would automatically get better.

A related view spoke not of changing all individuals, but a few key ones — those who exercise power in society. The idea was to try to make the rich and powerful ‘see reason’.

One of the first British socialists, Robert Owen, began by trying to convince industrialists that they should be kinder to their workers. The same idea is still dominant today among the leaders of the Labour Party, including its left wing. Note how they always call the crimes of the employers ‘mistakes’, as if a bit of argument will persuade big business to relax its grip on society.

6

Marx referred to all such views as ‘idealist’. Not because he was against people having ‘ideas’, but because such views see ideas as existing in isolation from the conditions in which people live.

People’s ideas are intimately linked to the sort of lives they are able to live. Take, for instance, ‘selfishness’. Present day capitalist society breeds selfishness — even in people who continually try to put other people first. A worker who wants to do his best for his children, or to give his parents something on top of their pension, finds the only way is to struggle continually against other people — to get a better job, more overtime, to be first in the queue for redundancy. In such a society you cannot get rid of ‘selfishness’ or ‘greediness’ merely by changing the minds of individuals.

It’s even more ridiculous to talk of changing society by changing the ideas of ‘top people’.

Suppose you were successful in winning a big employer over to socialist ideas and he then stopped exploiting workers. He would just lose in competition with rival employers and be driven out of business.

Even for those who rule society what matters is not ideas, but the structure of the society in which they hold those ideas.

The point can be put another way. If ideas are what change society, where do the ideas come from? We live in a certain sort of society. The ideas put across by the press, the TV, the educational system and so on defend that sort of society. How has anyone ever been able to develop completely different ideas? Because their daily experiences contradict the official ideas of our society.

For example, you cannot explain why far fewer people are religious today than 100 years ago simply in terms of the success of atheistic propaganda. You have to explain why people listen to atheistic ideas in a way they did not 100 years ago.

Similarly, if you want to explain the impact of ‘great men’, you have to explain why other people agree to follow them. It is no good saying that, for example, Napoleon or Lenin changed history, without explaining why millions of people were willing to do what they suggested. After all, they were not mass hypnotists. Something in the life of society at a certain point led people to feel that what they suggested seemed correct.

You can only understand how ideas change history if you understand where those ideas come from and why people accept them. That means looking beyond the ideas to the material conditions of the society in which they occur. That is why Marx insisted: ‘It is not consciousness that determines being, but social being that determines consciousness.’

AN INTRODUCTION TO MARX'S THEORY OF ALIENATION Judy Cox Issue 79 of INTERNATIONAL SOCIALISM, quarterly journal of the Socialist Workers Party (Britain) Published July 1998 Copyright © International Socialism Summer 1998 We live in a world where technological achievements unimaginable in previous societies are within our grasp: this is the age of space travel, of the internet, of genetic engineering. Yet never before have we felt so helpless in the face of the forces we ourselves have created. Never before have the fruits of our labour threatened our very existence: this is also the age of nuclear disasters, global warming, and the arms race. For the first time in history we can produce enough to satisfy the needs of everyone on the planet. Yet millions of lives are stunted by poverty and destroyed by disease.

Despite our power to control the natural world, our society is dominated by insecurity, as economic recession and military conflict devastate lives with the apparently irresistible power of natural disasters. The more densely populated our cities become, the more our lives are characterised by 7

feelings of isolation and loneliness. To Karl Marx these contradictions were apparent when the system was still young. He noted that: On the one hand, there have started into life industrial and scientific forces, which no epoch of the former human history had ever suspected. On the other hand, there exist symptoms of decay, far surpassing the horrors of the Roman Empire. In our days everything seems pregnant with its contrary. Machinery, gifted with the wonderful power of shortening and fructifying human labour, we behold starving and overworking it. The new-fangled sources of wealth, by some strange weird spell, are turned into sources of want. The victories of art seem bought by loss of character.1 Marx developed his theory of alienation to reveal the human activity that lies behind the seemingly impersonal forces dominating society. He showed how, although aspects of the society we live in appear natural and independent of us, they are the results of past human actions. For Hungarian Marxist Georg Lukรกcs Marx's theory 'dissolves the rigid, unhistorical, natural appearance of social institutions; it reveals their historical origins and shows therefore that they are subject to history in every respect including historical decline'.2 Marx showed not only that human action in the past created the modern world, but also that human action could shape a future world free from the contradictions of capitalism. Marx developed a materialist theory of how human beings were shaped by the society they lived in, but also how they could act to change that society, how people are both 'world determined' and 'world producing'. For Marx, alienation was not rooted in the mind or in religion, as it was for his predessesors Hegel and Feuerbach. Instead Marx understood alienation as something rooted in the material world. Alienation meant loss of control, specifically the loss of control over labour. To understand why labour played such a central role in Marx's theory of alienation, we have to look first at Marx's ideas about human nature.3 What is human nature?

Marx opposed the common sense idea that humans have a fixed nature which exists independently of the society they live in. He demonstrated that many of the features attributed to unchanging human nature in fact vary enormously in different societies. However, Marx did not reject the idea of human nature itself. He argued that the need to labour on nature to satisfy human needs was the only consistent feature of all human societies, the 'ever lasting nature-imposed condition of human existence'.4 Human beings, like all other animals, must work on nature to survive. The labour of humans, however, was distinguished from that of animals because human beings developed consciousness. Marx gave a famous description of this at the beginning of Capital: A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement.5 In a useful introduction to Marx's ideas, How to Read Karl Marx, Ernst Fischer also described what is unique about human labour. He explained how, because we act on nature consciously, we build on our successes and develop new ways of producing the things we need. This means that we have a history, whereas animals do not: 'The species-nature of animal is an eternal repetition, that of man is transformation, development and change'.6 Working on nature alters not only the natural world, but also the labourer himself. Marx frequently reinforced this idea, as in the following quote from Capital: 'By thus acting on the external world and changing it, he at the same time changes his own nature. He develops his slumbering powers and compels them to act in obedience to his sway.' Thus labour is a dynamic process through which the labourer shapes and moulds the world he lives in and stimulates himself to create and innovate. Marx called our capacity for conscious labour our 'species being'.

8

Our species being is also a social being, as Marx explained in the Economic and Philosophical Manuscripts (1844): 'The individual is the social being.' People have to enter into relationships with each other regardless of their personal preferences because they need to work together to get what they need to live. In the Grundrisse, Marx emphasised the point: 'Society does not consist of individuals; it expresses the sum of connections and relationships in which individuals find themselves.' Humanity relates to the physical world through labour; through labour humanity itself develops and labour is the source of human beings' relationships with each other. What happens to the process of work, therefore, has a decisive influence on the whole of society.

Our ability to work, to improve how we work and build on our successes, has tended to result in the cumulative development of the productive forces. One such development gave rise to class society.

When society became capable of producing a surplus, it also became possible for a class to emerge which was liberated from the need to directly produce and could live from its control over the labour of others. This process was necessary in order to develop and direct the productive forces, but it also meant that the majority of society, the producers, lost control of their labour. Thus, the alienation of labour arose with class society, and Ernst Fischer has given a brilliant description of how it reversed the limitless potential of labour: The first tool contains within it all the potential future ones. The first recognition of the fact that the world can be changed by conscious activity contains all future, as yet unknown, but inevitable change. A living being which has once begun to make nature his own through the work of his hands, his intellect, and his imagination, will never stop. Every achievement opens the door to unconquered territory... But when labour is destructive, not creative, when it is undertaken under coercion and not as the free play of forces, when it means the withering, not the flowering, of man's physical and intellectual potential, then labour is a denial of its own principle and therefore of the principle of man.7 The emergence of class divisions in which one class had control over the means of producing what society needed, led to a further division between individuals and the society to which they belonged.

Certain forms of social life 'drive a wedge between the two dimensions of the self, the individual and the communal',8 producing a separation between individuals' interests and those of society as a whole. However, alienation is not an unalterable human condition which exists unchanged in every class society.

Alienation and capitalism: all in a day's work In feudal society humans had not yet developed the means to control the natural world, or to produce enough to be free from famine, or to cure diseases. All social relationships were 'conditioned by a low stage of development of the productive powers of labour and correspondingly limited relations between men within the process of creating and reproducing their material life, hence also limited relations between man and nature'.9 Land was the source of production, and it so dominated the feudal-manorial system that men saw themselves not as individuals but in relation to the land. Marx described this in the Economic and Philosophical Manuscripts: In feudal landownership we already find the domination of the earth as of an alien power over men.

The serf is an appurtenance of the land. Similarly the heir through primogeniture, the first born son, belongs to the land. It inherits him. The rule of private property begins with property in land which is its basis.10 Ownership of land was dependent on inheritance and blood lines: your 'birth' determined your destiny. In an early work Marx described how 'the aristocracy's pride in their blood, their descent, in short the genealogy of the body...has its appropriate science in heraldry. The secret of the aristocracy is zoology'.11 It was this zoology which determined your life and your relationships with others. On

9

the one hand, the low level of the productive forces meant constant labour for the peasants, while on the other, the feudal lords and the church officials took what they wanted from the peasants by force.

Thus alienation arose from the low level of the productive forces, from human subordination to the land and from the domination of the feudal ruling class. However, there were limits to these forms of alienation. The peasants worked their own land and produced most of the things they needed in their own independent family units. 'If a person was tied to the land, then the land was also tied to the people... The peasant, and even the serf of the middle ages, remained in possession of at least 50 percent, sometimes 60 and 70 percent, of the output of their labour'.12 The social relationships in feudal society were relationships of domination and subordination, but they were obviously social relationships between individuals. In Capital Marx described how 'the social relations between individuals in the performance of their labour appear at all events as their own mutual personal relations, and are not disguised under the shape of social relations between the products of labour'.13 However, the constraints of feudalism were very different from the dynamic of capitalism. The bourgeoisie wanted a society in which everything could be bought and sold for money: 'Selling is the practice of alienation'.14 The creation of such a society depended on the brutal enclosures of the common land. This meant that, for the first time, the majority in society were denied direct access to the means of production and subsistence, thus creating a class of landless labourers who had to submit to a new form of exploitation, wage labour, in order to survive. Capitalism involved 'a fundamental change in the relations between men, instruments of production and the materials of production'.15 These fundamental changes meant that every aspect of life was transformed. Even the concept of time was radically altered so that watches, which were toys in the 17th century, became a measure of labour time or a means of quantifying idleness, because of the 'importance of an abstract measure of minutes and hours to the work ethic and to the habit of punctuality required by industrial discipline'.16 Men no longer enjoyed the right to dispose of what they produced how they chose: they became separated from the product of their labour. Peter Linebaugh in his history of 18th century London, The London Hanged, explained that workers considered themselves masters of what they produced.

It took great repression, a 'judicial onslaught', in the late 18th century to convince them that what they produced belonged exclusively to the capitalists who owned the factories. During the 18th century most workers were not paid exclusively in money. 'This was true of Russian serf labour, American slave labour, Irish agricultural labour and the metropolitan labour in London trades'.17 By the 19th century, however, wage labour had replaced all other forms of payment. This meant labour was now a commodity, sold on the market. Capitalists and workers were formally independent of each other, but in reality inextricably connected. Production no longer took place in the home, but in factories where new systems of discipline operated. The mechanisation of labour in the factories transformed people's relationship with machines, 'those remarkable products of human ingenuity, became a source of tyranny against the worker'.18 In Capital Marx compared the work of craftsmen and artisans to that of the factory worker: In handicrafts and manufacture, the workman makes use of a tool, in the factory, the machine makes use of him. There the movements of the instrument of labour proceed from him, here it is the movements of the machines that he must follow. In manufacture the workmen are parts of a living mechanism. In the factory we have a lifeless mechanism independent of the workman, who becomes a mere living appendage.19 One of the most important, and devastating, features of factory production was the division of labour.

Prior to capitalism there had been a social division of labour, with different people involved in different branches of production or crafts. With capitalism there arose the detailed division of labour within each branch of production. This division of labour meant that workers had to specialise in particular tasks, a series of atomised activities, which realised only one or two aspects of their human powers at the expense of all the others. Harry Braverman pointed out the consequences of this 10

division: 'While the social division of labour subdivides society, the detailed division of labour subdivides humans, and while the subdivision of society may enhance the individual and the species, the subdivision of the individual, when carried on without regard to human capabilities and needs, is a crime against the person and humanity'.20 John Ruskin, the 19th century critic of industrialisation, made a similar point when he wrote that the division of labour is a false term because it is the men who are divided.

In this system workers become increasingly dependent on the capitalists who own the means of production. Just as the worker 'is depressed, therefore, both intellectually and physically, to the level of a machine, and from being a man becomes an abstract activity and a stomach, so he also becomes more and dependent on every fluctuation in the market price, in the investment of capital and on the whims of the wealthy'.21 It became impossible for workers to live independently of capitalism: to work meant to be reduced to a human machine; to be deprived of work meant living death. Without work, if capital ceases to exist for him, Marx argued the worker might as well bury himself alive: 'The existence of capital is his existence, his life, for it determines the content of his life in a manner indifferent to him'.22 There is no choice involved - work is a matter of survival. Therefore labour became forced labour; you could not choose not to work, you could not choose what you made, and you could not choose how you made it. Marx noted: The fact that labour is external to the worker, does not belong to his essential being; that he therefore does not confirm himself in his work, but denies himself, feels miserable and not happy, does not develop free mental and physical energy, but mortifies his flesh and ruins his mind. Hence the worker feels himself only when he is not working; when he is working he does not feel himself. He is at home when he is not working, and not at home when he is working. His labour is therefore not voluntary but forced, it is forced labour. It is therefore not the satisfaction of a need, but a mere means to satisfy need outside itself. Its alien character is clearly demonstrated by the fact that as soon as no physical or other compulsion exists it is shunned like the plague.23 There was another side to the fragmentation of labour in the factory system. The creation of the 'detail labourer who performed fractional work in the workshop meant that the value-producing class became collective, since no worker produced a whole commodity'.24 This collectivity expressed itself in constant struggle against capitalist forms of production and frequent attempts by workers to assert their right to control machines rather than be controlled by them, most famously in the Luddite Rebellion of the early 19th century, a revolt so widespread that more troops were deployed to crush it than were sent to fight with Wellington at Waterloo.

Four aspects of alienation The development of capitalism proved irresistible and it brought alienation on a scale previously unimaginable. In his Economic and Philosophical Manuscripts (also known as the 1844, or Paris Manuscripts) Marx identified four specific ways in which alienation pervades capitalist society.

The product of labour: The worker is alienated from the object he produces because it is owned and disposed of by another, the capitalist. In all societies people use their creative abilities to produce objects which they use, exchange or sell. Under capitalism, however, this becomes an alienated activity because 'the worker cannot use the things he produces to keep alive or to engage in further productive activity... The worker's needs, no matter how desperate, do not give him a licence to lay hands on what these same hands have produced, for all his products are the property of another'.25 Thus workers produce cash crops for the market when they are malnourished, build houses in which they will never live, make cars they can never buy, produce shoes they cannot afford to wear, and so on.

Marx argued that the alienation of the worker from what he produces is intensified because the products of labour actually begin to dominate the labourer. In his brilliant Essays on Marx's Theory 11

of Value, I I Rubin outlines a quantitative and a qualitative aspect to the production of commodities.

Firstly, the worker is paid less than the value he creates. A proportion of what he produces is appropriated by his boss; the worker is, therefore, exploited. Qualitatively, he also puts creative labour into the object he produces, but he cannot be given creative labour to replace it. As Rubin explains, 'In exchange for his creative power the worker receives a wage or a salary, namely a sum of money, and in exchange for this money he can purchase products of labour, but he cannot purchase creative power. In exchange for his creative power, the worker gets things'.26 This creativity is lost to the worker forever, which is why under capitalism work does not stimulate or invigorate us and 'open the door to unconquered territory', but rather burns up our energies and leaves us feeling exhausted.

This domination of dead labour over living labour lies behind Marx's assertion in the Manuscripts that 'the alienation of the worker means not only that his labour becomes an object, an external existence, but that it exists outside him, independently of him and alien to him, and begins to confront him as an autonomous power; that the life which he has bestowed on the object confronts him as hostile and alien'.27 For Marx this state of affairs was unique to capitalism. In previous societies those who work harder could usually be expected to have more to consume. Under capitalism, those who work harder increase the power of a hostile system over them. They themselves, and their inner worlds, become poorer. 'The worker becomes an ever cheaper commodity the more goods he creates. The devaluation of the human world increases in direct relation with the increase in value of the world of things'.28 The labour process: The second element of alienation Marx identified is a lack of control over the process of production. We have no say over the conditions in which we work and how our work is organised, and how it affects us physically and mentally. This lack of control over the work process transforms our capacity to work creatively into its opposite, so the worker experiences 'activity as passivity, power as impotence, procreation as emasculation, the worker's own physical and mental energy, his personal life - for what is life but activity? - as an activity directed against himself, which is independent of him and does not belong to him'.29 The process of work is not only beyond the control of the workers, it is in the control of forces hostile to them because capitalists and their managers are driven to make us work harder, faster and for longer stints. In addition, as Harry Braverman points out, 'in a society based upon the purchase and sale of labour power, dividing the craft cheapens its individual parts',30 so the bosses also have an interest in breaking down the labour process into smaller and smaller parts. The resulting rigidly repetitive process buries the individual talents or skills of the worker, as Marx described: Factory work exhausts the nervous system to the uttermost, it does away with the many-sided play of the muscles, and confiscates every atom of freedom, both in bodily and intellectual activity... The special skill of each individual insignificant factory operative vanishes as an infinitesimal quantity before the science, the gigantic physical forces, and mass of labour that are embodied in the factory mechanism and, together, with that mechanism, constitute the power of the master.31 Modern methods of production have increased the fragmentation of the labour process since Marx's day. The organisation of modern production is still based on the methods of the assembly line.

Scientific research is used to break the production process down into its component parts. This has led, firstly, to the deskilling of white collar jobs and to a situation where managers have a monopoly of control over the production process: 'The unity of thought and action, conception and execution, hand and mind, which capitalism threatened from it beginnings, is now attacked by a systematic dissolution employing all the resources of science and the various engineering disciplines based upon it'.32 Conditions of work, from the length of the working day to the space we occupy, are predetermined: 'The entire work operation, down to it smallest motion, is conceptualised by the management and engineering staff, laid out, measured, fitted with training and performance standards - all entirely in advance'.33 Workers are treated as machines, with the aim of transforming the subjective element of labour into objective, measurable, controlled processes. In some brilliant passages in History and Class Consciousness, Lukรกcs describes how the increasingly rationalised and 12

mechanised process of work affects our consciousness. As the following extract shows, his analysis was prophetic and gives a strikingly accurate picture of today's white collar work: In consequence of the rationalisation of the work-process the human qualities and idiosyncrasies of the worker appear increasingly as mere sources of error when contrasted with these abstract special laws functioning according to rational predictions. Neither objectively nor in his relation to his work does man appear as the authentic master of this process; on the contrary, he is a mechanical part incorporated into a mechanical system. He finds it already pre-existing and self-sufficient, it functions independently of him and he has to conform to its laws whether he likes it or not.34 Our fellow human beings: Thirdly, we are alienated from our fellow human beings. This alienation arises in part because of the antagonisms which inevitably arise from the class structure of society.

We are alienated from those who exploit our labour and control the things we produce. As Marx put it: If his activity is a torment for him, it must provide pleasure and enjoyment for someone else... If therefore he regards the product of his labour, his objectified labour, as an alien, hostile and powerful object which is independent of him, then his relationship to that object is such that another man alien, hostile, powerful and independent of him - is its master. If he relates to his own activity an unfree activity, then he relates to it as activity in the service, under the rule, coercion and yoke of another man.35 In addition, we are connected to others through the buying and selling of the commodities we produce. Our lives are touched by thousands of people every day, people whose labour has made our clothes, food, home, etc. But we only know them through the objects we buy and consume. Ernst Fischer pointed out that because of this we do not see each other 'as fellow-men having equal rights, but as superiors or subordinates, as holders of a rank, as a small or large unit of power'.36 We are related to each other not as individuals but as representatives of different relations of production, the personification of capital, or land or labour. As Bertell Ollman wrote, 'We do not know each other as individuals, but as extensions of capitalism: "In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality".'37 The commodities of each individual producer appear in depersonalised form, regardless of who produced them, where, or in what specific conditions. Commodity production means that everyone 'appropriates the produce of others, by alienating that of their own labour'.38 Marx described how mass commodity production continually seeks to create new needs, not to develop our human powers but to exploit them for profit: Each attempts to establish over the other an alien power, in the hope of thereby achieving satisfaction of his own selfish needs...becomes the inventive and ever calculating slave of inhuman, refined, unnatural and imaginary appetites. He places himself at the disposal of his neighbour's most depraved fancies, panders to his needs, excites unhealthy appetites in him, and pounces on every weakness, so that he can then demand the money for his labour of love.39 We see other people through the lens of profit and loss. Our abilities and needs are converted into means of making money and so we consider other human beings as competitors, as inferiors or superiors.40 Our human nature: The fourth element is our alienation from what Marx called our species being.

What makes us human is our ability to consciously shape the world around us. However, under capitalism our labour is coerced, forced labour. Work bears no relationship to our personal inclinations or our collective interests. The capitalist division of labour massively increased our ability to produce, but those who create the wealth are deprived of its benefits. Marx's descriptions of this process in the Manuscripts are extremely powerful indictments of the system: 13

It is true that labour produces marvels for the rich, but it produces privation for the worker. It produces palaces, but hovels for the worker. It procures beauty, but deformity for the worker. It replaces labour by machines, but it casts some of the workers back into barbarous forms of labour and turns others into machines. It produces intelligence, but it produces idiocy and cretinism for the worker.41 Human beings are social beings. We have the ability to act collectively to further our interests.

However, under capitalism that ability is submerged under private ownership and the class divisions it produces. We have the ability to consciously plan our production, to match what we produce with the developing needs of society. But under capitalism that ability is reversed by the anarchic drive for profits. Thus, rather than consciously shaping nature, we cannot control, or even foresee, the consequences of our actions. For example, new, cheaper techniques of production may, when repeated across industry, produce acid rain or gases which destroy the ozone layer.

Similarly, when one capitalist improves production in his factory, he is unwittingly contributing to the slowing up of the rate of profits for his class as a whole by lowering the rate of profit.42 One firm can produce to fulfil a particularly sharp demand, only to find when the goods hit the market that other firms got there first. Instead of simply meeting demand, there is a glut in the market. This means that we produce more but what we produce is unwanted. All previous societies suffered from shortages, famines and the failure of crops. Under capitalism recessions mean that workers 'consume less because they produce too much. And they consume less, not because their labour is inadequately productive, but because their labour is too productive'.43 There is nothing natural about the economic crises we face: it is our social organisation which prevents us enjoying the potential of our ability to produce.

What is commodity fetishism?

The domination of commodities in our society is so pervasive that it seems to be an inevitable, natural state of affairs. All our achievements, everything we produce, appear as commodities, as Marx noted: 'The wealth of societies in which the capitalist mode of production prevails appears as an immense collection of commodities'.44 Capitalism is the first system of generalised commodity production, in which the commodity has become 'a universal category of society as a whole'.45 The dominance of commodity production has implications for how we experience the world we have created.

The mysterious commodity: In every society human beings have laboured to created objects which help them fulfil their needs. So Marx began his analysis of commodities under capitalism by asserting that 'a commodity is an external object, a thing which through its qualities satisfies human needs of whatever kind', regardless of whether that need comes from stomach or the imagination.46 Commodities must have a use value, but they also have an exchange value. In capitalist society our many different human needs can only be met through the purchase of commodities: to eat we have to buy food in a shop, to travel we have to buy a car or a bus ticket, to have access to knowledge we have to buy books, TVs or computers. Yet the usefulness of all these commodities is overwhelmed by their exchange value and the satisfaction of human needs becomes inseparable from the workings of the market.47 The circulation of commodities on the market is even more cloaked in mystery than the process of their production, where workers have some direct relationship with the commodity they produce.

This relationship is lost when commodities are sent to market and exchanged for money, which, in turn, is exchanged for other commodities. As Marx wrote, 'The actual process of production, as a unity of the direct production process and the circulation process, gives rise to new formations, in which the vein of internal connections is increasingly lost, the production relations are rendered independent of one another, and the component values become ossified into forms independent of one another'.48 Marx explained how the circulation of commodities transforms relationships between 14

individual producers into relationships between the commodities they produce. They are divided from each other, yet utterly dependent on each other's commodities: The owners of commodities find out that the division of labour which turns them into independent private producers also makes the social process of production and the relations of the individual producers to each other within that process independent of the producers themselves; they also find out that the independence of the individuals from each other has its counterpart and supplement a system of all-round material dependence.49 In the capitalist system individuals have to possess certain things - labour power, or materials of production, for example - in order to enter into productive relationships with each other. As a consequence, 'it seems as if the thing itself possesses the ability, the virtue, to establish production relations', rather than the individuals themselves.50 Commodities acquire social characteristics because individuals enter the productive process only as the owners of commodities. Marx described this process: 'To the producers, therefore, the social relations between their private labours...do not appear as direct social relations between persons in their work, but rather as material relations between persons and social relations between things'.51 Thus it appears as if the market itself causes the rise and fall of prices, and pushes workers into one branch of production or out of another, independent of human agency. 'The impact of society on the individual is carried out through the social form of things'.52 This adds another dimension to alienated relationships because, as Marx argued, 'the characters who appear on the economic stage are merely personifications of economic relations; it is as the bearers of these economic relations that they come into contact with each other'.53 Marx described the whole process of the reification of human relationships, the attribution of human powers to inanimate objects, and the way in which social organisation appears as independent of human will as commodity fetishism. Commodity fetishism has increased with the growth of capitalism, in which 'the capitalist mode of production takes over the totality of individual, family, and social needs and, in subordinating them to the market, also reshapes them to serve the needs of capital'.54 Today there is a market for everything, for sex and art, for labour itself, as well as for TVs and cars. As Ernst Fischer wrote, 'We have become so accustomed to living in a world of commodities, where nature is perhaps only a poster for a holiday resort and man only an advertisement for a new product, we exist in such a turmoil of alienated objects offered cheaply for sale, that we hardly ask ourselves any longer what it is that magically transforms objects of necessity (or fashion) into commodities, and what is the true nature of the witches' Sabbath, ablaze with neon moons and synthetic constellations, that has become our day to day reality'.55 Money: the 'universal pimp': The creation of exchange values and the circulation of commodities requires a commodity which can represent all other commodities, through which all other commodities can be compared. Marx described how the development of capitalism brought with it the problem of how to evaluate different commodities and simultaneously created the solution in the form of money, the universal commodity. Physical objects, gold or silver become the 'direct incarnation of all human labour'. With the development of money people's relationship to their production assumes a material shape which is independent of their control and their conscious action: 'This situation is manifested first by the fact that the products of men's labour universally take on the form of commodities. The riddle of the money fetish is therefore the riddle of the commodity fetish, now become visible and dazzling to our eyes'.56 Marx called money the 'universal pimp', mediating between men and their desires. The value of money, the metals in which it was originally embodied, have long since been discarded in favour of intrinsically worthless alloy metal coins or paper money. And yet money can buy everything - it is the most powerful commodity in existence: 'Money is all other commodities divested of their shape, the product of their universal alienation'.57 The role of money in the circulation of commodities 15

shapes the consciousness of human beings involved in that process. Money takes on the value of the objects it represents, it appears to be the force which can create value itself. As Meszaros explains: Money is taken to possess these colossal powers as natural attributes. People's attitude toward money is, undoubtedly, the outstanding instance of capitalist fetishism, reaching its height in interest bearing capital. Here, people think they see money creating more money, self-expanding value... workers, machines, raw materials - all the factors of production - are downgraded to mere aids, and money itself is made the producer of wealth.58 Thus money acquires great abilities, but on the other side of the coin, all our human desires and abilities contract into what Marx called a sense of having: 'Private property has made us so stupid and one-sided that an object is only ours when we have it, when it exists for us as capital or when we directly possess, eat, drink, wear, inhabit it, etc, in short, when we use it'.59 Marx also described how this desire for possession is both stimulated and denied: 'The worker is only permitted to have enough for him to live, and he is only permitted to live in order to have'.60 In a particularly perceptive passage from the Manuscripts, Marx explains how money submerges our personalities. It is a brilliant rejoinder to those who argue that capitalism allows our individuality to flourish: That which exists for me through the medium of money, that which I can pay for, ie which money can buy, that am I, the possessor of the money. The stronger the power of my money, the stronger I am. The properties of money are my, the possessors', properties and essential powers. Therefore what I am and what I can do is by no means determined by my individuality. I am ugly, but I can buy the most beautiful women. Which means to say that I am not ugly, for the effect of ugliness, its repelling power, is destroyed by money. As an individual I am lame, but money procures me 24 legs.

Consequently, I am not lame. I am a wicked, dishonest, unscrupulous individual, but money is respected, and so also is its owner...through money I can have anything the human heart desires. Do I not therefore possess all human abilities? Does not money therefore transform all my incapacities into their opposite?61 Commodity fetishism and class: Alienation and commodity fetishism shape all relationships in society. Those who possess wealth also inhabit a world beyond their control, in which relationships are reified. Their individuality is submerged by the dictates of capitalism - as Marx wrote, the instinct to enrich himself, which 'in a miser is a mere idiosyncrasy, is, in the capitalist, the effect of the social mechanism, of which he is but one of the wheels'.62 The huge productive forces owned by the ruling class may bring them riches beyond our imaginings, but they cannot control the vast economic forces of the system or even plan any section of it accurately. The capitalists are caught in a contradiction, that 'capital is a social force, but it is privately, rather than collectively, owned so its movements are determined by individual owners necessarily indifferent to all the social implications of their activities'.63 The capitalist has constantly to compete in order to keep up with his competitors and while his actions may be perfectly sensible for the individual firm, when generalised across society they cause the economic recessions which can destroy many firms. Economic crises are irrefutable proof that the system is more powerful than any individual capitalist. This explains why crises are such a massive blow to the confidence and ideology of the ruling class. The capitalist may like to believe that his daring, entrepreneurial spirit creates his wealth, but in reality he 'rides a wave another has created'.64 The class struggle, which he cannot prevent, brings home forcibly how dependent he is on the labour of his employees, and, like economic crises, is a wounding blow to the outlook of the ruling class.

In The Holy Family Marx gives a brilliant description of the situation of the ruling class: The possessing class and the class of the proletariat present the same human self-alienation. But the former class feels at home in this self-alienation, it finds confirmation of itself and recognises in alienation its own power; it has in it a semblance of human existence, while the class of the 16

proletariat feels annihilated in its self-alienation; it sees therein its own powerlessness and the reality of an inhuman existence.65 Thus, no matter how deeply alienation affects them, the ruling class will always be driven to defend the system that creates their alienation with all the power and brutality at their disposal because of their material position within it. In addition to this, Lukรกcs argued that the ruling class can never rise above the commodity fetishism of capitalism. The bourgeoisie can never recognise the real nature of capitalism without confronting their own role as exploiters and upholders of the system. Therefore the capitalists do not want to recognise the real social relationships which underlie the institutions of capitalist society. They prefer to continue believing that the relations of production are natural and inevitable. In contrast, Lukรกcs argued that workers, though also shaped by commodity fetishism, were not permanently blinded to the reality of capitalism. Rather he argued that the working class is in a unique position to be able to tear the veil of reification from capitalism because its struggle against capitalism reveals its real own role in producing the wealth of society. Class struggle means that workers no longer see themselves as isolated individuals. It means that they can become conscious of the social character of labour. Lukรกcs suggests that when workers glimpse the reality behind commodity fetishism it can help them to realise the need for a revolutionary transformation of society: 'This enables us to understand why it is only in the proletariat that the process by which a man's achievement is split off from his total personality and becomes a commodity leads to a revolutionary consciousness'.66 The uses and abuses of Marx's theory The concept of alienation is a central but controversial aspect of Marxism. When Marx's key work on alienation, The Economic and Philosophical Manuscripts, was eventually published in 1932, it had a dramatic impact on the tradition known as 'Western Marxism', which included writers like Herbert Marcuse and John Paul Sartre.67 However, in the hands of the Western Marxists, the theory of alienation became intermingled with idealist theories, which explained alienation in terms of psychology rather than the organisation of society. The New Left which emerged in the late 1950s reacted against the theory and practice of Stalinism, but some of the writers associated with the New Left threw the Marxist baby out with the Stalinist bathwater. They abandoned some central aspects of Marxism, such as the central role of the economic structure in shaping the rest of society and the objective class antagonisms at the heart of capitalism. As Perry Anderson wrote, 'The most striking single trait of Western Marxism as a common tradition is thus perhaps the constant presence and influence on it of successive types of European idealism'.68 Alienation was seized upon to explain the miseries of modern life, and the 'lonely crowd', 'those aggregations of atomised city dwellers who feel crushed and benumbed by the weight of a social system in which they have neither significant purpose nor decision-making power'.69 Alienation came to refer predominately to a state of mind, rather than an understanding of how social organisation affected human beings.

Typical of the confused ideas about alienation fashionable in some quarters at this time is a book edited by Eric and Mary Josephson, Man Alone: Alienation in Modern Society, first published in 1962 and reprinted eight times before 1968. For the Josephsons, alienation describes 'the untold lives of quiet desperation that mark our age', and the long list of those suffering from alienation includes such diverse group as women, immigrants, sexual deviants, drug addicts, young people and artists.70 But the editors understand alienation exclusively as a psychological state, 'referring to an extraordinary variety of psycho-social disorders, including loss of field, anxiety states, anomie, despair, depersonalisation, rootlessness, apathy, social disorganisation, loneliness, atomisation, powerlessness, meaninglessness, isolation, pessimism, and the loss of beliefs and values'.71 If alienation is only a specific psychological problem, then it follows that the solution to alienation must be sought exclusively in the individual consciousness. If alienation is predominantly a state of mind, there is an implication that it can be cured without fundamentally changing the organisation of society. As Eric Fromm suggested, forms of alienation were 'chains of illusion' which can be broken 17

within the context of capitalist society, because they arise from 'stereotyped alternatives of thinking'.72 However, Marx's writings on alienation, from the Manuscripts to the Grundrisse and Capital, demonstrate that for him alienation was not merely a state of mind. The roots of the individual psyche were to be located in how society as a whole is organised. As one Marxist described it, 'The life activity of the alienated individual is qualitatively of a kind. His actions in religion, family affairs, politics and so on, are as distorted and brutalised as his productive activity... There is no sphere of human activity that lies outside these prison walls'.73 Marx's theory offers us an indispensable method of understanding how the production process shapes the whole of society.

There are two areas of activity which are particularly controversial in relation to alienation. This first is the place of intellectual, or mental labour, and creativity in alienated production.

The division of labour described in this article leads to a sharp division between work and creativity.

Work is regimented, broken down into separate tasks. The creative elements in each process are dispersed into a million fragments. Labour itself is a commodity and its value is determined by the labour time which went into its creation, for example, the amount spent on training or educating a worker. A highly skilled technician or engineer will therefore be paid more than an unskilled labourer. As Braverman wrote, 'In this way, a structure is given to all labour process that at its extremes polarises those whose time is infinitely valuable and those whose time is worth almost nothing'.74 However, this does not mean that the intellectual whose time is valuable escapes from the general pattern of alienation. On the contrary, one of the features of modern capitalism is the commercialisation of knowledge.75 The design of a microchip or computer software is just as much the property of the capitalist as a tin of beans or a car. Capitalists enrich themselves through the appropriation of mental labour in the same way as they do through material labour.

The social division of labour undermines the potential of intellectuals to discover new truths about society. As Franz Jakubowski wrote, The social division of labour creates a series of sub-spheres, not only in the economy but in the whole of social life and thought. These develop their own autonomous sets of laws. As a result of specialisation, each individual sphere develops according to the logic of its own specific object.76 Intellectual activity takes place within these limitations, in isolation from society as a whole. In the end, the individual sciences 'cannot understand either the method of the principle of even their own concrete substratum of reality'.77 All the potential we have to develop new techniques and methods is subordinated to competition. The very structure of capitalist society condemns our intellectual developments to the chase of facts in blind isolation from the real movements of society. This does not mean that nothing useful can be developed, rather that research takes place within a framework which constrains and limits its development.

The same processes are at work in the production and consumption of art in capitalist society. As Eugene Lunn explained in his excellent book Marxism and Modernism, bourgeois society offers artistic freedom on one hand and snatches it back with the other: 'Bourgeois society - with all its progressive advance over "feudal" constrictions - is also inimical to many forms of art, for example because of division of labour, the mechanisation of many forms of human activity, and the predominance of quantitative over qualitative concerns'.78 Marx argued that artists, like scientists and intellectuals, could not escape from the general conversion of all human creativity into commodities.

Firstly this is because artists, like all other workers, are dependent on their ability to make money: 'The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyers, the priest, the poet, the man of science, into its paid wage labourers'.79 Secondly, Lunn points out how commodity production shapes art. The fact that works of art are sold on the market shapes every level of their conception and production. Marx gave one example of this in his critique of the novels of Eugene Sue, in which he 'stresses the 18

influence upon the author of the ethical and political assumptions of its intended bourgeois public'.80 Neither can art escape commodity fetishism: 'If one form of spiritualising mystification has been eroded by expansion of commerce - the romantic apotheosis of the arts as soaring above material reality - a new fetishism has replaced it: the fetishism of commodities'.81 This also points to how new, challenging cultural developments are rapidly incorporated into the system as mere commodities.

This does not mean that works of art can be reduced to exactly the same status as a tin of beans. Art stimulates our imagination and emotions. It enriches our understanding of society and can reveal something of the contradictions behind reified appearances: 'It can pierce through the ideological clouds which enshroud social realities.' Some artists devote their energies to attempting to reach beyond capitalism, while others choose to celebrate the system as it exists, but even then the art they produce can penetrate the reified appearance of capitalism. As Lunn wrote: We cannot reduce art to exchange rates reflecting the pervasive alienation. Even with its halo removed, art was capable of diagnosing, and pointing beyond alienating social and economic conditions... All art has the capacity to create a need for aesthetic enjoyment and education which capitalism cannot satisfy. Although coming increasingly under the influence of the marketplace, art is produced and consumed in relative autonomy and is not identical to factory work or to a pure commodity.82 The second controversial application of Marx's theory of alienation is in the formulation of an analysis of other activities outside the sphere of work, which we undertake through choice rather than necessity. The more the world of work confronts us as hostile, exhausting and miserable, the more people pour their energies into their lives outside work. As the system develops new markets are constantly being carved out of our needs and wishes. For example, consider the multimillion pound industries which have developed around commodities which are said to make us look thin or young, our desire to play games, to experience nature or enjoy art. The very fact that we have the 'leisure industry' and the 'entertainment industry' points to the fact that the separation of work from leisure has left a void in our free hours: 'Thus filling time away from the job also becomes dependent upon the market, which develops to an enormous degree those passive amusements, entertainments, and spectacles that suit the restricted circumstances of the city and are offered as substitutes for life itself'.83 The retreat into the privatised world of the individual and the family is a pronounced feature of life in the 1990s. Adopting particular lifestyles seems to offer the only real chance of personal fulfilment.

Hence the increasing fascination for TV programmes and magazines about fashion, cooking, holidays and gardening and the boom in the Do-It-Yourself market. The family and the home have become leisure activities in and of themselves; they have also become subject to the priorities of the market. All the commodities which could increase our free time simply reinforce the family as a unit of consumption not an emotional haven: 'As the advances of modern household and service industries lighten the family labour, they increase the futility of family life; as they remove the burden of personal relations, they strip away its affections; as they create an intricate social life, they rob it of every vestige of community and leave in its place the cash nexus'.84 In addition, Meszaros describes how the retreat into private life simply increases the power of capitalism over us: 'The cult of privacy and of individual autonomy thus fulfils the dual function of objectively protecting the established order against challenge by the rabble, and subjectively providing a spurious fulfilment in an escapist withdrawal to the isolated and powerless individual who is mystified by the mechanisms of capitalist society which manipulate him'.85 Meszaros also makes the point that alienation has deprived us of our ability to have genuinely human relationships.

We are forced to seek compensation for the loss of our humanity in the limited area of our privatised personal lives, yet this merely reinforces our alienation from each other: 'To seek the remedy in autonomy is to be on the wrong track. Our troubles are not due to a lack of autonomy but, on the 19

contrary, to a social structure - a mode of production - that forces on men a cult of it, isolating them from each other'.86 Our attempts to express the creativity of which capitalism has deprived us cannot negate the totality of alienation. The eradication of alienation depends on the transformation of society as a whole.

However we organise our personal lives and leisure time, we cannot individually fulfil our collective ability to shape the natural world we live in. Lifestyles and leisure activities cannot liberate us from alienation, or even create little islands of freedom in an ocean of alienation. As alienation is rooted in capitalist society, only the collective struggle against that society carries the potential to eradicate alienation, to bring our vast, developing powers under our conscious control and reinstitute work as the central aspect of life. As Marx wrote in Capital, 'The veil is not removed from the countenance of the social life process, ie the process of material production, until it becomes production by freely associated men and stands under their conscious and planned control'.87 Notes 1California K Marx, Press, 'Speech at thep31.

Anniversary of the Peoples' Paper' quoted in E Lunn, Marxism and Modernism (University of 1984), 2 G Lukacs, History and Class Consciousness (Merlin, 1971), p47.

3alienation Marx was not to develop anofanalysis of human Marx's philosophical Hegel, saw as partthe ofoutfirst the development thepower human mind. alienation.

Ludwig Feuerbach put gods, forward apredecessor, materialist analysis of alienation, pointing how menthrough transfer rational the to change the world tobroke imaginary but he believed that religious alienation could be eradicated argument alone.

Marx from both Hegel's idealist concept of alienation ahistorical materialism Feuerbach.

For an1996), introduction Callinicos, and Thethe Revolutionary Ideas of KarlofMarx (Bookmarks, ch 3. to Marx's theorectical background, see A 4 Quoted in E Fischer, How to Read Karl Marx (Monthly Review Press, 1996), p53.

5 Ibid, p52.

6 Ibid, p51.

7 Ibid, p54.

8 T Eagleton, Marx (Phoenix, 1997), p27.

9 K Marx, Capital, vol 1 (Penguin, 1976), p173.

10 K Marx, Early Writings (Penguin, 1975), p318.

11 Quoted in P Walton and A Gamble, From Alienation to Surplus Value (Sheed and Ward, 1972), p20.

12 E Mandel and G Novak, The Marxist Theory of Alienation (Pathfinder, 1970), p20.

13 Capital, op cit, p170.

14 K Marx quoted in I Meszaros, Marx's Theory of Alienation (Merlin Press, 1986), p35.

15 P Linebaugh, The London Hanged (Penguin, 1993), p396.

16 Ibid, p225.

17 Ibid, p374.

18 Ibid, p24.

19 Capital, op cit, p460 20 H Braverman, Labour and Monopoly Capitalism (Monthly Review Press, 1974), p73.

21 K Marx, Early Writings, op cit, p285.

22 Ibid, p335.

23 Ibid, p326.

24 P Linebaugh, op cit, p225.

25 B Ollman, Alienation (Cambridge University Press, 1996), p143.

26 I I Rubin, Essays on Marx's Theory of Value (Black Rose Books, 1975), pxxv.

27 K Marx, Early Writings, p324.

28 E Fischer, op cit, p67.

29 Ibid, p327.

30 H Braverman, Labour and Monopoly Capitalism (Monthly Review Press, 1974), p80.

31 E Fischer, op cit, pp58-9.

32 H Braverman, op cit, p171.

33 Ibid, p180.

34 G Lukรกcs, op cit, p89.

35 K Marx, Early Writings, op cit, p331.

20

36 E Fischer, op cit, p63.

37 B Ollman, op cit, p144.

38 Rubin, op cit, p15.

39 K Marx, Early Writings, op cit, p359.

40 There 1977), is a brilliant Wishart, p49. description of one facet of this experience in C Caudwell, The Concept of Freedom (Lawrence and 41 K Marx, Early Writings, op cit, p325.

42 See C Harman, Economics of the Madhouse (Bookmarks, 1995).

43 E Mandel, op cit, p22.

44 K Marx, Capital, op cit, p125.

45 Ibid, p125.

46 Ibid, p1.

47 See ibid, p165.

48 Quoted in B Ollman, op cit, p187.

49 K Marx, Capital, op cit, pp202-203.

50 Ibid, p21.

51 Ibid, pp165-165.

52 Ibid, p24.

53 Ibid, p179.

54 H Braverman, op cit, p271.

55 E Fischer, op cit, p68.

56 Ibid, p187.

57 Ibid, p205.

58 I Meszaros, op cit, p197.

59 K Marx, Early Writings, op cit, p351.

60 Ibid, p361.

61 Ibid, p377.

62 K Marx, quoted in G Lukรกcs, op cit, p133.

63 Ibid, p63.

64 B Ollman, op cit, p154.

65 K Marx, 1990), p87. The Holy Family, quoted in F Jakubowski, Ideology and Superstructure in Historical Materialism (Pluto, 66 G Lukรกcs, op cit, p171.

67 P Anderson, Considerations on Western Marxism (New Left Books, 1976), pp50-51.

68 Ibid, p56.

69 E Mandel, op cit, p6.

70 E and M Josephson, Man Alone: Alienation in Modern Society (Dell Publishing Co, 1968), p12.

71 Ibid, p13.

72 Ibid, ch 1.

73 B Ollman, op cit, p202.

74 H Braverman, op cit, p83.

75 See, for instance, G Carchedi, Frontiers of Political Economy (Verso, 1991), p18.

76 F Jakubowski, op cit, p96.

77 Ibid, p96.

78 E Lunn, op cit, p15.

79 Ibid, p16.

80 Ibid, p12.

81 Ibid, p16.

82 Ibid, pp15-16.

83 H Braverman, op cit, p278, 84 Ibid, p282.

85 I Meszaros, op cit, p26.

21

86 Ibid, p267.

87 K Marx, Capital, op cit, p173.

Return to Contents page: Return to International Socialism Journal Index Home page A Short History of Neo-liberalism

TWENTY YEARS OF ELITE ECONOMICS AND EMERGING OPPORTUNITIES FOR STRUCTURAL CHANGE

by Susan George Conference on Economic Sovereignty in a Globalising World Bangkok, 24-26 March 1999 The Conference organisers have asked me for a brief history of neo-liberalism which they title "Twenty Years of Elite Economics". I'm sorry to tell you that in order to make any sense, I have to start even further back, some 50 years ago, just after the end of World War II. In 1945 or 1950, if you had seriously proposed any of the ideas and policies in today's standard neoliberal toolkit, you would have been laughed off the stage at or sent off to the insane asylum. At least in the Western countries, at that time, everyone was a Keynesian, a social democrat or a socialChristian democrat or some shade of Marxist. The idea that the market should be allowed to make major social and political decisions; the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection--such ideas were utterly foreign to the spirit of the time. Even if someone actually agreed with these ideas, he or she would have hesitated to take such a position in public and would have had a hard time finding an audience.

However incredible it may sound today, particularly to the younger members of the audience, the IMF and the World Bank were seen as progressive institutions. They were sometimes called Keynes's twins because they were the brain-children of Keynes and Harry Dexter White, one of Franklin Roosevelt's closest advisors. When these institutions were created at Bretton Woods in 1944, their mandate was to help prevent future conflicts by lending for reconstruction and development and by smoothing out temporary balance of payments problems. They had no control over individual government's economic decisions nor did their mandate include a licence to intervene in national policy.

In the Western nations, the Welfare State and the New Deal had got underway in the 1930s but their spread had been interrupted by the war. The first order of business in the post-war world was to put them back in place. The other major item on the agenda was to get world trade moving--this was accomplished through the Marshall Plan which established Europe once again as the major trading partner for the US, the most powerful economy in the world. And it was at this time that the strong winds of decolonisation also began to blow, whether freedom was obtained by grant as in India or through armed struggle as in Kenya, Vietnam and other nations.

On the whole, the world had signed on for an extremely progressive agenda. The great scholar Karl Polanyi published his masterwork, The Great Transformation in 1944, a fierce critique of 19th century industrial, market-based society. Over 50 years ago Polanyi made this amazingly prophetic and modern statement: "To allow the market mechanism to be sole director of the fate of human beings and their natural environment...would result in the demolition of society" [p.73]. However, Polanyi was convinced that such a demolition could no longer happen in the post-war world because, as he said [p.251], "Within the nations we are witnessing a development under which the economic system ceases to lay down the law to society and the primacy of society over that system is secured".

Alas, Polanyi's optimism was misplaced--the whole point of neo-liberalism is that the market mechanism should be allowed to direct the fate of human beings. The economy should dictate its

22

rules to society, not the other way around. And just as Polanyi foresaw, this doctrine is leading us directly towards the "demolition of society".

So what happened? Why have we reached this point half a century after the end of the Second World War? Or, as the organisers ask, "Why are we having this conference right now?" The short answer is "Because of the series of recent financial crises, especially in Asia". But this begs the question--the question they are really asking is "How did neo-liberalism ever emerge from its ultra-minoritarian ghetto to become the dominant doctrine in the world today?" Why can the IMF and the Bank intervene at will and force countries to participate in the world economy on basically unfavourable terms. Why is the Welfare State under threat in all the countries where it was established? Why is the environment on the edge of collapse and why are there so many poor people in both the rich and the poor countries at a time when there has never existed such great wealth? Those are the questions that need to be answered from an historical perspective.

As I've argued in detail in the US quarterly journal Dissent, one explanation for this triumph of neoliberalism and the economic, political, social and ecological disasters that go with it is that neoliberals have bought and paid for their own vicious and regressive "Great Transformation". They have understood, as progressives have not, that ideas have consequences. Starting from a tiny embryo at the University of Chicago with the philosopher-economist Friedrich von Hayek and his students like Milton Friedman at its nucleus, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centers, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly.

They have built this highly efficient ideological cadre because they understand what the Italian Marxist thinker Antonio Gramsci was talking about when he developed the concept of cultural hegemony. If you can occupy peoples' heads, their hearts and their hands will follow. I do not have time to give you details here, but believe me, the ideological and promotional work of the right has been absolutely brilliant. They have spent hundreds of millions of dollars, but the result has been worth every penny to them because they have made neo-liberalism seem as if it were the natural and normal condition of humankind. No matter how many disasters of all kinds the neo-liberal system has visibly created, no matter what financial crises it may engender, no matter how many losers and outcasts it may create, it is still made to seem inevitable, like an act of God, the only possible economic and social order available to us.

Let me stress how important it is to understand that this vast neo-liberal experiment we are all being forced to live under has been created by people with a purpose. Once you grasp this, once you understand that neo-liberalism is not a force like gravity but a totally artificial construct, you can also understand that what some people have created, other people can change. But they cannot change it without recognising the importance of ideas. I'm all for grassroots projects, but I also warn that these will collapse if the overall ideological climate is hostile to their goals.

So, from a small, unpopular sect with virtually no influence, neo-liberalism has become the major world religion with its dogmatic doctrine, its priesthood, its law-giving institutions and perhaps most important of all, its hell for heathen and sinners who dare to contest the revealed truth. Oskar Lafontaine, the ex-German Finance Minister who the Financial Times called an "unreconstructed Keynesian" has just been consigned to that hell because he dared to propose higher taxes on corporations and tax cuts for ordinary and less well-off families.

Having set the ideological stage and the context, now let me fast-forward so that we are back in the twenty year time frame. That means 1979, the year Margaret Thatcher came to power and undertook the neo-liberal revolution in Britain. The Iron Lady was herself a disciple of Friedrich von Hayek, she was a social Darwinist and had no qualms about expressing her convictions. She was well known for justifying her programme with the single word TINA, short for There Is No Alternative. The central value of Thatcher's doctrine and of neo-liberalism itself is the notion of competition-competition between nations, regions, firms and of course between individuals. Competition is central because it separates the sheep from the goats, the men from the boys, the fit from the unfit. It is supposed to allocate all resources, whether physical, natural, human or financial with the greatest possible efficiency.

23

In sharp contrast, the great Chinese philosopher Lao Tzu ended his Tao-te Ching with these words: "Above all, do not compete". The only actors in the neo-liberal world who seem to have taken his advice are the largest actors of all, the Transnational Corporations. The principle of competition scarcely applies to them; they prefer to practise what we could call Alliance Capitalism. It is no accident that, depending on the year, two-thirds to three-quarters of all the money labeled "Foreign Direct Investment" is not devoted to new, job-creating investment but to Mergers and Acquisitions which almost invariably result in job losses.

Because competition is always a virtue, its results cannot be bad. For the neo-liberal, the market is so wise and so good that like God, the Invisible Hand can bring good out of apparent evil. Thus Thatcher once said in a speech, "It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all." In other words, don't worry about those who might be left behind in the competitive struggle. People are unequal by nature, but this is good because the contributions of the well-born, the best-educated, the toughest, will eventually benefit everyone. Nothing in particular is owed to the weak, the poorly educated, what happens to them is their own fault, never the fault of society. If the competitive system is "given vent" as Margaret says, society will be the better for it. Unfortunately, the history of the past twenty years teaches us that exactly the opposite is the case.

In pre-Thatcher Britain, about one person in ten was classed as living below the poverty line, not a brilliant result but honourable as nations go and a lot better than in the pre-War period. Now one person in four, and one child in three is officially poor. This is the meaning of survival of the fittest: people who cannot heat their houses in winter, who must put a coin in the meter before they can have electricity or water, who do not own a warm waterproof coat, etc. I am taking these examples from the 1996 report of the British Child Poverty Action Group. I will illustrate the result of the ThatcherMajor "tax reforms" with a single example: During the 1980s, 1 percent of taxpayers received 29 percent of all the tax reduction benefits, such that a single person earning half the average salary found his or her taxes had gone up by 7 percent, whereas a single person earning 10 times the average salary got a reduction of 21%.

Another implication of competition as the central value of neo-liberalism is that the public sector must be brutally downsized because it does not and cannot obey the basic law of competing for profits or for market share. Privatisation is one of the major economic transformations of the past twenty years. The trend began in Britain and has spread throughout the world.

Let me start by asking why capitalist countries, particularly in Europe, had public services to begin with, and why many still do. In reality, nearly all public services constitute what economists call "natural monopolies". A natural monopoly exists when the minimum size to guarantee maximum economic efficiency is equal to the actual size of the market. In other words, a company has to be a certain size to realise economies of scale and thus provide the best possible service at the lowest possible cost to the consumer. Public services also require very large investment outlays at the beginning--like railroad tracks or power grids--which does not encourage competition either. That's why public monopolies were the obvious optimum solution. But neo-liberals define anything public as ipso facto "inefficient".

So what happens when a natural monopoly is privatised? Quite normally and naturally, the new capitalist owners tend to impose monopoly prices on the public, while richly remunerating themselves. Classical economists call this outcome "structural market failure" because prices are higher than they ought to be and service to the consumer is not necessarily good. In order to prevent structural market failures, up to the mid-1980s, the capitalist countries of Europe almost universally entrusted the post office, telecomms, electricity, gas, railways, metros, air transport and usually other services like water, rubbish collection, etc. to state-owned monopolies. The USA is the big exception, perhaps because it is too huge geographically to favour natural monopolies.

In any event, Margaret Thatcher set out to change all that. As an added bonus, she could also use privatisation to break the power of the trade unions. By destroying the public sector where unions were strongest, she was able to weaken them drastically. Thus between 1979 and 1994, the number of jobs in the public sector in Britain was reduced from over 7 million to 5 million, a drop of 29 24

percent. Virtually all the jobs eliminated were unionised jobs. Since private sector employment was stagnant during those fifteen years, the overall reduction in the number of British jobs came to 1.7 million, a drop of 7% compared to 1979. To neo-liberals, fewer workers is always better than more because workers impinge on shareholder value.

As for other effects of privatisation, they were predictable and predicted. The managers of the newly privatised enterprises, often exactly the same people as before, doubled or tripled their own salaries.

The government used taxpayer money to wipe out debts and recapitalise firms before putting them on the market--for example, the water authority got 5 billion pounds of debt relief plus 1.6 billion pounds called the "green dowry" to make the bride more attractive to prospective buyers. A lot of Public Relations fuss was made about how small stockholders would have a stake in these companies--and in fact 9 million Brits did buy shares--but half of them invested less than a thousand pounds and most of them sold their shares rather quickly, as soon as they could cash in on the instant profits.

From the results, one can easily see that the whole point of privatisation is neither economic efficiency or improved services to the consumer but simply to transfer wealth from the public purse-which could redistribute it to even out social inequalities--to private hands. In Britain and elsewhere, the overwhelming majority of privatised company shares are now in the hands of financial institutions and very large investors. The employees of British Telecom bought only 1 percent of the shares, those of British Aerospace 1.3 percent, etc. Prior to Ms Thatcher's onslaught, a lot of the public sector in Britain was profitable. Consequently, in 1984, public companies contributed over 7 billion pounds to the treasury. All that money is now going to private shareholders. Service in the privatised industries is now often disastrous--the Financial Times reported an invasion of rats in the Yorkshire Water system and anyone who has survived taking Thames trains in Britain deserves a medal.

Exactly the same mechanisms have been at work throughout the world. In Britain, the Adam Smith Institute was the intellectual partner for creating the privatisation ideology. USAID and the World Bank have also used Adam Smith experts and have pushed the privatisation doctrine in the South. By 1991 the Bank had already made 114 loans to speed the process, and every year its Global Development Finance report lists hundreds of privatisations carried out in the Bank's borrowing countries.

I submit that we should stop talking about privatisation and use words that tell the truth: we are talking about alienation and surrender of the product of decades of work by thousands of people to a tiny minority of large investors. This is one of the greatest hold-ups of ours or any generation.

Another structural feature of neo-liberalism consists in remunerating capital to the detriment of labour and thus moving wealth from the bottom of society to the top. If you are, roughly, in the top 20 percent of the income scale, you are likely to gain something from neo-liberalism and the higher you are up the ladder, the more you gain. Conversely, the bottom 80 percent all lose and the lower they are to begin with, the more they lose proportionally.

Lest you thought I had forgotten Ronald Reagan, let me illustrate this point with the observations of Kevin Phillips, a Republican analyst and former aid to President Nixon, who published a book in 1990 called The Politics of Rich and Poor. He charted the way Reagan's neo-liberal doctrine and policies had changed American income distribution between 1977 and 1988. These policies were largely elaborated by the conservative Heritage Foundation, the principle think-tank of the Reagan administration and still an important force in American politics. Over the decade of the 1980s, the top 10 percent of American families increased their average family income by 16 percent, the top 5 percent increased theirs by 23 percent, but the extremely lucky top 1 percent of American families could thank Reagan for a 50 percent increase. Their revenues went from an affluent $270.000 to a heady $405.000. As for poorer Americans, the bottom 80 percent all lost something; true to the rule, the lower they were on the scale, the more they lost. The bottom 10 percent of Americans reached the nadir: according to Phillip's figures, they lost 15% of their already meagre incomes: from an already rock-bottom average of $4.113 annually, they dropped to an inhuman $3.504. In 1977, the

25

top 1 percent of American families had average incomes 65 times as great as those of the bottom 10 percent. A decade later, the top 1 percent was 115 times as well off as the bottom decile.

America is one of the most unequal societies on earth, but virtually all countries have seen inequalities increase over the past twenty years because of neo-liberal policies. UNCTAD published some damning evidence to this effect in its 1997 Trade and Development Report based on some 2600 separate studies of income inequalities, impoverishment and the hollowing out of the middle classes. The UNCTAD team documents these trends in dozens of widely differing societies, including China, Russia and the other former Socialist countries.

There is nothing mysterious about this trend towards greater inequality. Policies are specifically designed to give the already rich more disposable income, particularly through tax cuts and by pushing down wages. The theory and ideological justification for such measures is that higher incomes for the rich and higher profits will lead to more investment, better allocation of resources and therefore more jobs and welfare for everyone. In reality, as was perfectly predictable, moving money up the economic ladder has led to stock market bubbles, untold paper wealth for the few, and the kind of financial crises we shall be hearing a lot about in the course of this conference. If income is redistributed towards the bottom 80 percent of society, it will be used for consumption and consequently benefit employment. If wealth is redistributed towards the top, where people already have most of the things they need, it will go not into the local or national economy but to international stockmarkets.

As you are all aware, the same policies have been carried out throughout the South and East under the guise of structural adjustment, which is merely another name for neo-liberalism. I've used Thatcher and Reagan to illustrate the policies at the national level. At the international level, neoliberals have concentrated all their efforts on three fundamental points: 

free trade in goods and services



free circulation of capital



freedom of investment

Over the past twenty years, the IMF has been strengthened enormously. Thanks to the debt crisis and the mechanism of conditionality, it has moved from balance of payments support to being quasiuniversal dictator of so-called "sound" economic policies, meaning of course neo-liberal ones. The World Trade Organisation was finally put in place in January 1995 after long and laborious negotiations, often rammed through parliaments which had little idea what they were ratifying.

Thankfully, the most recent effort to make binding and universal neo-liberal rules, the Multilateral Agreement on Investment, has failed, at least temporarily. It would have given all rights to corporations, all obligations to governments and no rights at all to citizens.

The common denominator of these institutions is their lack of transparency and democratic accountability. This is the essence of neo-liberalism. It claims that the economy should dictate its rules to society, not the other way around. Democracy is an encumbrance, neo-liberalism is designed for winners, not for voters who, necessarily encompass the categories of both winners and losers.

I'd like to conclude by asking you to take very seriously indeed the neo-liberal definition of the loser, to whom nothing in particular is owed. Anyone can be ejected from the system at any time--because of illness, age, pregnancy, perceived failure, or simply because economic circumstances and the relentless transfer of wealth from top to bottom demand it. Shareholder value is all. Recently the International Herald Tribune reported that foreign investors are "snapping up" Thai and Korean companies and Banks. Not surprisingly, these purchases are expected to result in "heavy layoffs".

In other words, the results of years of work by thousands of Thais and Koreans is being transferred into foreign corporate hands. Many of those who laboured to create that wealth have already been, or soon will be left on the pavement. Under the principles of competition and maximising shareholder value, such behaviour is seen not as criminally unjust but as normal and indeed virtuous.

I submit that neo-liberalism has changed the fundamental nature of politics. Politics used to be primarily about who ruled whom and who got what share of the pie. Aspects of both these central 26

questions remain, of course, but the great new central question of politics is, in my view, "Who has a right to live and who does not". Radical exclusion is now the order of the day, I mean this deadly seriously.

I've given you rather a lot of bad news because the history of the past 20 years is full of it. But I don't want to end on such a depressing and pessimistic note. A lot is already happening to counter these life-threatening trends and there is enormous scope for further action.

This conference is going to help define much of that action which I believe must include an ideological offensive. It's time we set the agenda instead of letting the Masters of the Universe set it at Davos. I hope funders may also understand that they should not be funding just projects but also ideas. We can't count on the neo-liberals to do it, so we need to design workable and equitable international taxation systems, including a Tobin Tax on all monetary and financial market transactions and taxes on Transnational Corporation sales on a pro-rata basis. I expect we will go into detail on such questions in the workshops here. The proceeds of an international tax system should go to closing the North-South gap and to redistribution to all the people who have been robbed over the past twenty years.

Let me repeat what I said earlier: neo-liberalism is not the natural human condition, it is not supernatural, it can be challenged and replaced because its own failures will require this. We have to be ready with replacement policies which restore power to communities and democratic States while working to institute democracy, the rule of law and fair distribution at the international level.

Business and the market have their place, but this place cannot occupy the entire sphere of human existence.

Further good news is that there is plenty of money sloshing around out there and a tiny fraction, a ridiculous, infinitesimal proportion of it would be enough to provide a decent life to every person on earth, to supply universal health and education, to clean up the environment and prevent further destruction to the planet, to close the North-South gap--at least according to the UNDP which calls for a paltry $40 billion a year. That, frankly, is peanuts.

Finally, please remember that neo-liberalism may be insatiable but it is not invulnerable. A coalition of international activists only yesterday obliged them to abandon, at least temporarily, their project to liberalise all investment through the MAI. The surprise victory of its opponents infuriated the supporters of corporate rule and demonstrates that well organised network guerillas can win battles.

Now we have to regroup our forces and keep at them so that they cannot transfer the MAI to the WTO. Look at it this way. We have the numbers on our side, because there are far more losers than winners in the neo-liberal game. We have the ideas, whereas theirs are finally coming into question because of repeated crisis. What we lack, so far, is the organisation and the unity which in this age of advanced technology we can overcome. The threat is clearly transnational so the response must also be transnational. Solidarity no longer means aid, or not just aid, but finding the hidden synergies in each other's struggles so that our numerical force and the power of our ideas become overwhelming.

I'm convinced this conference will contribute mightily to this goal and I thank you all for your kind attention.

27

Session 1b:

How Capitalism Works.

28

HOW CAPITALISM WORKS Kevin Ovenden LOCKHEED Martin, the biggest arms manufacturer in the world. GlaxoSmithKline, the most profitable drug company. Exxon, the leading oil giant. These multinationals are the modern day horsemen of the apocalypse — merchants of death, profiteers from disease, polluters on a global scale. They and the 200 or so other giant corporations are the pride of the capitalist system. And they express all that is wrong with it. Capitalism is not as simple as a greedy state of mind. It is a particular way of organising society that developed in northern Europe two centuries ago and now dominates the world.

Produce Every society needs to produce the wherewithal for people to live and sustain the next generation.

Capitalism separates the people involved in that production process from the technologies, offices, factories and other “means of production” that are needed for it to take place. It creates a majority class, the working class, who collectively do the work, and a minority, the capitalists, who own or control the means of production. That happened at the birth of capitalism. The early capitalists forced peasants off the land into cities where they had no way of surviving other than selling their ability to work to someone else.

Today laws and repressive institutions like the police defend the capitalists’ monopoly of the means of production. It is perfectly legal to shut a factory, but illegal for workers to occupy one. Capitalists even slap patents on scientific techniques and ideas. They are like kidnappers, seizing what society needs and allowing it to be used only if they can make a profit from it. That profit comes from exploitation, paying workers for just a fraction of the work they are forced to do. The capitalists as a whole exploit workers. They are also in cut-throat competition with one another.

There is no overall plan of production. So in the car industry, for example, companies such as GM, Ford and Nissan each try to grab a larger share of the market at the expense of the others.

Competition means capitalists cannot sit back at the end of the year after making a profit.

They must reinvest again and again in new plants and expanded production in order not to fall behind. This pressure to “accumulate capital”, as Karl Marx put it, is relentless. He described in the Communist Manifesto in 1848 how “the need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.”He saw how capitalism ripped up other forms of production, such as peasant agriculture.

Capitalism has created huge concentrations of new technologies and means of production through reinvesting the profits it gets from exploiting more and more workers. But that has come at a terrible price. More areas of our lives are subordinated to this drive for profit and accumulation than ever before. That’s why we see multinationals invading education, health and other services.

Choices in our personal lives are corrupted by the multibillion pound advertising industry. And increasing exploitation means workers everywhere face longer hours, and attacks on pay and conditions.

So new “labour-saving machines” mean workers get sacked, and those who remain must work harder. At its most obscene, capitalism brings an undreamt of capacity to feed the world alongside famine. Companies pump out goods in competition with one another, rather than in a planned way to meet people’s needs. The result, most obviously in the mobile phone industry today, is more goods

29

produced than can be bought. They go unsold because people cannot afford them. The economy lurches from boom to slump. The whole world becomes a prisoner of capitalism’s crazy logic.

Scientists Capitalists employ scientists who warn them about global warming. But none of them can pull back from the precipice for fear of handing an advantage to competitors using polluting techniques. Two centuries of accumulation and competition have produced today’s multinational juggernauts.

Alongside them stand powerful states, which extend capitalist competition to the arms race and wars as they try to secure areas of the world for their firms. The multinationals, states and institutions such as the IMF, World Bank and WTO are all aspects of capitalism.

In opposing them, we need to link each particular struggle into a powerful movement, based on the exploited mass of the world’s population, against a system which was created by human beings but which now threatens to destroy them.

Who makes the profits?

Businessmen like Qasim Lakhani amass huge amounts of wealth every day. They claim they are entitled to it because they ‘took risks’, or simply because they ‘worked hard to earn it’. The conventional view of economics is also that profits are the reward for investment just as wages are a reward for investment. But this seemingly fair exchange of wealth hides what is really going on - that profits are the result of exploitation of workers.

In previous societies exploitation was easy to see. Slave owners owned workers and ‘created wealth’ by forcing slaves to work in return for their basic upkeep. Under feudalism, serfs worked on their own land for a few days a week to sustain themselves but for part of the week they were forced to work for nothing on the lord’s land to keep him in luxury.

Capitalists don’t own workers but they exploit them in the same way - by keeping part of the wealth workers produce for themselves. To understand this we have to look at Marx’s labour theory of value.

Marx argued that the value of every commodity is measured by the amount of labour time involved in producing it. For example, a pair of shoes that takes 1 hour of labour time to produce may cost £10, and if a loaf of bread involves 15 minutes of labour time to produce, you would be able to buy 4 loaves of bread for the same price as one pair of shoes.

Of course this doesn’t mean that workers who take longer to do a job are creating more wealth.

The value depends on the amount of labour time needed to produce something given the level of technology or expertise available at any one time. This is the socially necessary labour time.

Computers, for example, can be produced with far less labour time today than ten years ago because of the advances in technology. So the value of computers is much less. Changes in supply and demand may distort the value of any commodity for a short time. If there was a bad harvest and wheat was in short supply the price of bread would rise. But in general the price tends to fluctuate around the value of the labour involved in producing it.

In our society, labour is treated as a commodity like any other. As a result it is also exchanged for the value of the labour time that is needed to sustain it. Workers are generally paid enough money to feed, house, and clothe themselves - that is the cost of making sure they are able to come to work every day.

30

But the difference is that the labour power, unlike any other commodity, has the ability to create surplus value. If workers are employed for an eight hour day, the chances are that they have created the equivalent value to their wages in three or four hours. The rest is used by their employer to create surplus value or profit. But aren’t employers entitled to some return on their investment? Capitalists may own all the factories, land and offices - the means of production - but where did it come from to begin with? Again all wealth comes from labour. Machines do not produce anything on their own.

Workers need machines and tools to produce wealth but even machines had to be made by workers to begin with.

Even the raw materials used to make the machines had to be located and mined or harvested using human labour. The capital that bosses invest is just ‘dead labour’ - the wealth produced by previous generations of workers that has been appropriated over the years. Under capitalism there is no such thing as a ‘fair days work for a fair day’s pay’. Workers will never get the full amount of wealth they really produce until we do away with profits.

CAPITALISM- Detailed

By Alex Callinicos (from Revolutionary Ideas of Karl Marx) Capital was Marx’s crowning achievement, the centrepiece of his life’swork. Its object was, as he put it in the preface to Volume 1, ‘to revealthe economic law of motion of modern society’ (C i 92). Previouseconomic thinkers had grasped one or other aspect of capitalism’sworkings. Now Marx sought to understand it as a whole. In line withthe method of analysis and conception of history set out in the twoprevious chapters, Marx analysed capitalism not as the end of history,as the form of society corresponding to human nature, but as a historicallytransitory mode of production whose internal contradictionswould lead to its downfall.

It may be helpful to readers unfamiliar with the ‘dismal science’of economics (as Thomas Carlyle called it) briefly to outline thesubject matter of this chapter. It starts with the cornerstone of Capital,the labour theory of value, according to which commodities—products sold in the marketplace—exchange in proportion to thesocially necessary labour time required for their production. Weshall then see how this theory underlies Marx’s account of capitalistexploitation, for it is the surplus value created by workers which isthe source of the profits on which capitalism as an economic systemrests. Competition between capitals—whether individual capitalists,companies or even nations—each out to grab the largest amount ofsurplus value, leads to the formation of a general rate of profit, andtherefore, as we shall see, to a modification of the labour theory ofvalue.

Competition also gives rise to a tendency for the rate of theprofit to fall, which is the fundamental cause of the crises which regularlyafflict the capitalist system.

LABOUR AND VALUE The basis of every human society is the labour process, human beingscooperating in order to make use of the forces of nature, and thus tomeet their needs. The product of labour must, before anything else,answer some human need. It must, in other words, be useful. Marxtherefore calls it a use value. Its value lies first and foremost in being of use to someone. The need met by a use value does not have to be a physical need. A book is a use value, because people need to read. Equally, the needs that use values meet may be to achieve vile purposes. A murderer’s gun or a policeman’s truncheon is as much a use value as a can of baked beans or a surgeon’s scalpel.

Under capitalism, however, the products of labour take the form of commodities. A commodity, as Adam Smith pointed out, does not merely have a use value. Commodities are made, not to be directly consumed, but to be sold on the market. They are produced in order to be exchanged. As such, each commodity has an exchange value, ‘the quantitative relation, the proportion, in which use values of one kind exchange for use values of another kind’ (C i 126). Thus, the exchange value of a shirt might be a hundred cans of baked beans.

31

Use value and exchange value are very different from each other. To take an example of Smith’s, air is something of almost infinite use value to human beings, since without it we would die, yet it has no exchange value (if we ignore the ability of the rich to buy themselves less polluted surroundings). Diamonds, on the other hand, are of comparatively little use, but have a very high exchange value.

Moreover, a use value has to meet some specific human need. If you are hungry, a book is no good. By contrast, the exchange value of a commodity is simply the amount it will exchange for other commodities.

Exchange values reflect what commodities have in common, rather than their specific qualities. A loaf of bread can be exchanged for a tin opener, either directly or through the medium of money, even though their uses are very different. What is it that they have in common, that permits this exchange to take place?

Marx’s answer is that all commodities have a value, of which exchange value is merely the reflection. This value represents the cost to society of producing that commodity. Because human labour power is the motive force of production, that cost can be measured only by the amount of labour devoted to the commodity. But by labour Marx does not here mean the particular type of labour involved in, say, baking a loaf of bread or manufacturing a tin opener. This real, ‘concrete’ labour as Marx puts it, is too varied and complex to provide us with the measure of value that we need. To find our measure we must abstract labour from its concrete form. Writes Marx, ‘A use value, or useful article, therefore has value only because abstract human labour is objectified or materialised in it’ (C i 129).

So labour has a ‘dual character’: On the one hand, all labour is an expenditure of human labour power in the physiological sense, and it is in this quality of being equal, or abstract, human labour that it forms the value of commodities. On the other hand, all labour is an expenditure of human labour power in a particular form and with a definite aim, and it is in this quality of being definite useful labour that it produces use values (C i 137).

Marx described this twofold character of labour as one of ‘the best points in my book’ (SC 192). It was here that Marx’s theory parted company with that of Ricardo and the political economists. Marx criticised Ricardo for focusing almost exclusively on trying to find a precise formula for determining the exchange value of commodities. They wanted, of course, to find ways of predicting market prices. ‘Ricardo’s mistake is that he is concerned only with the magnitude of value… What Ricardo does not investigate is the specific form in which labour manifests itself as the common element in commodities,’ wrote Marx (TSV iii 131, 138).

Marx was not specifically interested in market prices. His aim was to understand capitalism as a historically specific form of society, to find what made capitalism different from previous forms of society, and what contradictions would lead to its future transformation. Marx wanted to know, not how much labour formed the exchange value of commodities, but in what form labour performed this function and why under capitalism production was of commodities for the market rather than products for direct use as in previous societies.

The twofold character of labour is crucial in answering this question because labour is a social and cooperative activity. This is true not simply of particular sorts of work, but of society as a whole. The labour of each individual or group of individuals is social labour in the sense that it contributes to the needs of society. These needs require all sorts of different products—not simply various sorts of food, but also clothing, shelter, means of transport, the tools needed in production, and so on. This means that different sorts of useful labour have to be carried out. If everyone produced only one type of product, then society would soon collapse.

Every society therefore needs some means of distributing social labour among different productive activities. ‘This necessity of the distribution of social labour in definite proportions cannot possibly be done away with by a particular form of social production,’ Marx writes (SC 209).

But there is a fundamental difference between capitalism and other modes of production. Capitalism has no mechanism through which society can collectively decide how much of its labour will be 32

devoted to particular tasks. To understand why this is so, we must look at pre-capitalist modes of production, where the goal of economic activity was primarily the production of use values, and each community could meet all or most of its needs from the labour of its own members. Thus: …in the patriarchal rural industry of a peasant family which produces corn, cattle, yarn, linen and clothing for its own use…the distribution of labour within the family and the labour time expended by the individual members of the family, are regulated by differences in sex and age as well as by seasonal variations in the natural conditions of labour (C i 171).

The distribution of labour is collectively regulated even in precapitalist societies where exploitation and classes exist. Thus, in feudalism: …labour and its products…take the shape, in the transactions of society, of services in kind and payments in kind… Whatever we may think, then, of the different roles in which men confront each other in such a society, the social relationships between individuals appear in any event as their own personal relations, are not disguised as social relations between things, between the products of labour (C i 170).

In the case of slavery and feudalism, both modes of production based on class exploitation, the bulk of production is devoted entirely to meeting the needs of the producers and the exploiting class. The main issue is not what is produced, but rather the division of the social product between exploiter and exploited. Under capitalism things are very different. The development of the division of labour means that production in each workplace is now highly specialised, and separate from other workplaces. Each producer cannot meet his needs out of his own production. A worker in a tin opener factory cannot eat tin openers. In order to live, he must sell them to others. The producers are thus interdependent in two senses: they need each other’s products, but they also need each other as purchasers of their own products so that they can obtain the money with which to buy what they need.

This system Marx calls generalised commodity production. The producers are bound together only by the exchange of their products among one another: Objects of utility become commodities only because they are the products of the labour of private individuals who work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their private labours appear only within this exchange. In other words, the labour of the private individual manifests itself as an element of the total labour of society only through the relations which the act of exchange establishes between the products, and through their mediation, between the producers (C i 165-166).

Hitherto, concrete labour was directly social labour. Where production was for use, to meet some specific need, its social role was obvious, and there from the start. Where production is for exchange, however, there is no necessary connection between the useful labour carried out by a particular producer and the needs of society. Whether the products of a specific factory, for example, meet some social need can be discovered only after they have been manufactured, once they have been put on sale in the market. If no one wants to buy these goods, then the labour that produced them was not social labour. There is a second respect in which there is a difference between social and private labour under capitalism. Makers of the same product will compete for the same market.

Their relative success will depend on how cheaply they sell their products. This involves increasing the productivity of labour: ‘In general, the greater the productivity of labour, the less the labour time required to produce an article, the less the mass of labour crystallised in that article, and the less its value,’ writes Marx (C i 131).

The pressure of competition forces producers to adopt similar methods of production to their rivals, or find themselves undercut. Consequently, the value of commodities is determined not by the total amount of labour used to produce them, but rather by the socially necessary labour time, that is, by ‘the labour time required to produce any use value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society’ (C i 129). An inefficient producer who uses more than the socially necessary labour to produce something will find that the price he gets for it will not compensate him for his extra labour. Only 33

socially necessary labour is social labour. Abstract social labour is thus not merely a concept, something that exists only in the mind. It dominates people’s lives. Unless producers are able to meet the ‘normal conditions of production’, they will find themselves forced out of business.

But this is not all. We have seen that private useful labour only becomes social labour once its product has been sold. But for exchange to take place, there must be some way of telling how much socially necessary labour each commodity contains. Society cannot do this collectively, because capitalism is a system in which the producers relate to each other only through their products. The solution is for one commodity to take on the role of universal equivalent, against which the values of all the other commodities can then be measured. When one particular commodity becomes fixed in the role of universal equivalent, it becomes money. And, writes Marx, ‘the representation of the commodity as money implies…that the different magnitudes of commodity values…are all expressed in a form in which they exist as the embodiment of social labour’ (TSV iii 130).

So capitalism is an economic system in which individual producers do not know in advance whether their products meet a social need. They can find out only by trying to sell these products as commodities on the market. The competition between producers seeking to capture markets by underselling each other reduces their different labours to one measure, abstract social labour as embodied in money. Where the supply of a commodity exceeds the demand for it, its price will fall, and producers will shift to other more profitable economic activities.

It is in this way, and only indirectly, that social labour is distributed among different branches of production. Marx’s analysis of value is therefore directed towards what makes capitalism unique as a form of social production. His focus is ‘the real internal framework of bourgeois relations of production’ (C i 175 n34).

His purpose is to show that ‘as values, commodities are social magnitudes…relations of men in their productive activity… Where labour is communal, the relations of men in their social production do not manifest themselves as “values” of “things”’ (TSV iii 129).

Almost as soon as Capital was published, bourgeois economists objected that Marx’s account of value at the beginning of Volume 1 does not prove that commodities actually exchange in proportion to the socially necessary labour time required to produce them. They have continued to do so to this very day. Marx commented on one such critic: The unfortunate fellow does not see that, even if there were no chapter on ‘value’ in my book, the analysis of the real relations which I give would contain the proof and demonstration of the real value relation… Science consists precisely in demonstrating how the law of value asserts itself. So that if one wanted at the very beginning to ‘explain’ all the phenomena which seemingly contradict that law, one would have to present science before science (SC 209-210).

The whole of Capital is thus the proof of the labour theory of value. Marx considered the correct scientific method to be that of ‘rising from the abstract to the concrete’ (G 101). He starts off by setting out the labour theory of value in the very abstract form in which we have been so far considering it. But this is only the starting point of his analysis. He then proceeds, step by step, to show how the complex, and often chaotic behaviour of the capitalist economy can be understood on the basis of the labour theory of value, and only on that basis.

SURPLUS VALUE AND EXPLOITATION The capitalist mode of production involves, according to Marx, two great separations. The first we have already discussed—the separation of the units of production. In other words, the capitalist economy is a system divided into separate, interdependent, and competing producers. Just as important, however, is the division within each unit of production, between the owner of the 34

means of production and the direct producers, that is, between capital and wage labour. Commodities can exist, Marx pointed out, without capitalism. Money and trade are to be found in pre-capitalist societies. However, the exchange of commodities in such societies is mainly a means of obtaining use values, the things people need.

The circulation of commodities in such circumstances takes the form of C-M-C, where C stands for a commodity, and M for money. Each producer takes his commodity and sells it for money, using that money to buy another commodity from another producer. Money is the only intermediary in the transaction. Where capitalist relations of production prevail, however, the circulation of commodities takes another, more complex form: M-CM ´. Money is invested in order to produce commodities which are then exchanged for—more money. What is more, the M´, the money which the capitalist or investor holds after the transaction, is greater than M, the money invested in the first place. The extra money, or profit, Marx called ‘surplus value’. Where does it come from?

Ricardo had effectively answered this question when he argued that the value created by labour was then divided into wages and profits. Labour was the source of surplus value. However, he was unable to grasp this clearly because he ran into an apparent contradiction. He defined wages as the value of labour. How can this be so when wages are less than the total value created by labour, which Ricardo argues is divided between wages and profits? Ricardo did not confront this question because he took the existence of surplus value for granted.

Marx’s explanation of the existence of surplus value, however, rested on his analysis of the relationship between capital and wage labour. What the worker sells the capitalist in exchange for his or her wages is not labour, but labour power, as he explains: The use value which the worker has to offer to the capitalist…is not materialised in a product, does not exist apart from him at all, thus exists…only in potentiality, as his capacity. It becomes a reality only when…set in motion by capital (G 267). Labour power is a commodity, and like all commodities it has a value and a use value. Its value is determined by the socially necessary labour time involved in keeping the worker alive, and bringing up the children to replace him or her. ‘Its value, like that of every other commodity, is already determined before it enters into circulation, for a definite quantity of social labour has been spent on the production of that labour power. But its use value consists in the subsequent exercise of that power’ (C i 277). Labour power’s use value is labour, and once the worker has been employed, the capitalist sets him or her to work. But labour is the source of value, and moreover the worker will normally create during a working day more value than the daily wages with which the capitalist purchased his or her labour power. ‘What was really decisive for him [the capitalist] was the specific use value which this commodity possesses of being a source not only of value, but of more value than itself’ (C i 300-301).

For example, let us assume that in a working day of eight hours, four hours labour replaces the value of labour power advanced by the capitalist in the form of wages. The other four hours is pocketed by the capitalist. Surplus value, or profit, is merely the form of existence of surplus labour peculiar to the capitalist mode of production. The significance of this analysis of the purchase and sale of labour power is that it enables Marx to trace the origins of surplus value to the exploitation of the worker by capital.

Furthermore, it highlights the fact that the patterns traced by the classical economists are not natural and inevitable, but are historically specific relations of production. Marx is able to do this while assuming that all commodities, including labour power, sell at their value. In other words, the capitalist does not gain his profit by cheating the worker and paying labour power less than the equivalent of the socially necessary labour time required to reproduce it. Exploitation is nothing abnormal, it is a typical outcome of the regular workings of the capitalist mode of production. It 35

arises from the difference between the value created by labour power once it is put to work, and the value of labour power itself.

The purchase and sale of labour power depends upon the separation of the worker from the means of production so that ‘the worker…[is] free in the double sense that as a free individual he can dispose of his labour power as his own commodity, and that, on the other hand…he is free of all the other commodities needed for the realisation of his labour power’ (C i 272-273). The exchange between capital and wage labour presupposes ‘the distribution of the elements of production itself, the material factors of which are concentrated on one side, and labour power, isolated, on the other’ (C ii 33).

Marx shows in Capital Volume 1 Part Eight how this ‘distribution’ was the result of a historical process, in which the peasantry were deprived of their land, and the means of production— initially the land itself—became the monopoly of a class whose objective was profit. Marx was thus able to explain the contrast between the apparent political equality of all the citizens of capitalist society, and the real inequality of class exploitation. The exchange between capital and wage labour is an exchange of equivalents. Both worker and capitalist are commodity owners: the one of labour power, the other of money.

Labour power is paid for at its value—the cost of reproducing it. So where’s the exploitation?

As long as we stay in the ‘realm of circulation’, the marketplace where everyone is a commodity owner acting in accordance with his or her self-interest, exploitation is invisible. It is only when we enter ‘the hidden abode of production, on whose threshold there hangs the notice “no admittance except on business”’ (C i 279-280) that things change. Exploitation is possible because of the peculiar property of the commodity sold by the worker, namely the fact that its use value is labour, the source of value and surplus value. And in production that labour power is set to work. Before we look at the process of production under capitalism, we need to pin down a little more accurately just what is meant by capital. At its simplest, capital is an accumulation of value which acts to create and accumulate more value.

Long before capitalism, of course, rich men accumulated wealth by expropriating the surplus value of slaves and serfs. But this wealth was used for consumption, so that they and their retainers could have a greater share of the necessities and luxuries of life. This wealth was not capital, though it shares a common source—surplus labour. The first sign that an accumulation of wealth has begun to act as capital is the formula M-C-M´ which we came across earlier. The formula denotes a transaction in which money (M) is exchanged for commodities (C), which are then resold for a greater sum of money (M´). At first such transactions were made by traders, who would, for example, import spices from the East and resell them in northern Europe, where the demand for spices to preserve meat meant they could get a higher price.

But capital proper really only comes into existence when the commodity being bought and sold is labour power, for this wage labour then defines the relations of production that are peculiar to capitalism. Capital, therefore, is defined by two things: what it is and how it acts. It is an accumulation of surplus value produced by labour, and this accumulation can take the form of money, commodities, or means of production— and usually a combination of all three. It acts to secure further accumulation: Marx described this as ‘the self-expansion of value’. Capital is not necessarily identified with individual capitalists. In the early development of capitalism, wealthy individuals did play a major role, but this is far from the case today.

It is in the nature of capitalism, in fact, that capital takes on a life of its own, operating according to an economic logic that transcends any individuals. Individual units of capital, which are usually termed ‘capitals’, can be anything from a small company to a major corporation, a financial 36

institution to a nation-state. In order to grasp the peculiar nature of the capitalist production process, Marx formulated a number of new concepts. We saw in the previous chapter that there are two main elements of any labour process—labour power and the means of production. Under the capitalist mode of production both elements take the form of capital.

The capitalist has to invest money in purchasing both labour power and the means of production before he can hope to increase his initial investment. The money used to buy labour power Marx called variable capital; that advanced to obtain plant, equipment, raw materials, and other means of production he called constant capital. The reason for these names should be obvious in the light of the labour theory of value. Variable capital expands in value, because it is invested in labour power, the commodity which is the source of value. Constant capital does not. Capitalist production thus involves both living labour—the labour of the worker which replaces the value of labour power and at the same time creates surplus value, and dead labour accumulated in the means of production.

This dead labour is the labour of the workers who made the means of production in the first place. As the machinery gradually deteriorates through its use to make new commodities, its value is transferred to these commodities. The rate of surplus value was the name Marx gave to the ratio between surplus value and variable capital, the capital invested in labour power. This measured the rate of exploitation, in other words the degree to which the capitalist was successful in pumping surplus labour out of the worker. To go back to our previous example, if necessary labour is four hours, and surplus labour is four hours, then the rate of surplus value is 4:4, or 100 percent. There were two ways, Marx argued, in which capitalists could increase the rate of surplus value, one common to all modes of production, the other specific to capitalism. These were the production of, respectively, absolute and relative surplus value.

Absolute surplus value is created by lengthening the working day. Thus, if workers spend ten instead of eight hours a day at work, while necessary labour is still only four hours, then another two hours of surplus labour have been added. The rate of surplus value has risen from 4:4 to 6:4, or from 100 to 150 percent. Some of the most brilliant and powerful pages in Capital are those in which Marx describes how, especially in the early phases of the industrial revolution, capitalists sought to extend the working day as long as possible, forcing even nine year old boys to work three 12- hour shifts running in the hellish conditions of the iron foundries. ‘Capital’, he writes, ‘is dead labour which, vampire-like, lives only by sucking living labour, and lives the more, the more labour it sucks’ (C i 342). There are, however, objective limits to the extension of the working day. Pushed too far, it ‘not only produces a deterioration of human labour power by robbing it of its normal moral and physical conditions of development and activity, but also produces the premature exhaustion and death of this labour power itself’ (C i 376). Capital, which depends on labour power as the source of value, thus acts against its own interests.

At the same time, the remorseless extension of the working day engenders organised resistance by its victims. Marx chronicles the role played by collective working class action in forcing British capitalists to accept the Factory Acts limiting the hours of work. ‘Hence, in the history of capitalist production, the establishment of a norm for the working day presents itself as a struggle over the limits of that day, a struggle between collective capital, ie the class of capitalists, and collective labour, ie the working class’ (C i 344). Capital can nonetheless raise the rate of surplus value also by the production of relative surplus value. An increase in the productivity of labour will lead to a fall in the value of the commodities it produces. If some technical improvement in the conditions of production thus cheapens the consumer goods which workers buy with their wages, then the value of labour power has fallen. Less social labour will now be needed to reproduce labour power, and the portion of the working day devoted to necessary labour will fall, leaving more time spent creating surplus value.

37

Let us say that higher productivity in consumer industries leads to a halving of the value of consumer goods. To go back to our original example, necessary labour will now take up only two hours out of an eight-hour day. So the rate of surplus value is now 6:2. It has risen from 100 to 300 percent. Marx argues that although both absolute and relative surplus value will be found in all phases of capitalist development, there tends to be a historical shift in their importance. When capitalist relations of production are first introduced, they do so on the basis of methods of production inherited from the artisan industries of feudal society. These handicraft methods are not at first fundamentally altered: workers are simply grouped together into larger units of production, and subjected to a more complex division of labour. New relations of production are grafted onto an old labour process: Given a pre-existing mode of labour…surplus labour can be created only by lengthening the working day, ie by increasing absolute surplus value (C i 1021).

In a mode of production such as feudalism, where neither exploiter nor exploited necessarily has a strong interest in expanding the productive forces, more surplus labour can only be extracted from the direct producers by making them work longer hours. Capitalism, however, introduces a new way of increasing the rate of exploitation, by getting the producers to work more efficiently. ‘With the production of relative surplus value the entire form of production is altered and a specifically capitalist form of production comes into being’ (C i 1024). What Marx calls manufacture, based on ‘the broad foundation of the town handicrafts and the domestic industries of the countryside’ (C i 490) is supplanted by modern large-scale industry, or ‘machinofacture’, in which production is organised around systems of machines, and the labour process is constantly altered in the light of technological innovations. ‘There now arises a technologically and otherwise specific mode of production— capitalist production—which transforms the labour process and its actual conditions’ (C i 1034-1035).

The most important consequence is that the labour process is increasingly socialised.

Production now takes place in large units organised around machines, and involving a highly complex division of labour. ‘The real lever of the overall labour process is increasingly not the individual worker’ but ‘labour power socially combined’ (C i 1039-1040). Capitalism thus creates what Marx calls the ‘collective worker’, of which individuals are limbs, bound together by their joint effort in producing commodities. Marx emphasises that the purpose of the constant transformation of the labour process under capitalism is that of increasing the rate of exploitation by producing relative surplus value: Like every other instrument for increasing the productivity of labour, machinery is intended to cheapen commodities and, by shortening the part of the working day in which the worker works for himself, to lengthen the other part, the part he gives the capitalist for nothing. The machine is a means for producing surplus value (C i 492). This highlights what we saw in the last chapter, that the productive forces develop to the extent that they are permitted to do so by the prevailing relations of production. The peculiarity of capitalism is that these relations require continual improvements in the productivity of labour.

COMPETITION, PRICES AND PROFITS Marx’s analysis of the capitalist production process in the first volume of Capital takes place at quite a high level of abstraction. Most important is the fact he assumes that commodities exchange at their values, that is, in proportion to the socially necessary labour time involved in their production. In particular, he excludes the effects of competition, and of fluctuations in the supply of commodities and the demand for them. This procedure was justified because Marx was concerned at this point to grasp the essential features of the capitalist economy, and to trace them to their source in the extraction of surplus value from the workers within the process of production. Marx’s object in analysing the capitalist process of production was what he called ‘capital in general, as distinct from particular capitals’. This, he conceded, was an abstraction, not: …an arbitrary abstraction, but an 38

abstraction which grasps the specific characteristics which distinguish capital from all other forms of wealth— or modes in which social production develops. These are the aspects common to every capital as such, or which make every specific sum of values into capital (G 449).

The ‘aspects common to every capital as such’ come down to the fact that capital is the selfexpansion of value, which arises from the exploitation of the worker in production. Thus, what distinguishes capital from other ‘modes in which social production develops’ is surplus value as ‘the specific economic form in which unpaid surplus labour is pumped out of the direct producers’ (C iii 791). The analysis of ‘capital in general’ is intended to uncover the basis of capitalist relations of production. There is, however, another stage in Marx’s examination of capitalism. We saw that this mode of production involves two separations: one between labour power and the means of production, which underlies the exchange between wage labour capital and thus makes possible the extraction of surplus value; the other between the units of production, which arises from the fact that there is no collective way under capitalism for social labour to be distributed among different activities, and so individual producers relate to each other only through the exchange of their products. It is an essential feature of capitalism that no single producer controls the economy.

‘Capital exists and can only exist as many capitals,’ writes Marx (G 414).

The sphere of ‘many capitals’ is that of competition. Individual capitals struggle with each other over markets, seeking to win control of particular sectors. The behaviour of these capitals can only be understood in the light of Marx’s analysis of ‘capital in general’, and especially of the process of production. What makes them capitals is the self-expansion of value in production. But in a very important sense Marx’s analysis of competition completes that of the process of production.

To appreciate this point fully, we must first take a look at the three volumes of Capital. Volume 1, as we have seen, is concerned with the analysis of the process of production. But because capitalism is a system of generalised commodity production, the capitalist will actually obtain the surplus value he has extracted from the worker only if he succeeds in selling the commodities which embody this value.

What Marx calls the realisation of the value created in production—its transformation into money—depends on the circulation of commodities on the market. Volume 2 of Capital is concerned with this process of circulation, examining its implications in two ways. First, Marx considers the different circuits of capital, the successive transformations of, for example, money capital into the labour power and means of production which are used to produce commodities, and then into a larger sum of money if these commodities are sold at their value. Marx then considers the way in which the circuits of individual capitals interweave to bring about the reproduction of the entire economy.

Much of what he says in Volume 2 is brilliant and innovative, but in this book we shall only touch on it when discussing crises in the following section. It is in Capital Volume 3 that the analysis of competition becomes relevant. Here Marx is concerned with capitalist production as a whole.

Because the realisation of the value generated in production depends on the circulation of commodities: …the capitalist process of production taken as a whole represents a synthesis of the processes of production and of circulation… The various forms of capital as evolved in this book…approach step by step the form which they assume on the surface of society, in the action of different capitals on one another, in competition, and in the ordinary consciousness of the agents of production themselves (C iii 26). The central importance of competition is that through its pressure individual producers are forced to behave as capitals. ‘The influence of individual capitals on one another has the effect precisely that they must conduct themselves as capital ’ (G 657).

The law of value—the exchange of commodities in proportion to the socially necessary labour time involved in their production— depends upon competition in two ways. Marx 39

distinguishes between the value of a commodity, and its market price. Value is the social labour expended on it; the market price is the amount of money which it will fetch at any one time. The two will often differ, because the market price will fluctuate in response to oscillations in supply and demand. Marx argues that these fluctuations cancel themselves out over time. A commodity’s value, however, as we saw in the opening section of this chapter, is the socially necessary labour involved in its production.

This may well differ from the actual amount of labour used to produce it. Marx therefore distinguishes between a commodity’s individual value, the labour time it embodies, and its social or market value, which reflects the prevailing conditions of production in that industry. The market value of the commodity is determined by the competition between the capitals in that industry, each trying to win a larger share of the market than its rivals, each seeking to do so by improving its conditions of production and thus reducing the value of its commodities. Usually the resulting market value will be the value of goods produced in the average conditions of production in the industry. An individual capital’s products will, as a result of this competition, sell at the market value, even if the actual labour used to produce these commodities, their individual value, is more or less than the market value.

There is, moreover, a second way in which competition enters into the workings of the law of value. This arises from the fact that commodities are the ‘product of capital’ (C i 949 ff). In other words, the capitalist invests his capital in the production of commodities, not for its own sake, but in order to produce surplus value. Now, as we saw in the previous section, the source of surplus value is variable capital—in other words, the workers that the capitalist employs in exchange for their wages.

However, the capitalist does not simply advance the money to pay these wages; he also has to fork out for the machinery, buildings, raw materials and so on, which are necessary if the workers are actually to produce commodities. What counts for the capitalist is not simply the return he makes on the variable capital, but rather that on his total investment, variable capital plus the constant capital tied up in the means of production.

Recognition of this fact led Marx to distinguish between the rate of surplus value and the rate of profit. The rate of surplus value is simply the ratio of surplus value to variable capital. As we saw in the previous section, this measures the degree of exploitation of labour power. The rate of profit, on the other hand, is the ratio between surplus value and total capital, variable capital plus constant capital. From the point of view of understanding capitalism, the rate of surplus value is more basic, because labour power is the source of value.

But what matters to the capitalist is the rate of profit because he needs to make an adequate return on his total investment, not just on what he spends on wages. Obviously, the two rates will differ. Take a capitalist who employs 100 workers at a wage of £50 a week. His total wage bill—his variable capital—is £5,000 a week. If the rate of surplus value is 100 percent, then the surplus value produced every week will also be £5,000. This is his profit. (The capitalist also gets back his original £5,000, making £10,000 in all.) But suppose the capitalist also has to advance £2,500 a week to pay for the plant, buildings and so on. This is his constant capital. The total capital invested each week will be £7,500, and the rate of profit, the return on his total investment, is the ratio of the profit received to the total capital, or £5,000:£7,500—67 percent. The existence of a rate of profit is an illustration of how, according to Marx, competition conceals the real relations of production. For it is the rate of profit that capitalists use in their everyday calculations.

Because this concept relates surplus value to the total capital, the fact that labour power is the source of surplus value is concealed. It appears as if the constant capital invested in the means of production is also responsible for creating value and surplus value. This is an example of what Marx calls commodity fetishism, the way the working of the capitalist economy leads people to believe 40

that their social relationships are in some mystical way governed by physical objects—use values and the machinery used to produce them. The effect is to justify the existence of profits, since the capitalist, as the owner of the means of production, seems just as entitled as the worker to a share of the product they have supposedly cooperated in making. There is more to the rate of profit, however, than this mystification. Marx argues that the rate of profit will differ from industry to industry depending on the prevailing conditions of production.

To explain this he uses another concept, that of the organic composition of capital. This is the ratio of constant capital to variable capital. In other words, it reflects (in value terms) the amount of machinery, raw materials and so on that are needed to produce a given commodity relative to the labour power needed. It is in fact a measure of the productivity of labour. For the more efficient labour power is, the more machinery will an individual worker set to work, the more raw materials will he or she use and so on.

So the higher the productivity of labour, the higher the organic composition of capital will be too. What does this mean for the rate of profit? Let us examine the case of two capitalists, A and B. Let us assume that each has the same weekly wage bill—£5,000—and, as Marx does, that each has the same rate of surplus value, 100 percent. So each receives a weekly profit of £5,000. But while A invests constant capital each week of £5,000, B, in a different sector of industry, has to invest £10,000. For A, then, the organic composition of his capital, the ratio of constant to variable capital, is £5,000:£5,000, or 1:1. His profit of £5,000 is made with a total capital of £10,000, so his rate of profit is £5,000:£10,000, or 50 percent. The organic composition of B’s capital, on the other hand, is £10,000:£5,000, or 2:1—twice that of A. B’s rate of profit is £5,000:£15,000, or only 33 percent. So the higher the organic composition of capital, the more machinery and raw materials used by each worker, the lower the rate of profit—because only labour power produces surplus value. Now capitalists are concerned to gain the largest possible return for their investment, the highest possible rate of profit. Since the amount of machinery, buildings and so on needed for production varies from industry to industry, in other words, some industries have higher organic composition of capital than others, capital will tend to flow to where the rate of profit is highest—in other words, to where the organic composition of capital is low. Why, after all, should capitalist B continue investing all his money where it gives him a return of only 33 percent when he could get 50 percent if he put his capital in industry A? This leads to what Marx calls the equalisation of the rate of profit.

The flow of capital from one industry to another will tend to even out the differences in the rate of profit. The result is that a general rate of profit is formed which reflects the relationship between the total surplus value produced in the entire economy, and the total social capital invested.

Individual capitals will receive a share of the total surplus value extracted, in proportion, not to the variable capital they have advanced, but to the total capital they have invested. To see what this means, let’s go back to A and B, and assume that they are the only two capitals in the economy. The total surplus value is then £10,000 and the total social capital £25,000. The general rate of profit is £10,000:£25,000, or 40 percent. It is higher than B’s original 33 percent, but lower than A’s 50 percent. Each will receive a return of 40 percent on their total capital. On his £10,000 A will get £4,000, while B, with £15,000, will get £6,000. Since each enterprise extracts £5,000 in surplus value from its workers, £1,000 has been transferred between them. How does this happen?

Unfortunately, our model above, with capitalists A and B, is too simplified to demonstrate the mechanism that causes this transfer of surplus value, but we can still use it to show how this mechanism is set in motion. Capitalist B, seeing A making a higher rate of profit than he is, is naturally going to want a piece of the action. He’s going to shift some of his capital into industry A. This will lead to an increase in production, and this increase will continue until the supply of these goods exceeds the demand.

41

Once there are more of these goods for sale than there are buyers, their price will fall. So these commodities will end up being sold below their value, and industry A will become less profitable. Conversely, since capitalist B has removed some of his money from his own industry, production of goods B will fall. When the supply of these goods is lower than demand, the price of these commodities will rise, and they will sell at prices above their value. The profit rate of industry B, initially low, will rise. So as capital continually searches for the highest return, the increase of investment in industries with low use of plant, machinery and raw materials relative to labour power, in other words low organic composition of capital and therefore high rate of profit, will tend to bring prices down and reduce that rate of profit. The opposite will happen in industries with high organic composition of capital.

As Marx writes, ‘This incessant outflow and influx’, through which capital is constantly redistributed among the different spheres of production depending on their relative profitability, will continue until ‘it creates such a ratio of supply and demand that the average profit in the spheres of production becomes the same, and values are, therefore, converted into prices of production’ (C iii 195-196). Equilibrium is reached when the prices of different goods are set at levels which earn every capital the same rate of profit. It is as if all the surplus value pumped out of workers, wherever they may be employed, flows into a single pool from which capitalists draw profits in proportion to the sums they have invested.

The origin of surplus value is thus further mystified, since the profits a capitalist gains no longer seem to bear any relation to the amount of labour his workers have performed. ‘All these phenomena’, Marx comments, ‘seem to contradict the determination of value by labour time… Thus everything appears reversed in competition’ (C iii 209). This appearance is dissolved once we consider the overall relationship between the capitalist class and the working class: In each particular sphere of production, the individual capitalist, as well as the capitalists as a whole, take part in the exploitation of the total working class by the totality of capital… For, assuming all other conditions…to be given, the average rate of profit depends on the intensity of exploitation of the sum total of labour by the sum total of capital (C iii 196-197). The capitalists strive (and this striving is competition) to divide among themselves the quantity of unpaid labour…which they squeeze out of the working class, not according to the surplus labour produced directly by a particular capital, but corresponding firstly to the relative portion of the aggregate capital which a particular capital represents, and secondly according to the amount of surplus labour produced by the aggregate capital. The capitalists, like hostile brothers, divide among themselves the loot of other people’s labour so that on average one receives the same amount of unpaid labour as the other (TSV ii 29).

Here, then, we have a mathematically precise proof why capitalists form a veritable freemason society vis-à-vis the whole working class, while there is little love lost between them in competition among themselves (C iii 198). One consequence of the equalisation of the rate of profit is that the law of value must be modified. ‘It is evident that the emergence…of the general rate of profit necessitates the transformation of values into cost prices that are different from these values’ (TSV ii 434). To see why this is so, let’s go back to our old friends the capitalists A and B. To arrive at the value of their weekly products, let us assume that the value of all the constant capital they advance each week is transferred to the commodities they produce. The total value of their weekly product is then equal to variable capital + surplus value + constant capital. In A’s case this is £5,000 + £5,000 + £5,000 = £15,000. In B’s case it is £5,000 + £5,000 + £10,000 = £20,000. But the equalisation of the rate of profit means that £1,000 of surplus value has been transferred from A to B. So the values produced must be modified to take account of this redistribution. For A, we then get £5,000 + £4,000 + £5,000 = £14,000, and for B, £5,000 + £6,000 + £10,000 = £21,000. Marx calls these converted values which reflect the formation of the general rate of profit prices of production.

42

Their formation is an inevitable consequence of the fact that ‘capital exists, and can only exist as many capitals’. ‘What competition, first in a single sphere [of production], achieves is a single market value and market price derived from the various individual values of commodities.

And it is competition of capitals in different spheres, which first brings out the price of production, equalising the rates of profit in the different spheres’ (C iii 180). The conversion of values into prices of production is part of the same process as the formation of values themselves. For it is competition in particular industries which leads to commodities being sold at their socially necessary labour time in the first place. The transformation of values into prices of production thus completes the labour theory of value rather than undermining it. Marx points out that the deviations of prices of production from values ‘always resolves itself into one commodity receiving too little of the surplus value while another receives too much, so that the deviations from the values which are embodied in the prices of production compensate one another’ (C iii 161). ‘The sum of the prices of production of all commodities produced in society…is equal to the sum of their values’ (C iii 159-160). If we turn back to the case of A and B two paragraphs ago, we see that the total value of their products, £35,000, remains the same before and after the conversion of values into prices of production. The so-called ‘transformation problem’ has nevertheless caused an enormous controversy, which began when Capital Volume 3 was published in 1894 and shows no sign of abating today.

Some of the criticisms are simple matters of ignorance. For example, the Austrian economist Eugen von Boehm-Bawerk, author of one of the first discussions of the transformation problem, argued that Marx had changed his mind after writing Capital Volume 1, and decided that commodities did not after all exchange at their values. This ignores the fact, as Engels pointed out when he published Capital Volume 3 after Marx’s death, that the manuscripts on which it is based were written by Marx in 1864 and 1865, before he completed the final draft of Volume 1! In any case, Theories of Surplus Value, taken from the even earlier 1861/63 manuscripts, shows that Marx, like Ricardo before him, was perfectly well aware that the existence of the general rate of profit implied that the law of value must be modified.

There are some more valid technical criticisms. Marx, in his examples of the transformation, ignored the fact that the value of the commodities represented by variable and constant capital must themselves be converted into prices of production. It will not do, therefore, as I did in my own illustration, to leave A’s capital at £10,000 and B’s at £15,000 both before and after the transformation. The goods consumed by workers, and the plant, machinery and so on which they use to produce commodities, will themselves have been affected by the formation of a general rate of profit, and will also have had their values transformed into prices of production. Marx was not unconscious of this problem, but felt that it was not important enough to worry about (see C iii 164165). Later research suggests that he is wrong, and that a complete transformation of values into prices of production has more far-reaching implications than Marx thought. However, those mathematical solutions to the problem which have been reached do not invalidate Marx’s basic account of the conversion of values into prices of production.

Some economists, including a number of Marxists, still insist that the ‘transformation problem’ proves that the labour theory of value must be rejected. Their main argument for this is that there are techniques for determining the prices of commodities that do not involve starting from their values. This is perfectly true, but mistakes the point of the labour theory of value. Its main purpose is not to provide us with a formula for determining the ratio in which commodities will exchange for each other (although it does do that, once we have corrected Marx’s version of the transformation).

Marx’s intention is ‘to reveal the economic law of motion of modern society’—to uncover the tendencies of historical development contained in the capitalist mode of production. The labour theory of value is an instrument towards this end. Marx’s procedure in Capital reflects his general method of ‘rising from the abstract to the concrete’. In Volumes 1 and 2, where he is analysing

43

‘capital in general’, the basic characteristics of capitalist relations of production, he assumes that commodities exchange at their values.

This is a perfectly valid assumption to make, because the transformation problem arises only when we start considering the differences between capitals. It is only when Marx comes to consider the sphere of ‘many capitals’, and the competition which takes place between them, as in Capital Volume 3, that he is obliged to drop the assumption that commodities exchange at their values. This is necessary if we are to ‘locate and describe the concrete forms which grow out of the movements of capital as a whole’ (C iii 26). However, we can do this successfully only if we have made the initial abstraction, that of assuming that commodities exchange at their values, which was necessary to analyse ‘capital in general’. Marx’s chief criticism of Ricardo was that he simply assumed the existence of the general rate of profit, failing to consider value and surplus value in isolation from competition. His error was ‘lack of the power of abstraction, inability when dealing with the values of commodities, to forget profits, a factor which confronts him as a result of competition’ (TSV ii 191). So far we have considered the relationship between ‘capital in general’ and ‘many capitals’ statically, merely looking at how it affects the formation of value. Let’s now take a more dynamic view, and examine the role played by competition between capitals in the development of the bourgeois economy.

ACCUMULATION AND CRISES One of the main features of capitalism which sets it off from other modes of production, is the accumulation of capital. In slave or feudal societies, the exploiter will consume the bulk of the surplus product which he has seized from the direct producers. Production is still dominated by use value: its objective is consumption. This changes once the capitalist mode of production prevails.

Most of the surplus value squeezed out of the workers is not consumed. Rather, it is reinvested in further production. It is this process, through which surplus value is constantly ploughed back into the production of yet more surplus value, that Marx calls the accumulation of capital. In a famous passage in Capital Volume 1, Marx shows how this gives rise in the capitalist class to an ideology of ‘abstinence’, in which the bourgeoisie are encouraged to deny even their own consumption, and to save as much surplus value as possible so that it may be reinvested: Accumulate, accumulate! That is Moses and the prophets! ‘Industry furnishes the material which saving accumulates’ [says Adam Smith]. Therefore save, save, ie reconvert the greatest possible portion of surplus value or surplus product into capital! Accumulation for the sake of accumulation, production for the sake of production: this was the formula in which classical economics expressed the historical mission of the bourgeoisie in the period of its domination (C i 742).

But, says Marx, the motive for this is not greed (though as an individual the capitalist might be greedy). We don’t need to look for some ‘natural propensity to truck and barter’ in human nature.

The system itself provides the capitalist’s motive: In so far as he is capital personified, his motivating force is not the acquisition and enjoyment of use values, but the acquisition and augmentation of exchange values… As such, he shares with the miser an absolute drive towards self-enrichment. But what appears in the miser as the mania of an individual is in the capitalist the effect of a social mechanism in which he is merely a cog (C i 739). This ‘social mechanism’ is competition between ‘many capitals’. We have seen that Marx believed ‘the influence of individual capitals on one another has the effect precisely that they must conduct themselves as capital’. This is especially true of accumulation itself. A capital which does not reinvest surplus value will soon find itself outstripped by its rivals. Those who have invested in improved methods of production are able to produce more cheaply and can undercut the price of the first capital’s goods. A capital which fails to accumulate will soon find itself driven into bankruptcy.

44

The accumulation process, just because it is inseparable from competition between capitals, is not a smooth or even affair. Marx argues that the accumulation process is also the reproduction of capitalist relations of production. What he means is that society cannot go on existing unless production is constantly renewed and this depends on capitalists ploughing the value they have realised on the market back into production. Marx distinguishes between two forms of reproduction.

Simple reproduction takes place when production is renewed at the same level as previously—and the economy stagnates rather than grows. Extended reproduction, however, involves surplus product being used to increase production. This latter case is the norm under capitalism. In Volume 2 of Capital Marx analyses the conditions under which simple or extended reproduction takes place. He shows that here use value plays a very important role. For reproduction to happen, it is not enough for there to be the money to buy labour power and the instruments of production. There must also be enough consumer goods to feed the workers, and enough machinery, raw materials and so on for them to put to work. Marx divides the economy into two broad sectors, Departments I and II. Department I of the economy produces the means of production: for instance, mining for raw materials and factories producing machinery. Department II produces consumer goods: food, clothing and so on. Marx shows that for either simple or extended reproduction to happen, both departments must produce goods in certain proportions.

But whether these proportions between the different sectors of the economy actually hold is a matter largely of accident. Capitalists produce, not for themselves, but for the market. There is no guarantee whatsoever that what is produced will be consumed. Whether this happens depends on there being effective demand for the commodity. In other words, not only must someone want to buy it, but they must have the money to do so. Often this demand does not exist. The result is an economic crisis. For example, let us say that capitalists in Department I (means of production) cut the wages of their workers in order to increase the rate of surplus value.

These workers will then be able to buy fewer of the products of Department II (consumer goods). Capitalists in Department II may react to this decline in their markets by cutting back on their orders for new plant and equipment. Department I capitalists, hit in turn by this fall in demand for their products, may lay off workers, which then causes their Department II counterparts to do the same…and so on. This process, only really understood by bourgeois economists since the appearance of J M Keynes’s General Theory of Employment, Interest and Money in 1936, was analysed by Marx in Capital Volume 2 some 70 years earlier. The possibility of economic crises is inherent in the very nature of the commodity.

Let us recall that the simple circulation of commodities takes the form of C-M-C. A commodity is sold, and the money used to buy another commodity. But there is no reason why a sale must necessarily be followed by another purchase. Having sold his commodity, the seller may decide to hoard the money he has received. There are often conditions in which capitalists decide to do precisely this, because the rate of profit is too low for it to be worth their while to invest. The source of crises is thus ultimately the unplanned character of capitalist production, where ‘a balance is itself an accident owing to the spontaneous nature of this production’, as Marx writes (C ii 499). However, this merely shows that crises are possible. To understand why they actually happen we have to dig deeper into the nature of the accumulation process. Marx’s explanation of economic crises is based on what he called the law of the tendency of the rate of profit to fall, ‘in every respect the most important law of modern political economy, and the most essential for understanding the most difficult relations’, he wrote (G 748).

The rate of profit has a general tendency to fall under capitalism, says Marx. Not just in specific areas of the economy nor just in particular periods but generally, and the reason, he says, is the continual increase in the productivity of labour. To use his own words, ‘The progressive 45

tendency of the rate of profit to fall is just an expression, peculiar to the capitalist mode of production, of the progressive development of the social productivity of labour’ (C iii 212). The higher the productivity of labour, the more machinery and raw materials an individual worker is responsible for. In other words, the amount of constant capital invested in plant, equipment and raw materials grows relative to the variable capital used to pay the worker’s wages. In value terms, this means that the organic composition of capital is higher. And we have already seen how, because labour power is the source of surplus value, the higher the organic composition of capital, the lower the rate of profit. So as productivity increases, the rate of profit falls.

But if this is so, then why should any capitalist ever invest for higher productivity? The answer is that, in the short term, he benefits from doing so, and in the long term he is forced to do so by competition. Let us recall that the individual value of a commodity, the actual labour embodied in it, may differ from the social or market value, which is determined by the average conditions of production in that industry. Now take the case of an individual capitalist using these average conditions of production. Suppose that he introduces a new technique, which raises the productivity of his workers above the average. The individual value of his commodities will fall below their social value because they have been produced more efficiently than is normal in that sector. The capitalist can now fix their prices at a level that is lower than the social value thus undercutting his competitors, but still higher than their individual value, thus realising an extra profit. ] But this situation will not last indefinitely. Other capitalists will adopt the new technique to prevent themselves being undercut and driven out of business. Once this innovation becomes the norm in the industry the social value of its products will fall to match the individual value of the innovator’s commodities, wiping out his advantage. Through the pressure of competition capitals are therefore compelled to adopt new techniques and raise the productivity of labour. ‘The law of determination of value by labour time’ thus acts as ‘a coercive law of competition,’ writes Marx (C i 436). For the individual capitalist, ‘the determination of value as such…interests him only in so far as it raises or lowers the cost of production of commodities for himself, thus only in so far as it makes his position exceptional’ (C iii 873). Each capitalist is concerned to raise the productivity of labour only as a means of outstripping his competitors. The effect is to force all the ‘many capitals’ to conform to the law of value, and constantly to increase the productivity of labour.

However, the outcome of all these self-seeking actions by capitalists out to increase the amount of surplus value they can seize from their workers and their competitors is to bring down the general rate of profit: No capitalist ever voluntarily introduces a new method of production no matter how much more productive it may be, and how much it may increase the rate of surplus value, so long as it reduces the rate of profit. Yet every such new method of production cheapens the commodities. Hence, the capitalist sells them originally above their prices of production, or, perhaps, above their value. He pockets the difference between their costs of production and the market prices of the same commodities produced at higher costs of production. He can do this…because his method of production stands above the social average. But competition makes it general and subject to the general law.

There follows a fall in the rate of profit—perhaps first in this sphere of production and eventually it achieves a balance with the rest, which is, therefore, wholly independent of the will of the capitalist (C iii 264-265). This tendency of the rate of profit to fall is a reflection of the fact that ‘beyond a certain point, the development of the powers of production becomes a barrier for capital; hence the capital relation a barrier for the development of the productive powers of labour’ (G 749).

The greater productivity of labour, which reflects humanity’s growing power over nature, takes the form, within capitalist relations of production, of a rising organic composition of capital, and hence a falling rate of profit. It is this process which underlies economic crises. ‘The growing incompatibility

46

between the productive development of society and its hitherto existing relations of production expresses itself in bitter contradictions, crises, spasms’ (G 749).

The falling rate of profit is, however, only the starting point of Marx’s analysis of capitalist crises. He stresses that there are ‘counteracting influences at work, which cross and annul the effect of the general law, and which give it merely the characteristic of a tendency’, ‘a law whose absolute action is checked, retarded and weakened’ (C iii 232, 235). Indeed, ‘the same influences which produce a tendency in the general rate of profit to fall, also call forth counter-effects, which hamper, retard and partly paralyse this fall’ (C iii 239). For example, the rising organic composition of capital means that a smaller number of workers can produce a given amount of commodities. The capitalist may well react by sacking the surplus workers— this may indeed have been his aim in introducing the new technique in the first place.

The result is that the accumulation of capital involves the constant expulsion of workers from production. What Marx calls ‘relative overpopulation’ is created. It is not, as Malthus and his followers claimed, that there are more people than there is food to keep them alive. Rather, there are more people than capitalism needs, and so the surplus is deprived of the wages on which workers depend for their existence. The capitalist economy consequently generates an ‘industrial reserve army’ of unemployed workers, which plays a crucial role in the accumulation process. Not only do the unemployed provide a pool of workers that can be flung into new branches of production. They also help to prevent wages from rising too high. Labour power, like every commodity, has a value— the labour time involved in its production, and a price—the amount of money paid for it. The price of labour power is wages, and like all market prices wages fluctuate in response to rises and falls in the supply and demand of labour power.

The existence of the industrial reserve army keeps the supply of labour power large enough to prevent the price of labour power from rising above its value. Writes Marx, ‘The general movements of wages are exclusively regulated by the expansion and contraction of the industrial reserve army’ (C i 790). This does not mean that Marx believed in the ‘iron law of wages’, according to which wages cannot rise above the bare physical minimum necessary for subsistence. As he pointed out in the Critique of the Gotha Programme, this so-called ‘law’ is based on Malthus’s theory of population, and is therefore utterly false. Capitalism, as we have seen, involves constant increases in the productivity of labour. These lead, of necessity, to a steady reduction in the value of commodities, including labour power. The falling value of consumer goods means that the purchasing power of workers’ wages can stay the same or even rise although the value of labour power has fallen.

So in absolute terms, workers’ living standards may well rise. In relative terms, however, their position has deteriorated, because the rate of surplus value has risen, and so their share of the total value they have created has fallen. The existence of an industrial reserve army strengthens the position of the capitalist, and makes it easier for him to increase the rate of surplus value. If the total amount of capital remains the same, then the rate of profit will rise. So a greater intensity of exploitation is one counteracting influence on the falling rate of profit. Increasing the rate of exploitation is double-edged, however. If it is achieved through increasing the productivity of labour, then the organic composition of capital will rise, and so a higher rate of surplus value will in this case mean a lower rate of profit.

Marx believed that such a situation was typical of the tendency of the rate of profit. He rejected any attempt to explain economic crises through workers winning higher wage increases: The tendency of the rate of profit to fall is bound up with a tendency for the rate of surplus value to rise…

Nothing is more absurd, for this reason, than to explain the fall in the rate of profit by a rise in the rate of wages, although this may be the case by way of an exception… The rate of profit does not fall 47

because labour becomes less productive, but because it becomes more productive. Both the rise in the rate of surplus value and the fall in the rate of profit are but specific forms through which growing productivity of labour is expressed under capitalism (C iii 240).

The same was true, Marx argued, of another counteracting influence, the cheapening of the elements of constant capital. Rising productivity in Department I, the production of the means of production, means that the value of the plant, machinery and so on which make up the constant capital falls: With the growth in the proportion of constant to variable capital, grows also the productivity of labour, the productive forces brought into being, with which social labour operates.

As a result of this increasing productivity of labour, however, a part of the existing constant capital is continuously depreciated in value, for its value depends, not on the labour time it cost originally, but on the labour time with which it can be reproduced, and this is continually diminishing as the productivity of labour grows (TSV ii 415-416). Many critics of Marx (some of them Marxists) have argued that the fact that rising labour productivity cheapens the elements of constant capital means that the organic composition does not rise and so the rate of profit does not fall. Even though the technical composition of capital, in other words the physical ratio between means of production and labour power, grows enormously, they contend, in value terms this relationship stays the same because the cost of producing the means of production has fallen.

What they ignore is that what matters for the capitalist is the return he makes on his original investment. The money he laid out on plant, equipment and so on will have been to buy these means of production at their original values, not the labour time it would now cost to replace them. He must make an adequate profit on this investment, not on what it might now cost him to make it. But let us now look at crises themselves. It is indeed mainly through crises that the value of constant capital is brought in line, not with ‘the labour time it cost originally’, but with ‘the labour time with which it can be reproduced’. Economic crises may be precipitated by a variety of factors. For example, one may be brought on by a sudden rise in the price of some important raw material—such as the fourfold rise in the price of oil in 1973-74. Often crises start through some disruption of the financial system—for example, a major bank going bankrupt, or a stock market crash. A large portion of Capital Volume 3 is devoted to explaining how development of the credit system, as a result of which more and more money is created by the banks themselves, plays a vital role in both preventing and bringing about crises.

However, the underlying cause of crises is always the tendency of the rate of profit to fall, and the counteracting influences which it brings into play. We have seen that the nature of the commodity is such that C-M does not necessarily lead to M-C. Money gained by selling a commodity may be hoarded rather than used to buy another commodity. This takes place on a massive scale during economic crises. Vast numbers of commodities go unsold. This sets capitalism apart from earlier modes of production. In slave and feudal societies crises were those of underproduction, of shortage, in which there was not enough to feed everyone. Capitalist crises, however, are those of overproduction. This does not mean, Marx emphasises, ‘that the amount of products is excessive in relation to the need for them… The limits to production are set by the profit of the capitalist and in no way by the needs of the producers’ (TSV ii 527).

Too many commodities have been produced to realise an adequate profit for the capitalist. If we want an example, we need look no further back than the butter mountains and wine lakes created to keep the price of agricultural goods high, while more than 700 million people starve in the Third World. At the same time as crises are produced by the internal contradictions of capital accumulation, they ‘are always momentary and forcible solutions of the existing contradictions’ (C iii 249). This takes place through what Marx called the depreciation or devaluation of capital. The collapse of the markets for their goods forces many capitals out of business.

48

Effectively, large amounts of capital are destroyed. The destruction of capital is sometimes literal—machinery rusts, stocks of goods rot or are destroyed. But falling prices also wipe out a large part of the value of the means of production. ‘The destruction of capital through crises means the depreciation of values which prevents them from renewing their reproduction process as capital on the same scale’ (TSV ii 496). It is in this way, through economic crises, that the value of constant capital is brought in line, not with the labour time originally used to produce it, but with what it would now cost to reproduce it. In this manner the organic composition of capital is reduced and the rate of profit recovers.

So crises serve to restore capital to a condition in which it can be profitably employed: The periodical depreciation of existing capital—one of the means immanent in capitalist production to check the fall of the rate of profit and hasten accumulation of capital value through the formation of new capital—disturbs the given conditions within which the process of circulation and reproduction of capital takes place, and is therefore accompanied by stoppages and crises in the production process (C iii 249). There are other ways in which crises serve to offset the tendency of the rate of profit to fall. Marx writes that ‘crises are always prepared by…a period in which wages rise generally and the working class actually gets a larger share of that part of the annual product which is intended for consumption’ (C ii 414-415).

This reflects the fact that at the height of economic booms many commodities become scarce because they are in demand by so many capitals eager to get as large a share of the market as possible. This is true of labour power: as the pace of economic growth quickens, so the industrial reserve army is run down, and workers, especially skilled ones, become scarce. The workers’ improved bargaining position then enables them to bid up the price of labour power, and so the rate of wages rises. An economic recession, by forcing up unemployment, makes it easier for the employers to drive down wages, and to compel those workers still with jobs to accept worse conditions of production. Crises, then, are periods when the capitalist system is reorganised and reshaped in order to restore the rate of profit to a level at which investment will take place. Not all capitals benefit equally from this process. The weaker and less efficient firms, and those with an especially large burden of out-of-date machinery, will be driven out of business. The stronger and more efficient capitals survive, and emerge from the recession stronger. They are able to buy up land and instruments of production at bargain-basement prices, and to force on workers changes in the labour process which will increase the rate of surplus value. Crises therefore contribute to the process which Marx called the centralisation and concentration of capital. Concentration takes place when capitals grow in size through the accumulation of surplus value.

Centralisation, on the other hand, involves the absorption of smaller by bigger capitals. The process of competition itself encourages this trend, because the more efficient firms are able to undercut their rivals and then to take them over. But economic recessions speed up the process by enabling the surviving capitals to buy up the means of production cheap. A constant increase in the size of individual capitals is therefore an inevitable part of the accumulation process. ‘The path characteristically described by modern industry’, Marx writes, ‘takes the form of a…cycle (interrupted by smaller oscillations) of periods of average activity, production at high pressure, crisis, and stagnation’ (C i 785). The alternation of boom and slump is an essential feature of the capitalist economy.

As Trotsky put it, ‘Capitalism does live by crises and booms, just as a human being lives by inhaling and exhaling… Crises and booms were inherent in capitalism from its birth; they will accompany it to its grave.’ The analysis of the way in which crises are built into the accumulation of capital, which Marx develops in Capital, is conducted at quite a high level of abstraction. It needs to be elaborated, as we shall see in the final chapter, by an account of how, as the system grows older, the centralisation and concentration of capital makes it more difficult for crises to perform their role 49

of restoring the conditions of profitable accumulation. Nevertheless, Capital provides the basis of any attempt to understand the capitalist economy.

CONCLUSION The capitalist mode of production illustrates Marx’s general thesis that reality is dialectical, that it contains contradictions within it. For, on the one hand, technological change, the introduction of new methods of production, is part and parcel of capitalism’s very existence. The pressure of competition forces capitalists constantly to innovate, and thereby to increase the forces of production. On the other hand, the development of the productive forces under capitalism leads inevitably to crises. As Marx puts it in the Communist Manifesto: The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form was…the first condition of existence for all earlier industrial classes.

Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones (CW vi 487).

The difference between capitalism and its precursors arises from the relations of production: It is clear that in any economic formation of society where the use value rather than the exchange value of product predominates, surplus labour will be restricted to a more or less confined set of needs, and that no boundless thirst for surplus labour will arise from the character of production itself (C i 345). The feudal lord, for example, was content so long as he received enough rent from his peasants to support himself, his family and his retainers in the style to which they were accustomed.

The capitalist, however, has a ‘voracious appetite’, a ‘werewolf-like hunger for surplus labour’ (C i 349, 355) which springs from the need to match the technical improvements of his competitors or be driven out of business.

Marx was a firm defender of what he called ‘the great civilising influence of capital’ (G 409) against those, such as the Romantics, who looked back nostalgically to pre-capitalist societies. He praised Ricardo for ‘having his eye solely for the development of the productive forces’ (C iii 259).

‘To assert, as sentimental opponents of Ricardo’s did, that production as such is not the object, is to forget that production for its own sake means nothing but the development of human productive forces, in other words the development of the richness of human nature as an end in itself ’ (TSV iii 117-118). So capitalism was historically progressive: [It] drives beyond national barriers and prejudices…as well as all traditional, confined, complacent, encrusted satisfactions of human needs, and reproductions of old ways of life. It is destructive to all this, and constantly revolutionises it, tearing down all the barriers which hem in the development of the forces of production, the expansion of needs, the all-sided development of production, and the exploitation and exchange of natural and mental forces (G 410). At the same time, however, the tendency of the rate of profit to fall shows that capitalism is not, as the political economists believed, the most rational form of society, but is rather a historically limited, and contradictory mode of production, which fetters the forces of production at the same time as it develops them. ‘The real barrier of capitalist production is capital itself,’ writes Marx (C iii 250). ‘The violent destruction of capital, not by relations external to it, but rather as a condition of its self-preservation, is the most striking form in which it is given it to be gone and to give room to a higher state of social production’ (G 749-750).

Contrary to what many commentators, some of them Marxists, have said, Marx did not believe that the economic collapse of capitalism is inevitable. ‘Permanent crises do not exist,’ he insisted (TSV ii 497 n). As we have seen, ‘the crises are always momentary and forcible solutions of the existing contradictions.’ There is no economic crisis so deep that the capitalist system cannot recover from it, provided that the working class is prepared to pay the price in unemployment, falling

50

living standards, deteriorating working conditions. Whether any crisis leads to ‘a higher state of social production’ depends upon the consciousness and action of the working class.

51

Session 2:

All Change: Marx’s Theory of History

52

Session 2: All Change: Marx’s Theory of History

UNDERSTANDING HISTORY Chris Harman, How Marxism Works, Chapter 2 IDEAS BY THEMSELVES cannot change society. This was one of Marx’s first conclusions. Like a number of thinkers before him, he insisted that to understand society you had to see human beings as part of the material world.

Human behaviour was determined by material forces, just like the behaviour of any other natural object. The study of humanity was part of the scientific study of the natural world. Thinkers with such views were called materialists.

Marx regarded materialism as a great step forward over the various religious and idealist notions of history. It meant that you could argue scientifically about changing social conditions, you no longer depended on praying to God or on ‘spiritual change’ in people.

The replacement of idealism by materialism was the replacement of mysticism by science.

But not all materialist explanations of human behaviour are correct. Just as there have been mistaken scientific theories in biology, chemistry or physics, so there have been mistaken attempts to develop scientific theories of society. Here are a few examples: One very widespread, non-Marxist, materialist view holds that human beings are animals, who behave ‘naturally’ in certain ways. Just as it is in the nature of wolves to kill or in the nature of sheep to be placid, so it is in the nature of men to be aggressive, domineering, competitive and greedy (and, it is implied, of women to be meek, submissive, deferential and passive).

A recent formulation of this view is to be found in the best-selling book the Naked Ape. The conclusions drawn from such arguments are almost invariably reactionary. If men are naturally aggressive, it is said, then there is no point in trying to improve society. Things will always turn out the same. Revolutions will ‘always fail’.

But ‘human nature’ does in fact vary from society to society. For instance, competitiveness, which is taken for granted in our society, hardly existed in many previous societies. When scientists first tried to give Sioux Indians IQ tests, they found that the Indians could not understand why they should not help each other do the answers. The society they lived in stressed co-operation, not competition.

The same with aggressiveness. When Eskimos first met Europeans, they could not make any sense whatsoever of the notion of ‘war’. The idea of one group of people trying to wipe out another group of people seemed to them crazy.

In our society it is regarded as ‘natural’ that parents should love and protect their children.

Yet in the ancient Greek city of Sparta it was regarded as ‘natural’ to leave infants out in the mountains to see if they could survive the cold.

‘Unchanging human nature’ theories provide no explanation for the great events of history.

The pyramids of Egypt, the splendours of Ancient Greece, the empires of Rome or the Incas, the modern industrial city, are put on the same level as the illiterate peasants who lived in the mud hovels of the Dark Ages. All that matters is the ‘naked ape’ — not the magnificent civilisations the ape has built. It is irrelevant that some forms of society succeed in feeding the ‘apes’, while others leave millions to starve to death.

Many people accept a different materialist theory, which stresses the way it is possible to change human behaviour. Just us animals can he trained to behave differently in a circus to a jungle, 53

so, say the supporters of this view, human behaviour can similarly be changed. If only the right people got control of society, it is said, then ‘human nature’ could be transformed.

This view is certainly a great step forward from the ‘naked ape’. But as an explanation of how society as a whole can be changed it fails. If everyone is completely conditioned in present day society, how can anyone ever rise above society and see how to change the conditioning mechanisms? Is there some God-ordained minority that is magically Immune to the pressures that dominate everyone else? If we are all animals in the circus, who can be the lion-tamer?

Those who hold this theory either end up saying society cannot change (like the Naked Apers) or they believe change is produced by something outside society — by God, or a ‘great man’, or the power of individual ideas. Their ‘materialism’ lets a new version of idealism in through the back door.

As Marx pointed out, this doctrine necessarily ends up by dividing society into two parts, one of which is superior to society. This ‘materialist’ view is often reactionary. One of the best known adherents of the view today is a right-wing American psychologist called Skinner. He wants to condition people to behave in certain ways. But since he himself is a product of American capitalist society, his ‘conditioning’ merely means trying to make people conform to that society.

Another materialist view blames all the misery in the world on ‘population pressure’. (This is usually called Malthusian after Malthus, the English economist of the late 18th century who first developed it.) But it cannot explain why the United States, for instance, burns corn while people in India starve.

Nor can it explain why 150 years ago there was not enough food produced in the US to feed 10 million people, while today enough is produced to feed 200 million.

It forgets that every extra mouth to feed is also an extra person capable of working and creating wealth.

Marx called all these mistaken explanations forms of ‘mechanical’ or ‘crude’ materialism.

They all forget that as well as being part of the material world, human beings are also acting, living creatures whose actions change it.

The Materialist Interpretation of History ‘Men can be distinguished from animals by consciousness, by religion or anything else you like. They themselves begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence — their food, shelter and clothing’.

With these words, Karl Marx first stressed what was distinct about his explanation of how society developed. Human beings are animals descended from apelike creatures. Like other animals, their first concern is feeding themselves and protecting themselves from the climate.

The way other animals do this depends on their inherited biological make up. A wolf stays alive by chasing and killing its prey, in ways determined by its biologically inherited instincts. It keeps warm on cold nights because of its fur. It brings up its cubs according to inherited patterns of behaviour.

But human life is not fixed in this way. The humans who roamed the earth 100,000 years ago or 30,000 years ago lived quite different lives from ourselves. They lived in caves and holes in the ground. They did not have containers to keep food or water in, they depended for their food on collecting berries or throwing stones at wild animals. They could not write, or count beyond the fingers on their hands. They had no real knowledge of what went on beyond their immediate neighbourhood or what their forefathers had done.

54

Yet physically their make-up 100,000 years ago was similar to that of modern man and 30,000 years ago it was identical. If you washed and shaved a caveman, put him in a suit and walked him down the High Street, no one would think him out of place.

As the archaeologist C Gordon Childe has noted: ‘The earliest skeletons of our own species belong to the closing phases of the last Ice Age . . . Since the time when skeletons of homo sapiens first appear in the geological record, perhaps 25,000 years ago, man's bodily evolution has come virtually to a standstill, although his cultural progress was just beginning.’

The same point is made by another archaeologist, Leakey: 'The physical differences between men of the Aurignacian and Magdalenian cultures (25,000 years ago) on the one hand, and present day men on t he other is negligible, while the cultural difference is immeasurable’.

By ‘culture’ the archaeologist means the things which men and women learn and teach one another (how to make clothes from furs or wool, how to make pots out of clay, how to make fire, how to build homes, and so forth) as opposed to those things that animals know instinctively.

The lives of the earliest humans were already vastly different from those of other animals.

For they were able to use the physical features peculiar to humans — large brains, forelimbs capable of manipulating objects — to begin to shape their surroundings to suit their needs.

This meant humans could adapt themselves to a wide range of different conditions, without any change in their physical make up. Humans no longer simply reacted to conditions around them. They could act upon those conditions, beginning to change them to their own advantage.

At first they used sticks and stones to attack wild beasts, they lit torches from naturally occurring fires to provide themselves with heat and light, they covered themselves with vegetation and animal skins. Over many tens of thousands of years they learnt to make fire themselves, to shape stones using other stones, eventually to grow food from seeds they themselves had planted, to store it in pots made out of clay, and to domesticate certain animals.

Comparatively recently — a mere 5,000 years ago, out of half a million years of human history — they learnt the secret of turning ores into metals that could be shaped into reliable tools and effective weapons.

Each of these advances had an enormous impact, not merely in making it easier for humans to feed and clothe themselves, but also in transforming the very organisation of human life itself.

From the beginning human life was social. Only the joint efforts of several humans could enable them to kill the beasts, to gather the food and keep the fires going. They had to co-operate.

This continual close co-operation also caused them to communicate, by uttering sounds and developing languages. At first the social groups were simple. There was not enough naturally growing produce anywhere to support groups of humans more than perhaps a couple of dozen strong.

All effort had to be put into the basic tasks of getting the food, so everyone did the same job and lived the same sort of life.

With no means of storing any quantities of food, there could be no private property or class divisions, nor was there any booty to produce a motive for war.

There were, until a few years ago, still hundreds of societies in many different parts of the globe where this was still the pattern —among some of the Indians of North and South America, some of the peoples of Equatorial Africa and the Pacific Ocean, the Aborigines of Australia.

Not that these people were less clever than ourselves or had a more ‘primitive mentality’. The Australian Aborigines, for instance, had to learn to recognise literally thousands of plants and the habits of scores of different animals in order to survive.

The anthropologist Professor Firth had described how:

55

‘Australian tribes . . . know the habits, markings, breeding grounds and seasonal fluctuations of all the edible animals, fish and birds of their hunting grounds. They know the external and some of the less obvious properties of rocks, stones, waxes, gums, plants, fibres and barks; they know how to make fire; they know how to apply heat to relieve pain, stop bleeding and delay the putrefaction of fresh food; and they also use fire and heat to harden some woods and soften others . . . They know something at least of the phases of the moon, the movement of the tides, the planetary cycles, and the sequence and duration of the seasons; they have correlated together such climactic fluctuations as wind systems, annual patterns of humidity and temperature and fluxes in the growth and presence of natural species . . . In addition they make intelligent and economical use of the by-products of animals killed for food; the flesh of the kangaroo is eaten; the leg bones are used as fabricators for stone tools and as pins; the sinews become spear bindings; the claws are set into necklaces with wax and fibre; the fat is combined with red ochre as a cosmetic, and blood is mixed with charcoal as paint . . .They have some knowledge of simple mechanical principles and will trim a boomerang again and again to give it the correct curve…’

They were much more ‘clever’ than us in dealing with the problems of surviving in the Australian desert. What they had not learnt was to plant seeds and grow their own food — something our own ancestors learnt only about 5,000 years ago, after being on the earth for 100 times that period.

The development of new techniques of producing wealth — the means of human life — has always given birth to new forms of co-operation between humans, to new social relations.

For example, when people first learnt to grow their own food (by planting seeds and domesticating animals) and to store it (in earthen-ware pots) there was a complete revolution in social life — called by archaeologists ‘the neolithic revolution’. Humans had to co-operate together now to clear the land and to harvest food, as well as to hunt animals. They could live together in much greater numbers than before, they could store food and they could begin to exchange goods with other settlements.

The first towns could develop. For the first time there was the possibility of some people leading lives that did not involve them just in providing food: some would specialise in making pots, some in mining flints and later metal for tools and weapons, some in carrying through elementary administrative tasks for the settlement as a whole. More ominously, the stored surplus of food provided a motive for war.

People had begun by discovering new ways of dealing with the world around them, or harnessing nature to their needs. But in the process, without intending it, they had transformed the society in which they lived and with it their own lives. Marx summed up this process: a development of the ‘forces of production’ changed the ‘relations of production’ and, through them, society.

There are many, more recent examples.

Three hundred years ago the vast majority of people in this country still lived on the land, producing food by techniques that had not changed for centuries. Their mental horizon was bounded by the local village and their ideas very much influenced by the local church. The vast majority did not need to read and write, and never learned to.

Then, 200 years ago, industry began to develop. Tens of thousands of people were drawn into the factories. Their lives underwent a complete transformation. Now they lived in great towns, not small villages. They needed to learn skills undreamt of by their ancestors, including eventually the ability to read and write. Railways and steamships made it possible to travel across half the earth.

The old ideas hammered into their heads by the priests no longer fitted at all. The material revolution in production was also a revolution in the way they lived and in the ideas they had.

56

Similar changes are still affecting vast numbers of people. Look at the way people from villages in Bangladesh or Turkey have been drawn to the factories of England or Germany seeking work. Look at the way many find that their old customs and religious attitudes no longer fit.

Or look at the way in the past 50 years the majority of women have got used to working outside the home and how this has led them to challenge the old attitudes that they were virtually the property of their husbands.

Changes in the way humans work together to produce the things that feed clothe and shelter them cause changes in the way in which society is organised and the attitude of people in it. This is the secret of social change — of history — that the thinkers before Marx (and many since), the idealists and the mechanical materialists could not understand.

The idealists saw there was change — but said it must come out of the skies. The mechanical materialists saw that humans were conditioned by the material world but could not understand how things could ever change. What Marx saw was that human beings are conditioned by the world around them, but that they react back upon the world, working on it so as to make it more habitable.

But in doing so they change the conditions under which they live and therefore themselves as well.

The key to understanding change in society lies in understanding how human beings cope with the problem of creating their food, shelter and clothing. That was Marx’s starting point. But that does not mean that Marxists believe that improvements in technology automatically produce a better society, or even that inventions automatically lead to changes in society. Marx rejected this view (some-times called technological determinism). Again and again in history, people have rejected ideas for advancing the production of food, shelter or clothing because these clash with the attitudes or the forms of society that already exist.

For example under the Roman Empire there were many ideas about how to produce more crops from a given amount of ground, but people didn’t put them into effect because they required more devotion to work than you could get from slaves working under fear of the whip. When the British ruled Ireland in the 18th century they tried to stop the development of industry there because it clashed with the interests of businessmen in London.

If someone produced a method of solving the food problem of India by slaughtering the sacred cows or providing everyone in Britain with succulent steaks by processing rat meat, they would be ignored because of established prejudices.

Developments in production challenge old prejudices and old ways of organising society, but they do not automatically overthrow those old prejudices and social forms. Many human beings fight to prevent change — and those wanting to use new methods of production have to fight for change.

If those who oppose change win, then the new forms of production cannot come into operation and production stagnates or even goes backwards.

In Marxist terminology: as the forces of production develop they clash with the pre-existing social relations and ideas that grew up on the basis of old forces of production. Either people identified with the new forces of production win this clash, or those identified with the old system do. In the one case, society moves forward, in the other it remains stuck in a rut, or even goes backwards.

CLASS STRUGGLE Chris Harman, How Marxism Works, Chapter 3 WE LIVE in a society that is divided into classes, in which a few people have vast amounts of private property, and most of us have virtually none. Naturally, we tend to take it for granted that things have always been like this. But in fact, for the greater part of human history, there were no 57

classes, no private property, and no armies or police. This was the situation during the half a million years of human development up to 5,000 or 10,000 years ago.

Until more food could be produced by one person’s work than was needed to keep that person fit for work, there could be no division into classes. What was the point of keeping slaves if all that they produced was needed to keep them alive?

But beyond a certain point, the advance of production made class divisions not only possible but necessary. Enough food could be produced to leave a surplus after the immediate producers had taken enough to stay alive. And the means existed to store this food and to transport it from one place to another.

The people whose labour produced all this food could simply have eaten the extra ‘surplus’ food. Since they lived fairly meagre, miserable lives, they were strongly tempted. But that left them unprotected against the ravages of nature, which might mean famine or a flood the next year and against attacks from hungry tribes from outside the area.

It was, at first, of great advantage to everyone if a special group of people took charge of this extra wealth, storing it against future disaster, using it to support craftsmen, building up means of defence, exchanging part of it with distant people for useful objects. These activities came to be carried out in the first towns, where administrators, merchants and craftsmen lived. Out of the markings on tablets used to keep a record of the different sorts of wealth, writing began to develop.

Such were the first, faltering steps of what we call ‘civilisation’. But — and it was a very big but — all this was based on control of the increased wealth by a small minority of the population.

And the minority used the wealth for its own good as well as the good of society as a whole.

The more production developed, the more wealth came into the hands of this minority — and the more it became cut off from the rest of society. Rules, which began as a means of benefiting society, became ‘laws’, insisting that the wealth and the land that produced it was the ‘private property’ of the minority. A ruling class had come into existence — and laws defended its power.

You might perhaps ask whether it would have been possible for society to have developed otherwise, for those who laboured on the land to control its produce?

The answer has to be No. Not because of ‘human nature’, but because society was still very poor. The majority of the earth’s population were too busy scratching the soil for a meagre living to have time to develop systems of writing and reading, to create works of art, to build ships for trade, to plot the course of the stars, to discover the rudiments of mathematics, to work out when rivers would flood or how irrigation channels should be constructed. These things could only happen if some of the necessities of life were seized from the mass of the population and used to maintain a privileged minority which did not have to toil from sunrise to sunset.

However, that does not mean that the division into classes remains necessary today. The past hundred years have seen a development of production undreamt of in the previous history of humanity. Natural scarcity has been overcome — what now exists is artificial scarcity, created as governments destroy stocks of food.

Class society today is holding humanity back, not leading it forward.

It was not just the first change from purely agricultural societies to societies of towns and cities that gave rise, necessarily, to new class divisions. The same process was repeated every time new ways of producing wealth began to develop.

So, in Britain a thousand years ago, the ruling class was made up of feudal barons who controlled the land and lived off the backs of the serfs. But as trade began to develop on a big scale, there grew up alongside them in the cities a new privileged class, of wealthy merchants. And when industry began to develop on a substantial scale, their power in turn was disputed by the owners of industrial enterprises.

58

At each stage in the development of society there was an oppressed class whose physical labour created the wealth, and a ruling class who controlled that wealth. But as society developed both the oppressed and the oppressors underwent changes.

In the slave societies of ancient Rome, the slaves were the personal property of the ruling class. The slave owner owned the goods produced by the slave because he owned the slave, in exactly the same way as he owned the milk produced by a cow because he owned the cow.

In the feudal society of the middle ages, the serfs had their own land, and owned what was produced from it; but in return for having this land they had to do a number of days’ work every year on the land owned by the feudal lord. Their time would be divided: perhaps half their time they would be working for the lord, half the time for themselves. If they refused to do work for the lord, he was entitled to punish them (through flogging, imprisonment or worse).

In modern capitalist society, the boss does not physically own the worker nor is he entitled to physically punish a worker who refuses to do unpaid work for him. But the boss does own the factories where the worker has to get a job if he or she wants to keep alive. So it is fairly easy for him to force the worker to put up with a wage which is much less than the value of the goods the worker makes in the factory.

In each case the oppressing class gets control of all the wealth that is left over once the most elementary needs of the workers have been met. The slave owner wants to keep his property in a good condition, so he feeds his slave in exactly the same way as you might oil your car. But everything surplus to the physical needs of the slave, the owner uses for his own enjoyment. The feudal serf has to feed and clothe himself with the work he puts in on his own bit of land. All the extra labour he puts in on the lord’s fields goes to the lord.

The modern worker gets paid a wage. All the other wealth he creates goes to the employing class as profit, interest or rent.

The Class Struggle and the State The workers have rarely accepted their lot without fighting back. There were slave revolts in ancient Egypt and Rome, peasant revolts in Imperial China, civil wars between the rich and poor in the cities of ancient Greece, in Rome and Renaissance Europe.

That is why Karl Marx began his pamphlet, The Communist Manifesto, by insisting that ‘The history of all hitherto existing societies has been the history of class struggles’. The growth of civilisation had depended on the exploitation of one class by another, and therefore on the struggle between them.

However powerful an Egyptian pharaoh, a Roman emperor or a mediaeval prince, however luxurious their lives, however magnificent their palaces, they could do nothing unless they guaranteed that the products grown by the most miserable peasant or slave passed into their possession. They could only do this if alongside the division into classes there also grew something else — control over the means of violence by themselves and their supporters.

In earlier societies there had been no army, police or governmental apparatus separate from the majority of the people. Even some 50 or 60 years ago, for instance, in parts of Africa, it was still possible to find societies in which this was still so. Many of the tasks done by the state in our society were simply done informally by the whole population, or by meetings of representatives.

Such meetings would judge the behaviour of any individual who was considered to have broken an important social rule. Punishment would be applied by the whole community — for instance by forcing miscreants to leave. Since everyone was agreed on the necessary punishment, separate police were not needed to put it into effect. If warfare occurred all the young men would take part, under leaders chosen for the occasion, again without any separate army structure.

59

But once you had a society in which a minority had control over must of the wealth, these simple ways of keeping ‘law and order’ and organising warfare could no longer work. Any meeting of representatives or any gathering of the armed young men would be likely to split along class lines.

The privileged group could only survive if it began to monopolise in its own hands the making and implementation of punishments, laws, the organisation of armies, the production of weapons. So the separation into classes was accompanied by the growth of judges, policemen and secret policemen, generals, bureaucrats —all of whom were given part of the wealth in the hands of the privileged class in return for protecting its rule.

Those who served in the ranks of this ‘state’ were trained to obey without hesitation the orders of their ‘superiors’ and were cut off from all normal social ties with the exploited mass of people. The state developed as a killing machine in the hands of the privileged class. And a highly effective machine it could be.

Of course, the generals who ran this machine often fell out with a particular emperor or king, and tried to put themselves in his place. The ruling class, having armed a monster, could often not control it. But since the wealth needed to keep the killing machine running came from the exploitation of the working masses, every such revolt would be followed by continuation of society along the old lines.

Throughout history people who have really wanted to change society for the better have found themselves up against not just the privileged class, but also an armed machine, a state, that serves its interest.

Ruling classes, together with the priests, generals, policemen and legal systems that backed them up, all grew up in the first place because without them civilisation could not develop. But once they are established in power, they come to have an interest in hindering the further development of civilisation. Their power is dependent upon their ability to force those who produce wealth to hand it over to them. They become wary of new ways of producing wealth, even if more efficient than the old, lest control escape from their hands.

They fear anything that could lead to the exploited masses developing initiative and independence. And they also fear the growth of new privileged groups with enough wealth to be able to pay for arms and armies of their own. Beyond a certain point, instead of aiding the development of production, they began to hinder it.

For example, in the Chinese Empire, the power of the ruling class rested upon its ownership of the land and its control over the canals and dams that were necessary for irrigation and to avoid floods. This control laid the basis for a civilisation that lasted some 2,000 years. But at the end of this period production was not much more advanced than at the beginning — despite the flourishing of Chinese art, the discovery of printing and gunpowder, all at a time when Europe was stuck in the Dark Ages.

The reason was that when new forms of production did begin to develop, it was in towns, through the initiative of merchants and craftsmen. The ruling class feared this growth in power of a social grouping that was not completely under its control. So periodically the imperial authorities took harsh measures to crush the growing economies of the towns, to drive production down, and to destroy the power of the new social classes.

The growth of new forces of production — of new ways of producing wealth — clashed with the interests of the old ruling class. A struggle developed, the outcome of which determined the whole future of society.

Sometimes the outcome, as in China, was that new forms of production were prevented from emerging, and society remained more or less stagnant for very long periods of time.

Sometimes, as in the Roman Empire, the inability of new forms of production to develop meant that eventually there was no longer enough wealth being produced to maintain society on its 60

old basis. Civilisation collapsed, the cities were destroyed and people reverted to a crude, agricultural form of society.

Sometimes a new class, based upon a new form of production, was able to organise to weaken and finally overthrow the old ruling class, together with its legal system, its armies, its ideology, its religion. Then society could go forward.

In each case whether society went forwards or backwards depended on who won the war between the classes. And, as in any war, victory was not ordained in advance, but depended on the organisation, cohesion and leadership of the rival classes.

Who are the working class?

“Why are socialists supporting a middle class group?”This was the response of one irate Fianna Failer to the nurses strike.

It is a common argument. Writers at the top research institute, the ESRI, often single out public sector workers for attack if they seek more wages.

They justify this by claiming that more than half the Irish workforce is now ‘middle class’ because they took advantage of education to gain a ‘favoured niche in the class system.’

Confusing But the term middle class is highly confusing. It can refer to a routine white collar worker or to a Chief Executive.

A consultant who earns £70,000 a year and orders around hospital staff is supposed to be middle class – but so is a nurse who is stressed out while she earns just over £20,000.

Capitalism is a system that is constantly changing and as a result the working class itself undergoes change.

In the early part of the century white collar employees were very different to manual workers.

They lived in larger houses, had domestic servants and often emulated their bosses in many ways.

The offices were fairly small and clerks often had a close relationship with their employer.

The vast majority were men who could aspire to promotion into higher grades.

However, the situation for the majority of white collar employees has changed. In 1958, the sociologist David Lockwood pointed to three major differences between white collar and blue collar workers - yet all three of them have disappeared today.

First, income. Lockwood argued that white collar employees earned more than blue collar employees. But it is no longer true.

A factory floor worker in Intel for example earns far more than an office worker in the local authorities.

Second, job security. Again there have been huge changes as occupations like teaching and banking officials now increasingly rely on contract staff who have little security.

Third, promotion. White collar workers were supposed to expect promotion into management. But it is no longer true.

There is certainly a shift between grades – but few of the mainly female workforce get into management.

Those who use the term ‘middle class’ often focus on people’s lifestyle to pretend there is a major difference between groups like nurses and the rest of the working class.

But for socialists the key issue is what is the relationship to the means of production. Do you have to sell your labour – or do you live off the labour of others?

Modest Nurses, like most other white collar groups, rely on a modest salary.

Their working lives are controlled by a management hierarchy who try to intensify their work effort. They are subject to hire and fire like other groups.

Moreover, even their lifestyles are beginning to change.

61

In the past, a nurse could expect to start owning her own home before she was thirty – yet today that is extremely difficult.

She could also expect a certain respectability that came with being part of the Irish Guild of Catholic Nurses.

Today she is being lambasted in the press for being callous and ‘putting lives at risks’.

All of these enormous changes are reflected the fact that the Irish Nurses Organisation is no longer a purely professional body but is an affiliated member of the ICTU. There are, though, some white collar employees who formally get a wage but whose function is to manage, control and intensify the process of exploitation.

Office managers, professors, school principles or matrons all belong to a ‘new middle class’ who seek to exert an influence on the mass of white collar unions.

Sometimes they belong to the same union as other white collar employees and because they have more time off and more resources, they often rise to the top of the union machines.

This grouping will try to preserve the old professional ethos and will emphasize the differences with manual workers.

But this is not in the interest of the vast majority of white collar employees and it is the task of socialists to convince them of this.

THEWORKERS POWER Chris Harman, How Marxism Works, Chapter 7 MARX BEGAN The Communist Manifesto with the statement, ‘The history of all hitherto existing societies has been the history of class struggles.’

The question of how the ruling class was to force the oppressed class to keep producing wealth for it was crucial. Because of this, in every previous society, there had been enormous struggles between the classes which often culminated in civil war — the slave uprisings in Ancient Rome, the peasant uprisings in mediaeval Europe, the great civil wars and revolutions of the 17th and 18th centuries.

In all of these great struggles, the mass of the insurgent forces were from the most oppressed section of society. But, as Marx hastened to add, at the end of the day all their efforts served only to replace one privileged ruling minority with another. So, for example, in ancient China there were several successful peasant revolts — but they merely replaced one emperor with another. Similarly, those who made the greatest effort in the French revolution were the ‘Bras Nus’ — the poorer classes of Paris, but at the end of the day society was ruled not by them hut by bankers and industrialists instead of the king and courtiers.

There were two main reasons for this failure of the lower classes to keep control of the revolutions in which they fought.

Firstly, the general level of wealth in society was fairly low. It was only because the vast mass of people were kept in abysmal poverty that a small minority had time and leisure to develop the arts and sciences to maintain civilisation. In other words, class division was necessary if society was to progress.

Secondly, the life of the oppressed classes did not prepare them to run society. By and large they were illiterate, they had little idea of what things were like outside their own immediate locality, and, above all, their everyday life divided each of them against the other. Each peasant was concerned with cultivating his own plot of land. Each craftsman in the town ran his own small business and was to some extent in competition with other craftsmen, not united with them.

Peasant revolts would start with vast numbers of people rising up to divide the land of the local feudal lords, but once the lord was defeated, they would fall to squabbling among themselves about how they would divide the land. As Marx put it, peasants were like ‘potatoes in a sack’; they could be forced together by some outside power but were not capable of linking permanently to represent their own interests.

62

The workers who create the wealth under modern capitalism differ from all the previous lower classes. Firstly, the division of classes is no longer necessary for human progress. So much wealth is created that the capitalist society itself periodically destroys huge quantities through wars or economic crisis. It could be divided up equally and society could still have a flowering of science, arts and so forth.

Secondly, life under capitalism prepares workers in many ways to take control of society. For example, capitalism needs workers who are skilled and educated. Also capitalism forces thousands of people into huge workplaces in huge conurbations where they are in close contact with one another, and where they can be a powerful force for changing society.

Capitalism makes workers cooperate in production within the factory, and those cooperative skills can easily be turned against the system, as when workers organise themselves into unions.

Because they are massed together in huge concentrations it is much easier for workers to democratically control such bodies than it was for previously oppressed classes.

Furthermore, capitalism tends increasingly to turn groups of people who thought of themselves as a ‘cut above’ ordinary workers (such as clerks or technicians) into wage labourers who are forced to organise unions and so on as other workers do.

Lastly, the development of communications — railways, roads, air transport, postal systems, telephones, radio and television — allows workers to communicate outside their own locality or industry. They can organise as a class on a national and international scale — something beyond the wildest dreams of previous oppressed classes.

All these facts mean that the working class can not only be a force which rebels against existing society, but can organise itself, electing and controlling its own representatives, so as to change society in its own interest, and not just to set up yet another emperor or group of bankers. As Karl Marx put it: ‘All previous historical movements were movements of minorities in the interests of minorities. The proletarian movement is the self-conscious independent movement of the immense majority in the interests of the immense majority.

What’s special about workers The movement against aspects of global capitalism has many diverse strands, from poor farmers, environmentally conscious small businesses, NGO’s, to developing nations. In that sense it is understandable that the language of many of those attempting to organise the anti-globalisation movement talks, as do Attac for example, of its participants being “citizens” and “people”.

Socialists, while recognising the importance of the breadth of the movement, have nevertheless urged that it devote particular energy in attempting to connect to the working class.

One simple reason for doing so is that working class organisations are among the most solid of those with an interest in opposing the giant corporations.

Conservative There can be difficulties overcoming the conservatism of trade union structures and the officials that staff them, but when they do move, they bring enormous resources to the movement.

The Seattle protests against the WTO were a watershed not least because of the involvement of the steel workers’ unions, which brought tens of thousands of people to the marches. The same strength of numbers and organisation has been shown since, especially in the recent anti-capitalist protests in Italy.

Trade unions are themselves a reflection of a more fundamental reason why workers can provide an enduring organisational backbone to the anti-globalisation movement. As citizens we are individuals, scattered, only sporadically united by marches or public meetings. But workers are automatically part of a collective.

Brought together in the workplace, in continual contact with one another, workers can organise very resilient and democratic structures. It was a hard fight to establish trade unions, and a 63

fight that still has to be waged in many companies, but the collective nature of work experience makes it possible to organise as workers in a way that is not available to us as simply citizens.

So, for strength of organisation, it makes sense to involve workers in the anti-globalisation movement.

But even more significant is how the working class holds the answer to the question of how to defeat the massive international power of the corporations.

One starting point, adopted by many of the constituent parts of the movement, is to advocate the use of consumer power to effect change. This, for example, is a major theme of the current issue of Focus.

Particular instances of boycotts of the products of certain companies have been tremendously effective.

Perhaps the best example from recent times was when Shell attempted to dump an oil rig in the Atlantic, and spontaneously a boycott grew up across Europe.

A consumer boycott can be an effective way to agitate over injustice although on its own it has limitations.

Many important aspects of economic life are out of the control of consumers. For example it’s hard to single out any particular Irish bank to boycott when they were all proved to be rotten with their aiding of tax evasion.

Quite rightly activists have organised against Nike for its particularly bad practices, but is Adidas that far behind?

Another tactic has been that of a minority of the movement, which is to pursue confrontation with the police and property damage against the most notorious multi-nationals.

These tactics are unlikely to amount to a real challenge to the corporations, such actions cannot be sustained and they demobilise, rather than energise, people.

By contrast the working class has a fundamentally effective potential power that has yet to be seriously tapped by the movement.

Effect A thousand people engaged in a boycott, or in clashes with the police can begin to present a challenge to the corporations, but the same thousand, if they are airport workers at Dublin airport can have an enormous effect on the shipment of freight if they withdraw their labour. Similarly a strike by power workers has the potential to shut down the country.

Telecom workers have nearly the same concentration of economic power in their hands. Even groups of workers like nurses have a great deal of power, not least because they can inspire solidarity action from workers more able to take action directly against the system.

The point is that the wheels of global capitalism are turned by workers. The boardrooms of global corporations only seem powerful because they preside over the daily labour of millions of people. Their dependence on workers is their Achilles heel.

Inspired by the great workers’ struggles of the past, socialists can see the potential of unleashing that power against the global capitalism.

MANIFESTO OF THE COMMUNIST PARTY

By Karl Marx and Fredrick Engels A spectre is haunting Europe — the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre: Pope and Tsar, Metternich and Guizot, French Radicals and German police-spies.

Where is the party in opposition that has not been decried as communistic by its opponents in power? Where is the opposition that has not hurled back the branding reproach of communism, against the more advanced opposition parties, as well as against its reactionary adversaries?

64

Two things result from this fact: I. Communism is already acknowledged by all European powers to be itself a power.

II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Spectre of Communism with a manifesto of the party itself.

To this end, Communists of various nationalities have assembled in London and sketched the following manifesto, to be published in the English, French, German, Italian, Flemish and Danish languages.

65

Bourgeois and Proletarians1 The history of all hitherto existing society2 is the history of class struggles.

Freeman and slave, patrician and plebeian, lord and serf, guild-master3 and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.

In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations.

The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.

Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other — Bourgeoisie and Proletariat.

From the serfs of the Middle Ages sprang the chartered burghers of the earliest towns. From these burgesses the first elements of the bourgeoisie were developed.

The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.

The feudal system of industry, in which industrial production was monopolised by closed guilds, now no longer sufficed for the growing wants of the new markets. The manufacturing system took its place. The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop.

1

By bourgeoisie is meant the class of modern capitalists, owners of the means of social production and employers of wage labour. By proletariat, the class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live. [Engels, 1888 English edition] 2

That is, all written history. In 1847, the pre-history of society, the social organisation existing previous to recorded history, all but unknown. Since then, August von Haxthausen (1792-1866) discovered common ownership of land in Russia, Georg Ludwig von Maurer proved it to be the social foundation from which all Teutonic races started in history, and, by and by, village communities were found to be, or to have been, the primitive form of society everywhere from India to Ireland. The inner organisation of this primitive communistic society was laid bare, in its typical form, by Lewis Henry Morgan's (1818-1861) crowning discovery of the true nature of the gens and its relation to the tribe. With the dissolution of the primeval communities, society begins to be differentiated into separate and finally antagonistic classes. I have attempted to retrace this dissolution in The Origin of the Family, Private Property, and the State, second edition, Stuttgart, 1886. [Engels, 1888 English Edition and 1890 German Edition (with the last sentence omitted)] 3

Guild-master, that is, a full member of a guild, a master within, not a head of a guild. [Engels, 1888 English Edition]

66

Meantime the markets kept ever growing, the demand ever rising. Even manufacturer no longer sufficed. Thereupon, steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.

Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages.

We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.

Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class. An oppressed class under the sway of the feudal nobility, an armed and selfgoverning association in the medieval commune4: here independent urban republic (as in Italy and Germany); there taxable “third estate” of the monarchy (as in France); afterwards, in the period of manufacturing proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, cornerstone of the great monarchies in general, the bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.

The bourgeoisie, historically, has played a most revolutionary part.

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.

The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.

The bourgeoisie has disclosed how it came to pass that the brutal display of vigour in the Middle Ages, which reactionaries so much admire, found its fitting complement in the most slothful 4

This was the name given their urban communities by the townsmen of Italy and France, after they had purchased or conquered their initial rights of self-government from their feudal lords. [Engels, 1890 German edition] “Commune” was the name taken in France by the nascent towns even before they had conquered from their feudal lords and masters local self-government and political rights as the "Third Estate". Generally speaking, for the economical development of the bourgeoisie, England is here taken as the typical country, for its political development, France. [Engels, 1888 English Edition]

67

indolence. It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his, real conditions of life, and his relations with his kind.

The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and selfsufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life. Just as it has made the country dependent on the towns, so it has made barbarian and semi-barbarian countries dependent on the civilised ones, nations of peasants on nations of bourgeois, the East on the West.

The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralised the means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralisation. Independent, or but loosely connected provinces, with separate interests, laws, governments, and systems of taxation, became lumped together into one nation, with one government, one code of laws, one national class-interest, one frontier, and one customs-tariff.

68

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation or rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?

We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged, the feudal organisation of agriculture and manufacturing industry, in one word, the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder.

Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class.

A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself.

But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons — the modern working class — the proletarians.

In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed — a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers,

69

who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.

Owing to the extensive use of machinery, and to the division of labour, the work of the proletarians has lost all individual character, and, consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labour, is equal to its cost of production. In proportion, therefore, as the repulsiveness of the work increases, the wage decreases. Nay more, in proportion as the use of machinery and division of labour increases, in the same proportion the burden of toil also increases, whether by prolongation of the working hours, by the increase of the work exacted in a given time or by increased speed of machinery, etc.

Modern Industry has converted the little workshop of the patriarchal master into the great factory of the industrial capitalist. Masses of labourers, crowded into the factory, are organised like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class, and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overlooker, and, above all, by the individual bourgeois manufacturer himself. The more openly this despotism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is.

The less the skill and exertion of strength implied in manual labour, in other words, the more modern industry becomes developed, the more is the labour of men superseded by that of women.

Differences of age and sex have no longer any distinctive social validity for the working class. All are instruments of labour, more or less expensive to use, according to their age and sex.

No sooner is the exploitation of the labourer by the manufacturer, so far, at an end, that he receives his wages in cash, than he is set upon by the other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.

The lower strata of the middle class — the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants — all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialised skill is rendered worthless by new methods of production. Thus the proletariat is recruited from all classes of the population.

The proletariat goes through various stages of development. With its birth begins its struggle with the bourgeoisie. At first the contest is carried on by individual labourers, then by the workpeople of a factory, then by the operative of one trade, in one locality, against the individual bourgeois who directly exploits them. They direct their attacks not against the bourgeois conditions of production, but against the instruments of production themselves; they destroy imported wares that compete with their labour, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the Middle Ages.

At this stage, the labourers still form an incoherent mass scattered over the whole country, and broken up by their mutual competition. If anywhere they unite to form more compact bodies, this is not yet the consequence of their own active union, but of the union of the bourgeoisie, which class, in order to attain its own political ends, is compelled to set the whole proletariat in motion, and is moreover yet, for a time, able to do so. At this stage, therefore, the proletarians do not fight their enemies, but the enemies of their enemies, the remnants of absolute monarchy, the landowners, the 70

non-industrial bourgeois, the petty bourgeois. Thus, the whole historical movement is concentrated in the hands of the bourgeoisie; every victory so obtained is a victory for the bourgeoisie.

But with the development of industry, the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more. The various interests and conditions of life within the ranks of the proletariat are more and more equalised, in proportion as machinery obliterates all distinctions of labour, and nearly everywhere reduces wages to the same low level. The growing competition among the bourgeois, and the resulting commercial crises, make the wages of the workers ever more fluctuating. The increasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes. Thereupon, the workers begin to form combinations (Trades’ Unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there, the contest breaks out into riots.

Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers. This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralise the numerous local struggles, all of the same character, into one national struggle between classes. But every class struggle is a political struggle. And that union, to attain which the burghers of the Middle Ages, with their miserable highways, required centuries, the modern proletarian, thanks to railways, achieve in a few years.

This organisation of the proletarians into a class, and, consequently into a political party, is continually being upset again by the competition between the workers themselves. But it ever rises up again, stronger, firmer, mightier. It compels legislative recognition of particular interests of the workers, by taking advantage of the divisions among the bourgeoisie itself. Thus, the ten-hours’ bill in England was carried.

Altogether collisions between the classes of the old society further, in many ways, the course of development of the proletariat. The bourgeoisie finds itself involved in a constant battle. At first with the aristocracy; later on, with those portions of the bourgeoisie itself, whose interests have become antagonistic to the progress of industry; at all time with the bourgeoisie of foreign countries. In all these battles, it sees itself compelled to appeal to the proletariat, to ask for help, and thus, to drag it into the political arena. The bourgeoisie itself, therefore, supplies the proletariat with its own elements of political and general education, in other words, it furnishes the proletariat with weapons for fighting the bourgeoisie.

Further, as we have already seen, entire sections of the ruling class are, by the advance of industry, precipitated into the proletariat, or are at least threatened in their conditions of existence.

These also supply the proletariat with fresh elements of enlightenment and progress.

Finally, in times when the class struggle nears the decisive hour, the progress of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift, and joins the revolutionary class, the class that holds the future in its hands. Just as, therefore, at an earlier period, a section of the nobility went over to the bourgeoisie, so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.

71

Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of Modern Industry; the proletariat is its special and essential product.

The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history. If by chance, they are revolutionary, they are only so in view of their impending transfer into the proletariat; they thus defend not their present, but their future interests, they desert their own standpoint to place themselves at that of the proletariat.

The “dangerous class�, [lumpenproletariat] the social scum, that passively rotting mass thrown off by the lowest layers of the old society, may, here and there, be swept into the movement by a proletarian revolution; its conditions of life, however, prepare it far more for the part of a bribed tool of reactionary intrigue.

In the condition of the proletariat, those of old society at large are already virtually swamped.

The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations; modern industry labour, modern subjection to capital, the same in England as in France, in America as in Germany, has stripped him of every trace of national character. Law, morality, religion, are to him so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.

All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their conditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own previous mode of appropriation, and thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify; their mission is to destroy all previous securities for, and insurances of, individual property.

All previous historical movements were movements of minorities, or in the interest of minorities. The proletarian movement is the self-conscious, independent movement of the immense majority, in the interest of the immense majority. The proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole superincumbent strata of official society being sprung into the air.

Though not in substance, yet in form, the struggle of the proletariat with the bourgeoisie is at first a national struggle. The proletariat of each country must, of course, first of all settle matters with its own bourgeoisie.

In depicting the most general phases of the development of the proletariat, we traced the more or less veiled civil war, raging within existing society, up to the point where that war breaks out into open revolution, and where the violent overthrow of the bourgeoisie lays the foundation for the sway of the proletariat.

Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of the feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than 72

population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law.

It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.

The essential conditions for the existence and for the sway of the bourgeois class is the formation and augmentation of capital; the condition for capital is wage-labour. Wage-labour rests exclusively on competition between the labourers. The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by the revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products.

What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.

73

Proletarians and Communists In what relation do the Communists stand to the proletarians as a whole? The Communists do not form a separate party opposed to the other working-class parties.

They have no interests separate and apart from those of the proletariat as a whole.

They do not set up any sectarian principles of their own, by which to shape and mould the proletarian movement.

The Communists are distinguished from the other working-class parties by this only: (1) In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality.

(2) In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.

The Communists, therefore, are on the one hand, practically, the most advanced and resolute section of the working-class parties of every country, that section which pushes forward all others; on the other hand, theoretically, they have over the great mass of the proletariat the advantage of clearly understanding the lines of march, the conditions, and the ultimate general results of the proletarian movement.

The immediate aim of the Communists is the same as that of all other proletarian parties: formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of political power by the proletariat.

The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer.

They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes. The abolition of existing property relations is not at all a distinctive feature of communism.

All property relations in the past have continually been subject to historical change consequent upon the change in historical conditions.

The French Revolution, for example, abolished feudal property in favour of bourgeois property.

The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonisms, on the exploitation of the many by the few.

In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.

74

We Communists have been reproached with the desire of abolishing the right of personally acquiring property as the fruit of a man’s own labour, which property is alleged to be the groundwork of all personal freedom, activity and independence.

Hard-won, self-acquired, self-earned property! Do you mean the property of petty artisan and of the small peasant, a form of property that preceded the bourgeois form? There is no need to abolish that; the development of industry has to a great extent already destroyed it, and is still destroying it daily.

Or do you mean the modern bourgeois private property?

But does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation. Property, in its present form, is based on the antagonism of capital and wage labour. Let us examine both sides of this antagonism.

To be a capitalist, is to have not only a purely personal, but a social status in production.

Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion.

Capital is therefore not only personal; it is a social power.

When, therefore, capital is converted into common property, into the property of all members of society, personal property is not thereby transformed into social property. It is only the social character of the property that is changed. It loses its class character.

Let us now take wage-labour.

The average price of wage-labour is the minimum wage, i.e., that quantum of the means of subsistence which is absolutely requisite to keep the labourer in bare existence as a labourer. What, therefore, the wage-labourer appropriates by means of his labour, merely suffices to prolong and reproduce a bare existence. We by no means intend to abolish this personal appropriation of the products of labour, an appropriation that is made for the maintenance and reproduction of human life, and that leaves no surplus wherewith to command the labour of others. All that we want to do away with is the miserable character of this appropriation, under which the labourer lives merely to increase capital, and is allowed to live only in so far as the interest of the ruling class requires it.

In bourgeois society, living labour is but a means to increase accumulated labour. In Communist society, accumulated labour is but a means to widen, to enrich, to promote the existence of the labourer.

In bourgeois society, therefore, the past dominates the present; in Communist society, the present dominates the past. In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality.

And the abolition of this state of things is called by the bourgeois, abolition of individuality and freedom! And rightly so. The abolition of bourgeois individuality, bourgeois independence, and bourgeois freedom is undoubtedly aimed at.

By freedom is meant, under the present bourgeois conditions of production, free trade, free selling and buying.

75

But if selling and buying disappears, free selling and buying disappears also. This talk about free selling and buying, and all the other “brave words” of our bourgeois about freedom in general, have a meaning, if any, only in contrast with restricted selling and buying, with the fettered traders of the Middle Ages, but have no meaning when opposed to the Communistic abolition of buying and selling, of the bourgeois conditions of production, and of the bourgeoisie itself.

You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. You reproach us, therefore, with intending to do away with a form of property, the necessary condition for whose existence is the non-existence of any property for the immense majority of society.

In one word, you reproach us with intending to do away with your property. Precisely so; that is just what we intend.

From the moment when labour can no longer be converted into capital, money, or rent, into a social power capable of being monopolised, i.e., from the moment when individual property can no longer be transformed into bourgeois property, into capital, from that moment, you say, individuality vanishes.

You must, therefore, confess that by “individual” you mean no other person than the bourgeois, than the middle-class owner of property. This person must, indeed, be swept out of the way, and made impossible.

Communism deprives no man of the power to appropriate the products of society; all that it does is to deprive him of the power to subjugate the labour of others by means of such appropriations.

It has been objected that upon the abolition of private property, all work will cease, and universal laziness will overtake us.

According to this, bourgeois society ought long ago to have gone to the dogs through sheer idleness; for those those of its members who work, acquire nothing, and those who acquire anything do not work. The whole of this objection is but another expression of the tautology: that there can no longer be any wage-labour when there is no longer any capital.

All objections urged against the Communistic mode of producing and appropriating material products, have, in the same way, been urged against the Communistic mode of producing and appropriating intellectual products. Just as, to the bourgeois, the disappearance of class property is the disappearance of production itself, so the disappearance of class culture is to him identical with the disappearance of all culture.

That culture, the loss of which he laments, is, for the enormous majority, a mere training to act as a machine.

But don’t wrangle with us so long as you apply, to our intended abolition of bourgeois property, the standard of your bourgeois notions of freedom, culture, law, &c. Your very ideas are but the outgrowth of the conditions of your bourgeois production and bourgeois property, just as your jurisprudence is but the will of your class made into a law for all, a will whose essential character and direction are determined by the economical conditions of existence of your class.

76

The selfish misconception that induces you to transform into eternal laws of nature and of reason, the social forms springing from your present mode of production and form of property – historical relations that rise and disappear in the progress of production – this misconception you share with every ruling class that has preceded you. What you see clearly in the case of ancient property, what you admit in the case of feudal property, you are of course forbidden to admit in the case of your own bourgeois form of property.

Abolition [Aufhebung] of the family! Even the most radical flare up at this infamous proposal of the Communists.

On what foundation is the present family, the bourgeois family, based? On capital, on private gain. In its completely developed form, this family exists only among the bourgeoisie. But this state of things finds its complement in the practical absence of the family among the proletarians, and in public prostitution.

The bourgeois family will vanish as a matter of course when its complement vanishes, and both will vanish with the vanishing of capital.

Do you charge us with wanting to stop the exploitation of children by their parents? To this crime we plead guilty.

But, you say, we destroy the most hallowed of relations, when we replace home education by social.

And your education! Is not that also social, and determined by the social conditions under which you educate, by the intervention direct or indirect, of society, by means of schools, &c.? The Communists have not invented the intervention of society in education; they do but seek to alter the character of that intervention, and to rescue education from the influence of the ruling class.

The bourgeois clap-trap about the family and education, about the hallowed co-relation of parents and child, becomes all the more disgusting, the more, by the action of Modern Industry, all the family ties among the proletarians are torn asunder, and their children transformed into simple articles of commerce and instruments of labour.

But you Communists would introduce community of women, screams the bourgeoisie in chorus.

The bourgeois sees his wife a mere instrument of production. He hears that the instruments of production are to be exploited in common, and, naturally, can come to no other conclusion that the lot of being common to all will likewise fall to the women.

He has not even a suspicion that the real point aimed at is to do away with the status of women as mere instruments of production.

For the rest, nothing is more ridiculous than the virtuous indignation of our bourgeois at the community of women which, they pretend, is to be openly and officially established by the Communists. The Communists have no need to introduce community of women; it has existed almost from time immemorial.

Our bourgeois, not content with having wives and daughters of their proletarians at their disposal, not to speak of common prostitutes, take the greatest pleasure in seducing each other’s wives.

77

Bourgeois marriage is, in reality, a system of wives in common and thus, at the most, what the Communists might possibly be reproached with is that they desire to introduce, in substitution for a hypocritically concealed, an openly legalised community of women. For the rest, it is self-evident that the abolition of the present system of production must bring with it the abolition of the community of women springing from that system, i.e., of prostitution both public and private.

The Communists are further reproached with desiring to abolish countries and nationality.

The working men have no country. We cannot take from them what they have not got. Since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is so far, itself national, though not in the bourgeois sense of the word.

National differences and antagonism between peoples are daily more and more vanishing, owing to the development of the bourgeoisie, to freedom of commerce, to the world market, to uniformity in the mode of production and in the conditions of life corresponding thereto.

The supremacy of the proletariat will cause them to vanish still faster. United action, of the leading civilised countries at least, is one of the first conditions for the emancipation of the proletariat.

In proportion as the exploitation of one individual by another will also be put an end to, the exploitation of one nation by another will also be put an end to. In proportion as the antagonism between classes within the nation vanishes, the hostility of one nation to another will come to an end.

The charges against Communism made from a religious, a philosophical and, generally, from an ideological standpoint, are not deserving of serious examination.

Does it require deep intuition to comprehend that man’s ideas, views, and conception, in one word, man’s consciousness, changes with every change in the conditions of his material existence, in his social relations and in his social life?

What else does the history of ideas prove, than that intellectual production changes its character in proportion as material production is changed? The ruling ideas of each age have ever been the ideas of its ruling class.

When people speak of the ideas that revolutionise society, they do but express that fact that within the old society the elements of a new one have been created, and that the dissolution of the old ideas keeps even pace with the dissolution of the old conditions of existence.

When the ancient world was in its last throes, the ancient religions were overcome by Christianity. When Christian ideas succumbed in the 18th century to rationalist ideas, feudal society fought its death battle with the then revolutionary bourgeoisie. The ideas of religious liberty and freedom of conscience merely gave expression to the sway of free competition within the domain of knowledge.

“Undoubtedly,” it will be said, “religious, moral, philosophical, and juridical ideas have been modified in the course of historical development. But religion, morality, philosophy, political science, and law, constantly survived this change.”

78

“There are, besides, eternal truths, such as Freedom, Justice, etc., that are common to all states of society. But Communism abolishes eternal truths, it abolishes all religion, and all morality, instead of constituting them on a new basis; it therefore acts in contradiction to all past historical experience.�

What does this accusation reduce itself to? The history of all past society has consisted in the development of class antagonisms, antagonisms that assumed different forms at different epochs.

But whatever form they may have taken, one fact is common to all past ages, viz., the exploitation of one part of society by the other. No wonder, then, that the social consciousness of past ages, despite all the multiplicity and variety it displays, moves within certain common forms, or general ideas, which cannot completely vanish except with the total disappearance of class antagonisms.

The Communist revolution is the most radical rupture with traditional relations; no wonder that its development involved the most radical rupture with traditional ideas.

But let us have done with the bourgeois objections to Communism.

We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.

The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.

Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production.

These measures will, of course, be different in different countries.

Nevertheless, in most advanced countries, the following will be pretty generally applicable: 79

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all emigrants and rebels.

5. Centralisation of credit in the banks of the state, by means of a national bank with State capital and an exclusive monopoly.

6. Centralisation of the means of communication and transport in the hands of the State.

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character. Political power, properly so called, is merely the organised power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circumstances, to organise itself as a class, if, by means of a revolution, it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms and of classes generally, and will thereby have abolished its own supremacy as a class.

In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all.

80

Socialist and Communist Literature 1. Reactionary Socialism A. Feudal Socialism Owing to their historical position, it became the vocation of the aristocracies of France and England to write pamphlets against modern bourgeois society. In the French Revolution of July 1830, and in the English reform agitation[A], these aristocracies again succumbed to the hateful upstart. Thenceforth, a serious political struggle was altogether out of the question. A literary battle alone remained possible. But even in the domain of literature the old cries of the restoration period had become impossible.5 In order to arouse sympathy, the aristocracy was obliged to lose sight, apparently, of its own interests, and to formulate their indictment against the bourgeoisie in the interest of the exploited working class alone. Thus, the aristocracy took their revenge by singing lampoons on their new masters and whispering in his ears sinister prophesies of coming catastrophe.

In this way arose feudal Socialism: half lamentation, half lampoon; half an echo of the past, half menace of the future; at times, by its bitter, witty and incisive criticism, striking the bourgeoisie to the very heart’s core; but always ludicrous in its effect, through total incapacity to comprehend the march of modern history.

The aristocracy, in order to rally the people to them, waved the proletarian alms-bag in front for a banner. But the people, so often as it joined them, saw on their hindquarters the old feudal coats of arms, and deserted with loud and irreverent laughter.

One section of the French Legitimists and “Young England” exhibited this spectacle.

In pointing out that their mode of exploitation was different to that of the bourgeoisie, the feudalists forget that they exploited under circumstances and conditions that were quite different and that are now antiquated. In showing that, under their rule, the modern proletariat never existed, they forget that the modern bourgeoisie is the necessary offspring of their own form of society.

For the rest, so little do they conceal the reactionary character of their criticism that their chief accusation against the bourgeois amounts to this, that under the bourgeois régime a class is being developed which is destined to cut up root and branch the old order of society.

What they upbraid the bourgeoisie with is not so much that it creates a proletariat as that it creates a revolutionary proletariat.

In political practice, therefore, they join in all coercive measures against the working class; and in ordinary life, despite their high-falutin phrases, they stoop to pick up the golden apples dropped

[A]

A reference to the movement for a reform of the electoral law which, under the pressure of the working class, was pased by the British House of Commons in 1831 and finally endorsed by the House of Lords in June, 1832. The reform was directed against monopoly rule of the landed and finance aristrocracy and opened the way to Parliament for the representatives of the industrial bourgeoisie. Neither workers nor the petty-bourgeois were allowed electoral rights, despite assurances they would. [Editor’s note] 5 Not the English Restoration (1660-1689), but the French Restoration (1814-1830). [Engels, 1888 German edition]

81

from the tree of industry, and to barter truth, love, and honour, for traffic in wool, beetroot-sugar, and potato spirits.6 As the parson has ever gone hand in hand with the landlord, so has Clerical Socialism with Feudal Socialism.

Nothing is easier than to give Christian asceticism a Socialist tinge. Has not Christianity declaimed against private property, against marriage, against the State? Has it not preached in the place of these, charity and poverty, celibacy and mortification of the flesh, monastic life and Mother Church? Christian Socialism is but the holy water with which the priest consecrates the heartburnings of the aristocrat.

B. Petty-Bourgeois Socialism The feudal aristocracy was not the only class that was ruined by the bourgeoisie, not the only class whose conditions of existence pined and perished in the atmosphere of modern bourgeois society. The medieval burgesses and the small peasant proprietors were the precursors of the modern bourgeoisie. In those countries which are but little developed, industrially and commercially, these two classes still vegetate side by side with the rising bourgeoisie.

In countries where modern civilisation has become fully developed, a new class of petty bourgeois has been formed, fluctuating between proletariat and bourgeoisie, and ever renewing itself as a supplementary part of bourgeois society. The individual members of this class, however, are being constantly hurled down into the proletariat by the action of competition, and, as modern industry develops, they even see the moment approaching when they will completely disappear as an independent section of modern society, to be replaced in manufactures, agriculture and commerce, by overlookers, bailiffs and shopmen.

In countries like France, where the peasants constitute far more than half of the population, it was natural that writers who sided with the proletariat against the bourgeoisie should use, in their criticism of the bourgeois rĂŠgime, the standard of the peasant and petty bourgeois, and from the standpoint of these intermediate classes, should take up the cudgels for the working class. Thus arose petty-bourgeois Socialism. Sismondi was the head of this school, not only in France but also in England.

This school of Socialism dissected with great acuteness the contradictions in the conditions of modern production. It laid bare the hypocritical apologies of economists. It proved, incontrovertibly, the disastrous effects of machinery and division of labour; the concentration of capital and land in a few hands; overproduction and crises; it pointed out the inevitable ruin of the petty bourgeois and peasant, the misery of the proletariat, the anarchy in production, the crying inequalities in the distribution of wealth, the industrial war of extermination between nations, the dissolution of old moral bonds, of the old family relations, of the old nationalities.

In its positive aims, however, this form of Socialism aspires either to restoring the old means of production and of exchange, and with them the old property relations, and the old society, or to cramping the modern means of production and of exchange within the framework of the old property

6

This applies chiefly to Germany, where the landed aristocracy and squirearchy have large portions of their estates cultivated for their own account by stewards, and are, moreover, extensive beetroot-sugar manufacturers and distillers of potato spirits. The wealthier British aristocracy are, as yet, rather above that; but they, too, know how to make up for declining rents by lending their names to floaters or more or less shady joint-stock companies. [Engels, 1888 German edition]

82

relations that have been, and were bound to be, exploded by those means. In either case, it is both reactionary and Utopian.

Its last words are: corporate guilds for manufacture; patriarchal relations in agriculture.

Ultimately, when stubborn historical facts had dispersed all intoxicating effects of self-deception, this form of Socialism ended in a miserable hangover.

C. German or “True” Socialism The Socialist and Communist literature of France, a literature that originated under the pressure of a bourgeoisie in power, and that was the expressions of the struggle against this power, was introduced into Germany at a time when the bourgeoisie, in that country, had just begun its contest with feudal absolutism.

German philosophers, would-be philosophers, and beaux esprits (men of letters), eagerly seized on this literature, only forgetting, that when these writings immigrated from France into Germany, French social conditions had not immigrated along with them. In contact with German social conditions, this French literature lost all its immediate practical significance and assumed a purely literary aspect. Thus, to the German philosophers of the Eighteenth Century, the demands of the first French Revolution were nothing more than the demands of “Practical Reason” in general, and the utterance of the will of the revolutionary French bourgeoisie signified, in their eyes, the laws of pure Will, of Will as it was bound to be, of true human Will generally.

The work of the German literati consisted solely in bringing the new French ideas into harmony with their ancient philosophical conscience, or rather, in annexing the French ideas without deserting their own philosophic point of view.

This annexation took place in the same way in which a foreign language is appropriated, namely, by translation.

It is well known how the monks wrote silly lives of Catholic Saints over the manuscripts on which the classical works of ancient heathendom had been written. The German literati reversed this process with the profane French literature. They wrote their philosophical nonsense beneath the French original. For instance, beneath the French criticism of the economic functions of money, they wrote “Alienation of Humanity”, and beneath the French criticism of the bourgeois state they wrote “Dethronement of the Category of the General”, and so forth.

The introduction of these philosophical phrases at the back of the French historical criticisms, they dubbed “Philosophy of Action”, “True Socialism”, “German Science of Socialism”, “Philosophical Foundation of Socialism”, and so on.

The French Socialist and Communist literature was thus completely emasculated. And, since it ceased in the hands of the German to express the struggle of one class with the other, he felt conscious of having overcome “French one-sidedness” and of representing, not true requirements, but the requirements of Truth; not the interests of the proletariat, but the interests of Human Nature, of Man in general, who belongs to no class, has no reality, who exists only in the misty realm of philosophical fantasy.

This German socialism, which took its schoolboy task so seriously and solemnly, and extolled its poor stock-in-trade in such a mountebank fashion, meanwhile gradually lost its pedantic innocence.

83

The fight of the Germans, and especially of the Prussian bourgeoisie, against feudal aristocracy and absolute monarchy, in other words, the liberal movement, became more earnest.

By this, the long-wished for opportunity was offered to “True” Socialism of confronting the political movement with the Socialist demands, of hurling the traditional anathemas against liberalism, against representative government, against bourgeois competition, bourgeois freedom of the press, bourgeois legislation, bourgeois liberty and equality, and of preaching to the masses that they had nothing to gain, and everything to lose, by this bourgeois movement. German Socialism forgot, in the nick of time, that the French criticism, whose silly echo it was, presupposed the existence of modern bourgeois society, with its corresponding economic conditions of existence, and the political constitution adapted thereto, the very things those attainment was the object of the pending struggle in Germany.

To the absolute governments, with their following of parsons, professors, country squires, and officials, it served as a welcome scarecrow against the threatening bourgeoisie.

It was a sweet finish, after the bitter pills of flogging and bullets, with which these same governments, just at that time, dosed the German working-class risings.

While this “True” Socialism thus served the government as a weapon for fighting the German bourgeoisie, it, at the same time, directly represented a reactionary interest, the interest of German Philistines. In Germany, the petty-bourgeois class, a relic of the sixteenth century, and since then constantly cropping up again under the various forms, is the real social basis of the existing state of things.

To preserve this class is to preserve the existing state of things in Germany. The industrial and political supremacy of the bourgeoisie threatens it with certain destruction — on the one hand, from the concentration of capital; on the other, from the rise of a revolutionary proletariat. “True” Socialism appeared to kill these two birds with one stone. It spread like an epidemic.

The robe of speculative cobwebs, embroidered with flowers of rhetoric, steeped in the dew of sickly sentiment, this transcendental robe in which the German Socialists wrapped their sorry “eternal truths”, all skin and bone, served to wonderfully increase the sale of their goods amongst such a public.

And on its part German Socialism recognised, more and more, its own calling as the bombastic representative of the petty-bourgeois Philistine.

It proclaimed the German nation to be the model nation, and the German petty Philistine to be the typical man. To every villainous meanness of this model man, it gave a hidden, higher, Socialistic interpretation, the exact contrary of its real character. It went to the extreme length of directly opposing the “brutally destructive” tendency of Communism, and of proclaiming its supreme and impartial contempt of all class struggles. With very few exceptions, all the so-called Socialist and Communist publications that now (1847) circulate in Germany belong to the domain of this foul and enervating literature.7

2. Conservative or Bourgeois Socialism

7

The revolutionary storm of 1848 swept away this whole shabby tendency and cured its protagonists of the desire to dabble in socialism. The chief representative and classical type of this tendency is Mr Karl Gruen. [Engels, 1888 German edition]

84

A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society.

To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organisers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind. This form of socialism has, moreover, been worked out into complete systems.

We may cite Proudhon’s Philosophis de la Misère as an example of this form.

The Socialistic bourgeois want all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom. They desire the existing state of society, minus its revolutionary and disintegrating elements. They wish for a bourgeoisie without a proletariat. The bourgeoisie naturally conceives the world in which it is supreme to be the best; and bourgeois Socialism develops this comfortable conception into various more or less complete systems. In requiring the proletariat to carry out such a system, and thereby to march straightway into the social New Jerusalem, it but requires in reality, that the proletariat should remain within the bounds of existing society, but should cast away all its hateful ideas concerning the bourgeoisie.

A second, and more practical, but less systematic, form of this Socialism sought to depreciate every revolutionary movement in the eyes of the working class by showing that no mere political reform, but only a change in the material conditions of existence, in economical relations, could be of any advantage to them. By changes in the material conditions of existence, this form of Socialism, however, by no means understands abolition of the bourgeois relations of production, an abolition that can be affected only by a revolution, but administrative reforms, based on the continued existence of these relations; reforms, therefore, that in no respect affect the relations between capital and labour, but, at the best, lessen the cost, and simplify the administrative work, of bourgeois government.

Bourgeois Socialism attains adequate expression when, and only when, it becomes a mere figure of speech.

Free trade: for the benefit of the working class. Protective duties: for the benefit of the working class. Prison Reform: for the benefit of the working class. This is the last word and the only seriously meant word of bourgeois socialism.

It is summed up in the phrase: the bourgeois is a bourgeois — for the benefit of the working class.

3. Critical-Utopian Socialism and Communism We do not here refer to that literature which, in every great modern revolution, has always given voice to the demands of the proletariat, such as the writings of Babeuf and others.

The first direct attempts of the proletariat to attain its own ends, made in times of universal excitement, when feudal society was being overthrown, necessarily failed, owing to the then undeveloped state of the proletariat, as well as to the absence of the economic conditions for its emancipation, conditions that had yet to be produced, and could be produced by the impending bourgeois epoch alone. The revolutionary literature that accompanied these first movements of the proletariat had necessarily a reactionary character. It inculcated universal asceticism and social levelling in its crudest form.

85

The Socialist and Communist systems, properly so called, those of Saint-Simon, Fourier, Owen, and others, spring into existence in the early undeveloped period, described above, of the struggle between proletariat and bourgeoisie (see Section 1. Bourgeois and Proletarians).

The founders of these systems see, indeed, the class antagonisms, as well as the action of the decomposing elements in the prevailing form of society. But the proletariat, as yet in its infancy, offers to them the spectacle of a class without any historical initiative or any independent political movement.

Since the development of class antagonism keeps even pace with the development of industry, the economic situation, as they find it, does not as yet offer to them the material conditions for the emancipation of the proletariat. They therefore search after a new social science, after new social laws, that are to create these conditions.

Historical action is to yield to their personal inventive action; historically created conditions of emancipation to fantastic ones; and the gradual, spontaneous class organisation of the proletariat to an organisation of society especially contrived by these inventors. Future history resolves itself, in their eyes, into the propaganda and the practical carrying out of their social plans.

In the formation of their plans, they are conscious of caring chiefly for the interests of the working class, as being the most suffering class. Only from the point of view of being the most suffering class does the proletariat exist for them.

The undeveloped state of the class struggle, as well as their own surroundings, causes Socialists of this kind to consider themselves far superior to all class antagonisms. They want to improve the condition of every member of society, even that of the most favoured. Hence, they habitually appeal to society at large, without the distinction of class; nay, by preference, to the ruling class. For how can people, when once they understand their system, fail to see in it the best possible plan of the best possible state of society?

Hence, they reject all political, and especially all revolutionary action; they wish to attain their ends by peaceful means, necessarily doomed to failure, and by the force of example, to pave the way for the new social Gospel.

Such fantastic pictures of future society, painted at a time when the proletariat is still in a very undeveloped state and has but a fantastic conception of its own position, correspond with the first instinctive yearnings of that class for a general reconstruction of society.

But these Socialist and Communist publications contain also a critical element. They attack every principle of existing society. Hence, they are full of the most valuable materials for the enlightenment of the working class. The practical measures proposed in them — such as the abolition of the distinction between town and country, of the family, of the carrying on of industries for the account of private individuals, and of the wage system, the proclamation of social harmony, the conversion of the function of the state into a more superintendence of production — all these proposals point solely to the disappearance of class antagonisms which were, at that time, only just cropping up, and which, in these publications, are recognised in their earliest indistinct and undefined forms only. These proposals, therefore, are of a purely Utopian character.

The significance of Critical-Utopian Socialism and Communism bears an inverse relation to historical development. In proportion as the modern class struggle develops and takes definite shape, this fantastic standing apart from the contest, these fantastic attacks on it, lose all practical value and 86

all theoretical justification. Therefore, although the originators of these systems were, in many respects, revolutionary, their disciples have, in every case, formed mere reactionary sects. They hold fast by the original views of their masters, in opposition to the progressive historical development of the proletariat. They, therefore, endeavour, and that consistently, to deaden the class struggle and to reconcile the class antagonisms. They still dream of experimental realisation of their social Utopias, of founding isolated “phalansteres”, of establishing “Home Colonies”, or setting up a “Little Icaria”8 — duodecimo editions of the New Jerusalem — and to realise all these castles in the air, they are compelled to appeal to the feelings and purses of the bourgeois. By degrees, they sink into the category of the reactionary [or] conservative Socialists depicted above, differing from these only by more systematic pedantry, and by their fanatical and superstitious belief in the miraculous effects of their social science.

They, therefore, violently oppose all political action on the part of the working class; such action, according to them, can only result from blind unbelief in the new Gospel.

The Owenites in England, and the Fourierists in France, respectively, oppose the Chartists and the Réformistes.

8

Phalanstéres were Socialist colonies on the plan of Charles Fourier; Icaria was the name given by Cabet to his Utopia and, later on, to his American Communist colony. [Engels, 1888 English Edition] “Home Colonies” were what Owen called his Communist model societies. Phalanstéres was the name of the public palaces planned by Fourier. Icaria was the name given to the Utopian land of fancy, whose Communist institutions Cabet portrayed. [Engels, 1890 German Edition]

87

Position of the Communists in Relation to the Various Existing Opposition Parties Section II has made clear the relations of the Communists to the existing working-class parties, such as the Chartists in England and the Agrarian Reformers in America.

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. In France, the Communists ally with the SocialDemocrats9 against the conservative and radical bourgeoisie, reserving, however, the right to take up a critical position in regard to phases and illusions traditionally handed down from the great Revolution.

In Switzerland, they support the Radicals, without losing sight of the fact that this party consists of antagonistic elements, partly of Democratic Socialists, in the French sense, partly of radical bourgeois.

In Poland, they support the party that insists on an agrarian revolution as the prime condition for national emancipation, that party which fomented the insurrection of Cracow in 1846.

In Germany, they fight with the bourgeoisie whenever it acts in a revolutionary way, against the absolute monarchy, the feudal squirearchy, and the petty bourgeoisie.

But they never cease, for a single instant, to instill into the working class the clearest possible recognition of the hostile antagonism between bourgeoisie and proletariat, in order that the German workers may straightway use, as so many weapons against the bourgeoisie, the social and political conditions that the bourgeoisie must necessarily introduce along with its supremacy, and in order that, after the fall of the reactionary classes in Germany, the fight against the bourgeoisie itself may immediately begin.

The Communists turn their attention chiefly to Germany, because that country is on the eve of a bourgeois revolution that is bound to be carried out under more advanced conditions of European civilisation and with a much more developed proletariat than that of England was in the seventeenth, and France in the eighteenth century, and because the bourgeois revolution in Germany will be but the prelude to an immediately following proletarian revolution.

In short, the Communists everywhere support every revolutionary movement against the existing social and political order of things.

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.

Finally, they labour everywhere for the union and agreement of the democratic parties of all countries.

The Communists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes 9

The party then represented in Parliament by Ledru-Rollin, in literature by Louis Blanc, in the daily press by the RĂŠforme. The name of Social-Democracy signifies, with these its inventors, a section of the Democratic or Republican Party more or less tinged with socialism. [Engels, English Edition 1888]

88

tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win.

WORKING MEN OF ALL COUNTRIES, UNITE!

89

Session 3:

The Return of Empire: Theories of Imperialism

90

Session 3: The Return of Empire: Theories of Imperialism

IMPERIALISM Chris Bambery When Marx became a revolutionary socialist in the 1840s, capitalism was largely confined to Britain and the Low Countries. In 1916 amid the horrors of world war Lenin wrote Imperialism – The Highest Stage of Capitalism. In the years since Marx’s death capitalism had spread its tentacles throughout the world. It had become essentially a world economy. Britain, hitherto the “Workshop of the World”, had been outstripped by its rivals – Germany and the USA in particular – and began its long slide into decline.

In other respects too things had changed dramatically. After all, the model of capitalism Marx presented in Capital was one based on small, usually family-owned, units of production. The textile industry was key. Periodically crisis would hit, driving weaker, less efficient firms to the wall. Their rivals could restore profits by seizing wider markets and by expanding productivity at little cost as they bought up machinery from bankrupt rivals. By the time Lenin wrote Imperialism, capitalism was dominated by the massive monopolies of the “new” industries, such as steel and heavy engineering.

During the slump which hit capitalism in the 1870s and again in the 1880s the American “robber barons” – Carnegie, Rockefeller, Morgan, among others, bought up their rivals at rock bottom prices. New, massive firms such as the United States Steel Corporation achieved nearmonopoly positions. dominating the market. In Germany too there was a wave of bankruptcies and mergers which led to a massive restructuring of industry. Major cartels and trusts dominated both economies. Such restructuring, the implementation of new technologies, and the dominant position of these monopolies, which enabled them to outprice their rivals, guaranteed rapid economic expansion. Between 1890 and 1907 output doubled.

British capitalism was left lagging behind, but found another way out of the crisis, courtesy of its previous position as the world’s dominant capital. For British capitalism controlled vast areas of the globe, either directly through colonisation or indirectly through trade links forged in years of prosperity. British imperial power guaranteed safe markets and new areas for investment where cheap labour and materials guaranteed good returns. In 1871 British foreign investments stood at £800 million. By 1913 this had reached a staggering £3,500 million. Unlike its rivals, Britain achieved restabilisation without massive restructuring through bankruptcy and mergers.

But the two means of escape were not counterposed. Already rival capitals were competing on an international scale. In Germany and the USA the continual increase in capital investment, in new improved means of production, began to hit profit rates. The British “solution” seemed increasingly attractive. From the 1890s onwards both powers began to follow Britain’s path.

Germany set out to dominate central and Eastern Europe, seized the remaining uncolonised areas of Africa and made a bid for control over the Middle East by allying with the decaying Ottoman Empire. America went to war with Spain, seizing control of Cuba, grabbed the Philippines and achieved dominance in Latin America.

Such moves brought Germany and the US into direct conflict with Britain and other imperial powers such as France and Belgium (not to mention the emerging Japanese capitalism). Faced with this competition, Britain turned belatedly to restructuring and concentration of capital. The first decade of this century saw major mergers, particularly in banking, and the adoption of new means of production. But everywhere profits were under pressure as capital expenditure rose and even Britain’s imperial domination could not offset that.

91

Lenin’s Imperialism – the Highest Stage of Capitalism was written to provide an easily understood explanation of why the First World War was no accident, caused by the intrigues of rival court circles or the machinations of arms manufacturers, but how it flowed from the dynamic of capitalism. In particular Lenin set out to show how the war followed what he termed imperialism, and other Marxists termed “monopoly capitalism” or “finance capitalism”.

War had become a central feature of capitalism. Imperialist rivals could not co-exist without being periodically driven into armed conflict. Competition was on an international level, with the rival powers constantly trying to widen their spheres of influence at the expense of others. As Lenin explained: “The capitalists partition the world not out of personal malice, but because the degree of concentration which has been reached forces them to adopt this method in order to get profits ...”

The central explanation for all of this lay for Lenin with the emergence of monopoly capital and the dominance of the banks over industry (finance capital). They had reached a higher point of monopoly than industry, which was now dependent on them for new sources of investment. Finance capital needed new areas of profitable investment and had launched on a struggle to divide what today we call the Third World. Between them Britain. France, Germany and the USA dontrolled the world through the export of capital in order to exploit low cost labour and materials. As Lenin wrote, these four powers controlled “... nearly 80 percent of the world’s finance. Thus in one way or another, the whole world is more or less the debtor to and vassal of these four international banker countries.”

Lenin’s stress on the instability and conflict built into the system was in sharp contrast to the leading “Marxist” of the day, the Austro-German Karl Kautsky. Kautsky argued that the development of monopoly capitalism had opened a new era of ultra-imperialism in which these giants would unite to form a single world trust, abolishing competition. The war was therefore an aberration which was not in the interests of monopoly capital.

The Bolshevik theorist Bukharin developed a more general theory of imperialism, one which Lenin welcomed and quoted approvingly. In Bukharin’s model, industrial capital becomes increasingly entwined with the respective national states. This led to intensified competition between these state capitals on an international level. Economic competition gave way to military conflict in order to seize the resources of rival capitalists and restructure production on a still wider basis.

Bukharin was now creating a model of the world economic system dominated by conflicting state monopoly capitalisms. Both he and Lenin seemed to have moved light years beyond Marx’s model in Capital. Yet what remains key to all three is the central dynamic of capitalism – the competition between capitals forcing them to accumulate, to re-invest their profits in further production. In order to expand their means of production capital had moved from driving rival firms to the wall, through the creation of monopolies and the colonisation of the world, to the emergence of military conflict between rival states as a result of economic competition between monopolies.

One other thing remains central to Lenin’s theory of imperialism: what the Hungarian Marxist Georg Lukács called the “actuality of revolution”. Lenin’s book was written with one object: to show that the only way out of imperialist slaughter was workers revolution. In contrast to Kautsky, he was out to prove that capitalism had already created the economic basis for socialism, and that the system itself was entering a “period of wars and revolution”. In the advanced countries a powerful working class faced the bourgeoisie. In the colonial world the struggle for national liberation confronted imperialism. The conflict in the colonial world powerfully aided workers in the industrially advanced countries.

The outcome of all this was not pre-determined. All the time Lenin was writing, the choice was already evident on the Western and Eastern Fronts – between socialism or barbarism, between workers’ revolution or the slaughter of the trenches. And Lenin also sounded a warning for the workers’ movement. The reformist leaders and trade union bureaucrats had backed the “war effort”, sending their members to die in their thousands. These “labour lieutenants of capital”, said Lenin, acted as a prop for imperialism – supporting their own national capitalism and holding back workers’ international struggle. “The fight against imperialism is a sham and humbug”, he wrote, “unless it is inseparably bound up with the fight against opportunism.”

92

TIDE? OR IVORY SNOW? Public Power in the Age of Empire Transcript of full speech by Arundhati Roy in San Francisco, California on August 16th, 2004.

Copyright 2004 Arundhati Roy. For permission to reprint contact arnove@igc.org I've been asked to speak about "Public Power in the Age of Empire." I'm not used to doing as I'm told, but by happy coincidence, it's exactly what I'd like to speak about tonight.

When language has been butchered and bled of meaning, how do we understand "public power"?

When freedom means occupation, when democracy means neo-liberal capitalism, when reform means repression, when words like "empowerment" and "peacekeeping" make your blood run cold why, then, "public power" could mean whatever you want it to mean. A biceps building machine, or a Community Power Shower. So, I'll just have to define "public power" as I go along, in my own self-serving sort of way.

In India, the word public is now a Hindi word. It means people. In Hindi, we have sarkar and public, the government and the people. Inherent in this use is the underlying assumption that the government is quite separate from "the people." This distinction has to do with the fact that India's freedom struggle, though magnificent, was by no means revolutionary. The Indian elite stepped easily and elegantly into the shoes of the British imperialists. A deeply impoverished, essentially feudal society became a modern, independent nation state. Even today, fifty seven years on to the day, the truly vanquished still look upon the government as mai-baap, the parent and provider. The somewhat more radical, those who still have fire in their bellies, see it as chor, the thief, the snatcher-away of all things.

Either way, for most Indians, sarkar is very separate from public. However, as you make your way up India's social ladder, the distinction between sarkar and public gets blurred. The Indian elite, like the elite anywhere in the world, finds it hard to separate itself from the state. It sees like the state, it thinks like the state, it speaks like the state.

In the United States, on the other hand, the blurring of the distinction between sarkar and public has penetrated far deeper into society. This could be a sign of a robust democracy, but unfortunately, it's a little more complicated and less pretty than that. Among other things, it has to do with the elaborate web of paranoia generated by the U.S. sarkar and spun out by the corporate media and Hollywood.

Ordinary Americans have been manipulated into imagining they are a people under siege whose sole refuge and protector is their government. If it isn't the Communists, it's al-Qaeda. If it isn't Cuba. it's Nicaragua. As a result, this, the most powerful nation in the world - with its unmatchable arsenal of weapons, its history of having waged and sponsored endless wars, and the only nation in history to have actually used nuclear bombs - is peopled by a terrified citizenry, jumping at shadows. A people bonded to the state not by social services, or public health care, or employment guarantees, but by fear.

This synthetically manufactured fear is used to gain public sanction for further acts of aggression.

And so it goes, building into a spiral of self-fulfilling hysteria, now formally calibrated by the U.S government's Amazing Technicolored Terror Alerts: fuchsia, turquoise, salmon pink.

To outside observers, this merging of sarkar and public in the United States sometimes makes it hard to separate the actions of the U.S. government from the American people. It is this confusion that fuels anti-Americanism in the world. Anti-Americanism is then seized upon and amplified by the U.S. government and its faithful media outlets. You know the routine: "Why do they hate us? They hate our freedoms" . . . etc. . . . etc. This enhances the sense of isolation among American people and

93

makes the embrace between sarkar and public even more intimate. Like Red Riding Hood looking for a cuddle in the wolf's bed.

Using the threat of an external enemy to rally people behind you is a tired old horse, which politicians have ridden into power for centuries. But could it be that ordinary people are fed up of that poor old horse and are looking for something different? There's an old Hindi film song that goes yeh public hai, yeh sab jaanti hai (the public, she knows it all). Wouldn't it be lovely if the song were right and the politicians wrong?

Before Washington's illegal invasion of Iraq, a Gallup International poll showed that in no European country was the support for a unilateral war higher than 11 percent. On February 15, 2003, weeks before the invasion, more than ten million people marched against the war on different continents, including North America. And yet the governments of many supposedly democratic countries still went to war.

The question is: is "democracy" still democratic?

Are democratic governments accountable to the people who elected them? And, critically, is the public in democratic countries responsible for the actions of its sarkar?

If you think about it, the logic that underlies the war on terrorism and the logic that underlies terrorism is exactly the same. Both make ordinary citizens pay for the actions of their government.

Al-Qaeda made the people of the United States pay with their lives for the actions of their government in Palestine, Saudi Arabia, Iraq, and Afghanistan. The U.S government has made the people of Afghanistan pay in their thousands for the actions of the Taliban and the people of Iraq pay in their hundreds of thousands for the actions of Saddam Hussein.

The crucial difference is that nobody really elected al-Qaeda, the Taliban, or Saddam Hussein. But the president of the United States was elected (well ... in a manner of speaking).

The prime ministers of Italy, Spain, and the United Kingdom were elected. Could it then be argued that citizens of these countries are more responsible for the actions of their government than Iraqis are for the actions of Saddam Hussein or Afghans for the Taliban?

Whose God decides which is a "just war" and which isn't? George Bush senior once said: "I will never apologize for the United States. I don't care what the facts are." When the president of the most powerful country in the world doesn't need to care what the facts are, then we can at least be sure we have entered the Age of Empire.

So what does public power mean in the Age of Empire? Does it mean anything at all? Does it actually exist?

In these allegedly democratic times, conventional political thought holds that public power is exercised through the ballot. Scores of countries in the world will go to the polls this year. Most (not all) of them will get the governments they vote for. But will they get the governments they want?

In India this year, we voted the Hindu nationalists out of office. But even as we celebrated, we knew that on nuclear bombs, neo-liberalism, privatization, censorship, big dams - on every major issue other than overt Hindu nationalism - the Congress and the BJP have no major ideological differences. We know that it is the fifty-year legacy of the Congress Party that prepared the ground culturally and politically for the far right. It was also the Congress Party that first opened India's markets to corporate globalization.

In its election campaign, the Congress Party indicated that it was prepared to rethink some of its earlier economic policies. Millions of India's poorest people came out in strength to vote in the elections. The spectacle of the great Indian democracy was telecast live - the poor farmers, the old 94

and infirm, the veiled women with their beautiful silver jewelry, making quaint journeys to election booths on elephants and camels and bullock carts. Contrary to the predictions of all India's experts and pollsters, Congress won more votes than any other party. India's communist parties won the largest share of the vote in their history. India's poor had clearly voted against neo-liberalism's economic "reforms" and growing fascism. As soon as the votes were counted, the corporate media dispatched them like badly paid extras on a film set. Television channels featured split screens. Half the screen showed the chaos outside the home of Sonia Gandhi, the leader of the Congress Party, as the coalition government was cobbled together.

The other half showed frenzied stockbrokers outside the Bombay Stock Exchange, panicking at the thought that the Congress Party might actually honor its promises and implement its electoral mandate. We saw the Sensex stock index move up and down and sideways. The media, whose own publicly listed stocks were plummeting, reported the stock market crash as though Pakistan had launched ICBMs on New Delhi.

Even before the new government was formally sworn in, senior Congress politicians made public statements reassuring investors and the media that privatization of public utilities would continue.

Meanwhile the BJP, now in opposition, has cynically, and comically, begun to oppose foreign direct investment and the further opening of Indian markets.

This is the spurious, evolving dialectic of electoral democracy.

As for the Indian poor, once they've provided the votes, they are expected to bugger off home. Policy will be decided despite them.

And what of the U.S. elections? Do U.S. voters have a real choice?

It's true that if John Kerry becomes president, some of the oil tycoons and Christian fundamentalists in the White House will change. Few will be sorry to see the back of Dick Cheney or Donald Rumsfeld or John Ashcroft and their blatant thuggery. But the real concern is that in the new administration their policies will continue. That we will have Bushism without Bush.

Those positions of real power - the bankers, the CEOs - are not vulnerable to the vote (. . . and in any case, they fund both sides).

Unfortunately the importance of the U.S elections has deteriorated into a sort of personality contest.

A squabble over who would do a better job of overseeing empire. John Kerry believes in the idea of empire as fervently as George Bush does.

The U.S. political system has been carefully crafted to ensure that no one who questions the natural goodness of the military-industrial-corporate power structure will be allowed through the portals of power.

Given this, it's no surprise that in this election you have two Yale University graduates, both members of Skull and Bones, the same secret society, both millionaires, both playing at soldiersoldier, both talking up war, and arguing almost childishly about who will lead the war on terror more effectively.

Like President Bill Clinton before him, Kerry will continue the expansion of U.S. economic and military penetration into the world. He says he would have voted to authorize Bush to go to war in Iraq even if he had known that Iraq had no weapons of mass destruction. He promises to commit more troops to Iraq. He said recently that he supports Bush's policies toward Israel and Ariel Sharon 100 percent. He says he'll retain 98% of Bush's tax cuts.

95

So, underneath the shrill exchange of insults, there is almost absolute consensus. It looks as though even if Americans vote for Kerry, they'll still get Bush. President John Kerbush or President George Berry.

It's not a real choice. It's an apparent choice. Like choosing a brand of detergent. Whether you buy Ivory Snow or Tide, they're both owned by Proctor & Gamble.

This doesn't mean that one takes a position that is without nuance, that the Congress and the BJP, New Labor and the Tories, the Democrats and Republicans are the same. Of course, they're not.

Neither are Tide and Ivory Snow. Tide has oxy-boosting and Ivory Snow is a gentle cleanser.

In India, there is a difference between an overtly fascist party (the BJP) and a party that slyly pits one community against another (Congress), and sows the seeds of communalism that are then so ably harvested by the BJP. There are differences in the I.Q.s and levels of ruthlessness between this year's U.S. presidential candidates. The anti-war movement in the United States has done a phenomenal job of exposing the lies and venality that led to the invasion of Iraq, despite the propaganda and intimidation it faced.

This was a service not just to people here, but to the whole world. But now, if the anti-war movement openly campaigns for Kerry, the rest of the world will think that it approves of his policies of "sensitive" imperialism. Is U.S. imperialism preferable if it is supported by the United Nations and European countries? Is it preferable if UN asks Indian and Pakistani soldiers to do the killing and dying in Iraq instead of U.S. soldiers? Is the only change that Iraqis can hope for that French, German, and Russian companies will share in the spoils of the occupation of their country?

Is this actually better or worse for those of us who live in subject nations? Is it better for the world to have a smarter emperor in power or a stupider one? Is that our only choice?

I'm sorry, I know that these are uncomfortable, even brutal questions, but they must be asked.

The fact is that electoral democracy has become a process of cynical manipulation. It offers us a very reduced political space today. To believe that this space constitutes real choice would be na誰ve.

The crisis in modern democracy is a profound one.

On the global stage, beyond the jurisdiction of sovereign governments, international instruments of trade and finance oversee a complex system of multilateral laws and agreements that have entrenched a system of appropriation that puts colonialism to shame. This system allows the unrestricted entry and exit of massive amounts of speculative capital - hot money - into and out of third world countries, which then effectively dictates their economic policy. Using the threat of capital flight as a lever, international capital insinuates itself deeper and deeper into these economies.

Giant transnational corporations are taking control of their essential infrastructure and natural resources, their minerals, their water, their electricity. The World Trade Organization, the World Bank, the International Monetary Fund, and other financial institutions like the Asian Development Bank, virtually write economic policy and parliamentary legislation. With a deadly combination of arrogance and ruthlessness, they take their sledgehammers to fragile, interdependent, historically complex societies, and devastate them.

All this goes under the fluttering banner of "reform."

As a consequence of this reform, in Africa, Asia, and Latin America, thousands of small enterprises and industries have closed down, millions of workers and farmers have lost their jobs and land.

96

The Spectator newspaper in London assures us that "[w]e live in the happiest, healthiest and most peaceful era in human history." Billions wonder: who's "we"? Where does he live? What's his Christian name?

The thing to understand is that modern democracy is safely premised on an almost religious acceptance of the nation state. But corporate globalization is not. Liquid capital is not. So, even though capital needs the coercive powers of the nation state to put down revolts in the servants' quarters, this set up ensures that no individual nation can oppose corporate globalization on its own.

Radical change cannot and will not be negotiated by governments; it can only be enforced by people.

By the public. A public who can link hands across national borders.

So when we speak of "Public Power in the Age of Empire," I hope it's not presumptuous to assume that the only thing that is worth discussing seriously is the power of a dissenting public. A public which disagrees with the very concept of empire. A public which has set itself against incumbent power - international, national, regional, or provincial governments and institutions that support and service empire.

What are the avenues of protest available to people who wish to resist empire? By resist I don't mean only to express dissent, but to effectively force change. Empire has a range of calling cards. It uses different weapons to break open different markets. You know the check book and the cruise missile For poor people in many countries, Empire does not always appear in the form of cruise missiles and tanks, as it has in Iraq or Afghanistan or Vietnam. It appears in their lives in very local avatars losing their jobs, being sent unpayable electricity bills, having their water supply cut, being evicted from their homes and uprooted from their land. All this overseen by the repressive machinery of the state, the police, the army, the judiciary. It is a process of relentless impoverishment with which the poor are historically familiar. What Empire does is to further entrench and exacerbate already existing inequalities.

Even until quite recently, it was sometimes difficult for people to see themselves as victims of the conquests of Empire. But now local struggles have begun to see their role with increasing clarity.

However grand it might sound, the fact is, they are confronting Empire in their own, very different ways. Differently in Iraq, in South Africa, in India, in Argentina, and differently, for that matter, on the streets of Europe and the United States.

Mass resistance movements, individual activists, journalists, artists, and film makers have come together to strip Empire of its sheen. They have connected the dots, turned cash-flow charts and boardroom speeches into real stories about real people and real despair. They have shown how the neo-liberal project has cost people their homes, their land, their jobs, their liberty, their dignity. They have made the intangible tangible. The once seemingly incorporeal enemy is now corporeal.

This is a huge victory. It was forged by the coming together of disparate political groups, with a variety of strategies. But they all recognized that the target of their anger, their activism, and their doggedness is the same. This was the beginning of real globalization. The globalization of dissent.

Broadly speaking, there are two kinds of mass resistance movements in third world countries today.

The landless peoples' movement in Brazil, the anti-dam movement in India, the Zapatistas in Mexico, the Anti-Privatization Forum in South Africa, and hundreds of others, are fighting their own sovereign governments, which have become agents of the neo-liberal project. Most of these are radical struggles, fighting to change the structure and chosen model of "development" of their own societies.

Then there are those fighting formal and brutal neocolonial occupations in contested territories whose boundaries and fault lines were often arbitrarily drawn last century by the imperialist powers.

97

In Palestine, Tibet, Chechnya, Kashmir, and several states in India's northeast provinces, people are waging struggles for self-determination.

Several of these struggles might have been radical, even revolutionary when they began, but often the brutality of the repression they face pushes them into conservative, even retrogressive spaces in which they use the same violent strategies and the same language of religious and cultural nationalism used by the states they seek to replace.

Many of the foot soldiers in these struggles will find, like those who fought apartheid in South Africa, that once they overcome overt occupation, they will be left with another battle on their hands - a battle against covert economic colonialism.

Meanwhile, as the rift between rich and poor is being driven deeper and the battle to control the world's resources intensifies. Economic colonialism through formal military aggression is staging a comeback.

Iraq today is a tragic illustration of this process. An illegal invasion. A brutal occupation in the name of liberation. The rewriting of laws that allow the shameless appropriation of the country's wealth and resources by corporations allied to the occupation, and now the charade of a local "Iraqi government."

For these reasons, it is absurd to condemn the resistance to the U.S. occupation in Iraq, as being masterminded by terrorists or insurgents or supporters of Saddam Hussein. After all if the United States were invaded and occupied, would everybody who fought to liberate it be a terrorist or an insurgent or a Bushite?

The Iraqi resistance is fighting on the frontlines of the battle against Empire. And therefore that battle is our battle.

Like most resistance movements, it combines a motley range of assorted factions. Former Baathists, liberals, Islamists, fed-up collaborationists, communists, etc. Of course, it is riddled with opportunism, local rivalry, demagoguery, and criminality. But if we are only going to support pristine movements, then no resistance will be worthy of our purity.

This is not to say that we shouldn't ever criticize resistance movements. Many of them suffer from a lack of democracy, from the iconization of their "leaders," a lack of transparency, a lack of vision and direction. But most of all they suffer from vilification, repression, and lack of resources.

Before we prescribe how a pristine Iraqi resistance must conduct their secular, feminist, democratic, nonviolent battle, we should shore up our end of the resistance by forcing the U.S. and its allies government to withdraw from Iraq.

The first militant confrontation in the United States between the global justice movement and the neo-liberal junta took place famously at the WTO conference in Seattle in December 1999. To many mass movements in developing countries that had long been fighting lonely, isolated battles, Seattle was the first delightful sign that their anger and their vision of another kind of world was shared by people in the imperialist countries.

In January 2001, in Porto Alegre, Brazil, 20,000 activists, students, film makers - some of the best minds in the world - came together to share their experiences and exchange ideas about confronting Empire. That was the birth of the now historic World Social Forum. It was the first, formal coming together of an exciting, anarchic, unindoctrinated, energetic, new kind of "Public Power." The rallying cry of the WSF is "Another World is Possible." It has become a platform where hundreds of conversations, debates, and seminars have helped to hone and refine a vision of what kind of world it should be.

98

By January 2004, when the fourth WSF was held in Mumbai, India, it attracted 200,000 delegates. I have never been part of a more electrifying gathering. It was a sign of the social forum's success that the mainstream media in India ignored it completely. But now, the WSF is threatened by its own success. The safe, open, festive atmosphere of the forum has allowed politicians and nongovernmental organizations that are imbricated in the political and economic systems that the forum opposes to participate and make themselves heard.

Another danger is that the WSF, which has played such a vital role in the movement for global justice, runs the risk of becoming an end unto itself. Just organizing it every year consumes the energies of some of the best activists. If conversations about resistance replace real civil disobedience, then the WSF could become an asset to those whom it was created to oppose. The forum must be held and must grow, but we have to find ways to channel our conversations there back into concrete action.

As resistance movements have begun to reach out across national borders and pose a real threat, governments have developed their own strategies of how to deal with them. They range from cooptation to repression.

I'm going to speak about three of the contemporary dangers that confront resistance movements: the difficult meeting point between mass movements and the mass media, the hazards of the NGOization of resistance, and the confrontation between resistance movements and increasingly repressive states.

The place in which the mass media meets mass movements is a complicated one.

Governments have learned that a crisis-driven media cannot afford to hang about in the same place for too long. Like business houses need a cash turnover, the media need crises turnover. Whole countries become old news. They cease to exist, and the darkness becomes deeper than before the light was briefly shone on them. We saw it happen in Afghanistan when the Soviets withdrew. And now, after Operation Enduring Freedom put the CIA's Hamid Karzai in place, Afghanistan has been thrown to its warlords once more.

Another CIA operative, Iyad Allawi, has been installed in Iraq, so perhaps it's time for the media to move on from there, too.

While governments hone the art of waiting out crisis, resistance movements are increasingly being ensnared in a vortex of crisis production, seeking to find ways of manufacturing them in easily consumable, spectator-friendly formats.

Every self-respecting peoples' movement, every "issue" is expected to have its own hot air balloon in the sky advertising its brand and purpose.

For this reason, starvation deaths are more effective advertisements for impoverishment than millions of malnourished people, who don't quite make the cut. Dams are not newsworthy until the devastation they wreak makes good television. (And by then, it's too late).

Standing in the rising water of a reservoir for days on end, watching your home and belongings float away to protest against a big dam used to be an effective strategy, but isn't any more. The media is dead bored of that one. So the hundreds of thousands of people being displaced by dams are expected to either conjure new tricks or give up the struggle.

Colorful demonstrations and weekend marches are vital but alone are not powerful enough to stop wars. Wars will be stopped only when soldiers refuse to fight, when workers refuse to load weapons onto ships and aircrafts, when people boycott the economic outposts of Empire that are strung across the globe.

99

If we want to reclaim the space for civil disobedience, we will have to liberate ourselves from the tyranny of crisis reportage and its fear of the mundane. We have to use our experience, our imagination, and our art to interrogate the instruments of that state that ensure that "normality" remains what it is: cruel, unjust, unacceptable. We have to expose the policies and processes that make ordinary things - food, water, shelter and dignity - such a distant dream for ordinary people.

Real pre-emptive strike is to understand that wars are the end result of flawed and unjust peace.

As far as mass resistance movements are concerned, the fact is that no amount of media coverage can make up for mass strength on the ground. There is no option, really, to old-fashioned, back-breaking political mobilization.

Corporate globalization has increased the distance between those who make decisions and those who have to suffer the effects of those decisions. Forums like the WSF enable local resistance movements to reduce that distance and to link up with their counterparts in rich countries. That alliance is an important and formidable one. For example, when India's first private dam, the Maheshwar Dam, was being built, alliances between the Narmada Bachao Andolan (the NBA), the German organization Urgewald, the Berne Declaration in Switzerland, and the International Rivers Network in Berkeley worked together to push a series of international banks and corporations out of the project. This would not have been possible had there not been a rock solid resistance movement on the ground. The voice of that local movement was amplified by supporters on the global stage, embarrassing and forcing investors to withdraw.

An infinite number of similar, alliances, targeting specific projects and specific corporations would help to make another world possible. We should begin with the corporations who did business with Saddam Hussein and now profit from the devastation and occupation of Iraq.

A second hazard facing mass movements is the NGO-ization of resistance. It will be easy to twist what I'm about to say into an indictment of all NGOs. That would be a falsehood. In the murky waters of fake NGOs set up or to siphon off grant money or as tax dodges (in states like Bihar, they are given as dowry), of course there are NGOs doing valuable work. But it's important to consider the NGO phenomenon in a broader political context.

In India, for instance, the funded NGO boom began in the late 1980s and 1990s. It coincided with the opening of India's markets to neo-liberalism. At the time, the Indian state, in keeping with the requirements of structural adjustment, was withdrawing funding from rural development, agriculture, energy, transport, and public health. As the state abdicated its traditional role, NGOs moved in to work in these very areas. The difference, of course, is that the funds available to them are a minuscule fraction of the actual cut in public spending. Most large funded NGOs are financed and patronized by aid and development agencies, which are in turn funded by Western governments, the World Bank, the UN, and some multinational corporations. Though they may not be the very same agencies, they are certainly part of the same loose, political formation that oversees the neo-liberal project and demands the slash in government spending in the first place.

Why should these agencies fund NGOs? Could it be just old-fashioned missionary zeal? Guilt? It's a little more than that. NGOs give the impression that they are filling the vacuum created by a retreating state. And they are, but in a materially inconsequential way. Their real contribution is that they defuse political anger and dole out as aid or benevolence what people ought to have by right.

They alter the public psyche. They turn people into dependent victims and blunt the edges of political resistance. NGOs form a sort of buffer between the sarkar and public. Between Empire and its subjects. They have become the arbitrators, the interpreters, the facilitators.

In the long run, NGOs are accountable to their funders, not to the people they work among. They're what botanists would call an indicator species. It's almost as though the greater the devastation caused by neo-liberalism, the greater the outbreak of NGOs. Nothing illustrates this more poignantly 100

than the phenomenon of the U.S. preparing to invade a country and simultaneously readying NGOs to go in and clean up the devastation.

In order make sure their funding is not jeopardized and that the governments of the countries they work in will allow them to function, NGOs have to present their work in a shallow framework more or less shorn of a political or historical context. At any rate, an inconvenient historical or political context.

Apolitical (and therefore, actually, extremely political) distress reports from poor countries and war zones eventually make the (dark) people of those (dark) countries seem like pathological victims.

Another malnourished Indian, another starving Ethiopian, another Afghan refugee camp, another maimed Sudanese . . . in need of the white man's help. They unwittingly reinforce racist stereotypes and re-affirm the achievements, the comforts, and the compassion (the tough love) of Western civilization. They're the secular missionaries of the modern world.

Eventually - on a smaller scale but more insidiously - the capital available to NGOs plays the same role in alternative politics as the speculative capital that flows in and out of the economies of poor countries. It begins to dictate the agenda. It turns confrontation into negotiation. It depoliticizes resistance. It interferes with local peoples' movements that have traditionally been self-reliant. NGOs have funds that can employ local people who might otherwise be activists in resistance movements, but now can feel they are doing some immediate, creative good (and earning a living while they're at it). Real political resistance offers no such short cuts.

The NGO-ization of politics threatens to turn resistance into a well-mannered, reasonable, salaried, 9-to-5 job. With a few perks thrown in. Real resistance has real consequences. And no salary.

This brings us to a third danger I want to speak about tonight: the deadly nature of the actual confrontation between resistance movements and increasingly repressive states. Between public power and the agents of Empire.

Whenever civil resistance has shown the slightest signs of evolving from symbolic action into anything remotely threatening, the crack down is merciless. We've seen what happened in the demonstrations in Seattle, in Miami, in Gรถthenberg, in Genoa.

In the United States, you have the USA PATRIOT Act, which has become a blueprint for antiterrorism laws passed by governments across the world. Freedoms are being curbed in the name of protecting freedom. And once we surrender our freedoms, to win them back will take a revolution.

Some governments have vast experience in the business of curbing freedoms and still smelling sweet. The government of India, an old hand at the game, lights the path.

Over the years the Indian government has passed a plethora of laws that allow it to call almost anyone a terrorist, an insurgent, a militant. We have the Armed Forces Special Powers Act, the Public Security Act, the Special Areas Security Act, the Gangster Act, the Terrorist and Disruptive Areas Act (which has formally lapsed but under which people are still facing trial), and, most recently, POTA (the Prevention of Terrorism Act), the broad-spectrum antibiotic for the disease of dissent.

There are other steps that are being taken, such as court judgments that in effect curtail free speech, the right of government workers to go on strike, the right to life and livelihood. Courts have begun to micro-manage our lives in India. And criticizing the courts is a criminal offense.

But coming back to the counter-terrorism initiatives, over the last decade, the number of people who have been killed by the police and security forces runs into the tens of thousands. In the state of Andhra Pradesh (the pin-up girl of corporate globalization in India), an average of about 200 101

"extremists" are killed in what are called "encounters" every year. The Bombay police boast of how many "gangsters" they have killed in "shoot outs." In Kashmir, in a situation that almost amounts to war, an estimated 80,000 people have been killed since 1989. Thousands have simply "disappeared."

In the northeastern provinces, the situation is similar.

In recent years, the Indian police have opened fire on unarmed people, mostly Dalit and Adivasi.

Their preferred method is to kill them and then call them terrorists. India is not alone, though. We have seen similar thing happen in countries such Bolivia, Chile, and South Africa. In the era of neoliberalism, poverty is a crime and protesting against it is more and more being defined as terrorism.

In India, POTA (the Prevention of Terrorism Act) is often called the Production of Terrorism Act. It's a versatile, hold-all law that could apply to anyone from an al-Qaeda operative to a disgruntled bus conductor. As with all anti-terrorism laws, the genius of POTA is that it can be whatever the government wants. After the 2002 state-assisted pogrom in Gujarat, in which an estimated 2,000 Muslims were savagely killed by Hindu mobs and 150,000 driven from their homes, 287 people have been accused under POTA. Of these, 286 are Muslim and one is a Sikh.

POTA allows confessions extracted in police custody to be admitted as judicial evidence. In effect, torture tends to replace investigation. The South Asia Human Rights Documentation Center reports that India has the highest number of torture and custodial deaths in the world. Government records show that there were 1,307 deaths in judicial custody in 2002 alone.

A few months ago, I was a member of a peoples' tribunal on POTA. Over a period of two days, we listened to harrowing testimonies of what is happening in our wonderful democracy. It's everything from people being forced to drink urine, to being stripped, humiliated, given electric shocks, burned with cigarette butts, having iron rods put up their anuses, to being beaten and kicked to death.

The new government has promised to repeal POTA. I'd be surprised if that happens before similar legislation under a different name is put in place. If its not POTA it'll be MOTA or something.

When every avenue of non-violent dissent is closed down, and everyone who protests against the violation of their human rights is called a terrorist, should we really be surprised if vast parts of the country are overrun by those who believe in armed struggle and are more or less beyond the control of the state: in Kashmir, the north eastern provinces, large parts of Madhya Pradesh, Chattisgarh, Jharkhand, and Andhra Pradesh. Ordinary people in these regions are trapped between the violence of the militants and the state.

In Kashmir, the Indian army estimates that 3,000 to 4,000 militants are operating at any given time.

To control them, the Indian government deploys about 500,000 soldiers. Clearly, it isn't just the militants the army seeks to control, but a whole population of humiliated, unhappy people who see the Indian army as an occupation force.

The Armed Forces Special Powers Act allows not just officers, but even junior commissioned officers and non-commissioned officers of the army, to use force and even kill any person on suspicion of disturbing public order. It was first imposed on a few districts in the state of Manipur in 1958. Today, it applies to virtually all of the north east and Kashmir. The documentation of instances of torture, disappearances, custodial deaths, rape, and summary execution by security forces is enough to turn your stomach.

In Andhra Pradesh, in India's heartland, the militant Marxist-Leninist Peoples' War Group - which for years been engaged in a violent armed struggle and has been the principal target of many of the Andhra police's fake "encounters" - held its first public meeting in years on July 28, 2004, in the town of Warangal.

102

It was attended by about hundreds of thousands of people. Under POTA, all of them are considered terrorists. Are they all going to be detained in some Indian equivalent of Guantรกnamo Bay? The whole of the north east and the Kashmir valley is in ferment. What will the government do with these millions of people?

There is no discussion taking place in the world today that is more crucial than the debate about strategies of resistance. And the choice of strategy is not entirely in the hands of the public. It is also in the hands of sarkar.

After all, when the U.S. invades and occupies Iraq in the way it has done, with such overwhelming military force, can the resistance be expected to be a conventional military one? (Of course, even if it were conventional, it would still be called terrorist.) In a strange sense, the U.S. government's arsenal of weapons and unrivalled air and fire power makes terrorism an all-but-inescapable response. What people lack in wealth and power, they will make up with stealth and strategy.

In this restive, despairing time, if governments do not do all they can to honor nonviolent resistance, then by default they privilege those who turn to violence. No government's condemnation of terrorism is credible if it cannot show itself to be open to change by to nonviolent dissent.

But instead nonviolent resistance movements are being crushed. Any kind of mass political mobilization or organization is being bought off, or broken, or simply ignored.

Meanwhile, governments and the corporate media, and let's not forget the film industry, lavish their time, attention, technology, research, and admiration on war and terrorism. Violence has been deified.

The message this sends is disturbing and dangerous: If you seek to air a public grievance, violence is more effective than nonviolence.

As the rift between the rich and poor grows, as the need to appropriate and control the world's resources to feed the great capitalist machine becomes more urgent, the unrest will only escalate.

For those of us who are on the wrong side of Empire, the humiliation is becoming unbearable.

Each of the Iraqi children killed by the United States was our child. Each of the prisoners tortured in Abu Ghraib was our comrade. Each of their screams was ours. When they were humiliated, we were humiliated. The U.S. soldiers fighting in Iraq - mostly volunteers in a poverty draft from small towns and poor urban neighborhoods - are victims just as much as the Iraqis of the same horrendous process, which asks them to die for a victory that will never be theirs.

The mandarins of the corporate world, the CEOs, the bankers, the politicians, the judges and generals look down on us from on high and shake their heads sternly. "There's no Alternative," they say. And let slip the dogs of war.

Then, from the ruins of Afghanistan, from the rubble of Iraq and Chechnya, from the streets of occupied Palestine and the mountains of Kashmir, from the hills and plains of Colombia and the forests of Andhra Pradesh and Assam comes the chilling reply: "There's no alternative but terrorism." Terrorism. Armed struggle. Insurgency. Call it what you want.

Terrorism is vicious, ugly, and dehumanizing for its perpetrators, as well as its victims. But so is war.

You could say that terrorism is the privatization of war. Terrorists are the free marketers of war.

They are people who don't believe that the state has a monopoly on the legitimate use of violence.

Human society is journeying to a terrible place.

Of course, there is an alternative to terrorism. It's called justice.

103

It's time to recognize that no amount of nuclear weapons or full-spectrum dominance or daisy cutters or spurious governing councils and loya jirgas can buy peace at the cost of justice.

The urge for hegemony and preponderance by some will be matched with greater intensity by the longing for dignity and justice by others.

Exactly what form that battle takes, whether its beautiful or bloodthirsty, depends on us.

Issue 99 of INTERNATIONAL SOCIALISM JOURNAL Published Summer 2003 Copyright Š International Socialism

ANALYSING IMPERIALISM CHRIS HARMAN The US assault against Iraq has seen protests in virtually every major city in the world, not merely for peace, but against 'imperialism'. The word has been used by the unlikeliest of people to express their abhorrence at US government actions.

But there is not always clarity as to what imperialism means at the beginning of the 21st century. To some it represents the culmination of the development of capitalism over the last two and half centuries--the 'highest stage' of the system. To some it represents simply a grab for profitable raw materials or investment which the system as a whole could manage without, or a drive to increase the profits of just one section of the US ruling class, the military-industrial complex. There are even some who hold that states trying to conquer other states is an archaic practice followed by certain political leaders in contradiction to the dynamics of the system as whole. So Michael Hardt, coauthor of the highly influential Empire, writes that 'the US is fast becoming an imperialist power along the old European model, but on a global scale', but hastens to add that 'business leaders around the globe recognise that imperialism is bad for business because it sets up barriers that hinder global flows'.1 And Bernard Cassen, the leader of ATTAC in France and a key figure in the World Social Forum, claimed shortly before the attack on Iraq, 'Whether war breaks out or not, B-52s and special forces will not alter poverty in Brazil or hunger in Argentina'.2 The disagreements were between people who were agreed in resisting the latest act of aggression by the world's most powerful--and most dangerous--state. But they remain important in determining how we fight back in the long term. If imperialism is merely a set of state actions cut off from the wider dynamic of the system, then pressures to reform the state can bring peace. It is even possible to see the drive to war as something standing in opposition to the wider trend of the system--whether you call this, as apologists for the system do, 'free trade', or as some opponents do, 'empire'. By contrast, if it is organically linked to the system as a whole, you have to overthrow the system to remove the threat.

Part 1: Classic theories of imperialism The best known statement about the centrality of imperialism to the system is Lenin's pamphlet Imperialism: The Highest Stage of Capitalism. It was written in the midst of the First World War. Its aim was to be a 'popular outline', showing how the resort to war was a product of the 'latest stage of capitalism'--the original subtitle to the work: Capitalism has grown into a world system of colonial oppression and financial strangulation of the overwhelming majority of the people of the world by a handful of 'advanced' countries.

And this 'booty' is shared by two or three world-dominating pirates (America, England, Japan), armed to the teeth who embroil the whole world in their war over the division of their booty.3 The capitalist powers, he points out, have partitioned the world between them on the basis of 'a calculation of the strength of the participants, their general economic, financial, military and other strength'. But 'the relative strength of these participants is not changing uniformly, for under 104

capitalism there cannot be an equal development of different undertakings, trusts, branches of industry or countries'. A partition of the world that corresponded to the relative strength of the great powers at one point no longer does so a couple of decades later. The partitioning of the world gives way to struggles over the repartitioning of the world: Peaceful alliances prepared the ground for wars and in their turn grow out of wars. One is the condition for the other, giving rise to alternating forms of peaceful and non-peaceful struggle on one and the same basis, that of imperialist connections and interrelations of world economics and world politics.4 Lenin's theory was not just a theory of military conflicts between the great powers. He insisted these conflicts were a product of changes in capitalism itself: Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a 'natural law'... Marx had proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development, leads to monopoly. Today, monopoly has become a fact... The rise of monopolies, as the result of the concentration of production, is a general and fundamental law of the present stage of development of capitalism... For Europe, the time when the new capitalism definitely superseded the old can be established with fair precision; it was the beginning of the 20th century.5 This is something quite different from the old free competition between manufacturers, scattered and out of touch with one another, and producing for an unknown market.

Concentration has reached the point at which it is possible to make an approximate estimate of all sources of raw materials (for example, the iron ore deposits) of a country and even, as we shall see, of several countries, or of the whole world. Not only are such estimates made, but these sources are captured by gigantic monopolist associations. An approximate estimate of the capacity of markets is also made, and the associations 'divide' them up amongst themselves by agreement. Skilled labour is monopolised, the best engineers are engaged; the means of transport are captured--railways in America, shipping companies in Europe and America.6 But once this stage is reached, competition between the giant corporations is no longer based simply-or even mainly--on the old purely market methods. Taking control of raw materials so that rivals cannot get them, blocking rivals' access to transport facilities, selling goods at a loss so as to drive rivals out of business, denying them access to credit, are all methods used: 'There is no longer a competitive struggle between small and large, between the technically developed and the technically backward. We see here the monopolists throttling all those who do not submit to the monopoly, to its yoke, to its dictation'.7 'Monopolies bring with them everywhere monopolist principles: the utilisation of "connections" for profitable deals takes the place of competition in the open market'.8 And central among the connections are those linking the monopolies based in a particular country to its state. Lenin quoted the experience of four major industries to justify this account--steel and zinc, oil, and the electrical and merchant shipping of Europe and North America. From these he concluded that the development of monopoly at home has its corollary in the use of state power to establish influence abroad. The competitive struggle between the monopolies became a struggle between their states to control different parts of the world: The capitalists divide the world, not out of any particular malice, but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits. And they divide it 'in proportion to capital', 'in proportion to strength', because there cannot be any other method of division under commodity production and capitalism.9 The epoch of the latest stage of capitalism shows us that certain relations between capitalist associations grow up, based on the economic division of the world; while parallel to and in connection with it, certain relations grow up between political alliances, between states, on the basis of the territorial division of the world, of the struggle for colonies, of the 'struggle for spheres of influence'.10

105

This found expression in the division of the world into the great empires--the British, the French, the Russian, the Belgian and the Dutch, which divided most of Asia and Africa between them in Lenin's time. But Lenin was insistent that imperialism involved more than the division between the great powers of what we would today call the 'Third World'. He criticises Karl Kautsky for writing, 'Imperialism...consists in the striving of every industrial capitalist nation to bring under its control or to annex all large areas of agrarian territory, irrespective of what nations inhabit it'.11 The imperialist division of the world, Lenin insisted, was increasingly centred on industrial areas: 'The characteristic feature of imperialism is precisely that it strives to annex not only agrarian territories, but even most highly industrialised regions (German appetite for Belgium; French appetite for Lorraine)'.12 Lenin's fellow Bolshevik, Bukharin--whose Imperialism and World Economy was written shortly before Lenin's work, but which appeared afterwards, with an introduction by Lenin--made the argument just as forcefully: Where formerly many individually owned enterprises competed with each other, there appears the most stubborn competition between a few gigantic capitalist combines pursuing a complicated and, to a considerable degree, calculated policy. There finally comes a time when competition ceases in an entire branch of production... The centralisation process proceeds apace. Combines...in industry and banking...unite the entire 'national' production, which assumes the form of a company of companies, thus becoming a state capitalist trust.

Competition reaches its highest, the last conceivable, stage of development. It is now competition of the state capitalist trusts on the world market... Competition is reduced to a minimum within the boundaries of the 'national' economies, only to flare up in colossal proportions, such as would not have been possible in any of the preceding historical epochs...

The centre of gravity is shifted in the competition of gigantic, consolidated and organised economic bodies possessed of a colossal fighting capacity in the world tournament of 'nations'... Imperialist annexation is only a case of the general application of the general capitalist tendency towards centralisation of capital...

One may distinguish two sorts of centralisation: the one where an economic unit absorbs another unit of the same kind, and the one which we term vertical centralisation, where an economic unit absorbs another of a different kind... An example of horizontal imperialist annexation is the seizure of Belgium by Germany [in the First World War]; an example of the vertical annexation is the seizure of Egypt by England... It is customary to reduce imperialism to colonial conquests alone... Now, however, the time has come for a fundamental redivision... Even the territory of the home country is drawn into the process of redivision.13 Lenin and Bukharin's works were produced in the middle of the First World War, and their aim was to explain the forces behind it. Their enduring power lies in the way in which they still provide an explanation, like no other, of the whole of what has been called the '30 years war' of the 20th century--the great military clashes that tore Europe apart, causing a total of 50 million deaths and devastation all the way from the channel to the Volga, and sucking into the maelstrom hundreds of millions of people in the most distant stretches of the world. It was an explanation that spurred opponents of war in Europe and North America to challenge not merely the militarists, but also the economic system as a whole. And it spurred a whole generation of people fighting to shake off the shackles of empire in the Third World to see some sort of identity of interest with the workers' movements of the advanced countries.

The attacks on the theory The sheer power of this theory of imperialism has led to repeated attempts to refute it. Since Bukharin became a non-person during the high tide of Stalinism,14 most of the attacks--and defences-have been directed at Lenin's pamphlet.

The attacks have generally concentrated on two interlinked fronts. They have denied any empirical link between the great expansion of the Western colonial empires and the dynamics of capitalism.

And they have argued that peaceful free trade rather than a militaristic struggle to control chunks of territory is the most profitable course for the majority of capitalists to pursue.

106

The first argument is not difficult to deal with. The great period of growth of the Western empires was the last quarter of the 19th century. Some European powers (Britain, Holland, France) already had empires, inherited from a previous phase of capitalist development, but not until the 1880s did they seek to divide all the world between them. In 1876 no more than 10 percent of Africa was under European rule. By 1900 more than 90 percent was colonised. In the same period Britain, France, Russia and Germany established wide spheres of influence extending out from colonial enclaves in China; Japan took over Korea and Taiwan; France conquered all of Indochina; the US seized Puerto Rico and the Philippines from Spain; and Britain and Russia agreed to an informal partitioning of Iran.

This was the period in which the export of capital became a central feature of the economy of Britain, still the world's dominant capitalist country. Total investment in foreign stocks rose from ÂŁ95 million in 1883 to ÂŁ393 million in 1889. It soon equalled 8 percent of Britain's gross national product and absorbed 50 percent of savings.15 Its biggest colony, India, accounted for 12 percent of its exports of goods and 11 percent of its capital exports, while providing a surplus to Britain's balance of payments that could help pay for investments elsewhere in the world.16 At the same time, many of the raw materials required for the most technologically advanced industries of the time came from colonial areas (vegetable oils for margarine and soap manufacture, copper for the electrical industry, rubber and oil for the fledgeling automobile industry).

The 1870s and early 1880s had been a period of depressed markets, falling prices, and low profits and dividends in Britain. With the growth of foreign investment this 'great depression' came to an end.17 It is not true that the exports of capital, let alone of goods, went to the colonies. Much went to the US, and quite a lot went to Latin American countries like Argentina. But what mattered for both politicians and industrial interests was that 'Britain ruled the waves'. There was a global empire, in which direct dominance in some parts of the world contributed to hegemony--and defence of economic interests--in other areas.

As I have put the argument elsewhere: Colonies offered the capitalists of the colonial power protected outlets for investment. They also provided military bases to protect routes to investment elsewhere. For Britain possessions such as Malta, Cyprus, Egypt, South Yemen and the Cape were important not just as sources of profit in their own right, but as stopping-off places to India--and India, 'the jewel in the crown', was also a stopping-off place to Singapore, the tin and rubber of Malaya, the recently opened markets of China, and the rich dominions of Australia and New Zealand.

The empire was like a woven garment which stopped British capitalism catching a cold: a single thread might seem of little importance, but if snapped the rest would start unravelling.

At least that was how those who ran the empire, their colleagues in the City of London and their friends in British industry saw things.18 Where British capitalism went, others wanted to follow and set about grabbing what they could. It was usually a case of first come, first served. France took huge swathes of North and West Africa, Belgium's king seized a vast area of the Congo region, and the Dutch consolidated their scattered holdings in the East Indies into a modern empire. But the one country in Europe that was beginning to overtake British capitalism industrially, Germany, was the last to join the race, only getting Tanganyika (the main part of modern Tanzania), South West Africa (Namibia), Cameroon, Togo and Rwanda-Burundi as consolation prizes. By the turn of the century there were powerful voices in German industry connected to the National Liberal Party (after 1918 the National People's Party) who were arguing that German business could only compete globally if Germany had more colonies-or at least a sphere of influence stretching through eastern and south eastern Europe.

Whichever way you look at the 1890s and the 1900s--or for that matter the 1920s and the 1930s--you find that empire was seen as a positive economic advantage by capitalist classes. There would be differences of opinion over the advantages to be gained from particular imperialist adventures. There was no great divergence about the benefits of empire in general.

107

But this still leaves open the second objection. Was it really in the interests of businessmen to see their taxes burnt up in wars that disrupted markets? Would it not have been preferable for them to have forced through policies based on free trade and peaceful competition for markets, pushing aside those narrow interests which benefited directly from arms spending and colonies?

This was essentially the argument of one of the first accounts of imperialism, produced by the English liberal economist Hobson, whose work was published in 1902. He saw imperialism as the product of one interest group, those connected with certain financial institutions. These opted for guaranteed returns of interest on overseas loans rather than taking the risks involved in industrial investment at home, and welcomed colonial expansion as a way of making sure their state guaranteed the safety of their investments: Seeing that the imperialism of the last three decades is clearly condemned as a business policy, in that at enormous expense it has procured a small, bad, unsafe increase of markets, and has jeopardised the entire wealth of the nation in rousing the strong resentment of other nations, we may ask, 'How is the British nation induced to embark upon such unsound business?' The only possible answer is that the business interests of the nation as a whole are subordinated to those of certain sectional interests that usurp control of the national resources and use them for their private gain.19 He identifies these as being the arms manufacturers, 'the great manufacturers for export trade', 'the shipping trade', but insists that 'by far the most important economic factor in imperialism is the influence relating to investments... The period of energetic imperialism has been coincident with a remarkable growth in the income from external investments... To a larger extent every year Great Britain is becoming a nation living upon tribute from abroad, and the classes who enjoy this tribute have an ever-increasing incentive to employ the public policy, the public purse and the public force to extend the field of their private investments, and to safeguard and improve their existing investments.'

So one small section of the capitalist class has, in effect, turned the state to its own advantage, despite the harm it does to the rest: Aggressive imperialism, which costs the taxpayer so dear, which is of so little value to the manufacturer and trader, which is fraught with such grave incalculable peril to the citizen, is a source of great gain to the investor who cannot find at home the profitable use he seeks for his capital, and insists that his government should help him to profitable and secure investments abroad.

This includes a layer of rentiers--bond holders who receive their dividends regularly without ever having to worry themselves with productive or commercial activity of any sort. But at the centre of it is something 'still more dangerous'--'the special interest of the financier, the general dealer in investments...the great financial houses, who use stocks and shares not so much as investments to yield them interest, but as material for speculation in the money market'.

He adds, in a passage that shows hostility to 'finance' rather than capitalism as a whole, which has the potential to lead in a dangerous direction: United by the strongest bonds of organisation, always in closest and quickest touch with one another, situated in the very heart of the business capital of every state, controlled, so far as Europe is concerned, chiefly by men of a single and peculiar race, who have behind them many centuries of financial experience, they are in a unique position to control the policy of nations.20 The alternative to imperialism, on Hobson's reasoning, was not the revolutionary overthrow of capitalism, but governmental action to expand the domestic economy and defend the interests of industry against finance. Such action would form the basis of an alliance uniting trade unions and the great majority of business interests in opposition to the rentiers and the finance capitalists.

Ten years later Karl Kautsky, the veteran theorist of the German Social Democratic Party, came up with a very similar account of imperialism. The political biography by Massimo Salvadori summarises his view:

108

In the past several years finance capitalism had come to the forefront of the internal and international scene. The finance capitalists, who drew their profits from the export of capital, represented the most reactionary and militaristic force in domestic politics, since they had a direct interest in transforming each national state into an apparatus of support for their own expansion. Imperialism was therefore directly linked to finance capitalism. But the interests of finance capital were not identical to those of industrial capital, which could expand only by broadening its markets through free trade. It was from the industrial sector that impulses towards international concord arose in the bourgeois camp. It was with this sector that social democracy should link up to safeguard peace. Imperialism, the expression of one phase of capitalist development and the cause of armed conflicts, was not the only possible form of development of capitalism.21 Along with finance capitalists, Kautsky also saw the arms producers as having an interest in imperialism and war. But he maintained that 'the economic costs of rearmament, while they favoured the development of some sectors of industry, were detriments to others'.22 'The source of the political power of finance capital, which aimed at subjugating all society, could be traced back to its union with militarism and the bureaucracy'.23 From his view that capitalism as whole had no interest in partitioning the world into rival colonies, Kautsky drew the conclusion that it was approaching a new stage. He developed this argument in an article he wrote in 1914 in which he saw the colonisation of the previous three decades as a result of industrial capitalists trying to secure for themselves raw materials and markets.

'Capitalist accumulation in industry can proceed freely only when the agricultural region which supplies its raw material and consumes its products is constantly being enlarged.' There were various ways to do this. One was called 'imperialism', especially fostered by the system of investing capital in agrarian countries which encouraged 'efforts to reduce these lands to a state of political dependence'. 'The effort to subdue and hold agrarian regions' had caused serious conflicts between the great capitalist powers which led to 'tremendous competition in armaments' and 'long-prophesied world war'.

But, he went on to argue, 'this phase of imperialism' was not necessary to the continued existence of capitalism: There is no economic necessity for the continuation of the great competition in the production of armaments after the close of the present war. At best such a continuation would serve the interests of only a few capitalist groups. On the contrary capitalist industry is threatened by the conflicts between the various governments. Every far-sighted capitalist must call out to his associates: Capitalists of all lands unite! From a purely economic point of view, therefore, it is not impossible that capitalism is now to enter upon a new phase, a phase marked by the transfer of trust methods to international politics, a sort of superimperialism.24 Monopolies, the state and finance capital Lenin's Imperialism is very much a critique of Kautsky. It rests on three planks.

First, there is the argument that the whole system is in a monopoly stage. Monopolies are not just, as are Hobson's financiers or Kautsky's finance capitalists, individual elements within each national economy. They are the central, dominating forms of capital, dragging other sections behind them.

Second, in such a situation the political 'influence' they exert is not an accidental feature. It is intrinsic to the form capitalist competition now takes. No large capital can survive unless it has connections to the state and uses these to expand at the expense of other capitals. Or, to put the argument another way, capitalism is never simply an abstract system of free flowing capital. The system has always been composed of different individual capitals, each run by people who attempt to use their connections with each other and with the state to cheat the market. But under the 'free market' capitalism of Marx's time, none was big enough to influence the dynamic of the system as a whole. By contrast, in Lenin's picture individual capitals dominate each major sector of production within each country and are able, through their connections with each other and the state, to impose a whole new dynamic of political and military expansionism on society as a whole.

109

Finally, Lenin backs up his points by his empirical accounts of the development of major industrial concerns. It is his ability to marshal such arguments and facts that enables Lenin to insist so convincingly that any agreement between the great capitalist powers at the end of the First World War will give way to new conflict and renewed war.

There are, however, certain subsidiary problems with the way Lenin presents his arguments that leave a back door open for arguments of the Kautsky sort.

In his pamphlet Lenin readily acknowledges his use of Hobson's work and that of the Austrian Marxist economist Hilferding, who was also an important influence on Kautsky's views on imperialism.25 Lenin is critical of both. But he puts at the very centre of his analysis Hilferding's use of the phrase 'finance capital' to describe the dominant feature of the system in its imperialist phase, and he accepts much of Hobson's description of the dominant and parasitic role of finance within this.

Hilferding had carried through a very important account of the changes in capitalism in the quarter of a century after Marx's death in 1883--the rise of the joint stock company in place of the individual entrepreneur, the growing importance of the banks as a source of investment, and the role of the state in protecting the markets of already mature national capitalisms. There was, he argued, a merging together of financial capital and industrial capital to produce a synthesis of the two.

But there was a central ambiguity in Hilferding's own use of 'finance capital'. At some points it meant a merger of finance and industry--or at least financial interests lubricating the merger of industrial concerns: 'The banks have to invest an ever-increasing part of their capital in industry, and in this way they become to a greater and greater extent industrial capitalists. I call bank capital...which is actually transformed in this way into industrial capital, finance capital'.26 'Industry becomes increasingly dependent upon bank capital, but this does not mean that the magnates of industry also become dependent on banking magnates'.27 On this basis giant trusts and cartels were emerging that could dominate whole sectors of industry.

They leaned on the state to protect their domestic markets, so enabling them to raise their prices at home--and attempt to conquer foreign markets with lower prices. It was this pressure of the combined finance-industrial capitals that changed the whole attitude of capital to the state. 'It is not free trade England, but the protectionist countries, Germany and the United States, which become the models of capitalist development,' wrote Hilferding.28 Far from continuing with the traditional liberal notion of a minimal 'night-watchman state', the great trusts wanted a state with the power to widen its boundaries so as to enlarge the market in which they could gain monopoly profits: 'While free trade was indifferent to colonies, protectionism leads directly to a more active colonial policy, and to conflicts of interest between different states'.29 The drive for empire was endemic in the most modern forms of capitalism. And since British, French and, to a lesser degree, Dutch and Belgian capitalism had already carved the world up between them, the expansion of German capitalism inevitably meant military clashes with them.

But Hilferding also used the term 'finance capital' in a way resonant of Hobson's description of finance as something with interests in opposition to those of the mass of industrial capitals: The mobilisation of capital and the continual expansion of credit gradually bring about a complete change in the position of the money capitalists. The power of the banks increases, and they become the founders and eventually the rulers of industry, whose profits they seize for themselves as finance capital, just as formerly the old usurer seized, in the form of 'interest', the produce of the peasants and the ground rent of the lord of the manor.30 The finance capitalists were then seen as the force pushing for colonies and wars, even while the industrial capitalists want to hold back. In a review Kautsky paraphrased Hilferding as calling finance capital 'the most brutal and violent form of capital'.31 But the ambiguity in Hilferding's formulation enabled him to draw a directly contradictory conclusion and so say that the rise of finance capital has an ameliorative impact on the rest of the system, by bringing about a growing organisation of the national economy, making it less subject to slumps, booms and market frenzies: 'The mass psychoses which speculation generated at the beginning of the capitalist era...seem gone forever'.32 Within a few years Hilferding was developing 110

this into a whole theory of 'organised capitalism', supposedly on its way to banishing major economic crises and the inevitable drive towards war forever.33 The use of the term 'finance capital' can still lead to such confusions today. Those who preach very limited reforms of the present system, like Will Hutton, blame the problems of British capitalism on the political dominance of City of London financiers, while a section of the anti-globalisation movement see a 'Tobin tax' directed against the cross-border financial flows as the way to deal with economic crises and world poverty.

Lenin was scathing about the trend in Hilferding's politics, describing him as an 'ex-Marxist'.34 But he took over the term finance capital and puts it at the centre of his own theory. In doing so he left his own work open to ambiguous interpretations. His intention was to insist that the tendency towards monopoly meant that the core capitals in each country were driven to imperialist policies of dividing and redividing the world. For this reason, he criticised one of Hilferding's definitions of 'finance capital' as 'capital controlled by banks and employed by industrialists' as 'incomplete': It is silent on one extremely important fact: the increase of concentration of production and of capital to such an extent that concentration leads, and has led, to monopoly... The concentration of production; the monopolies arising therefrom; the merging or coalescence of the banks with industry--such is the history of the rise of finance capital and such is the content of this term.35 But the phraseology of certain other parts of the pamphlet has allowed people to interpret him as saying, rather as Hobson and Kautsky did, that financial interests and the banks were mainly responsible for imperialism. This was especially so when, basing himself on Hobson, he insisted on the 'parasitic' character of finance capital, writing of 'the extraordinary growth of a class, or rather of a social stratum of rentiers, ie people who live by "clipping coupons", who take no part in any enterprise whatever, whose profession is idleness. The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production, and sets the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies'.36 This stress on the 'parasitism' of finance capital allowed some people who supposedly based themselves on his work to claim in the decades after his death that it was possible to form anti-imperialist alliances with sections of industrial capital against finance capital--that is, to fall back precisely into the Kautsky policy that Lenin attacked so bitterly.

It also seemed to make the whole theory of imperialism rest upon the key role of the banks in exporting financial capital. But this did not fit with the picture even when Lenin was writing, let alone in the decades afterwards. The export of finance--and of the rentiers--was a central feature of British capitalism in the two decades before Hobson wrote. But Britain no longer 'showed the future' to other capitalist countries, as it had in Marx's day. Its new competitors, like Germany and the US, had leapt over Britain when it came to the concentration and monopolisation of industry. In the German case it was the industrial combines, especially those in heavy industry, that sought to expand beyond national frontiers by the establishment of colonies and spheres of influence. Moreover, the characteristic feature of the US and Russian economies in this period was not the export of capital but the inflow of funds from other capitalist countries (although here there was some re-export of capital). On a strict reading of Lenin's Imperialism these would seem not to be imperialist states at all at the time of the First World War, even though both had joined in the partitioning of the rest of the world in the previous quarter of a century.

This focus on financiers is even more problematic when we come to the quarter of a century after Lenin wrote. Britain began to go down the German road with the formation of its own great industrial near-monopolies (ICI, Unilever, etc ), while it was heavy industry that played the key part in pushing the redivision of Europe in Germany's interests in the 1930s. And, as Tony Cliff pointed out, Japanese imperialism followed a policy of industrialising parts of its Taiwanese, Korean and Manchurian colonies as an extension of its own economy.37 Overall Cliff noted, 'While in the years 1860 to 1914 the quantity of capital invested abroad by the advanced capitalist countries grew almost uninterruptedly, from 1914, by when imperialism had reached maturity, the quantity of capital invested abroad never rose above the level of l914 and even declined below it'.38 111

What is more, far from the imperialist powers becoming deindustrialised parasites living to an ever increasing extent off incomes obtained from production elsewhere in the world, they experienced the expansion of new industries in the years between the wars, which increased the gap between them and most of the rest of the world. Yet they also remained intent on imperialist expansion, with Britain and France grabbing most of the Middle East and the former German colonies, Japan expanding into China, and Germany then beginning to carve out a new empire in Europe.

Lenin, by leaning excessively on Hobson's interpretation of Britain before 1900, damages his own argument.

Bukharin and the drive to war Bukharin's account of imperialism holds up much better, despite being much less widely known. He uses the category of 'finance capital' repeatedly in Imperialism and World Economy. But he explicitly warns against seeing it as something distinct from industrial capital.

'Finance capital...must not be confused with money capital, for finance capital is characterised by being simultaneously banking and industrial capital'.39 It is inseparable, for Bukharin, from the trend towards domination of the whole national economy by 'state capitalist trusts': The individual production branches are in various ways knit together into one collective body, organised on a large scale. Finance capital seizes the entire country in an iron grip.

'National economy' turns into one gigantic combined trust whose partners are the financial groups and the state. Such formations we call state capitalist trusts.40 The export of capital to satisfy the desire of rentiers is only one subordinate feature of a system in which giant industrial firms increasingly linked to the state struggle with each other in international competition. This competition takes place on three different fronts--for commodity exports, for raw material and for capital exports: 'Those three roots of the policy of finance capitalism, however, represent in substance only three facets of the same phenomenon, namely of the conflict between the growth of productive forces on the one hand, and the "national" limits of the production organisation on the other'.41 In his later Economics of the Transformation Period, Bukharin suggests that 'finance capitalism' tends towards a new imperialist stage of capitalism, state capitalism: The state organisation of the bourgeoisie concentrated within itself the entire power of this class. Consequently, all remaining organisations...must be subordinated to the state. All are 'militarised'... Thus there arises a new model of state power, the classical model of the imperialist state, which relies on state capitalist relations of production. Here 'economics' is organisationally fused with 'politics'; the economic power of the bourgeoisie unites itself directly with the political power; the state ceases to be a simple protector of the process of exploitation and becomes a direct, capitalist collective exploiter...

State capitalist relations of production are, logically and historically, a continuation of finance capitalist relations and constitute the completion of the latter. It is therefore not surprising that the starting point of their development constituted those organisational forms that were given by finance capital, ie syndicates, trusts and banks.42 Once this stage is reached 'there is a struggle of economies against each other, a war of capitalist competition. The form of this competition can be widely different. The imperialist policy...is one form of this competition.'

War now becomes central to the system, arising from the competition between the 'state capitalist trusts', but also feeding back into and determining their internal organisation: With the formation of state capitalist trusts, competition is being almost entirely shifted to foreign countries; obviously, the organs of the struggle that is to be waged abroad, primarily state power, must therefore grow tremendously... Whenever a question arises about changing commercial treaties, the state power of the contracting groups of capitalists appears on the scene, and the mutual relations of those states--reduced in the final analysis to the relations between their military forces--determine the treaty. When a loan is to be granted to one or the other country, the government, basing itself on military power, secures the highest possible rate of interest for its nationals, guarantees obligatory orders, stipulates 112

concessions, struggles against foreign competitors. When the struggle begins for the exploitation by finance capital of a territory that has not been formally occupied by anybody, again the military power of the state decides who will possess that territory. In 'peaceful' times the military state apparatus is hidden behind the scenes where it never stops functioning; in war times it appears on the scene most directly...

If state power is generally growing in significance, the growth of its military organisation, the army and the navy, is particularly striking. The struggle between state capitalist trusts is decided in the first place by the relation between their military forces, for the military power of the country is the last resort of the struggling 'national' groups of capitalists. The immensely growing state budget devotes an ever larger share to 'defence purposes', as militarisation is euphemistically termed...

Every improvement in military technique entails a reorganisation and reconstruction of the military mechanism; every innovation, every expansion of the military power of one state, stimulates all the others. What we observe here is like the phenomenon we come across in the sphere of tariff policies where a raise of rates in one state is immediately reflected in all others, causing a general raise...

Capitalist society is unthinkable without armaments, as it is unthinkable without wars. And just as it is true that not low prices cause competition but, on the contrary, competition causes low prices, it is equally true that not the existence of arms is the prime cause and the moving force in wars (although wars are obviously impossible without arms) but, on the contrary, the inevitableness of economic conflicts conditions the existence of arms. This is why in our times, when economic conflicts have reached an unusual degree of intensity, we are witnessing a mad orgy of armaments.43 Speaking in 1922, he argued: The main groups of the bourgeoisie are now of the nature of trustified groups within the framework of the state... It is quite conceivable that such a form of enterprise should resort chiefly to violent forms of competition... Thus arise the new forms of competition which lead to military attack by the state.44 Bukharin here foreshadows the version of imperialism that characterised the late 1930s and the 1940s. But in one respect he was weaker than Lenin--in terms of drawing the political consequence of his theory when it came to the countries oppressed by imperialism.

Lenin, imperialism and the colonial countries Imperialism: The Highest Stage of Capitalism had had an enormous impact on the colonial liberation movements--and on those showing solidarity with them in the imperialist countries. This was partly because it was a clear call for workers within imperialist countries to oppose the policies of their own rulers. It was also because it was read in association with other writings by him on the right of peoples to self determination.

In these Lenin had dealt with the political implications of imperialism. He saw that the revolt of the oppressed nationalities within the great empires that dominated the world could tear them apart.

These revolts could arouse much wider layers of the population to action and weaken the Western capitalist states running the great empires--and this was true even if the revolts were led by remnants of the old pre-capitalist exploiting classes or by the newly emerging bourgeois groups. What mattered was that these local exploiting classes were politically dominated by the states of the great empires, and in fighting back weakened those states. Revolutionary socialists had to encourage and aid such fightbacks by unconditionally supporting the right of political self determination in the face of imperialist oppression.

Lenin was criticised in the years before 1917 by other revolutionaries, such as Rosa Luxemburg, Pyatakov and Bukharin. They said that political independence under the leadership of such exploiting groups would be meaningless, since they would still be economically dependent upon the more powerful imperialist ruling classes within a world capitalist system.

This was neither here nor there for Lenin. The struggle for national self determination was a political struggle, directed against concrete oppressive political institutions, the world's most powerful states.

113

He spelt this out strongly after the Dublin rising against British rule in 1916: To imagine that social revolution is conceivable without revolts by small nations in the colonies and in Europe, without revolutionary outbursts by a section of the petty bourgeoisie with all its prejudices, without a movement of the politically non-conscious proletarian and semi-proletarian masses, against oppression by the landowners, the church, and the monarchy, against national oppression, etc-to imagine all this is to repudiate social revolution. So one army lines up in one place and says, 'We are for socialism,' and another somewhere else and says, 'We are for imperialism,' and that will be a social revolution! Only those who hold such a ridiculously pedantic view could vilify the Irish rebellion by calling it a 'putsch'. Whoever expects a 'pure' social revolution will never live to see it. Such a person pays lip-service to revolution without understanding what revolution is.45 He was insistent on the difference between political independence and economic independence. One was achievable through political struggle, and the other was a utopian demand once capitalism had established a world market, so making production in any one state, even the most powerful, dependent on production elsewhere.

But the potential forces for political struggle were enormous. Lenin prophesied rebellions for the rights of oppressed nationalities within all of the great empires--and his prophecy proved correct in the years after 1916 when such rebellions took off in Ireland, India, Egypt and Indonesia, and against the European and Japanese 'concessions' in China. And his insistence that the workers' parties on the left had unconditionally to support such rebellions attracted towards the newly formed Communist International a number of important activists from the colonial movements.46 By the mid-1920s Communist advisers were playing a key role in nationalist armies fighting for control of southern China, and over the next three decades Communists provided with a bowdlerised version of Lenin's theory by Stalin were able to influence some important national liberation movements in the colonial world (although, they could lose such influence when, as in during the Quit India movement of 1942, Stalin's influence led them to oppose national liberation struggles).

But there was one big problem with Lenin's theory when it came to the colonial world. Imperialism: The Highest Stage of Capitalism held that the export of capital to the colonies would lead to their industrial development: The export of capital influences and greatly accelerates the development of capitalism in those countries to which it is exported. While, therefore, the export of capital may tend to a certain extent to arrest development in the capital-exporting countries, it can only do so by expanding and deepening the further development of capitalism throughout the world.47 One of Lenin's earliest works, The Development of Capitalism in Russia, had been directed against those who denied the possibility of capitalist development. He continued to stand by this position when he wrote Imperialism. It was this belief that industrial development was increasingly in the colonies that led him to describe the colonising countries as 'parasitic'.48 However, the attraction of Communism to many in the national liberation movements had been because of the perception that capitalism was not producing appreciable industrial advance. In many Third World countries there was a very large urban middle class which suffered from impoverishment, precarious job opportunities and unemployment, as well as political marginalisation by the colonial set-up. The lack of willingness of movements dependent on the local bourgeoisie to wage a consistent and determined struggle against colonialism could attract some of the urban middle class to Communism--provided Communism addressed their concerns about economic development as well as political independence. A debate over this issue arose in the Communist International in 1927-1928, just before complete Stalinisation destroyed any possibility of rational debate within it.

Jane Degras has written: The chief point in dispute was whether the colonies were being 'decolonised', ie whether the metropolitan countries were promoting or retarding the industrialisation of their colonies; India served as the focus of this discussion... Members of the British delegation believed Britain was industrialising India to take advantage of cheap labour there. Bukharin in his 114

introductory speech came out against the decolonisation theory; the Indians themselves were divided; Roy...had written that decolonisation was proceeding and contained the seeds of the dissolution of the British Empire. He is said to have advanced the decolonisation theory at the end of 1927. The bourgeoisie were not only withdrawing from the national revolution, but were moving towards an agreement with the imperialists to contain it. S Tagore (appearing under the name Narayan) claims that...in April 1927 he and Bukharin agreed that some sort of decolonisation was proceeding in India.49 Kuusinen, Stalin's man in the Comintern at the time, then intervened to insist, 'If it were true that British imperialism had really turned to the industrialisation of India, we should have to revise our entire conception of the nature of imperialist colonial policy'50--without, of course, recognising that any 'revision' would have meant agreeing with Lenin's writings! He then went on to claim, 'Investment was not industrialisation... Britain was determined to destroy the industry of India and thrust the proletariat back into the villages; it has found its agent in Gandhi.'

Two British delegates, Arnot and Rothstein, argued back, 'Imperialism by its own contradictions fostered industrial development in the colonies that was going to compete with it, thus transferring domestic contradictions onto the world scene'.51 But the theses of the Congress were adamant: 'There is an objective impossibility of a non-capitalist path of development for the backward countries...

The specific colonial forms of capitalist exploitation...hinder the development of the productive forces of the colonies'.52 This argument became cast in stone during the following decades of Stalinism, when it was used to argue that the only way colonial and ex-colonial countries could develop economically was to follow the pattern established in the USSR. There was a convergence between this current of ideas rooted in the Stalinist tradition with another current that had arisen, more or less independently, in Latin America. Direct colonial rule had ended in most of the region in the 1820s. But in the first decades of the 20th century the conditions of life of people in large areas of it were hardly different to those for the colonised peoples of Africa and Asia. There were impoverished peasantries, urban bourgeoisies unable fully to wrest power from landed oligarchies, and a large, educated petty bourgeoisie which resented its inability to achieve lifestyles like those that existed in North America and Western Europe.

Movements began to arise in the inter-war years that saw the main obstacle to economic advance as lying in the stultifying influence of British and American imperialism. Haya de la Torre, son of an unsuccessful businessman, formed the Alianza Revolucionaria Peruana (APRA) in 1924 around a programme of nationalism and anti-imperialism which gathered wide support from both the middle class and workers in Peru, and encouraged middle class activists in other countries to follow suit: 'For at least 20 years, from 1930 to 1950, Haya de la Torre was the anti-imperialist guide of a whole generation of enlightened bourgeois and even of the proletariat'.53 The crisis of the early 1930s hit the Latin American economies--and their ruling classes--very hard.

From 1900 to 1930 they had, if anything, gained slightly from trends in world trade.54 Now they saw the price of their exports collapse. As economic crisis turned to political crisis, sections emerged within the ruling class who formed blocs with sections of the middle class, and in some cases certain leaders of the labour movement, to push for an economic policy designed to shift resources from the production of raw materials and food to industrialisation.

As Roxborough writes: The theorists...argued there was an immediate and direct link between changes in the industrialised countries at the centre and the underdeveloped countries at the periphery.

From the late 19th century until the middle of the 20th...Latin America had taken on the role of supplier of raw materials and foodstuffs to the industrialised nations and had, in return, imported manufactured products... They argued--and on this there is some controversy-that...the terms of trade had been moving against Latin American nations since about 1870.

This meant that every quantum of Latin American exports brought in return a smaller and smaller quantum of imports of manufactured goods... The only realistic policy for Latin American countries to adopt was a deliberate policy of fostering...import substitution industrialisation... This meant an attack on the old landed exporting oligarchies by a process 115

of land reform and export diversification, and a redistribution of income to increase consumer demand for relatively low priced manufactured goods...

In political terms, the strategy was seen as an alliance of nearly all social classes against the landed oligarchy... In many ways this analysis was similar to the argument put forward by the Communist Party, which...argued that revolutionaries should support the 'progressive national bourgeoisie' in its struggle to remove the last vestiges of feudalism and imperialist domination, and modernise the economy.55 Governments like that of Vargas in Brazil and then that of Peron in Argentina moved strongly in the direction suggested by such arguments, but so did others, so that for a time the policy was virtually the orthodoxy. Such governments were not in any serious sense hostile to US or Western European capitalism. But their policies did face varying degrees of opposition from powerful landowning classes who had commercial and financial links with Britain or the US, and it was possible for the 'populist' politicians to give a nationalist and supposedly anti-imperialist tinge to their policies. Coopting the APRA-type nationalism of the middle classes, they interpreted history before and after independence from Spain as being one of imperialist domination. This enabled them to get their way in pushing recalcitrant sections of capital into line, denouncing them as 'anti-national', while enjoying the support of other sections who stood to gain massively from industrialisation policies. It also enabled them to fragment the working class movement between those who, putting class interests first, denounced their domestic policies (and the governments as 'fascist', or at least 'semi-fascist'), and those who justified being co-opted by those governments on the grounds that they were 'fighting imperialism'.56 The Second World War: the confirmation of the theory The Second World War was the great and barbaric confirmation of the classic theory of imperialism.

Lenin and Bukharin had insisted, in opposition to people like Kautsky, that the great capitalist powers would be forced to move from peace to war as they strove to partition and repartition the world. And this is what happened in the mid to late 1930s in response to unprecedented economic crisis. Each national capitalism turned to a greater or lesser degree to an integration between national capital and the national state--and the other side of this 'state monopoly capitalism' was the use of 'protectionist' measures to restrict direct market competition from foreign capitalists. World trade, which had risen fourfold between 1891 and 1925, by 1932 had fallen back to the level of 1905. The imperialism of countries seeking to penetrate distant parts of the world through capital exports turned into the imperialism of countries trying to form tight trading blocs in opposition to each other. But capitalist states could not simply undo their dependence upon components and materials from outside their own borders. This put a greater premium than before on the national state being able to exert direct political influence to control resources beyond its own borders--to imperialism of one sort or another.

The result was a recurrence, on a more intense basis, of the tension that had culminated in the First World War. The established colonial powers, especially Britain and France, were able to rely upon their existing empires--enlarged by the seizure of German colonies and much of the Middle East in the aftermath of the First World War--to create political-economic blocs, dominated by their own currencies (known respectively as the sterling area and gold bloc). The US was able to increase its influence, particularly in Latin America, after buying up many British investments there during the First World War. The world's second industrial power, Germany, was restricted to an even narrower national territory than in 1914. It had lost its colonies, and France had made a series of alliances in Eastern Europe (the 'Little Entente') directed at reducing German influence there, and even over German-speaking Austria. In the Far East expanding Japanese capitalism similarly felt penned in by the colonial rule exercised by the French over Vietnam, the British over Malaya, the Dutch over the East Indies (present day Indonesia) and the US over the Philippines--as well as by the continuing British and French 'concessions' in China.

The rulers of Germany and Japan went for political options that, as well as repression of the working class movement at home, subordinated individual capitalists to programmes of national capitalist accumulation imposed by the state. The Nazi government used dictatorial political powers to impose 116

regimentation on the economy. The major capitalist groups remained intact. But from now on they were subordinated to the needs of an arms drive which they themselves supported. Armaments and the expansion of heavy industry drove the whole economy forward, providing markets and outlets for investment. However, there was one major problem with any such policy. Germany was not a self contained economic unit. The only way to overcome instability in raw material sources was to expand the boundaries of the German Reich so as to incorporate neighbouring economies, and to subordinate their industries to the German military drive. The logic of state-directed monopoly capitalism led to a form of imperialism Lenin had referred to in 1916 and which was central to Bukharin's theory--the seizure of 'highly industrialised regions'.57 Beyond a certain point such expansion led to inevitable clashes with other great powers who feared threats to their own spheres of influence and empires. As they reacted by resorting to armed force, the German regime in turn had to direct even more of the economy towards arms--and reach out to grab new territory--in order 'defend' the lands it had already grabbed.

As I have written elsewhere: Once the path of military expansion had been decided upon, it fed upon itself. To challenge the existing empires required the maximum military-industrial potential. Every successful imperialist adventure increased this--for example, the Japanese takeover of Manchuria, the German annexation of Austria and then Czechoslovakia. But at the same time it increased the hostility of the existing empires--leading to the need for a greater arms potential and further military adventures. The breaking points were the German seizure of western Poland and the Japanese onslaught on Pearl Harbour.58 The rulers of the existing French and British empire were driven to resist. Many were reluctant to do so with the experience of the previous world war in mind. They feared that the cost of another would eat up their already diminished foreign investments, they were terrified of a repetition of the revolutionary upheavals that had threatened 20 years before, and they saw the rapidly industrialising USSR as nearly as dangerous as their old German rival. They hoped that somehow a German imperialism controlling the core of north western and central Europe would be able to coexist with their own domination of vast tracts of Africa and Asia. But in the end they were forced to fight. For Britain and France what was involved was no longer a struggle to grab new sources of surplus value, but to hang on to what they already had. They had to fight together against German imperialism if their own imperialisms were not to suffer. Their alliance was joined in the summer of 1941 by Russia, once the logic of German expansion led it to move on from victory over Poland, Belgium and France to push into the Ukraine and south east towards the oil of Baku. A few months later the US was also forced into the war as the logic of Japanese imperialism led it to try to grab the poorly defended Far Eastern possessions of all the Western capitalisms.

The alliance against Germany and Japan overshadowed the clashes between the other imperialisms.

In the 1920s there had been predictions of a major clash between the US and Britain both by some within the British Foreign Office and by Leon Trotsky. The predictions were not fulfilled. There were sharp clashes of interest between the British and US governments in the course of the Second World War. They jostled for influence over Saudi Arabia with its oilfields, and there was bitter resentment by British ministers like Eden over the way the US effectively made British capitalism liquidate overseas investments in order to pay its bills for US weapons and food.59 But greater hostility to the demands of German and Japanese imperialism led to British imperialism accepting, grudgingly, a subordination to US interests.

Part 2: Imperialism in the Cold War years The clash of imperialisms in the 1930s had taken the form of the conflict between Britain and France with their diffuse global empires and Germany as it built a continental empire in Europe. With the defeat of Germany, a new conflict in some ways similar grew up between the two great victors of the war.

The US had aspirations for its industries, the most advanced and productive in the world, to penetrate the whole world economy through 'free trade'. The Western European powers, exhausted by the war, were in no position to challenge it directly (although British politicians often expressed a private 117

desire to be so). But the other victor, the USSR, was in such a position. Its ruling bureaucracy had embarked with a degree of success on the forced industrialisation of their country in the late 1920s by subordinating everything to accumulation of means of production, building a state capitalism of their own at the expense of the gains made by workers and peasants in the revolution of 1917. This gave them the means, through large and powerful land forces, to dominate virtually the whole of northern Eurasia, from the borders of Western Europe right through to the Pacific. But with levels of industrial productivity less than half those of the US, they were in no position to sustain themselves in economic competition through free trade.

In 1947 and 1948 they decided to contest the US attempt at global hegemony by blocking its access to the economies under their control--not just the territory of the old Russian Empire, but also the countries of Eastern Europe which they subordinated to their military-industrial goals. The US, for its part, rushed to cement its hegemony over Western Europe through finance to pro-American Christian Democrat and Social Democrat political parties, a Marshall Plan for reviving European industry within parameters favourable to US interests, the creation of the NATO military alliance and setting up US bases in Europe.

The developing conflict cannot be explained by economics as often understood, in terms simply of profit and loss accounting. The armaments bills of both great powers soon exceeded anything their rulers could hope to gain from the increased exploitation of the lesser powers under their control. At no stage in the 1940s or 1950s did total US overseas investment (let alone the much smaller return on that investment) exceed US spending on arms. Even in the period of 'disarmament' prior to the outbreak of the Korean War 'military expenditure totalled something like $15 billion a year. Thus it was not only 25 times as high as the sum of private capital exports, but it was also many times greater than the sum of foreign aid. Marshall aid did not total more than $5 billion in any one year'.60 Thirty years later US overseas investment had grown many times over. The total was now about $500 billion ($200 billion of direct investment plus bank loans worth perhaps $300 billion). On top of this there were something like $300 billion of foreign assets controlled by US multinationals.61 Total expenditure on 'defence' had also risen to around $200 billion--less now than total overseas investment, but still substantially more than the profits that could possibly accrue from that investment.

The picture for the USSR will have been somewhat similar. In the years 1945-1950 it pillaged Eastern Europe, removing plant and equipment wholesale from East Germany and Romania, and forced the region as a whole to accept prices below world market levels for goods going to the USSR proper.62 But even in that period the economic gains from this must have been substantially less than the escalation of the USSR's arms budget once the Cold War had well and truly begun. And from 1955 onwards, fear of rebellion in Eastern Europe led the Soviet government to relax the direct economic pressure on its states. Their pattern of economic development was still to some extent determined by the strategic demands of the USSR, but direct exploitation seems to have virtually disappeared.

The imperialism which necessitated arms spending was not the imperialism of a single empire in which a few 'finance capitalists' at the centre make huge super-profits by holding billions of people down. This, after all, was a period in which international trade was much less important than it had been before 1914--an index of trade in manufactures as a proportion of world output fell from 1.2 in 1914 to 1.0 in 1930, and then slumped to 0.7 in 1940 and 0.6 in 1950.63 Rather it was the imperialism of rival empires, in which--as Bukharin had described it in 1916--the combined capitalists of each ruling class had to divert funds from productive investments to military expenditure in order to ensure that they hung on to what they already possessed.

The calculation in both Washington and Moscow was simple. To relax the level of military spending was to risk losing strategic superiority to the rival imperialism, enabling it to seize territory. So the Russians lived in fear of an attempted US 'roll back' of Eastern Europe, which would have broken these economies from the USSR's grasp, leading in turn to the possibility of an unravelling of the ties which bound the other constituent parts of the USSR to its Russian centre (something that did in fact happen eventually with the great economic and political crisis that shook the whole Eastern Bloc in 118

the years 1989 to 1991). In a somewhat similar way, the US ruling class feared the USSR pulling other Western states--in particular West Germany or Japan--into its sphere of influence, enabling it to vastly increase its military-economic potential for challenging US interests everywhere.

As one US spokesman put it at the time of the Korean War: Were either of the two critical areas on the borders of the Communist world to be overrun-Western Europe or Asia--the rest of the free world would be immensely weakened...in economic and military strength to resist further aggression... If Western Europe fell, the Soviet Union would gain control over 300 million people, including the largest pool of skilled manpower in the world. Its steel production would be increased by 55 million tons a year to 94 million, a total almost equal to our own... Its coal production would leap to 950 million tons compared to our 550 million. Electric energy in the area of Soviet domination would be increased from 130 to 350 billion kW hours, or almost up to our 400 billion.64 So the pattern was laid for the next 30 years, of each of the two great powers reaching out to draw as much of the world into its sphere of influence so as to gain a strategic advantage over the other. They fought a bloody war over control of the Korean peninsula, not because of the little wealth it possessed, but because of the strategic implications for the whole of the East Asian and Pacific region. They gave aid and arms to regimes which fell out with their rival--the US to 'Communist' Yugoslavia so as to gain a foothold in the Balkans close to Russia's borders; the USSR to Cuba so as to get a toehold in the Caribbean close to US borders; the USSR armed Somalia to fight an Ethiopia armed by the US, and then, in a quick turn around, the USSR armed Ethiopia and the US Somalia; Egypt was pulled into the Soviet sphere of influence briefly, and China left it to make an ad hoc arrangement with the US. Even this might not have been enough to explain the sheer level of military expenditure at the height of the Cold War--equivalent to nearly 20 percent of US national output and probably twice that proportion of the substantially lower USSR national output.65 But arms expenditure had one other great advantage for US capitalism. A massive upsurge in spending by the state on armaments during the Second World War to over 40 percent of national output had had the unintended consequences of providing a market for private capital, pulling it out of the developing recession of 1937 to 1939 and permitting a doubling of total output without lowering the rate of profit.66 During the Cold War there were similar gains with a lower level of arms spending (see figure 3). Profit rates remained more or less constant through the 1950s, sustaining investment and preventing the economy experiencing the sort of devastating slumps it had known 20 years before. One of the great absurdities of capitalism-that the destruction of value can alleviate the tendency to periodic crises67--encouraged the great arms race between the two rival imperialisms of the Cold War years.

The Cold War clash of imperialisms came to an end with the collapse of the Soviet Bloc in the late 1980s. But during its course enormous changes had taken place within the structure of world capitalism as a whole.

The end of the European empires The Second World War fits neatly with the theory of imperialism as expounded in 1916, especially

by Bukharin, but not with the emphasis taken over by Lenin from Hobson on financial capital and investments overseas. So do the 40 or so years of the Cold War, although in a way not recognised by many on the left at the time (and some still today).

Britain, France, Holland and Belgium reacted to the defeat of Germany and Japan by re-establishing their hold over their old colonial possessions in the Far East, North Africa and the Middle East--even if France often relied upon British or US troops to retake colonies for it. There were also attempts to maintain independent imperialist policies, with Britain developing its own nuclear weapons since key sections of its political establishment did not trust the US to defend its interests at all times.

Britain maintained its own military presence 'east of Suez', at considerable cost to itself, until the late 1960s. Britain and France together embarked on one last military adventure in defiance of the US with the Suez war of 1956.

But the trend in the post-war decades was away from the colonial policies and conflicts between Western capitalist powers, as theorised by Lenin and Bukharin, which had characterised the previous 119

70 years. Britain finally abandoned attempts to hang on to the jewel in the colonial crown, the Indian subcontinent, in 1947 after a major mutiny by its Indian sailors, and began in the same year a long retreat from the eastern Mediterranean. Malaysia and the African colonies were to follow in the next two decades. Dutch imperialism tried to hang on to the East Indies, but had conceded defeat by 1950.

French resistance to abandonment of empire was stronger--an unsuccessful nine-year war to hold on to Indochina was followed by an equally unsuccessful nine-year attempt to keep Algeria, but by the 1960s it too gave up all of its formal empire apart from a couple of islands in the Caribbean and Pacific.

The US replaced Western European influence in some regions. It took control of South Vietnam when the French withdrew in 1954--until it too was forced to withdraw after the most bitter of wars in the mid-1970s. It became the dominant influence in most of the Middle East and parts of Africa.

But, like the European powers, it retreated from formal colonisation, granting independence to the Philippines and keeping direct control only over Puerto Rico.

This retreat from direct colonisation had as a direct corollary the end of the old clashes between the Western powers over the partitioning of the rest of the world. The drive to war between them seemed to have gone once and for all. It was also accompanied by something else unexpected by the Lenin and Bukharin theories of imperialism--once divested of their colonies, each of the Western economies participated in a boom that eventually lasted more than a quarter of a century, saw minimal unemployment, and maintained profit levels without apparent trouble despite regular rises in living standards for their workers. And the advanced countries without any colonies--West Germany, Japan and Italy--had the economies which expanded fastest of all. It almost looked as if Hobson had been right in his claims that colonies were a drain on the economy which would otherwise be able to provide massive reforms at home.

In fact, the driving force behind the boom was precisely the Cold War imperialist rivalry between the US and the USSR, with its massive arms expenditure. Far from there being a 'surplus' of capital in the advanced countries, there was a shortage, and the exports of capital stayed down at the very low levels they had sunk to in the great slump of the 1930s.

As Mike Kidron pointed out in 1962: Even in Britain...the significance of capital exports has declined tremendously: latterly they have run at about 2 percent of gross national product compared with 8 percent in the period before World War One; they now absorb less than 10 percent of savings compared with some 50 percent before; and returns on foreign investment have been running at slightly over 2 percent of national income compared with 4 percent in the 1880s, 7 percent in 1907 and 10 percent in 1914. Between 1895 and 1913, 61 percent of all new capital issues were on overseas account; by 1938 they were down to 30 percent and more recently accounted for no more than 20 percent of the total.68 And foreign investment was decreasingly directed towards the less industrialised parts of the world: 'The concentration of activity is increasingly within the developed world, leaving all but a few developing countries outside the reach of the new dynamism'.69 The figures for the Latin America show the decline in the importance of foreign investment in the post-war period: PERCENTAGE SHARE OF FOREIGN DIRECT INVESTMENT IN DOMESTIC CAPITAL STOCK Argentina Mexico

1913: 34 1940: 16 1950: 3 1910: 49 1940: 32 1950: 26 1970: 9

The last figures can be compared with those of Canada, where the figure was 8 percent in 1950 and 12 percent in 1970.70 A shift in the demand for Third World products took place at the same time as the changing in the pattern of investment. At the beginning of the First World War raw materials from agricultural countries were indispensable for industrial production in the West, and colonial control was an important way for industrialised countries to ensure their own supplies and block access to their 120

rivals. But the interruptions to trade during the two world wars forced them to try to find substitutes for such raw materials. So the first half of the 20th century saw the invention of artificial fertilisers, synthetic rubber, rayon, nylon and a vast range of plastics. And during and after the Second World War there was a massive transformation of agriculture in both Europe and North America, with the use of industrial outputs and subsidies to raise food output, so reducing reliance on imports from the rest of the world. In a world now awash with raw material and foodstuffs, withdrawal from colonies in Africa and Asia was no longer the threat it would once have been to the industrialists of the European countries, and companies which had made their fortunes from such things now began to diversify their investments into new lines of business. By the early 1960s the bigger firms in Britain were consciously shifting their focus from the lands of the old empire to the new markets in Europe and North America.

There was, however, one great exception to this picture--oil. Here was the raw material of raw materials, the ingredient for manufacturing the plastics, the synthetic rubber and the artificial fibres, as well as providing for massively expanding energy needs and propelling the ever greater proliferation of motor vehicles, tanks and aircraft. And the supplies of it were increasingly to be found outside Europe and North America. In the early 1950s 'gulf oil' referred to reserves to be found around the Gulf of Mexico, especially in Texas. It was cost of pumping out that oil that determined world prices. By the mid-1970s, as was shown by the temporary interruption of supplies during the Arab-Israeli war of 1973, the gulf that mattered was the Persian Gulf. Saudi Arabia, Iraq, Iran, Kuwait, the petty sheikhdoms around the Arabian peninsula, were the countries that mattered.

Control over their policies became increasingly important for the advanced capitalist states. Bribes, threats, weapons sales, the deployment of military 'advisers' and seconded troops were used to achieve this--and so was support for the world's last classic colony, the Israeli settler state with its expulsion of most of the indigenous population and denial of rights to the rest. It was in this region that the wars that mattered for the world system increasingly took place--in 1947-1948, in 1956, in 1967, in 1973, in 1980-1989, in 1982, in 1991, in 2003.

The Third World after colonialism--coming to terms with harsh realities The dismantling of the European colonial empires was a political fact of immense importance for something like half the world's people who had lived under the thumb of such empires. It raised very important questions for those who had, in one way or another, fought against the hold of those empires. What happened to imperialism--and the fight against it--if empires no longer existed?

The reaction of many social democrats and liberals in the West was to say that imperialism no longer existed. This was, for instance, the conclusion drawn by the most widely known populariser of Marxism in Britain in the 1930s, John Strachey. In his End of Empire (1959) he argued that a combination of trade union pressure and government intervention had raised living standards, so that businesses no longer needed colonies to absorb the surplus and prevent overproduction. In effect, he was saying that Hobson's alternative to imperialism, a reflation of the domestic economy, had prevailed and solved the system's problems.

An important section of the left rejected such reasoning. They could see that the former colonial countries were still plagued by poverty and hunger--and that the Western firms that had benefited from empire remained entrenched in them. What is more, the end of the European empires was not the end to the violence inflicted on the peoples of what was now called the 'Third World' or the 'South'. In many places the US state was picking up the baton of violent oppression from the departing Europeans. The French had hardly left Algeria before US troops were inflicting terror on Vietnam, and the US withdrawal from Vietnam was hardly over before it was backing attempts by apartheid South Africa to send troops to tear apart Angola, recently liberated from Portuguese rule.

Rejecting facile talk about an end to imperialism usually meant insisting on the continued relevance of Lenin's 1916 analysis without recognising the changes that had occurred since it was written. Yet there was a real problem. The very strength of Lenin's approach rested on its insistence that the great Western powers were driven to divide and redivide the world between them, leading to war on the one hand and direct colonial rule on the other. This hardly fitted a situation in which the possibility of war between Western states seemed increasingly remote and colonies had gained independence.

121

Instead most of the left quietly redefined imperialism so as to refer simply to the exploitation of the Third World by Western capitalist classes, ignoring the drive towards war between imperialist powers so central to Lenin's theory, and in practice seeing the whole system as a version of the ultraimperialism forecast by Kautsky. At the same time they simply replaced talk of colonialism with talk of 'neo-colonies' or 'semi-colonies'.

Lenin had written of 'semi-colonies'. For him these were places like China at the time of the First World War, where colonial armies occupied enclaves of territory and used force to impose their will on the national government. They were countries where independence was a sham, concealing continued subordination to political control by forces in partial occupation of the country. There were some places where things did seem like this after the end of direct colonial control in the 1950s and 1960s. In many cases the departing colonial administrations were able to ensure that their place was taken by their own creatures. The new rulers were people who had collaborated with colonial rule in return for class privileges or a small share in its spoils, and there was enormous continuity in the personnel of the state, especially when it came to key positions in the armed forces. So, for instance, when France was finally forced to abandon Algeria, it also granted 'independence' to huge areas of West and Central Africa by handing power to people who continued, as in the past, to work with French companies, use the French currency--and invite French troops in periodically to maintain 'order'. It was hardly surprising that in such instances people spoke of 'neo-colonialism'.

But in some of the most important cases independence did mean independence. Governments proceeded not only to take seats in the United Nations and set up embassies all over the world. They also intervened in the economy, nationalising colonial companies, implementing land reforms, embarking on schemes of industrialisation inspired by the preaching of the Latin American dependency theorists or, often, by Stalin's Russia. Such things were undertaken with varying degrees of success or failure in India, Egypt, Syria, Iraq, Algeria, Indonesia, Ghana, Equatorial Guinea, Angola, Taiwan and South Korea, as well as by the more radical regimes of China, Cuba and Vietnam.

Over time even some of the 'docile' ex-colonial regimes began to follow the same path. This was true, for instance, of the Malaysian regime (run by politicians fostered by the British in order to crush the anti-colonial insurgency of the late 1940s and early 1950s), of the Shah's regime in Iran in the 1960s and early 1970s (brought to power in 1954 after a coup fostered by the CIA), and of the Taiwanese regime (established with US support after the victory of the People's Liberation Army on mainland China in the late 1940s). Even Mobutu, brought to power with the help of the CIA in Congo-Zaire in 1965, nationalised the mighty Union Miniere de Haut Katanga mining corporation along with 70 percent of export earnings three years later.

To call regimes like Nasser's Egypt or Nehru's India 'neo-colonial' or 'semi-colonial' was a travesty-as it was with the classic 'developmentalist' regimes of Vargas in Brazil, the PRI in Mexico, Peron and those who ousted him in the 1950s in Argentina, or for that matter the nationalist regime run by Fianna Fail in Ireland from the early 1930s onwards. In each case, attempts were made to establish not only independent political entities, but also independent centres of capital accumulation. These still operated within a world dominated by the much stronger capitalisms of the advanced countries, but they were by no means mere playthings of them.

The success of such attempts varied enormously from place to place. A handful of countries made it into what might be called the 'second division' of advanced capitalism. This was true of South Korea, Taiwan, Singapore and Hong Kong--and by the 1990s of coastal China as it experienced industrial growth rates much higher than anywhere else in the world. In each of these cases the imposition of dictatorial regimes and the use of harsh repression to hold down the living standards of the mass of the population resulted in 30 percent or more of output being used for accumulation and successful industrialisation. But similar methods in many other places had very different outcomes. In the major Latin American countries nearly half a century of successful if slow accumulation was followed, in the 1980s, by a 'lost decade' of stagnation, debt crises and increased impoverishment of wide sections of the population. Argentina, an industrialised country whose workers once had living standards as

122

high as those in France, began to stagnate from the early 1970s onwards. Sub-Saharan Africa underwent more than 30 years of falling output per head.

Even where 'development' did take place, it was usually accompanied by a combination of dictatorship and appalling conditions for the mass of people. This is why the feeling that nothing had changed with decolonisation was so widespread among sections of the middle class, workers and peasants. Inevitably there was growing disillusionment among the lower middle class and the workers--and sometimes sections of the peasantry--with the nationalist 'developmentalist' state. It became increasingly clear that it could not fulfil the promises it had made to improve the living standards of the mass of the population and improve the life chances of the middle class. This could easily translate into the feeling that it had betrayed the goal it had proclaimed of 'national liberation'.

Opposition movements took up its old slogans and directed them against it--even when, as in Argentina in the 1950s or India in the 1960s, the direct links between the state and foreign capital were still minimal. The nationalist ideology of the bourgeoisie and petty bourgeoisie seeking capitalist development became the left nationalist ideology of those who had suffered from the attempts at such development.

One expression of this was the popularity, particularly after the Cuban Revolution of 1959, of new, radical versions of dependency theory which fused the Stalinist and Latin American traditions and hegemonised much of the left worldwide in the 1960s. The writings of Paul Baran (especially The Political Economy of Growth) and AndrĂŠ Gunder Frank ('The Development of Underdevelopment') dominated most Marxist thinking on the subject (even though Gunder Frank did not see himself as Marxist).71 Baran wrote, 'Far from serving as an engine of economic expansion, of technological progress and social change, the capitalist order in these countries has represented a framework for economic stagnation, for archaic technology and for social backwardness',72 and, 'The establishment of a socialist planned economy is the essential, indeed indispensable, condition for the attainment of economic and social progress in underdeveloped countries'.73 Gunder Frank was just as adamant: Short of liberation from this capitalist structure or the dissolution of the world capitalist system as a whole, the capitalist satellite countries, regions, localities and sectors are condemned to underdevelopment... No country which has been tied to the metropolis as a satellite through incorporation in the world capitalist system has achieved the rank of an economically developed country except by finally abandoning the capitalist system.74 'Socialism' for Baran and 'breaking with capitalism' for Gunder Frank meant following the model of Stalinist Russia.75 The 'dependentist' argument, in either form, was a weak one. It rested on four unsustainable assumptions.

It assumed that capitalists from the advanced countries who invested in the Third World deliberately chose not to build up industry, even when it would have been profitable to do so, for fear of competing with industrial capital in their home states. So much of Gunder Frank's argument is of the circular form: industrial development did not take place because foreign merchant capital predominated, and this shows industrial development was stopped by foreign capital. This assumption, of course, was completely opposed to Lenin's belief, based on the experience of prerevolutionary Russia, that foreign capital could go into the building of industry. It also failed to account for the considerable industrial development that had taken place in Argentina and the British dominions before the First World War and in Mexico, Argentina and Brazil from the 1930s onwards.

Its second false assumption was that the Western states at all time have an interest in using their power to prevent any such industrialisation. In practice, they have done so at some points, but not at others. So Britain followed policies which prevented industrialisation of some parts of its empire, but at other points was quite happy to see industrialisation take place (for instance, with the growth of enormous shipbuilding and engineering industries in north east Ireland, or of jute mills in Bengal).

Thirdly, it assumed that the Western powers were able so to manipulate the Latin American governments as to prevent them following independent policies. Yet the reality was much more 123

complex. Any powerful state has a variety of instruments for bending a less powerful state to its will.

But it can rarely achieve more than part of what it wants. So, for instance, Britain did try to influence the outcome of the civil wars that plagued Argentina between the final achievement of independence in the 1820s and the early 1860s. But it was never fully successful, and was usually reduced to trying to make sure the outcome was the least worst from its point of view. The civil wars themselves, and the balance of forces determining their outcome, were a result of internal divisions within the Argentinian exploiting classes (rivalries between the great landowners of the interior and the merchants of Buenos Aires), with each looking for foreign allies to back its claims. This was a very different situation to that which prevailed in Europe's direct colonies or in its semi-colonial enclaves in China--although it had some similarities with Britain's self governing 'white dominions'.76 Finally, the theory insisted that because the ruling class of one country was 'dependent' upon its trade and investment patterns with bigger capitalist countries, it inevitably lost any ability to forge an independent path of capital accumulation and economic development. But this would rule out any such independence for most of the world's capitalist countries. For a good half century the European economies, for instance, have been to a high degree dependent on what happens in the US economy (hence the old saying, 'When the US gets a cold, Europe gets pneumonia'). The Dutch economy is to a very high degree dependent on what happens in Britain and Germany. But this has not turned the European ruling classes simply into puppets of the US, or the Dutch ruling class into a plaything of British and German interests.

Dependency theory appealed to people because it recognised the reality that much of the world was not automatically pulled out of poverty simply by embracing capitalism. But its remedy, cutting the poorer parts of the world off from the great concentrations of wealth (including that pillaged by imperialism in the past) in the advanced countries, was not an adequate one. These concentrations of wealth meant that the capitalists of the advanced countries could nearly always outcompete their new rivals--and outgun them if necessary. The USSR may have been able to industrialise (at enormous cost to its people) after 1928. Brazil and Argentina, and later Egypt and India, may have been able to build up some basic industries. But by the late 1960s there were limits as to how much further they could proceed using the model of self contained industrialising. Yet this was the model which dependency theory, whether in its old or its new form, propagandised.

Dependency theory reached its high point of popularity in the late 1960s and early 1970s as the last wave of anti-colonial struggles drove the US out of Vietnam, liberated Angola, Mozambique and Guinea-Bissau from the Portuguese, and ended white rule in Zimbabwe. Yet it was precisely at this time that it showed its inadequacy as, one after another, the old liberated states reached an economic impasse. If there were any doubts, the case of Cambodia proved it. To the praise of some dependency theorists, the Pol Pot regime that came to power in the mid-1970s cut off its economic links with the outside world and tried to follow a policy of completely 'independent' development--and the result was a death toll possibly even worse than that caused by US bombing in defence of the country's previous regime.

Mike Kidron had warned in 1971 that 'independent' development was no longer a viable option in Third World countries. He wrote of, 'the end of a terrible illusion, held as fervently by many seeming revolutionaries as by members of the more orthodox schools: that economic development in backward countries is possible without revolution in the developed'.77 He was not wholly right. The 'illusion' persisted for a good while longer, and a handful of states that had travelled along the path of 'independent development' at enormous cost to their workers and peasants were able to adopt a new strategy of accumulation based upon opening up their economies to foreign capital and trade. But most were damned whichever path they now took.

Part 3: Imperialism and 'globalisation' Imperialism had changed from Hobson's time to that of the Second World War. It had changed again in the post-war years. In the late 1960s and 1970s a third change took place.

For 20 years the Western powers were united behind US leadership in their opposition to a Soviet Bloc which was joined by China after the victory of the Communist forces there in 1949. There were occasional tensions between them. Britain and France, as we have seen, tried to wage war on Egypt 124

without US backing, and failed. Sections of the British and French establishment were, at first, fearful of a revived German capitalism, but eventually swallowed their doubts with German rearmament in 1954 and the establishment of a limited economic union between the most important Western European continental states, the Coal and Steel Community (later to become the European Common Market and eventually the European Union). Between 1953 and 1956 there was also fear that Stalin's successors would offer to unite their part of Germany, the German Democratic Republic, with West Germany, in return for the united Germany leaving the Western bloc. Lord Ismay, first secretary general of NATO, described its role for the European powers as being 'to keep the Russians out, the Americans in and the Germans down'.

But these tensions seemed marginal in the face of a series of Cold War conflicts--open war in Korea, eyeball to eyeball confrontations over two very small islands off the China coast, Quemoy and Matsu, the Berlin crisis of 1961 and, finally, the Cuban missile crisis of 1962, which was probably the closest the world came to nuclear war.

Things changed slowly after the Cuba crisis. China began to follow a course increasingly divergent to that of Russia and then in open opposition to it, with near war between the two in 1969 and the visit of US President Nixon to Beijing in 1971--at the height of his war against Russia's ally Vietnam. There were divergences, although never as wide or as open, in the Western camp as well.

The European powers did not see any gain for themselves in providing military backing for the US war in Vietnam or even diplomatic cover for its hostility to Cuba. And once he had managed to bring the Algerian war to an end, France's President De Gaulle was openly critical of the way the US used the predominance of the dollar in world trade to buy up overseas investments on the cheap. This led some people to speculate about a new round of inter-imperialist conflict, 'Europe versus America'.78 But the disagreements never seemed to get out of hand. The US did not put much pressure on its allies to do more over Vietnam or Cuba, and, despite De Gaulle, the other European powers tolerated the expansion of its dollar-based funds in Europe. Hostility to the rival imperialism in the East kept the Western imperialisms co-operating with each other when it came to major issues.

The more important shifts were those taking place beneath the surface.

The economic balance between the various Western states underwent a long term change, as Germany and Japan grew rapidly (see figure 2). In 1945 the US had accounted for something over 50 percent of world output; by the 1980s the figure was down to about 25 percent. In 1953 the US accounted for 59 percent of the advanced countries' combined GNP, and by 1977 only 48 percent; in the same period Japan's share rose from 3.6 percent to 13.2 percent, and of West Germany from 6.5 percent to 13.2 percent.79 In the early 1960s Japan's manufacturing exports were less than a third of the US's; by the late 1970s they were at the same level. And, after a small downturn with the world economic recession of 1974-75, they continued to grow more rapidly than the US's for another decade. The US--and to a lesser extent Britain--were paying the price of sustaining the whole world economy through arms spending. Essentially the US's arms industry kept its economy booming, and so provided a market for German and Japanese exports. Meanwhile, without massive arms bills themselves, Germany and Japan were able invest more in industry and begin to catch up with the US in terms of productivity and competitiveness.

Along with this went a second great shift within the system as a whole. From the late 1960s onwards there were growing financial flows across national boundaries. Foreign currency commitments of West European banks increased eightfold between 1968 and 1974. The flows sped up massively after the quadrupling of world oil prices in 1973-1974. Oil producing states were suddenly in receipt of enormous funds which their rulers mostly deposited in US banks, which then in turn lent them to certain newly industrialising countries (especially Brazil) and Eastern Bloc countries (Poland and Hungary). These were still booming and seemed to offer a safe return on the loans. The booms did not outlast the next world economic recession in 1980-1982, and difficulties in paying interest on the loans brought the countries to the verge of bankruptcy. But the circuits of finance continued their expansion. By September 1985 total lending to the world banking system totalled $2,347 billion,80 and the Eurobond market increased 70 percent in size in that year alone.

125

Parallel with the growth in international banking went an explosive expansion of international currency deals which made attempts by governments to control national banking systems seem increasingly futile. As the Financial Times noted in the mid-1980s, 'Deregulation and technological advance' was pulling 'the world banking market into a single great pool of capital',81 and leading to 'visionary phrases' from 'top international bankers' such as 'globalisation of securities markets' and 'serving the customer in a single world marketplace'.82 The growth of finance was accompanied by a resurrection of the feature Hobson, Hilferding and Lenin had paid so much attention to--the export of capital. The stock of foreign direct investment (FDI) had amounted to only 4 percent of world gross domestic product in 1950 (as against 9 percent in 1913). In 1999 it reached 15.9 percent.83 Total world FDI outflows amounted to $37 billion by 1982. By 1990 they had shot up to $235 billion and in 2000 to $1,150 billion. By the last date they were equivalent to around one sixth of total world fixed capital formation.84 But there was one major departure from the Hobson-Lenin picture. The flows were not from industrial to 'underdeveloped' countries. They were overwhelmingly to areas where industry already existed.

'The key point to notice is that stock of both inward and outward FDI are concentrated in the developed economies; the overwhelming share of FDI flows is between developed countries'.85 There was a rise from 25 to 30 percent in the share of FDI going to 'developing' countries between 1980 and 1990, but 'within the developing countries themselves these stocks are highly concentrated among a handful of countries... If China is excluded the share of inward stock held by the developing world has been more or less stagnant over the last 20 years... Ten developing countries received 80 percent of the total FDI flows to the developing countries'.86 Europe alone accounted for around half of US direct investment overseas in the mid 1990s, 50 times more than Indonesia and nearly 400 times as much as India, even though India's population is around four times larger than Europe's.87 Such flows of investment are an indication of where capitalists think profits are to be made, and they suggest that it is overwhelmingly within the advanced countries, and a handful of 'newly industrialising' countries and regions (of which coastal China is now the most important). This means that, whatever may have been the case a century ago, it makes no sense to see the advanced countries as 'parasitic', living off the former colonial world. Nor does it make sense to see workers in the West gaining from 'super-exploitation' in the Third World. Those who run the system do not miss any opportunity to exploit workers anywhere, however poor they are. But the centres of exploitation, as indicated by the FDI figures, are where industry already exists.

The rise in the figures for FDI reflects very much the rise of the multinational corporations.

Multinational firms (eg ITT, Ford, Coca-Cola) had existed in the pre-war period. But they were not generally based upon integrated international research and production. The British subsidiary of a US car firm would in general develop and market its own models independently of what happened in Detroit. It was this that began to change in the 1960s and 1970s. The successful firms began to be those who operated international development, production and marketing strategies. Already by the late 1950s IBM (bolstered by huge contracts for the US military) was able to dominate the new mainframe computer industry worldwide. Boeing (again bolstered by US military contracts) began to drive rival 'national' civil aviation firms into the ground, forcing European firms to pool their resources in the Airbus consortium. Petrochemical production ceased to be confined within individual European countries and came to involve elaborate pipelines carrying materials from plant in one country to plant in others. A new stage of capitalist production, based upon multinational enterprises, had arrived.

Once the process of internationalisation of production was under way, there was no stopping it. By the late 1980s there was hardly an industry in which firms in one country did not have to work out international strategies, based upon buying up, merging with or establishing strategic alliances with firms in other countries. Not all these mergers and alliances survived the ups and downs of the world economy over the next two decades. Some de-merged or divorced, only then to link up with other rivals. But the overall pattern was set. Firms which wanted to survive growing international competition had to embark on buying up affiliates abroad. By 2001 European companies were spending $126 billion buying companies in the US, and US firms $42 billion buying companies in 126

Europe.88 Some 80 percent of FDI in 1999 was on buying up foreign firms, as opposed to starting up new production facilities (so much for the neo-liberal myth that foreign investment always means increased output and jobs).89 The state, capital and 'globalisation' The internationalisation of finance, markets and production led, in the mid-1990s, to many people making a simple judgement. The state was disappearing as an economic actor. A new multinational world capitalist class was emerging which had no need for this relic of half a century ago. The judgement was wrong. It failed to recognise the continued interconnectedness of the biggest multinationals and the most powerful states.

A big portion of the sales and the bulk of the investments of the major multinationals remain concentrated in their home country (or, for small countries, in that and adjacent countries). A detailed survey showed this ten years ago.

PERCENTAGE OF BUSINESS FOR MULTINATIONALS IN HOME COUNTRY 90

Manufacturing sales

Service sales

Manufacturing assets

Service assets

US

64

75

70

74

Japan Germany France UK

75 48 45 36

77 65 69 61

97 n/a 55 39

92 n/a 50 61

The extreme concentration of assets in the home country for Japan and the US was apparent. Of the Fortune 100 largest firms, 40 did half or more of their sales in foreign markets, but only 18 maintained the majority of their assets abroad, and only 19 at least half their workforce.91 The picture was slightly less clear cut in the case of the European multinationals, because many have begun investing in neighbouring European countries, but if the European Union was treated as a 'home region', degrees of concentration comparable to those in the US and Japan were found. British multinationals were an exception, in that over 20 percent of their assets were in the US, a similar figure to that for continental Europe. Both figures were, however, much higher than for assets located in the whole of the rest of the world combined (including the much-hyped Asian 'Tigers').

The internationalisation of the system has proceeded apace over the last decade. But the changes have been quantitative, not qualitative. So in 1998 inward foreign investment was only equivalent to 10.9 percent of private domestic capital formation in the developed countries--leaving local investors responsible for nearly 90 percent. A survey of 498 top Japanese firms shows that just over a quarter of their profits come from overseas--which means they still depend for nearly three quarters on the domestic market.92 At the same time, most major multinational firms remain firmly controlled by capitalists from a particular country. Again, the most thorough figures come from ten or a dozen years ago. Of 30 US 'core' firms, only five had a foreigner on their executive board in 1991, and only 2 percent of board members of big American companies were foreigners. Only two of 20 big Japanese companies and four of 15 'core' German firms had a foreigner on their board.93 Recent studies suggest that most top multinational corporations will now have a couple of non-nationals on their boards. But these remain a small minority. So only ten of the top 35 Swedish companies had any foreign directors in 1999, and these only accounted for about 10 percent of all directors, while nearly three quarters of the top Dutch companies had no foreign directors, even though 60 percent of the sales of the top companies were outside Holland. Researchers concluded, 'The national diversity of top management teams has not progressed at the same rate as the internationalisation of the companies at large'.94 Firms with a global reach like ExxonMobil and Microsoft can operate with no non-US directors.95 Renault-Nissan refers to itself as a 'binational group' (French-Japanese), rather than multinational,96 and the US

127

business media have been screaming that the merger of Daimler-Benz and Chrysler, instead of living up to promises of a global corporation, has in fact resulted in a German-run one.

Regardless of the nationality of its directors, what the national state does can still have an enormous impact on the profitability of a company operating from its territory. It controls taxation and government expenditure, both of which influence both the general level of economic activity and the possibilities open to particular firms. Through its influence on the national bank, it influences the liquidity available to firms and the rates of interest they have to pay on any borrowing. It is responsible for company laws and labour laws which affect the balance between different companies, and between them all and their workers. It negotiates trade agreements which can open up markets in other countries. It ensures that other states make sure firms get paid for 'intellectual copyright' on new inventions and discoveries--increasingly important when it comes to pharmaceuticals, agroindustry and software--at a time when 'piracy' costs firms an estimated total of $200 billion a year,97 and continually threatens to eat into home markets. It has the capacity to intervene to protect firms against going bust if their profitability calculations go wildly wrong. And last, but by no means least, it exercises a monopoly of armed force which can be used against other states.

These functions do not disappear or become less important with the internationalisation of the system. The last 30 years have seen three major international crises and the beginning of a fourth.

The actions of states have been very important in determining the survival of certain major firms and the profitability of many others.

Decisions had to be made on whether to influence currency levels, whether to raise or lower short term interest rates, whether to enter into the trade agreements under the auspices of the General Agreement on Tariffs and Trade and then the World Trade Organisation (WTO), how to allocate government contracts, the level of military expenditure. And on top of these there was the question of what should be done with the direct state intervention into the economy though nationalised industries, currency controls, tariffs and so on inherited from the previous period. Even the neoliberal decision to scrap all these things was still a decision to be made. Multinationals with over 35 percent of their investments (the minimum in our list above) in one 'home' country could not afford to neglect trying to have an impact on any of these choices.

So it was that negotiations between states played a key role in the interrelations between the firms based within them at certain points in the 1980s and 1990s: the 'Plaza Accord' agreement between the US and Japanese governments to shift the value of the yen compared to the dollar so as to make life easier and more profitable for US firms in the mid-1980s;98 the decision of the European governments to form the European Exchange Rate Mechanism (ERM) and then the euro--and of the British government to escape from the devastating impact of the ERM on the exports of British firms in 1992; the haggling between the European Union and the United States over barriers to trade in agricultural products and over 'intellectual copyright' (essential to raising the profitability of software and pharmaceutical companies); the discussions within the framework of the International Monetary Fund (IMF) over the treatment of indebted countries; agreements over landing rights at international airports; and the sorts of weapons supposedly integrated military pacts were going to use.

How important state decisions could be for very big firms can be seen by looking at the Fortune 100 list of the world's biggest firms: 'All formerly or currently leading US computers, semiconductors and electronic makers in 1993 Fortune 100 benefited enormously from preferential defence contracts', another 23 were 'directly engaged in the oil industry' and so very dependent upon the ability of their 'home' government to protect their concessions, while at least 20 companies would not have survived at all as independent companies if they had not been saved by their respective governments in the previous decade and a half.99 On top of this, all the key telecoms firms depended for major contracts and operating licences on governments, and bargaining between governments and international consortia.

The world biggest companies have both expanded beyond national boundaries on a scale that now exceeds the internationalisation of the system before the First World War and remain dependent to a high degree on their ability to influence 'their' national government. This is because, at the end of the

128

day, they need a state to protect their web of international interests, and the only states that exist are national states.

As Dick Ryan has recently noted with respect to the most internationalised aspect of the system: International finance provides a clear illustration of the centrality of nationality within global accumulation. The combination of satellite and computer technology has provided...all the technical preconditions for the neoclassical 'perfect market' of financial flows to equalise rates of return across financial frontiers and locations, transcending national boundaries.

Yet...it is well recognised that finance maintains national characteristics. It does not move systematically so as to equalise savings and investment in each nation... A global financial system comprised of nationally-designated currencies signals that globalisation cannot be devoid of a national dimension. Because nation-states are deemed responsible for the global commensurability of 'their' currency, globalisation, as it actually appears, even in the advanced form of finance, is not about eradicating the national dimension of accumulation.

Indeed, globalisation is not even about the national dimension 'hanging on' in a process of slow dissolution. Global accumulation is actually reproducing the national dimension, albeit in ways different to past eras.100 It does not matter how much governments may avow their ideological commitment to 'neoliberalism' and leaving the economy to the market. They can no more avoid making decisions on things that can have such a dramatic effect on the market than they can jump over their own shadow.

And the great multinationals cannot avoid influencing and being influenced by this decision making.

This never consists of the politicians simply responding in a mechanical manner to an agreed policy laid down by capital. For capital is made up of rival firms, each jostling for its own positions--and often of rival bosses within those firms each trying to get one up on the others. There are limits which capitalist governments cannot step outside of without doing immense damage to the economy and to themselves. But within this framework coalitions of capitalist politicians and business interests push divergent policies, each trying to show it can shape out the best policy for the ruling class as a whole. Such coalitions typically combine those motivated by short term profit, those with the big money to dominate the media, the simply corrupt, and those with an ideological vision that gives a section of the capitalist class a sense of historic purpose. The various factions that battle for control of the Republican and Democratic parties in the US are such coalitions. So too are the rival pro-euro and anti-euro groups within the Tory and New Labour wings of the British political establishment. What they are battling over is the use of state power for capitalist ends. It is this which creates the potential for imperialism in the sense of the use of coercion as a form of inter-capitalist competition on an international scale.

The United States: hegemony, force and the second Cold War The trend towards 'globalisation' began just as the US was suffering its most important military setback of the 20th century--its failure to subdue Vietnam. The US began the war believing it was facing a simple policing operation which its economic and military might would make easy. 'We have 30 Vietnams,' declared Robert Kennedy, shrugging off warnings about potential problems.101 But as it was forced to double and double again the forces it deployed, it faced not just resistance from those horrified by the war, but also growing opposition to the cost from within the ruling class, with Wall Street beginning to turn against continuation of the war,102 even though it was no higher than that of the Korean War 15 years before. The change in the world balance of economic forces was hitting at the US's ability to maintain its global hegemony. By the time the war eventually ended there were deep splits in the US political establishment that culminated in Nixon's attempts to spy on the Democratic Party, the Watergate affair and the forced abdication of the president. In the meantime, it had been forced to abandon the Bretton Woods international monetary system which enshrined US financial hegemony, and to begin cutting military spending, which fell in real terms by about 38 percent between the late 1960s and the late 1970s, and as a proportion of GNP by nearly half.103

129

It had lost its old ability to maintain easy dominance over two thirds of the world, just as the internationalisation of the economic system increased the importance of such dominance to its corporations.

For a time it seemed able to cope with a mixture of diplomacy, force and murderous thuggery, doled out by Kissinger, as adviser to Republican administrations, and Brzezinski for the Democrats. The US was able to turn to China as a counterweight to Russia, to use its arms to prevent an Arab victory in the 1973 war with Israel, to pull Egypt fully into the US camp, to help the local ruling class mercilessly crush the left in Chile in 1973 and Argentina in 1976, and to work with European social democracy to contain the Portuguese Revolution of 1974. But then came a triple shock to US hegemony. The revolutionary overthrow of the Iranian monarchy in 1979 suddenly destroyed one bastion of US strategy in the Middle East (the other was, and remains, the Israeli settler state) as Islamic militants seized the US embassy and held its officials hostage. Sandinista insurgents drove out the pro-US dictator of Nicaragua, established an anti-imperialist regime and inspired guerrilla movements in neighbouring El Salvador and Guatemala. And Russian troops moved into Afghanistan to keep a pro-Russian government in power in face of rising popular resistance.

These shocks preceded another, on the economic front--the second international recession in five years and, with it, increasing success by Japanese companies challenging US capitalism on its home ground. Japanese car firms began to take sales from the US giants Ford and General Motors, while the third US car giant, Chrysler, was only saved from bankruptcy by a government bail-out (and the selling off of its European subsidiaries).

Such events emphasised the degree to which the US hegemony had not been able to recover from the defeat in Vietnam, and pushed its leaders to embrace a new strategy--at first tentatively under Carter and then with relish under Reagan. It represented a return to the 'Cold War imperialism' strategy of confrontation with the USSR--and of using this to try to force the other Western powers to accept the US agenda on other strategic, political and economic fronts.

There were a number of elements to the strategy: (i) A reversal of the decade-long decline in arms spending, until it was back in real terms (although not as share of GDP) to what it was at the height of the Vietnam War, and the deployment of a new range of weaponry--the cruise and Pershing missile systems. The objective was to face the rulers of the USSR with a choice--accept US strategic superiority in every sphere (including the capacity to stage nuclear 'first strikes' and 'theatre wars'), or increase spending on arms to such a level as to break its own economy. This was the 'Bukharin' model of imperialist competition with a vengeance. (ii) Providing a very high level of arms, logistic support and aid in recruiting forces (organised via the Saudi government, Pakistan's military intelligence and the Saudi millionaire Osama Bin Laden) for the Afghan resistance, enabling it to bleed and demoralise the Soviet armed forces, much as the Vietnamese liberation movement had demoralised the US armed forces a decade earlier. (iii) Organising terrorist forces, the Contras, to undermine the Sandinista government in Nicaragua, and providing military funds and training in the 'counter-insurgency' methods practised in Vietnam to right wing pro-government forces fighting guerrilla insurgency in El Salvador and Guatemala. (iv) Exploiting the increased Cold War tension to pressure the European governments to accept a new generation of US weapons, and to support wider US strategic and economic goals as they had not all been prepared to during the Vietnam War. (v) Reasserting the dominant US position in the world financial system by taking advantage of financial instability caused by fluctuating oil prices and the threat to the world banking system produced by sudden indebtedness of those 'newly industrialising countries' which had borrowed heavily in the mid-1970s. The US Treasury secretary Brady masterminded the debt negotiations. The outcome protected the US banks, through putting the burden onto the governments of the borrowing countries (even when the borrowing had been private borrowing, as in the Chilean case), and prising them open to US exports and investments through IMF structural adjustment programmes.

Meanwhile, the US ruling class made use of the privilege no other ruling class had. The key role the dollar played in world trade enabled it to borrow easily even when its books no longer balanced.104

130

This 'New Cold War' was a new phase of militarised capitalism--of imperialism--drawing together different political and economic elements. It was not simply driven by profits from foreign investment or trade--these never exceeded the cost of the military expenditure, and the markets it opened up were usually marginal from the point of view of US capital as a whole. Nor was it driven simply by the bonus it provided for the arms contractors (as the Fortune table above shows, something beneficial to a high proportion of big companies). Rather the different factors formed a synergy, a virtuous circle in which the economy as a whole grew, boosted by arms spending (economists wrote at the time of 'military Keynesianism'), key companies developed new technologies financed by the military, there was an opening up of useful if not central new markets and increased control over economic assets overseas, and the manipulation of the international financial system in US interests.

The synergy enabled the US economy to grow from about 1982 onwards, and to keep growing, with assistance from the Federal Reserve Bank's cut in interest rates, even after the great fall in the world stockmarket in October 1987. As industry began to restructure and real wages fell, profit rates recovered--although to the level of the early 1970s, not to the much higher level of the 1950s. And economic progress was matched by victory on the strategic front. The cost of keeping up with the US cracked the USSR apart. It had to abandon its hold on Eastern Europe in 1989 in the face of popular unrest, and itself disintegrated in 1991. The Cold War had, it seemed, been won, and the economy had been revitalised.

That, at least, was the way the new wave of neo-conservative ideologues holding middling positions in the Reagan administrations (1983-1988) saw it. As far as they were concerned, the US should be much more prepared than hitherto to use force, nuclear force if necessary, to achieve its goals.

Nixon's mistake had been not to do this in Vietnam. They were able to play a role in pushing forward the new imperialism, especially in Central America where they were involved in building up the Contras and the death squads in defiance of Congressional decisions, getting funds to do so through arms and drug smuggling. But their time had not yet come.

Despite the belligerence of the Reagan administrations, US troops were rarely directly in battle. They were used against the small Caribbean island of Grenada in 1983, without success in Lebanon in 1986 (when they withdrew after two bomb attacks) and, under Bush, to overthrow the government of a former CIA protege, Noriega, in Panama in 1989. But the memory of Vietnam still ruled out their wider use. The US ruling class relied on others to do the dirty work for it--the local ruling classes in Latin America, the dictator Suharto in Indonesia, the white South Africans and the dictator Mobutu in Africa, Israel and the Saudis in the Middle East. The approach meant backing the dictator Saddam Hussein as a battering ram against Iran, and it emphasised co-operation with France and Germany as well as Britain in Europe, seeing the European Union as a way of stabilising the region under US hegemony.105 What is more, there was a tendency to shift away from the aggressive strategy even before the collapse of the Eastern Bloc. The famous 'walk in the woods' between Reagan and the new Russian leader Gorbachev in 1987 led to new proposals for arms limitation, the removal of the missiles from Europe and a new spell of reduction in arms spending, both in real money terms and as a proportion of GDP. The tendency became more pronounced under Bush Sr and the first Clinton administration (1989-1992 and 1993-1996).

The failure of two strategies This was no accidental U-turn. The approach of the Second Cold War had a central flaw from the point of view of US capitalism. It was directed at breaking apart the USSR and seeing off threats in the Third World. But doing these things did not go very far in dealing with the problems in the most important parts of the world for capitalism--the 'triad' of Europe, Japan and North America, where the great bulk of surplus value was created.

The 'military Keynesianism' produced growth in the US economy, but not as rapidly as in the other capitalist powers that benefited from the US market. By 1992 a committee of the US Congress could fearfully predict Japan overtaking the US economically within a dozen years. Whatever the successes of US foreign policy, the domestic US economy was increasingly dependent upon borrowing abroad 131

to deal with its 'double deficits'--on the government budget and on the balance of payments. George Bush Sr was forced to break his 'Read my lips, no new taxes' electoral pledge in order to try to deal with the budget deficit--and lost the election in 1992 to Bill Clinton, partly as a result. Clinton's more serious tackling of the deficit necessarily involved lowering the proportion of national resources going to arms.

At the same time, the collapse of the Eastern Bloc in 1989 and the disintegration of the USSR in 1991 created new areas of instability and shifts in the global balance of power that did not always automatically benefit US interests. In Europe most commentators at the time believed that West Germany would be the great beneficiary. Already the dominant manufacturing presence on mainland Europe, it was expected to expand economically and achieve greater strategic influence when it absorbed East Germany. Meanwhile, at the other end of Eurasia, China, with an economy enjoying annual economic growth close to 10 percent, stood to gain from the immense weakening of its rival to the north, giving it greater freedom to play a more assertive role internationally.

In these circumstances US governments followed policies based on doing deals with allies and rivals: building coalitions for the 1991 Gulf War against Saddam Hussein--and ensuring he remained in control of Iraq as a bulwark against instability and Iranian influence in the region; putting up no obstacle to German unification and stressing the role of NATO in Western Europe; pushing the Israelis to make token concessions to the Palestinians and then using the CIA to train the Palestinian security forces; working through United Nations auspices to intervene (disastrously, as it turned out) in Somalia; and giving moral and financial backing to the Yeltsin governments in Russia.

The policy was certainly not one of peace. A decline in military spending in real terms did not mean a loss in military strength compared to the rest of the world--by the end of the decade its spending had risen from 30 to 35 percent of the world total. Nor did it mean a loss of interest in new and even deadlier weapons systems: the 'capital intensity' of arms spending continued to rise in the mid-1990s after a brief drop at the turn of the decade. And there were more military interventions in the 1990s than there had been in the 1980s. There was the Gulf War of 1991, the military adventure in Somalia in 1993, the bombing of Serbia in 1995 to enforce a US plan for Bosnia, the pumping of military aid to the Colombian government, and then the full-scale war against Serbia in 1999.

There was also the beginnings of a switch from coalition building with the European powers and Russia to a policy that could be interpreted as, in part, against them. This was especially true after Brzezinski's protege Madeleine Albright took charge of foreign policy in Clinton's second term. The US pushed to expand NATO so as to take in the Eastern Europe states, it made the first moves to draw former Soviet republics like Georgia and Azerbaijan into its orbit, and it played a much more activist role in the former Yugoslavia. These were moves that could be read as undermining Russian influence, but also as trying to pen in the European powers and counter Chinese influence at the other end of Eurasia. Brzezinski himself said that 'the absorption of three Central European nations into NATO resolved a problem that was considered "impolite" to mention: the "disproportionate power" of Germany'.106 Yet the very fact that these moves were made indicated a growing unease about the US's ability to dominate in the post Cold War era as it had for the half-century before. Those who had guided US imperialism through the Vietnam years and after recognised the difficulties, but believed the US had no choice but to accept a certain loss of its old strength. Kissinger was absolutely blunt about this: In the post Cold War world the US is the only remaining superpower with the capacity to intervene in every part of the globe. Yet power has become more diffuse and issues to which military force are relevant have diminished... The end of the Cold War has created what some observers have called a 'unipolar' or 'one superpower' world. But the US is actually in no better position to dictate the global agenda unilaterally than it was at the beginning of the Cold War... The United States will face economic competition of a kind it never experienced during the Cold War.107 The US, he argued, could only achieve its goals by diplomacy aimed at keeping a 'balance of power' on the Eurasian land masses: 'The domination of a single power of either Europe or Asia...remains a good definition of strategic danger to America... Such a grouping would have the capacity to outstrip 132

America economically and, in the end, militarily... The danger would have to be resisted even were the dominant power apparently benevolent'.108 Problems would arise because 'in the years ahead Europe will not feel the need for American protection and will pursue its economic self interest much more aggressively'.109 Finally, he noted, 'China is on the road to superpower status. At a growth rate of 8 percent, which is less than it maintained over the 1980s, China's GNP will approach that of the US's by the end of second decade of the 21st century. Long before that China's shadow will fall over Asia'.110 In effect, Kissinger was describing a world of several rival imperialisms, marked by cross-cutting economic and military rivalries, and much more difficult to deal with than the old 'bipolar' model that had characterised the Cold War. For Brzezinski the problem was similar, although his conclusions not always the same. There was a 'geostrategic triad' made up of the US, Europe and China. Sustaining US influence meant cooperating with the other two powers, but also keeping them in check: 'China is already a major regional player, though not yet strong enough to contest America's global primacy or even its predominance in the Far Eastern region... China is capable of imposing on America unacceptable costs in the event that a local conflict in the Far East engages vital Chinese interests but only peripheral American ones'.111 The European Union, he pointed out, now had a population more than a third greater than the US's and a GDP virtually the same. It also had a key strategic position in relation to Russia and China on the Eurasian continent: The transatlantic alliance is America's most important global relationship. It is the springboard for US global involvement, enabling America to play the decisive role of arbiter in Eurasia--the world's central area of power... In the longer run...a truly politically united Europe would entail a basic shift in the distribution of global power, with consequences as far-reaching as those generated by the collapse of the Soviet Empire... The impact of such a Europe on America's own position in the world and the Eurasian power balance would be enormous...inevitably generating severe two-way transatlantic tensions.112 From such a diagnosis, the expansion of NATO and the moves into the Soviet republics made sense by tying to the US a belt of territory and interests occupying the land mass between the European Union, Russia and China. But Brzezinski was careful to stress the positive angles from a US point of view. A united Europe was still far from existing because of the contradictory interests of its constituent states, and their interests tied some of those states quite closely to the US: 'Currently, Europe...is a de facto military protectorate of the US... It is unlikely Europe will be able to close the military gap with the US in the near future'.113 The conclusion to be drawn from these analyses was that the US should be more assertive in its diplomacy, laying down the line to the other powers but not breaking off relations with them. This was the approach which the Clinton administration increasingly followed with Madeleine Albright in charge of foreign policy. The policy in former Yugoslavia typified the approach. Germany, newly emboldened to follow an independent foreign policy in the aftermath of reunification, had taken the decisive step that destroyed the old Yugoslav federation by recognising Croatian independence at a time when the US and Britain were still trying to keep it intact. But the European powers then proved completely incapable of stabilising the situation on their own doorstep. Two moves by the US military--the bombing of the Serbs and the Dayton agreement in 1995, and then the war against Serbia in 1999--were needed to bring back some degree of order to the area. As the US administration saw things, it had proved definitively to the European powers that they needed US military force to keep their own house in order.

Yet this was hardly going to make the Europeans bow down to the US in every set of negotiations over trade, investment or intellectual copyright. The US had still not found a way to cash in on its military power in economic terms. There was continued unease among sections of the its ruling class as to where its policies were leading.

As John J Hamre wrote in an introduction to one of Brzezinski's writings:

133

A national consensus about how the US as a 'hyperpower' should navigate the world is as illusive as ever... The lack of a broad consensus has provided a great opportunity for special interest groups to impose their priorities on the policy making process...[with] increasingly segmented analyses of developments across the world... No overarching theory has emerged, no comprehensive strategy has succeeded in attracting political consensus.114 The ground was ready for the neo-conservatives from the first Reagan administration of 15 years before to make a move.115 The Project The group had an overarching theory, and they began to organise to win key sections of the US political, economic and military establishment to it through think-tanks like the Project for the New American Century and the Heritage Foundation, their paper, the Weekly Standard, and innumerable speeches and articles by their key ideologues, William Kristol and Richard Perle. Their starting point was the insistence that the policy pursued under the Bush Sr and Clinton administrations was 'in tatters', in 'meltdown', and that the only thing to stop 'a decline in American power' was a return to a 'Reaganite' policy based on large increases in defence spending, the building of a 'missile defence' system, and action to deal with 'threats' from 'dictatorships' in China, Serbia, Iraq, Iran and North Korea.116 'Having led the West to victory in the Cold War, America faces an opportunity and a challenge. We are in danger of squandering the opportunity and failing the challenge'.117 So went a statement signed, among others, by Donald Rumsfeld, Paul Wolfowitz, Elliott Abrams, Jeb Bush, Dick Cheney, Donald Kagan, Zalmay Khalilzad and Dan Quayle. Another statement in 1998 emphasised the strategic need to take action against Iraq in particular, because otherwise 'our friends and allies in the Middle East and Europe will soon be subject to forms of intimidation by an Iraqi government bent on dominating the Middle East and its oil reserves'.118 The signatories of these statements took leading positions in the US government when the Supreme Court handed George W Bush victory in the 2000 election. As economic boom turned to recession and panic about 'terrorism' swept the US in the wake of 11 September 2001, they found very little resistance to their agenda within the administration and Congress. They were able to push through massive increases in military spending, both in terms of real spending and as a share of GDP, to go full speed ahead with the Son of Star Wars programme, and to unleash war against Afghanistan--and all while providing massive tax cuts for the rich. There was even some discussion within the Bush administration of going for Iraq straight after 11 September, but it was decided that it would be tactically better to go for the easy, less costly target first. It would show the scale of US power, climatise public opinion inside the US to the idea of war, and increase US strategic influence in Central Asia.

These actions amounted to a very sharp turn in US policy. There was some continuity with the latter part of the Clinton presidency,119 but after 11 September quantity turned into quality. Some opponents of the neo-conservatives regard what took place as virtually a coup by a 'cabal' with 'insane' policies. But their bombastic rhetoric and aggressive wars are an attempt by ardent supporters of the US-based section of world capitalism to solve real problems--just as the colonialist fantasies and racist rhetoric of those like Rhodes who spearheaded the carve-up of Africa in the 1890s expressed the needs of their capitalist class.

The new imperialism and the US economy today The scale of the problems facing the US economy became clear just as the neo-conservatives were installing themselves in the White House. It had recovered from the recession of the early 1990s and grown some 40 percent by the end of the decade, barely affected by the 1997 recession that began in Asia and swept through Russia and Latin America. By 1999 most mainstream economists were talking of a 'new economic paradigm' which would mean an end to boom-bust cycles, contrasting the US position to that of Japan, which was in virtually permanent recession, and Germany, which was growing slowly.

But the boom collapsed suddenly in the months before 11 September and US companies were found to have been exaggerating their profits by up to 50 percent. Central to the problems was a growing 134

dependence on the rest of the world. The deficit on international trade had not gone away. Advances the US had made in certain important industries (particularly computers and software) had not restored the overwhelming competitive lead it had once enjoyed. Capital expenditure per employee and productivity per hour worked was actually behind France and Germany. Productivity per person employed only remained higher because the working year was over 25 percent longer. The US domestic economy relied on an inflow of funds from abroad, which reached around $300 billion annually by 1999. The cumulative total was a massive $2,500 billion.

Foreign funds continued to flow into the US even when the recession finally came in 2001 and the share prices began a long fall to around half their old level. The US seemed a safer venue for investment than elsewhere, despite low profits, during the period of international instability associated with 11 September and the Afghan and Iraq wars.120 But there was an ever present risk of a sudden reversal of the trend which might throw the US economy into desperate straits. A quarter of a century of growing international movements of finance, investment, trade and production made US capitalism vulnerable to events beyond its border. Its great multinational corporations needed some policy which would enable the might of the US state to exercise control over such events. The new imperialism of the neo-conservative 'cabal' tried to provide it.

There was one important thing going for the policy. US arms expenditure in 2002 of $396 billion was more than that of Europe, Japan and Russia combined. But it was considerably less than the annual inflow of funds from abroad, now around $500 billion. As Martin Wolf of the Financial Times has put it, 'The US current account deficit is 50 percent bigger than its defence spending...

Indirectly the rest of the world pays for the exercise of US power'.121 The biggest single source of funds flowing into the US is Asia, which accounts for about 40 percent of them (half from Japan). Next comes Europe with over a fifth (less than half from the euro zone).122 Effectively, although they did not notice it, investors in Japan and to a lesser extent Europe were lending the US the money which enabled it to maintain its global military superiority. This superiority was one factor making the US seem a 'safe' haven for investors in East Asia and elsewhere in turbulent times, encouraging their governments to hold very large amounts in dollars (or dollar-denominated bonds), and so providing the wherewithal for US firms and consumers to buy more from the rest of the world. It was a virtuous circle allowing US capitalism to keep coping, for the time being at any rate.

The policies of the neo-conservatives consisted of upping the military dimension in an attempt to make the circle even more beneficial. Increased arms spending and massive cuts for the rich were meant to pull the US out of recession, just as the 'military Keynesianism' of Reagan had two decades ago. And increased military capacity would ensure the rest of the world accepted policies beneficial to US corporations--acceptance of US rules on patents and 'intellectual copyright' which are so important to the software and pharmaceutical companies, the setting of global oil prices to suit US interests, the continued domination by US firms of the international arms trade and the opening up of foreign markets to US goods. The US Space Command document 'Vision for 2020' had, after all, compared the US military effort to the way 'centuries ago nations built navies to protect and enhance their commerce'.123 The returns of trade alone would not make increased arms spending rational for the US ruling class as a whole, as opposed to minority sectors of it. The total foreign income of US companies in 1991 was only $281 billion--around $100 billion less than the arms budget. Even if you added in the profits made on the US's $900 billion of exports, the sums did not justify paying out nearly $400 billion on arms, let alone raising that total considerably over the next few years. The figures could make sense, however, if increased arms spending led to recovery from recession, further military handouts to finance technical advance for computer, software or aviation corporations, and to an increased capacity to dictate policies to other ruling classes--and all paid for by even bigger investment flows into the US as it demonstrated its overriding power. The strategy amounted to believing the US could more than compensate for losing its old lead in terms of market competition by using the one thing it has that the other powers do not--military might.

135

The war against Iraq fitted into this by providing a chance to demonstrate the sheer level of US military power and to increase control over the world's number one raw material. As A J Chien noted: The oil interest is...multi-faceted, not amounting simply to maximising oil companies' profits.

The larger issue is maximising US control, which has a variety of benefits including non-oil profits and geopolitical advantages... One should not fall into the common misconception that the overriding US concern is to keep oil prices low. Sometimes we want them high. In the early 1970s the Nixon administration favoured higher prices... The reason was the perception that Japan and Europe, more dependent on imported energy than the US, would suffer more from higher prices... Higher crude prices were also supported by the Reagan administration in 1986... The issue isn't price but control. The Saudi dictatorship does what we want, but the Iraqi dictatorship does not. That's the problem.124 Ian S Lustick from the University of Pennsylvania, an analyst and consultant on Middle East policy for previous administrations, put a somewhat similar argument: This cabal of neo-conservative warriors [is]...fully committed to an American military enforced new order in the Middle East with pretensions and fantasies of democratisation of the region...domination of the oil wealth, establishment of large, semi-permanent military bases in the heart of the region, and the elimination of all pressures on Israel to withdraw from the West Bank and Gaza... This fantasy, this vision...required...war to overthrow Saddam and to gain control of Iraq, and the oilfields and the geopolitical assets it represents.

To rebuild Iraq is emblematic...of the overwhelming power...of the United States in the post Cold War world...the irrefutable sign of the possibility and rewards of grand-scale unilateralism.125 The war, then, was part of a wider strategy of using US military power to compensate for relative economic decline over many years. The aim was to so reinforce US global hegemony as to make other countries accept US policies when it comes to the IMF, the World Bank, trade negotiations though the WTO--and by accepting those polices, to enable the US to continue to get the rest of the world's ruling classes to pay for deficits caused, in part at least, by its level of arms spending.

But merely to pose the issue like this is also to bring out the degree to which it was a gamble.

The logic of relying on increased spending on military power to get hegemony in other spheres is to create situations where military power--and the fact that you have it and others don't--matters. It is a scenario of 'war without end', justified by talk of the fight against 'terror' and 'rogue states'. But that confronts the US with the problem of having to take on any challenge to its hegemony, however much it might be tactically inadvisable to do so, for fear of being seen to display global weakness.

Just as the logic of fighting in Afghanistan was to force war upon Iraq, so the logic of military success in Iraq is to threaten Iran, Syria and North Korea today, perhaps Venezuela or Cuba tomorrow, and eventually even China if they do not submit to US demands.

Yet the gamble cannot do away with the central problem--the degree to which dependence on flows of foreign finance into the US creates potentially immense instability. It is not difficult to imagine scenarios in which investors in other countries started withdrawing their funds from the US, creating a vicious circle in which the falling value of the dollar led still others to move their funds to apparently safer havens. As that ardent defender of capitalism, Martin Wolf, has correctly observed, 'In military affairs, the US can be unilateralist. But the world of economics is intrinsically multilateral. Those running the world's sole superpower would do well to remember this potentially painful fact'.126 In the meantime it is by no means certain that Europe, Japan or China will bow to the US at the IMF or the WTO just because it has conquered Iraq.

The 'cabal' is caught, in just the same ways as those who guided US policy before it, between the need for US capital to control the world beyond its borders and the difficulties of doing so by military means alone.

The rival imperialisms US policy, whether as propounded by Kissinger and Brzezinski or the Project, has long rested upon recognition of diverging and often conflicting interests between the capitals based in different 136

countries. The more the capitals operate internationally and try to control things beyond their borders, the more important the divergences and conflicts become. It was his failure to see this 90 years ago that led Kautsky to embrace the theory of ultra-imperialism. It is the same failure that marks the writing of those who claim that free trade and neo-liberalism rule out conflict today--and of those who speak of 'empire' in the singular rather than of imperialisms in the plural.

Conflicting interests which can be blurred over during periods of boom suddenly re-emerge in a sharpened form during periods of crisis. When market growth is slow and profits rates are falling worldwide, the attempt of any one nationally-based bloc of multinationals to use the state to protect their interests internationally crashes into the attempts of other blocs to do the same.

The interpenetration of nationally-based capitals has reached a point much more advanced than during the period described by the classic writers on imperialism. The World Investment Report 2000 states that for the world as a whole FDI reached 'a record $1.3 trillion in the year 2000... The global expansion was driven by more than 60,000 transnational corporations with over 800,000 affiliates abroad... The top 30 host countries account for 95 percent of total world flows of FDI and 90 percent of stocks'.127 In the mid-1990s it was possible for some commentators to point out that major economies were still less internationalised than before 1914. That is no longer so. FDI today is equal to 15.9 percent of world GDP, as against 9 percent in 1913, and exports are 22 percent of GDP as against 8.7 percent.128 But the movements of goods and capital from country to country are not evenly distributed across the globe. They mainly go through a relatively small number of distinct channels (see figure 1).

Europe  Large movements of capital from Europe to North America, and a smaller movement from the US to Europe.  Major movements of capital between European countries, which are more important than movements to the US, except in the case of Britain.  Significant European capital stocks in Brazil and other parts of Latin America.  Significant flows of Western European capital to Eastern Europe--although only about 2 percent of world capital flows go there.  Significant European exports to Latin America--these are slightly bigger than the US's to the southern Mercosur region, but only about a quarter of the US's to Mexico.

Japan  Large movements of finance from Japan to the US, and smaller movements of capital to Europe.  Strong movements of capital from Japan to East and South East Asia.  Increasing capital flows from Japan to Hong Kong and China.  Growing imports from East and South East Asia.

The United States  A massive accumulated stock of US capital in Europe (about half of total accumulated US foreign investment).  Continued medium-sized flows of capital from the US to Europe.  Growing US capital flows to coastal China.  A massive trade deficit with China based on growing exports from China to the US.  Growing US capital flows to Mexico and Canada, and vice versa.  Significant accumulated US capital stock in South America.  The importance for the US of exports to Canada and Latin America (especially Mexico), which account for about a quarter of its total.

To this picture must be added:  The dependence of the US on imports for about half of its oil needs. About two thirds of these imports come from Mexico, Canada and Venezuela, a third from the Middle East.  The overwhelming dependence of Europe and Japan upon oil from the Middle East.

These facts show that as well as the tendency to globalisation of finance, there is a tendency towards the concentration of complexes of industrial production in the three advanced regions of the world-137

the so called 'triad' of North America, Europe and East Asia. The capitals based in each of these tend to have concentrations of interests in certain other regions of the world. This leads to differing--and often conflicting--international strategies by the great powers.

Western Europe: The European Union (EU) is an attempt to turn the interpenetration of its different national capitalisms into full-blooded integration, and to create a single European capitalist class with a proto-state to protect its interests worldwide. It has involved trying to harmonise the divergent interests of the old national capitalist classes, especially France and Germany.

German capitalism's central concern is with its powerful manufacturing interests, whose spread beyond national borders has mainly been to other parts of the European mainland. This has led to it reaching out to Eastern Europe as a location for modern industrial plant with relatively cheap, already skilled, labour close to its existing investments and markets. French capitalism has a wider range of concerns. It has a politically important agricultural sector, interests in its former colonies in North and West Africa, oil contracts in the Middle East (Iran and, at least until recently, Iraq), and growing service sector investments in Latin America. While the pattern of German development pushes it towards the east, France is pushed to assert itself in the region running from the Atlantic to the Arabian Sea--and both are regions which the US sees as central to its own geostrategic interests.

And success for a French-German axis in imposing greater unity on European capitalism would represent a potential challenge to US domination of the world financial system--for instance, the turning of the euro into an international reserve currency on a par with the dollar.

These contradictory interests find expression elsewhere. Part of the US strategy of cementing its global hegemony is to increase its penetration of Latin America through establishment of the Free Trade Area of the Americas (FTAA or ALCA). But although Latin America is the world's most important single region for US exports, an EU document states of the Mercosur countries (Brazil, Argentina, Paraguay and Uruguay), 'The EU is the first trade and investor partner in the region. EUMercosur bilateral trade amounted to â‚Ź48,498 million. The EU is the first investor with â‚Ź83 billion in the period 1998-2000. The US is the second trade and investor partner with Mercosur... USMercosur bilateral trade in the year 2000 amounted to â‚Ź44 billion.' Not surprisingly, the document adds, 'The recent establishment of the North American Free Trade Area illustrates the significant risks which the creation of the FTAA in 2005 could entail if not preceded by a free trade agreement between the EU and Mercosur'.129 Such clashes of interest explain the diplomatic manoeuvring in the United Nations and elsewhere in the run-up to the Iraq war. The US refusal to make concessions to France was seen by conservative French politicians to carve France out of a region where it saw itself as having 'legitimate interests'.

And the marshalling by the US of support from the rulers of Eastern Europe, Italy and Spain as well as Britain was a trampling on areas traditionally under a degree of German influence.

Certain mainstream European politicians are drawing the conclusion expressed by former French prime minister Laurent Fabius: 'Europe was unable to make its voice heard in the US because it was divided and lacked a unified defence force'.130 Andrew Moravcsik reports in the Financial Times, 'For some years politicians have found' the arguments for higher European arms spending convincing: 'The logic is irresistible: if the US respects only military power, then a European army will surely command respect'.131

138

FIGURE 1: FOREIGN DIRECT INVESTMENT STOCKS: THE TRIAD 2001

All figures are in billions of dollars and are approximate, depending on changes in the currency exchange and the different calculating methods of different governments.

FIGURE 2: CHANGES IN THE RELATIVE SIGNIFICANCE OF EUROPE, EAST ASIA AND NORTH 1948 1953 1963 1973 1983 1993 1999 AMERICA IN THE WORLD TRADE SYSTEM 1948-1999 Western Europe Eastern Europe* East Asia

31.0 6.0 4.3

34.9 8.2 5.5

41.0 11.0 7.2

44.8 8.9 10.5

39.0 9.5 15.0

43.7 2.9 22.2

43.0 3.9 21.3

North America 27.5 24.6 19.4 17.2 15.4 16.8 17.1 *Eastern Europe includes Central and Eastern Europe, Baltic States, CIS. Source: based on WTO(2000), Table II.2 FIGURE 3: UNITED STATES MILITARY SPENDING BEFORE BUSH'S INCREASES

Source: US Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts

139

But attempts to fuse the European capitalisms together in this way have always faced inbuilt obstacles. The companies of each European country value their links to their national states, and fear losing out to rivals from other countries in a transnational European state. What is more, many of them have valued investments inside the US which they do not want to put at risk. As a result, the French-German axis has always been unstable. In the aftermath of the Iraq war German business has been putting pressure on the German government to back off from continued diplomatic confrontation with the US. And, as Moravcsik points out, no government in Europe is likely to accept the cost of creating 'a co-ordinated military force with global capacities to fight a hightechnology, low-casualty war'. That would require Europeans to increase military spending, currently at 2 percent of domestic product, to more than the US rate of 4 percent.132 There is a capitalist dream of constructing a powerful new European imperialism in place of the competing petty imperialisms. But it will be very difficult to achieve. And, were it achieved, it would be just as barbaric as US imperialism (you only have to look at, say, French interventions in Africa to see why). This is why it is mistaken for people like George Monbiot to suggest the left should back the euro against the dollar.133 Japan: For more than half a century its rulers have been content to operate in the US's shadow, allowing the US to occupy one of their islands, Okinawa, as a base, and paying much of the cost of the US's 1991 war against Iraq. The worry Japan has caused the US has been economic, not military.

The worries were much reduced in the course of the 1990s. The Japanese economy has stagnated while the US economy has grown, and the industrial restructuring (encouraged by the Pentagon) means US firms again lead in the world computing industry. Japan gave wholehearted diplomatic support to this year's war against Iraq. But the potential for tension remains. Japanese industry has continued to invest heavily through its long recession and could be placed to mount a new economic challenge to the US in the future. And there are sections of the Japanese political establishment who believe it needs to develop its military power to play an independent role internationally--especially in East Asia, where it has important investments and where it could face serious problems if faced with military crises over the Koreas or over China and Taiwan.

Russia: It is an imperialism that has been almost completely on the defensive for more than a dozen years. When they ran the country as heads of the old Communist Party, its rulers regarded themselves as on a par with the US in terms of global influence, and competed with it strategically in areas like South Asia, the Middle East, the Horn of Africa and West Africa. Today it is very much the same class which runs the giant privatised corporations and, through the former KGB secret policeman Putin, the state. And so they too are resentful as they see the US invade a semi-ally, Iraq, and carve out bases (and oil concessions) for itself in Central Asia, in what was once part of their empire.

But they have been cut down in size economically twice--first by losing half of the USSR with the breakaway of the non-Russian republics, and then by the economic crisis which reduced the economic output of what remained by half. An economy that used to be between 30 and 50 percent of the size of the US's is now at most 10 per cent of the size.

They still possess considerable military power. But most of their equipment seems to be at least a technical generation older, and so would not fare very well in conventional battlefield conflicts. They can sell arms to weak countries which want to fight other weak countries, but dare not use it to directly confront those armed with modern US weaponry. And they themselves can only threaten the US with the ultimate suicide weapon, the nuclear warheads of their ageing missile system.

China: The country's coastal provinces have been by far the most successful section of the global system over the last decade and a half, growing somewhere close to 10 percent a year.

But economic successes have also bred important tensions. Hundreds of millions of peasants are witnessing the economic growth without gaining anything from it, as they flood into the cities each year looking for work that is not available. While the coastal areas linked into the world market industrialise at great speed, restructuring leads to massive job losses in the old heavy industrial sectors (which provide important inputs for the new industries). And the unevenness between different regions grows ever greater. Those running the regime fear a recurrence of the Tiananmen 140

Square events of 1989, when protests by students linked up with discontent among workers to produce near-rebellion in most Chinese cities. They also fear fragmentation of the country as those ruling in the regions tied most closely into the world market ignore the demands on resources of the impoverished inland provinces--in some cases provinces inhabited by ethnic and religious minorities who have never fully accepted Chinese rule. Against such centrifugal tendencies, the regime has one card to play--Chinese nationalism. But this leads to tensions with the US over the island of Taiwan, seen by Chinese nationalists as part of their national heritage and by the US neo-conservatives as an integral part of the US sphere of influence.

For the Chinese rulers to concede to the attitude of the US right would, as far as they are concerned, be to concede that they are going to give up part of the historic Chinese Empire. And if Taiwan in the east, why not the extensive non-Han provinces in the north and west? Would it not be a sign to the US right that China could be stripped of its empire and be reduced to a minor power, just as happened to Russia?

A recent Financial Times article states: Many analysts argue that it is only a matter of time before Chinese economic power is translated into military muscle... East Asia is a likely theatre for a major war, they argue. A recent report from a US Congressional committee concluded, 'The combination of Chinese leaders' perceptions of America as an adversarial hegemon and the lack of solid bilateral institutions for crisis management response is potentially explosive. In the worst case, this could lead to military conflict.' Hisaiko Okazaki, a conservative Japanese foreign policy commentator and former ambassador, fears that China's growing strength will eventually lead it to take control of Taiwan, thus threatening Japan's strategic supply routes. About 80 percent of Japan's oil supplies come from the Middle East; most of that passes through the Taiwan Strait.134 For some at least of the neo-conservatives in the White House, the Son of Star Wars strategy is directed to cutting China down to size. Paul Rogers of Bradford University has explained their logic: Many on the Republican right think the only threats to US dominance will come from China if it develops into an economic giant. One way to curb its growth is to force it to commit more money to defence, and the National Missile Defence system is one way of doing this. That may stimulate a dangerous nuclear arms race but, after all, the Soviet giant was successfully 'spent into an early grave', and perhaps the same strategy can be applied to China.135 Britain: New Labour prime minister Tony Blair is commonly referred to as George Bush's 'poodle'.

This sums up the subordinate position Britain plays in relation to US imperialism. But it also underestimates the degree to which British capitalism has its own imperialist interests. Its investments around the world are second only to those of the US, it is the base of some the bigger multinationals, and it still possesses nuclear weapons. Its problem is that it discovered nearly half a century ago with the Suez adventure that its state is not able to play an independent world role to match the international spread of its investments. Since then Tory and right wing Labour leaders alike have seen the only way to protect its interests as by a 'special relationship' with the US. They could not have won the Falklands/Malvinas War without US assistance, and they have turned to US presidents in the attempt to clear up the mess created by their past actions in Northern Ireland.

The Blair policy during the Iraq war was the logical follow-up to these things. But Blair is finding things are not quite so easy. The decline in the economic importance of the empire in the 1950s and 1960s led sections of British industry to turn increasingly to Europe for markets and investment. And so today British capitalism is pulled in two directions--towards the old alliance with the US and towards those who dream of a new European superstate. Blair would like to reconcile the two pressures by acting as an advocate for the US-oriented sections of British business within Europe.

But the recriminations between France and Germany on the one hand and the US on the other over the war are making life difficult for him.

The interaction between the great powers is not the peaceful concert of nations dreamt of by certain apostles of neo-liberalism and free trade, and interpreted as a single entity--'empire'--by Hardt and Negri. There are a set of contradictory interests, with military force a weapon of last resort for 141

dealing with them. The US attacks on Afghanistan and Iraq have shown us that force in action. But there is still a difference with the first four decades of the 20th century. These culminated in wars which ravaged their heartlands. The tensions since 1945 have led to massive accumulations of arms that could potentially be unleashed against the heartlands. But hot wars have been fought outside them, usually in the Third World.

One reason for this has been the 'deterrent' effect, the fear that waging war on a nuclear power will lead to destruction of the whole domestic economy as well as most of its people. Even today, the rulers of Russia, China, India, Pakistan and North Korea--and for that matter Britain and France--see possession of nuclear weapons as the ultimate defence against enemies.

Another has been the very interpenetration of the advanced capitalist economies that puts pressure on states to exercise power outside their own boundaries. Few capitalists want their national state to destroy huge chunks of their property in other states--and most of that property will be in other advanced capitalist countries. This does not rule out war completely. The capitalist economy was highly internationalised in 1914, but this did not prevent all-out war. Again, in 1941, the presence of Ford factories and Coca-Cola outlets in Germany did not stop a US declaration of war after Pearl Harbour. But it does provide them with an incentive to avoid such conflicts if they can--and to settle their differences in less industrialised parts of the world. Hence the years since 1945 have been marked by war after war, but away from Western Europe, North America and Japan. And often the wars have been 'proxy wars' involving local regimes to a greater or lesser extent beholden to, but not completely dependent on, particular great powers.

This has been especially true in Africa. During the last decade and a half of the Cold War the US and the USSR backed rival sides in wars and civil wars as part of their attempts to gain a strategic advantage over each other. Similarly, in South Asia, India was loosely aligned with the USSR and Pakistan more tightly tied to the US (and allied with China). More recently the US and France vied for influence in Central Africa in the early and mid-1990s. They backed rival sides in the war cum civil war that broke out in the border regions of Tanzania, Rwanda, Burundi and Congo-Zaire. They helped set in motion a catastrophe, resulting overall in 3 or 4 million dead. In the same years, the different big powers each developed different approaches for trying to gain advantage from the collapse of Yugoslavia, giving open or tacit support to the different armies that were engaged in mutual ethnic cleansing. In such situations, freelance armies emerged whose commanders emulated on a small scale the great imperial powers by waging war in order to enrich themselves, and enriching themselves in order further to wage war. Imperialism meant encouragement for local rulers to engage in the bloodiest of wars and civil wars--and then, occasionally, the sending in of Western troops to enforce 'peacekeeping' when the disorder reached such a scale as to threaten to damage Western interests. Contradictions which arise from the inter-imperialist antagonisms of the advanced capitalist states in this way make the worst impact in the poorer parts of the world.

War, exploitation and the Third World If the conflicts between the great capitalist powers find expression in horrific death tolls in wars waged in the Third World, here too the dire economic consequences of their policies for the mass of people are most marked.

Governments throughout the Third World had abandoned attempts at 'independent' economic development from the mid-1970s onwards. Former liberation fighters, supposed 'Communists' and right wing nationalists alike opened up their economies to foreign capital and embraced the 'Washington consensus' of neo-liberalism. This was not just a matter of pressure by the advanced capitalist states, blackmail by the IMF or conspiracies by the multinationals (though much blackmail and some conspiring did take place). The real problem was that the resources available for capital accumulation within the boundaries of any one state, however much protected from outside intrusion, were limited.

Those who had tried to accumulate at home now set out to advance their technology and find wider markets by deals with the world's great multinationals, and to get funds for further development by massive borrowing from the Western banks. As far as they were concerned, they were not surrendering to foreign capital but using it as a lever to raise themselves up. Political parties which 142

had preached the unity of all classes in order to achieve independent economic development now became ardent proponents of collaboration with the multinationals and the world banking system-Fianna Fail in Ireland, the Peronists in Argentina, APRA in Peru, Congress in India, the Communist parties in China and Vietnam.

Collaboration enabled a few sections of local capital to join the multinational league themselves. It enabled others to liquidate their local holdings, and to use the proceeds to invest in more profitable undertakings abroad, making themselves shareholders and bondholders in the advanced economies.

Argentina, Brazil and Mexico were typical. Their industrial bases had been established in the 1940s, 1950s and 1960s by the state intervening to direct investment in industry, often into state-owned companies. But by the 1970s it became clear to the more farsighted industrialists--whether in the state or private sectors--that they could not get the resources and the access to the most modern technologies needed to keep up with worldwide productivity levels unless they found ways of breaking out of the confines of the national economy. They began increasingly to turn to foreign multinationals for licensing agreements, joint production projects and funds--and they began themselves to operate as multinationals in other countries. So the Argentinian steel maker TechNet took control of the Mexican steel tube maker Tamsa in 1993, acquired the Italian steel tube maker Dalmikne in 1996, and then went on to expand into Brazil, Venezuela, Japan and Canada, adopting the name Tenaris. It boasts, 'With an annual production capacity of over 3 million tons of seamless pipes and 850,000 tons of welded pipes, the Tenaris Group is the world leader in the seamless pipe market'.136 There is a similar pattern with some Mexican companies. In the late 1980s Alfa, the largest industrial group in Mexico, with 109 subsidiaries spanning automotive components, food, petrochemicals and steel, embarked on a growing number of joint operations with foreign firms. Its director of finance said, 'Three quarters of our non-steel business involves joint ventures. We have the culture of joint ventures.' The glass maker Vitro, which had bought two American companies, became 'the world's leading glass container manufacturer, with its market almost equally split between the US and Mexico'.137 The logical outcome of this in Mexico was for its ruling class to forget its old nationalism, to join the North American Free Trade Area and increasingly operate as a subordinate component of US capitalism.

Occasionally the collaboration produced positive results for wider sections of local capital, provided some job opportunities for the aspirant middle classes (Ireland, South Korea, Singapore, Taiwan, coastal China), and even created conditions under which workers could boost their living standards through industrial action. Usually, however, it created increased indebtedness to foreign banks which the national states had to cope with. In such cases, a narrow stratum of people gained a taste of the fleshpots of multinational capital while the conditions of the mass of people deteriorated, or at best remained unchanged. A yuppie class lived in protected enclaves as if it were in the wealthiest parts of the industrialised world (and often went a step further and lived part of the year there), while much of the population festered in ever proliferating slums and shantytowns.

The results can be seen today in Latin America, where national income per head fell in the 1980s, in the Middle East, where it is lower now than 20 years ago, and above all in sub-Saharan Africa, where absolute poverty has become endemic as the share of world trade has fallen from 3 percent half a century ago to a mere 1 percent today.

Those who run the state face immense problems even when the developmentalist strategy is successful in its own capitalist or state capitalist terms. Its success depends upon a high level of domestic accumulation--and the other side of that, a high level of exploitation that can only be achieved by holding down workers' and peasants' living standards. But even when it succeeds in getting high levels of accumulation (which is the exception rather than the rule), it remains weak in its bargaining with the multinationals. As multinationals take over local firms, their proportion of local capital investment can rise to 40 or even 50 percent of the total, increasing their leverage over local decision making. But states in the poorer parts of the world do not have anything like the same leverage over multinationals, since the small size of their domestic economies mean they probably account for no more than 1 or 2 percent of the multinationals' worldwide investments and sales. As Burke and Epstein have put it, 'Even though foreign investment as a whole is of enormous 143

importance to multinational corporations, it is generally the case that any particular investment in a developing country, with one or two exceptions, is relatively unimportant to them. As result, the bargaining power of political jurisdictions relative to multinational corporations is often very low'.138 A huge gap begins to open up between what those who run the state have promised the mass of people and what they can deliver. High levels of repression and corruption become the norm rather than the exception. When the developmentalist strategy runs into problems, something else accompanies the repression--the hollowing out of the mass organisations that used to tie sections of the middle class to the state and, via them, some of the working class and peasantry. The oppressive state becomes a weak state and looks to foreign backing to reinforce its hold.

This happens as profitability problems in the advanced countries drive them to look for any opportunity, however limited, to grab surplus value from elsewhere. There is not much to be got from the poorest of the poor anywhere in the world, but what there is they are determined to get.

Imperialism means at the top level that the rival capitalist powers argue vehemently with each other on how to satisfy their different interests. At a lower level, it means constraining the local ruling classes of the Third World to act as collectors of debt repayments for the Western banks, royalty payments for the multinationals and profits for Western investors as well as for their own domestic capitalists. Debt servicing alone transfers $300 billion a year from the 'developing countries' to the wealthy in the advanced world.139 A website dedicated to defending US overseas investment boasts: Most new overseas investments are paid for by profits made overseas. Foreign direct investment by US companies was only $86 billion in 1996... If you subtract out the reinvested earnings of foreign operations, the result was only $22 billion... US companies' overseas operations also generate income that returns to the US... In 1995, this flow of income-defined as direct investment income, royalty and licence fees, and charges and services-back into the US amounted to $117 billion.140 There can be no end to the squeezing. The share of foreign investors in the total amount traded on the Brazilian stock exchange rose from 6.5 percent in 1991 to 29.4 percent in 1995,141 and the share of new Mexican government debt held by non-residents grew from 8 percent at the end of 1990 to 55 percent at the end of 1993.142 French and Spanish capital has been highly active in Latin America in this respect. The two big Spanish banks, the Bank of Bilbao and Vizcaya and the Bank of Santander, have bought up a very large proportion of the banking systems of many Latin American countries: 'At present, the biggest Spanish institutions own almost one third of the assets of the 20 biggest foreign banks, which means that they alone exceed the share of the United States banks, which have historically been the leader in this sector in the region'.143 The base in banking has been used to branch out into other types of business, 'investment banking, insurance and in particular participation in pension fund management', and to acquire 'minority shares in some non-financial enterprises, basically in sectors where other Spanish investors are very active (telecommunications and energy)'.144 'Aggressive strategies adopted by Spanish banks, and also by the Hong Kong and Shanghai Banking Corporation, forced the foreign banks which had already been established in the region for a long time to take defensive measures... Bankers Trust in Argentina and Lloyds Bank, Chase Manhattan and ABN-Anro in Brazil decided to buy local banks or shares in their equity'.145 The Spanish expansion has been paralleled by the strategy of French firms like Suez and Vivendi of buying up public utilities.

This trend towards taking over the provision of services as a way of guaranteeing a fixed return on capital is, as Franรงois Chesnais has pointed out, a growing trend worldwide. The share of services in foreign investment which 'represented only a quarter of the world stock of direct foreign investment in the 1960s amounted to about half by the end of the 1980s and made up 55 to 60 percent of new flows'.146 Hence the attempts through the WTO to impose TRIPS and GATS measures (relating to payment for patents and to the opening up of public services to the multinationals).

The economies of the Third World are too small a part of the world system for these new forms of financial capitalism to play the same role in solving the problems of the capitalists in the advanced countries that the old forms did in Hobson's time. Argentina's economy, for instance, is no larger than the US state of Ohio's, and even the biggest economy in Latin America, Brazil's, is 20 percent 144

smaller than California.147 But such squeezing can force people to revolt. The governments of Bolivia and Peru have been shaken by revolts against the selling off of water and electricity supply.

Bitterness against the foreign-owned banks and public utilities played a part in the near uprising that overthrew the De La Rua government in Argentina in December 2001. And the resistance can hurt individual companies. The Spanish banks and the French multinational utility companies Suez and Vivendi are now licking their wounds.

The politics of anti-imperialism today The suffering of the Third World and the revolts against that suffering have been very important in breeding the new wave of anti-capitalism that has been sweeping the world since Seattle. This in turn provided an important part of the impetus for the huge anti-war and anti-imperialist demonstrations at the time of the Iraq war. There is deepening consciousness of those involved in fighting capitalism in the West that they have to solidarise with those resisting oppression in the poorest parts of the world. This is immensely important in helping to undercut the racism and nationalism that has in the past so often bound workers in the advanced countries to their rulers.

At the same time, in the Third World and newly industrialising countries, the nationalism which was the ideology of the developmentalist section of local capital now becomes increasingly double edged.

Those suffering from exploitation, repression and political corruption begin to turn it against the most hated local ruling class figures. They are seen as betraying the nationalist agenda, their attacks on the conditions of the mass of the population as a surrender to imperialist pressures. People who were led to believe the state represented the whole nation, rich and poor alike, in the past, now come to see its ignoring of the interests of the mass of people as proving it is a foreign body, a 'new colonial' or 'semi-colonial' state imposed on them from outside. Left nationalism emerges as a current that holds the present state has to be reformed--and can be reformed--so as to remove the foreign influences and re-establish it as a repository of the common, national, interest.

Left nationalism often encourages people to begin to fight against sections of the local ruling class.

But its belief that there is some common 'national' interest binding exploiters and exploited together also opens it up to manipulation by the same local capitalist politicians who are working hand in hand with the great capitalist powers. They try to blame policies which suit their interests--like privatisation of utilities or repayment of debt--simply on the pressure of big brother outside.

Unfortunately they can often expect some representatives of the popular opposition to such policies to go along with this. So it is common in the Middle East to blame the toleration of the local capitalist classes for Israeli policies in Palestine purely on US pressure (or on 'non-Islamic' behaviour), or in Latin America to see the coups in Chile in 1973 and Argentina in 1976 (or, for that matter, the attempted coup in Venezuela in 2002) as a result just of US plots against 'national independence' rather than as driven by the determination of the local ruling class to crush any challenge to its position, knowing that the US ruling class would back it. Yet almost all the of the wars of the US against insurgent movements since Vietnam have been proxy wars, in which it has been able to rely on local ruling classes to wage on their own behalf as well as on its. This was true in Central America for much of the 1980s, when it trained and armed the forces of the right wing governments in Guatemala, El Salvador and Honduras, and the Contras in Nicaragua, with the deployment of only a handful of its own troops as 'advisers' to them. It has more recently been the case with its massive military aid to the governments of Colombia and its encouragement of the coup attempt in Venezuela.148 Talk of the state as 'semi-colonial' or 'neo-colonial' reinforces such a misperception. Imperialism is an enemy anywhere. But most of the time the immediate agent of exploitation and oppression is the local ruling class and the national state. These collaborate with one or other of the dominant imperialisms and impose the horrors of the world system on the local population. But they do so in the interests of the local ruling class as well as its imperial ally, not because the local rich have temporarily forgotten some 'national interest' they share with those they exploit.

The failure to see this means that left nationalism, as well as providing a certain focus for the bitterness of the mass of workers, peasants and the lower middle classes, also tends to direct this bitterness towards reformist solutions. At the domestic level, this means fighting for more nationalist 145

as against less nationalist solutions within the framework of the existing capitalist state. A current example of this arises in the struggle against the Free Trade Area of the Americas. Instead of seeking to give an anti-capitalist impetus to this, the non-revolutionary left in Latin America is counterposing Mercosur as some sort of alternative to it. But Mercosur is an attempt by sections of Brazilian big business to hegemonise the other economies of the region and strengthen investment and trade links with the European Union, and does not rule out negotiations over terms of access to the Free Trade Area of the Americas.

At the international level left nationalism means focusing upon issues like the terms of trade or the preference for one trading bloc over another, as if simply improving the terms on which national capitalists sell their commodities on the world market will solve the problems of the mass of people they exploit and oppress. This goes hand in hand with the view that the population of the advanced world as a whole exploit the population of the Third World as a whole, either through 'unequal exchange' or through 'super-profits' made from foreign investment in the Third World. In doing so, it deflects attention from the central dynamics of the world system, which depend to a very large extent on what happens in the most important locations of accumulation, foreign investment and trade--the established industrialised countries, a small number of the newly industrialising countries and, to an increasing extent, the Chinese coastal region. And it undermines the development of real international solidarity.

When Lenin wrote, he called for the workers' movement in the West to see anti-imperialist movements in the colonial world as its ally, but argued strongly against revolutionary socialists in the colonies giving a 'communist colouring' to the 'bourgeois-democratic liberation trends in the backward countries'.149 The argument needs to be repeated and reinforced today. 'Left nationalist' ideas in the 'developing' and 'newly industrialising' countries can spur people to confront local ruling classes that are tied to imperialism and give rise to near-revolutionary upsurges. But they also, inevitably, misdirect those involved in those upsurges in a reformist direction. This does not matter much for those of us who are active in the West building international activity against imperialism and war. We are on the side of Third World movements against imperialism, however confused their ideas may be. But it is of fundamental importance for Third World revolutionaries. If it was necessary to be critical of such ideas in Lenin's day, when real colonial oppression was directed against sections of the bourgeoisie and petty bourgeoisie in vast areas of the world, it is a hundred times more important today, when the bourgeoisie proper is a fully fledged partner, even if a junior one, of the most powerful sections of world capitalism. It is necessary to be part of the upsurges, but to build independently within them.

The dilemma of US imperialism US imperialism looked immensely strong in the aftermath of the Iraq war. But none of its central problems have been solved.

Its victory will frighten other governments in the Third World to jump to its orders. It will be that much easier for the IMF to impose its will on countries whose rulers might otherwise be tempted to cave in to opposition from their own people. That is why it was completely wrong for Bernard Cassen of ATTAC France to counterpose opposition to war to opposition to the measures that harm the world's poor.

But the increased exploitation and impoverishment of much of the Third World will not overcome the pressures on profitability and the competitiveness of US capitalism. The fundamental fact that permitted decolonisation without economic disaster for the advanced capitalisms half a century ago remains unchanged. Most investment from advanced capitalist countries is directed to other advanced capitalist countries and the small minority of newly industrialised countries for the simple reason that that is where most profit is to be obtained. Most of the Third World, including nearly all of Africa and much of Latin America outside Brazil and Mexico, is of diminishing economic importance for the dynamic of the system as a whole. Profits and interest payments from such regions are the lettering on the icing on the cake for world capital, not even a slice of the cake itself.

Oil is the strategic commodity of the 21st century, and the US has shown by two full-scale wars in a dozen years how keen it is to be in control of it. As I have argued earlier, what matters is not 146

primarily the profitability of its oil companies--giants like Microsoft, Boeing or General Motors are not keen to take the risks inherent in war just for the sake of Exxon. The real concern is controlling the price and availability of oil to provide a stable and beneficial framework, inside the US as well as outside, for profit making and accumulation by US capitalism as a whole. It is also to provide enhanced power when it comes to bargaining with the other advanced capitalist states.

But this cannot resolve the fundamental issue--long term downward pressure on profit rates which had been exacerbated by vast unprofitable investments during the speculative boom at the end of the 1990s.150 Control of Iraqi oil may be able to help prop up the present precarious domination the US exercises over the world financial system (although, as I write, the dollar is falling) and, with that, allow the US to continue consuming more than it produces. But it cannot add decisively to the proportion of worldwide surplus value controlled by US capitalists. Experts believe it may take up to five years before Iraqi oil comes to flow in sufficient quantities to pay the costs of rebuilding what US bombs and tanks have knocked down. And even then there will be difficult choices to be made.

Increasing output on such a scale as to lower the international price of oil substantially, so helping the US capitalist class as a whole may lead to a collapse of the oil revenues needed to pay the construction companies and keep up oil company profits.

Apologists for the war tried to use such calculations to claim the war was not about oil.151 Their argument was wrong, because oil is an important weapon in the struggle for global hegemony. But some of their calculations were right. Control of oil will not in itself make the tens of billions of dollars spent on the war into a profitable investment for US capitalism.152 It will certainly not cover the costs of a long term colonial occupation of Iraq--especially if instability as a result of the occupation leads to social upheavals and military intervention elsewhere in the region. Yet the very nature of the US victory in Iraq is likely to make long term military occupation inevitable.

The determination of the Bush gang to hammer home the US's global military strategy by going to war without allies (apart from Britain) ensured they blitzkrieged their way to Baghdad without establishing the prerequisites for the quick establishment of a stable new pro-US regime. In the aftermath they are faced with the choice between staying for a very long period of time or putting in Iraqi clients who may not be able to keep control of the country as a whole--and who may eventually be tempted to use the oil revenues for their own ends (as the Ba'athists did after the US helped bring them to power in 1963 and 1968).

This choice was causing splits within the Bush administration's 'unilateralist' war camp the very day after the conquest of Baghdad. On the one side stood 'liberal imperialists', with their dream of overturning the whole Middle East and running it through supposedly stable capitalist democracies which could provide long term legitimacy for the protection of imperial interests--an Arab version of the settlement imposed in Central America at the end of the 1980s. On the other were 'realist imperialists', eager like Kissinger before them to do deals with any dictator in order to exercise control at minimal cost to the US itself and without US troops getting involved in long term commitments. And in the background is the possibility of a deal with Europe, Russia and China for 'multilateral' or 'United Nations' efforts to bring stability. But such a deal would eliminate direct US control and cancel out some of the gains made by it in the war.

The probability is that the US will fall between all three stalls. It will be compelled to stay in occupation for a long time, logging up the budgetary costs at home and stoking the fires of resistance throughout the Middle East. It will play with local politicians who, lacking any real base, would only be able to stabilise their rule by resorting to the dictatorial methods carried to such heights by Saddam during and after his period as a US protege. And it will find it is having to do deals with its international rivals so as to keep the damage to its wider interests to a minimum.

It is difficult to see how it could be otherwise. The European powers abandoned colonialism in the 1950s and 1960s not out of benevolence, but because it did not pay economically in the face of insurgent nationalist movements and changes in the structure of the world economy. European empires had been self financing at the high point of the old imperialism a century ago, with India and Ireland always paying a surplus into the British Treasury--imperial possessions were a drain on budgets by the 1950s. A decade later the US found the costs of trying to hold on to Vietnam through 147

massive physical occupation far too excessive. This was why the Nixon administration eventually retreated from waging an all-out land war to a policy of trying to subdue the country by air strikes-and withdrew from the country when that did not work.

If the major sources of surplus value in the world are in the advanced countries, then the only real way to begin seriously to defray the costs of a high level of military expenditure would be to do what Germany did during the Second World War, and to establish occupation regimes in advanced countries which squeezed them dry. However arrogant they feel after Iraq, the apostles of the New American Century are not yet ready to do that--and mainstream US capital would put up serious opposition if they tried.

The US state cannot retreat from its occupation of Iraq, or even from its wider 'unilateralist' posturing against France, Germany and Russia. To do so would be to abandon the gains from its military gamble at the moment it seems to be winning, and to risk a cumulative loss of influence over other states and other capitalisms. Under the leadership of Cheney, Rumsfeld, Bush, Perle, Wolfowitz and the rest, it has set out on a journey from which it cannot easily turn back. Having raised the level of military expenditure, it will try to get a return on its investment by further military actions designed to increase still more its leverage over the other major players in the international system. But the outcome will never be satisfactory for US capitalism. It cannot make enough out of imperialism in crude cash terms to compensate for its expenditures in the way that the European capitalisms did a century ago. Nor can it rely, as it could during the Second World War and the early years of the Cold War, on military spending allowing it to prosper with a prolonged boom. The level of spending required to push the economy back into such a boom would, even more than in the Reagan years, damage US market competitiveness. As John K Galbraith has pointed out, the US dependence on huge imports means its position 'much more closely resembles the great powers in Europe in 1914 that that of America in 1939... To finance either a major military or a major domestic economic effort or both on world capital markets could very well unhinge the dollar and shift the balance of financial power--presumably to Europe'.153 But it cannot abandon its military commitments without damaging the hegemony which its multinational corporations need to protect their interests in an increasingly tumultuous world.

For these reasons, the US triumphant remains the US weak. The splits with the other powers will continue, even though they will alternate between defiant gestures and grovelling actions. There will also be recurrent splits within the US political establishment and ruling class as the Bush magic fails to transmute military self glorification into the humdrum business of making bigger profits.

None of this will make the world less barbarous. Those who have tasted blood will want more, and we can expect further aggressive wars. But it will make it easier to build the forces of resistance to them worldwide. They won a war in which they enjoyed a 30 or 40 to one military superiority. We were part of the biggest anti-imperialist mobilisations that the world has ever seen. And that experience will be there, as underlying weakness shows.

Notes 1.

M Hardt, The Guardian, 18 December 2002.

2.

B Cassen, 'On the Attack', New Left Review, January/February 2003, pp52-53.

3.

V I Lenin, Imperialism: The Highest Stage of Capitalism (London, 1933), pp10-11.

4.

Ibid, p108.

5.

Ibid, pp20-21.

6.

Ibid, pp24-25.

7.

Ibid, p26.

8.

Ibid, p60.

9.

Ibid, pp68-69.

148

10. Ibid, p69.

11. K Kautsky, quoted ibid, section 7: 'Imperialism, as a Special Stage of Capitalism'.

12. Ibid.

13. N I Bukharin, Imperialism and World Economy, ch 10: 'Reproduction of the Processes of Concentration and Centralisation of Capital on a World Scale', available on www.marxists.org 14. His major work, Imperialism and World Economy, did not appear in any English edition between the 1920s and 1970, while the first English edition of his subsequent Economics of the Transformation Period (with marginal notes by Lenin) was not published until 50 years after it was written. See Economics of the Transformation Period (New York, 1971).

15. Figures From H Feis, Europe: The World's Banker, 1879-1914, quoted in M Kidron, 'Imperialism: The Highest Stage but One', in International Socialism 9 (first series), p18.

16. The argument and the figures for this are provided by M Barratt Brown, The Economics of Imperialism (Harmondsworth, 1974), p195.

17. For a longer discussion of the economic connections between the two changes, see C Harman, Explaining the Crisis (London 1984), pp52-53.

18. C Harman, A People's History of the World (London 1999), p397.

19. J A Hobson, Imperialism: A Study (New York, 1902), www.econlib.org 20. Ibid, part 1, ch 4.

21. M Salvadori, Karl Kautsky and the Socialist Revolution, 1880-1938 (London, 1979), p171.

22. Ibid, p172.

23. Ibid.

24. All quotes are from K Kautsky, 'Imperialism and the War', International Socialist Review (November 1914), available on www.marxists.org 25. See Kautsky's review of Hilferding's Finance Capital: K Kautsky, 'Finance-Capital and Crises', Social Democrat, London, vol 15, 1911, available on www.marxists.org 26. R Hilferding, Finance Capital (London, 1981), p225.

27. Ibid, p225.

28. Ibid, p304.

29. Ibid, p325.

30. Ibid, p226.

31. K Kautsky, 'Finance-Capital and Crises', op cit.

32. R Hilferding, op cit, p294.

33. W Smaldone, Rudolf Hilferding: The Tragedy of a German Social Democrat (Illinois, 1996).

34. V I Lenin, introduction to Imperialism: The Highest Stage of Capitalism, op cit.

35. Ibid, ch 3, 'Finance Capital and the Financial Oligarchy'.

36. Ibid.

37. T Cliff, 'The Nature of Stalinist Russia', in T Cliff, Marxist Theory after Trotsky (London, 2003), pp116-120.

38. Ibid, p117.

149

39. N I Bukharin, Imperialism and World Economy, op cit, p114.

40. Ibid, p118.

41. Ibid, p104.

42. N I Bukharin, Economics of the Transformation Period (New York, 1971), p36.

43. N I Bukharin, Imperialism and World Economy, op cit, pp124-127.

44. N I Bukharin, 'Address to the Fourth Congress of the Comintern', in Bulletin of Fourth Congress, vol 1, Moscow, 24 November 1922, p7.

45. V I Lenin, 'The Discussion On Self-Determination Summed Up', Collected Works (Moscow, 1964), vol 22, section 10: 'The Irish Rebellion of 1916'.

46. For the impact in China see, for instance, Chesnais' magnificent The Chinese Labor Movement.

47. V I Lenin, Imperialism: The Highest Stage of Capitalism, op cit, ch 4, 'Export of Capital'.

48. Leon Trotsky spelt out the argument about industrial development in 1928: 'Capitalism...equalises the economic and cultural levels of the most advanced and most backward countries. Without this main process, it would be impossible to conceive...the diminishing gap between India and Britain' (Leon Trotsky, The Third International After Lenin (New York, 1957), p209).

49. J Degras (ed), The Comintern, 1939-43, Documents, vol 2 (London, 1971), p527.

50. Ibid, p528.

51. Ibid, p529.

52. Ibid, p534.

53. R Debray, 'Problems of Revolutionary Strategy in Latin America', New Left Review 45, September-October 1967.

54. Michael Barratt Brown concludes, after a detailed examination of the evidence, 'The important point in that the underdeveloped lands gained in volume terms and in unit values from 1900 right up to 1930' (M Barratt Brown, The Economics of Imperialism (Harmondsworth, 1974), p248).

55. I Roxborough, Theories of Underdevelopment (London, 1979), pp27-32.

56. Leon Trotsky showed some confusion over these matters in an article he wrote about Latin America while in exile in Mexico. He refers to Brazil under the Vargas government as both 'semi-fascist' and a 'semi-colony'. See L Trotsky, Escritos Latinoamericanos (Buenos Aires, 1999).

57. V I Lenin, Imperialism: The Highest Stage of Capitalism, op cit, section 7, 'Imperialism, as a Special Stage of Capitalism'.

58. C Harman, Explaining the Crisis (London, 1984), p71.

59. For an account of these tensions, see G Kolko, The Politics of War (New York, 1968).

60. F Sternberg, Capitalism and Socialism on Trial (London, 1950), p538.

61. Figures given in O G Wichel, Survey of Current Business (August 1980), p18.

62. For details, see C Harman, Class Struggles in Eastern Europe 1945-83 (London, 1988), pp42-49.

63. Calculation by Alan Winters, contained in Financial Times, 16 November 1987.

64. New York Times, 5 July 1950, quoted in T N Vance, 'The Permanent War Economy', New International, January-February 1951.

65. For graphs showing levels of US arms expenditure, see www.albany.edu 66. See various calculations given in C Harman, Explaining the Crisis, op cit, p80.

150

67. For an explanation of this in terms of Marxist theory, see ibid, pp81-82.

68. M Kidron, 'Imperialism: The Highest Stage but One', in International Socialism, first series, no 9, 1962, available on www.marxists.de 69. J Stopford and S Strange, Rival States, Rival Firms (Cambridge, 1991), p16.

70. All figures are from M J Twomey, 'Patterns of Foreign Investment', in JH Coastsworth and A M Taylor, Latin America and the World Economy since 1800, p188.

71. As Roxborough points out, Gunder Frank 'never claimed to be a Marxist' (I Roxborough, op cit, p49).

72. P Baran, The Political Economy of Growth (Harmondsworth, 1973), p399.

73. Ibid, p416.

74. A Gunder Frank, Capitalism and Underdevelopment in Latin America (Harmondsworth, 1971), pp35-36.

75. Despite Baran's preparedness to criticise certain features of Stalin's rule, he quoted Stalin himself favourably and repeated Stalinist lies about the USSR's agricultural performance and living standards. See, for example, P Baran, op cit, p441. Contrast Baran's treatment with the critical, scientific assessment of Soviet figures to be found in Tony Cliff's writings of the 1940s and 1950s, for instance 'The Nature of Stalinist Russia' (written in 1947), in T Cliff, Marxist Theory after Trotsky, op cit, pp116-120.

76. For discussions of the role Britain played in Argentina see, for instance, R Miller, Britain and Argentina in the Nineteenth Century (New York, 1993); R Gravil, The Anglo-Argentine Connection 1900-1939 (Boulder and London 1985); R Hara, 'Landowning Bourgeoisie or Business Bourgeoisie', Journal of Latin American Studies, 34 (August 2002), pp587-623; D C M Platt and G di Tella (eds), Argentina, Australia and Canada: Studies in Comparative Development (London, 1985); M A Garcia, Peronismo: desarrollo econ贸mico y lucha de clases en Argentina (Espluges de Llobregat, 1980) (the chapter on Peronism of this important work is available on the webpage humano.ya.com).

77. M Kidron, 'Memories of development', New Society, 4 March 1971, reprinted in M Kidron, Capitalism and Theory (London, 1974), p173.

78. See for instance E Mandel, Europe Versus America (London, 1970).

79. According to OECD calculations in the late 1970s.

80. Financial Times, World Banking Survey, 22 May 1986.

81. Ibid.

82. Financial Times, International Capital Markets Survey, 21 April 1987.

83. J Burke and G Epstein, 'Threat Effects of the Internationalisation of Production', Political Economy Research Institute working paper series, no 15 (University of Massachusetts, 2001).

84. UNCTAD, 'Overview', World Investment Report 2001, table 1.

85. J Burke and G Epstein, op cit.

86. Ibid.

87. Figures from US Bureau of Economic Analysis website.

88. H Skytta, The European Union and World Trade, Speakers Bureau, November 2002.

89. J Burke and G Epstein, op cit.

90. Table based on figures in P Hirst and G Thompson, Globalisation in Question (London, 1996), pp91-94.

91. W Ruigrok and R van Tulder, The Logic of International Restructuring (London, 1995), p156.

92. Figures given in www.jil.go.jp

151

93. W Ruigrok and R van Tulder, op cit, pp157-158.

94. M F Hijtjes, R Olie and U Glunk, 'Board Internationalisation and the Multinational Company', (Amsterdam, 2001).

95. See the Microsoft and Exxon-Mobil corporate websites.

96. Interview with Louis Schweitzer on www.renault.com 97. Estimate from Global Anti-Counterfeiting Group, in Financial Times, 30 April 2002.

98. For an account of the importance of this for US corporations' exports, see R Brenner, The Boom and the Bubble (London, 2002), pp59-64.

99. W Ruigrok and R van Tulder, op cit, p219.

100. D Bryan, 'Global Accumulation and Accounting for National Economic Identity', Review of Radical Political Economy 33 (2001), pp57-77.

101. Quoted in D Halberstam, The Best and the Brightest (London, 1970), p78.

102. For details, see C Harman, The Fire Last Time (London, 1987).

103. See the graphs available on www.albany.edu/~fordham/ 104. This process is well described in the first part of P Gowan, The Global Gamble (London and New York, 1999), pp3-240. But he has tendency to see the whole thing as planned by US governments, rather than as representing a response by them to unforeseen changes in the world system.

105. See, for instance, H Kissinger, Diplomacy (New York, 1994), and Z Brzezinski, The Geostrategic Triangle (Washington, 2001).

106. J Perlez, 'Blunt Reason For Enlarging NATO: Curbs On Germany', New York Times, 7 December 1997.

107. H Kissinger, op cit, p809.

108. Ibid, p813.

109. Ibid, p821.

110. Ibid, p116.

111. Z Brzezinski, op cit, p4.

112. Ibid, p29.

113. Ibid, p31.

114. Ibid, pviii.

115. On the continuity of this group and the development their approach in the 1990s, see A Callinicos, 'The Grand Strategy of the American Empire', International Socialism 97 (Winter 2002).

116. Weekly Standard, 7 September 1997.

117. Project for the New American Century, Statement of Principle, 7 June 1997.

118. Project for the New American Century, letter of 29 May 1998.

119. The proportion of Democrats voting for increased arms spending doubled between 1993 and 1998, although it remained lower than for Republicans: see graph on www.albany.edu/~fordham/ 120. See the graph for net lending by foreigners to US in Financial Times, 19 February 2003.

121. M Wolf, Financial Times, 19 February 2003.

122. Ibid.

152

123. This available on scienceforpeace.sa.utoronto.ca 124. A J Chien, 'Iraq: Is It About Oil?', Znet, 13 October 2002.

125. Unedited transcript, Middle East Policy Council, Thirty-First Capitol Hill Conference on US Middle East Policy, 'In the Wake of War: Geo-strategy, Terrorism, Oil Markets, and Domestic Politics'.

126. M Wolf, Financial Times, 19 February 2003.

127. United Nations Conference on Trade and Development, World Investment Report 2001, p10.

128. J Burke and G Epstein, op cit, p5.

129. European Union, 'Questions Related to Our Bi-regional Partnership with Latin America and the Caribbean', on www.delbnol.ced.eu.int 130. Quote in Financial Times, 3 April 2003.

131. A Moravcsik, Financial Times, 3 April 2003.

132. Ibid.

133. G Monbiot, 'The Bottom Dollar', The Guardian, 22 April 2003.

134. Financial Times, 1 December 2002.

135. P Rogers, The Guardian, 13 January 2001.

136. Report by the Techint group of companies, June 2001, www.techintgroup.com 137. Financial Times, 13 July 1990.

138. J Burke and G Epstein, op cit, p2.

139. Figure given by Jubilee Research in HIPC: How the Poor are Financing the Rich. A report from Jubilee Research at the New Economics Foundation by Romilly Greenhill and Ann Pettifor, April 2002, on www.jubilee2000uk.org 140. 'Trade Makes US Strong', www.ustrade.org 141. M C Penido and D Magalhaes Prates, 'Financial Openness: The Experience of Argentina, Brazil and Mexico', CEPAL Review 70 (April 2000), p61.

142. Ibid, p60.

143. A Calderon and R Casilda, 'The Spanish Banks Strategy in Latin America', CEPAL Review 70 (April 2000), pp78-79.

144. Ibid, p79.

145. M C Penido and D Magalhaes Prates, op cit, p63.

146. F Chesnais, La Mondialisation du Capital (Paris, 1997), p83.

147. Figures for relative sizes of GDPs of Latin American countries and US states given in IMF Staff Country Report 99/101, September 1999.

148. In the case of the Venezuelan stoppage of 2002-2003, a key section of the Venezuelan ruling class were so carried away with their hatred for the Chรกvez regime that they proceeded in a way which went against the immediately tactical interests of the US. The last thing it wanted was a cutback in supplies of Venezuelan oil (its third biggest source of oil imports) just as it was preparing for war against Iraq. This misinterpretation of US wishes was one reason that the attempt to remove Chรกvez failed, with pro-opposition newspaper columnists bemoaning the lack of greater US support from the summer of 2002 onwards.

149. Theses, Resolutions and Manifestos of the First Four Congresses of the Communist International (London, 1980), p80.

153

150. For details of the downward trend in profit rates, see R Brenner, The Boom and the Bubble, op cit, table 1.2, and figures 1.1, 1.2, 1.3, 1.4, 2.9, 2.10, 2.11, 10.1, 11.1. His evidence for the downward trend is all the more convincing given that he mistakenly rejects the classic Marxist 'law of the tendency of the rate of profit to fall'.

151. For a serious attempt at this, see J Tatom, 'Iraqi Oil is not America's Objective', Financial Times, 14 February 2003.

152. At least one pro-capitalist economist argued well before the recent war that if the military and other costs of maintaining US influence in the Middle East were taken into account, the cost of Middle East oil to the US was 'between two and five times higher than the spot price'. See N A Bailey, 'Venezuela and the United States', in L W Goodman et al (eds), Lessons of the Venezuelan Experience (Washington, 1995), pp391-392.

153. J K Galbraith, 'Thoughts on the War Economy', on utip.gov.utexas.edu Return to Contents page: Return to International Socialism Journal Index Home page

154

Session 4:

Racism: Where does it come from?

155

Session 4: Racism: Where does it come from?

Citizenship and Racism: The case against McDowell's Referendum by Kieran Allen Published April 2004 by Bookmarks Ireland, PO Box 1648, Dublin 8

Introduction: McDowell discovers too many black babies.

Chapter 1: Is There a Crisis in the Maternity Services?

Chapter 2: Who is a citizen?

Chapter 3: Racist Myths and Spongers Chapter 4: Why right wing parties are racist Chapter 5: Fortress Ireland: How institutionalised racism works Chapter 6: Where Does Racism Come From?

Chapter 7: Why close the borders?

Chapter 8: Fighting Racism

156

Session 5:

State and Revolution

157

Session 5: State and Revolution

Marx and the state Perhaps the most startling thing about the protests against the WTO in Seattle is how they have completely by-passed the parliamentary system.

The heroes of Seattle were people who called for open resistance to capitalism and see the parliamentary system as dominated by parties which are funded by big business.

Marx’s attitude to the state was also one of unremitting hostility.

Far from wishing to expand its activities, Marxists have sought to eventually do away with it.

In 1844, Marx declared that the most useful thing the State could do for society was to commit suicide.

He celebrated the Paris Commune of 1871 on the basis that it was "a Revolution against the State itself".

Marx’s argument about the state was distorted by the Labour Party tradition which held open the possibility the state could be won to more socialist purposes.

Marx defined the state in terms of social relations. The state is an organised body of people with a monopoly of violence.

The state’s very existence necessarily involves the loss, by the majority of society, of the power to govern their own lives.

The power of the state equals and parallels the powerlessness of its subjects. The state, which seals the function of government, ‘stands over’ the society it robs.

States only come into existence when society is divided on class lines. They are the instruments by which a ruling class holds onto its wealth and privilege.

In our society Marx argued that the state is the ‘management committee’ for the capitalist class.

This is why vast bulk of the state machinery is unelected and outside the control of the majority of the population.

No one elects the people who run the army, the police, the top of the civil service or the heads of big state companies.

Even the parliamentarians do not know what is happening in key institutions of the state.

Thus even though the Irish parliament passed a law saying that tax should be charged on interest, the Revenue Commissioners secretly connived with the banks to ensure that not single nonresident account was inspected for over a decade.

When the power of the state is challenged, the thin veil of parliamentary democracy is brushed aside and rule of the robo-cop style police officer is revealed.

This is why the Russian revolutionary Lenin said that at the heart of the state lies "bodies of armed men, prisons, etc".

Rosa Luxemburg argued that those who claimed that it is possible to preserve the existing state machinery in the struggle for socialism are not simply arguing for a different road to socialism they are arguing against socialism itself.

The heart of the socialist idea is self government, in every sphere of life, including production. And the state, in its very essence, is nothing but a series of massive impediments to that self-rule.

However if the state is an expression of class rule, it can only be finally eliminated when social classes themselves are eliminated.

A revolution can deliver an immense blow against the privileges of the corporate elite but it would be foolish to believe that power that comes with wealth which has been accumulate over two centuries disappears overnight.

158

Even after a revolution the old ruling class will fight a desperate rearguard action.

In order to deal with this the majority of society need to take onto itself the control of violence.

A workers state will be immensely democratic because it has to rely on the mobilisation the majority to break the power of a privileged minority.

All its officials would be subject to election and re-call if they did not carry out their mandates.

There would be no separation between political decisions and administration carried out by a giant bureaucracy.

In reality, the more the workers state uproots the basis of class rule, the less it resemble a state in any real sense of the word. It would as Marx argued "wither away".

THE STATE AND CAPITALISM TODAY (Part 1) Chris Harman The relation between capital and the state is central to an understanding of developments in the world today. It is thrown up in a whole series of apparently different discussions: on the future for the Third World, on the relations between the superpowers in the aftermath of the Cold War, on the prospects for successful economic restructuring in the USSR and Eastern Europe, on the repeated rows within the Tory government over European integration, on the significance of the United States’ war against Iraq. These issues have created considerable debate on the left. They have been the subject of an intermittent discussion among contributors to this journal for a decade and a half, and among the wider left there has been much greater confusion. [1] Article Index The state as simply a superstructure The most common view of the capitalist state among Marxists is to see it simply as a superstructure, as external to the capitalist economic system. Capitalism, in this view, consists in the pursuit of profits by firms (or, more accurately speaking, the self expansion of capitals) without regard to where they are based geographically. The state, by contrast, is a geographically based political entity, whose boundaries cut across the operations of the individual capitals.

The state may be a structure that developed historically to provide the political prerequisites for capitalist production-to protect capitalist property, to police the dealings of different members of the ruling class with each other, to provide certain services which are essential for the reproduction of the system, and to carry through such reforms as are necessary to make other sections of society accept capitalist rule – but it is not to be identified with the system itself.

This view of the state claims to be based on the Communist Manifesto: “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” But its origins do not lie in Marx himself so much as in the classical economists who preceded him: in the Communist Manifesto Marx simply takes their insistence on the need for a minimalist, “nightwatchman” state and draws out its class character.

Nevertheless it is the view that is to be found in most modern academic Marxism. So, for instance, it was to be found on both sides of the debate which took place in New Left Review between Ralph Miliband and Nicos Poulantzas. [2] Miliband argued what has been called the “instrumental” view of the state: it was tied to the capitalist class because its leading personnel came from the same milieu as the owners of private capital. [3] Poulantzas argued that this was to see a merely contingent relationship between the state and capitalism, to see the state’s character as depending simply on who manned its top structures. He 159

argued what has been called the “functional” view: the state has to fulfil the needs of the society of which it is part; since this is a capitalist society it is necessarily a capitalist state. The state is, as Poulantzas puts it, “a condensate of class forces”, and the forces it “condenses” are capitalist forces.

[4] Despite their apparent opposition to each other, both Miliband’s and Poulantzas’ views can lead to the conclusion that the capitalist state can be used to reform capitalist society. If it is the character of its personnel that guarantees the capitalist nature of the state then changing the personnel could change the character of the state, allowing it to be used for socialist purposes. If the state is a function of the society of which it is part, then if that society is racked by deep class struggles, these would find their expression through the state. The “condensate of class forces” could express both ruling class and working class pressures – which perhaps explains why Poulantzas could move from Maoism to Eurocommunism without any fundamental change in his theoretical framework.

More recently, another variant of the view of the state as external to capital has emerged on the left. Within academic Marxism there is a growing tendency for people to counterpose the capitalist system, as a system based upon the drive of firms to accumulate, to the “system of states” within which it has been enmeshed historically. [5] In a few cases this has led to the conclusion that the great wars of the present century have not resulted from any drive of capitalism towards war, but rather from the clash of “ancien regime” empires which capitalist development is now in the course of dismantling. [6] Nigel Harris comes from a very different tradition – a revolutionary tradition – to that of academic Marxism. His writings have always expressed an unbridled hatred for the state and complete contempt for those who believe it is possible to reform capitalism. But in his attempt to come to terms with the internationalisation of capital over the last 20 years he has turned to an account of the state which belongs to the “state simply as superstructure” school.

He argues that the interests of capital are increasingly international interests, not bounded by any national borders. Each individual capital grew up within a particular nation states, but can now operate within virtually any state, bending it to its will. The particular state was a necessary instrument at one stage of capitalist development – a superstructure once needed by capital accumulation – but is no longer. Capitalism is led to challenge the state which has accompanied its growth in the past, to act “against the arbitrary and corrupt absolutist state”, to “move to the completion of the bourgeois revolution” in a way reminiscent of 1848. [7] Nigel does not mean that the state simply withers away. Far from it. The bureaucratic structures of the state remain intact. They have interests of their own to preserve, interests that are tied to a particular national geographic area, interests in maintaining class peace, interests in attracting capital in competition with other states, interests in building up military prowess. And so the modern world is characterised not just by an increasing volume of trade in goods and capital, but by state boundaries which impede that trade in a manner which is, from a capitalist point of view, irrational. There is “bread”, but there are also “guns”.

Article Index The state as capital While most of the left has seen the state and capital as opposed, there has been a minority tradition that equates the state with capital. Its intellectual origins go back to the insights of Lenin and Bukharin in their books on imperialism written at the height of the First World War. [8] They spoke of the state “merging” with capital, of “state monopoly capitalism”, or simply of “state capitalism”. It was these insights that Tony Cliff used when he developed the only coherent Marxist analysis of Stalin’s Russia [9] and various ex-colonial countries. [10] But Mike Kidron went further and extended the “insights” into what he claimed was a complete “theory” of ageing capitalism. [11] In Kidron’s account individual states and individual capitals become completely congruent with each other: every state acts at the behest of a set of nationally based capitals, and every significant capital is incorporated in a particular state. If you talk about the interests of British capitalism, you are talking about the interests of the British state; if you talk about the British state, you are talking about the operations of British capitalism. This does not 160

mean that there are no exceptions to the rule – no capitals that temporarily escape from the control of national states or no national states that temporarily act against the interests of nationally based capitals. But these exceptions, for Kidron, are a hangover from the past, relics which will disappear with the further development of the system. Indeed, the logic is for all elements of the superstructure, even trade unions, to become simple expressions of the drive of national capital to compete with its foreign rivals. Certain academic Marxists hold views which in some ways parallel Kidron’s. These belong to the “logic of capital” or the “state as capital” schools. For them, the behaviour of the state is determined by the logic of capital accumulation, although they tend to see it as the logic of private capital within the individual state rather than of a state capital in competition with other state capitals. [12] Article Index Problems with both views There are problems of analysis and implications for political practice associated with both sets of views. If the state is simply a superstructure, then it is possible to contend that the problems that arise in the political sphere and those that arise economically are separate and distinct from each other. The struggle against the police or against racism then has nothing to do with the class struggle; the blow against the boss ceases to be a blow against the bomb. [13] This was the logic which led Bernstein and Kautsky to drop their differences and to claim that it was possible to fight militarism during the First World War without turning the imperialist war into a civil war. It is the same logic which led Edward Thompson in the mid-1980s to talk about military competition between states as “exterminism”, which had nothing to do with old style capitalism and which could be fought by men and women of good will from all classes.

The implications of the view of the state and capital as merging completely are just as great.

The forms of oppression maintained by the state are seen as flowing directly from the accumulation needs of capital. There can be no clash between them. Sexual oppression, racial discrimination, the structure of the family, bureaucratic hierarchies, political panics, even national trade union organisation, are all products of the “logic” of the state as capital. [14] The consequence of such a view is to drop any distinction between fundamental social clashes which challenge the very basis of capitalist rule and less fundamental ones that can be contained by reforms to the existing institutional structure. The result is either ultra-leftist spontaneism – as with Lotta Continua and then the Italian autonomists in their heyday – in which the revolution is seen as imminent in each and every struggle, since every form of oppression flows from the immediate requirements of capital accumulation. Or it is a variant of reformism, which sees the structures essential to capital as being undermined by piecemeal rejection of each particular oppression. The strategic aim becomes the establishment of “rainbow coalition” alliances between various “autonomous movements”, each seen as just as important as any other. [15] Article Index The origin of the national state and national capital You cannot correctly grasp the relationship between the state and capital today unless you reject both the “simple superstructure” and the “state as capital” positions. Instead, you have to understand the concrete ways in which capitals and the capitalist state necessarily interact in the course of historical development. Existing national states did arise out of the developing capitalist organisation of production, as superstructures. But they feed back into that organisation, helping to determine its tempo and direction.

Marx pointed out in Volume Two of Capital that capital appears in three forms – as productive capital, as commodity capital and as money capital. Every process of capital accumulation involves repeated changes from one form to the other: money capital is used to buy means of production, raw materials and labour power; these are put together in the production process to turn out commodities; these commodities are then exchanged for money; this money is then used to buy more means of production, raw materials and labour power, and so on.

161

The forms of capital are continually interacting as one changes into the other, so that at any given point in time some of the total capital will take the form of means of production, some of commodities waiting to be sold, and some of money. But there can also be a partial separation of these three different forms. The organisation of direct production, the selling of commodities and the supply of finance can devolve upon different groups of capitalists.

It is this separation which creates the illusion that capital is an object that grows in size by some magical process. For it does for those capitalists who simply buy and sell commodities, and for those capitalists who simply advance money and reap interest payments in return.

Each of these forms of capital has had, historically, a different relationship to the body which has a monopoly of political violence in any particular geographic locality – the state. Money capital can (or at least could, in its classical form, when gold was the main means of payment) operate regardless of state structures. It could flourish, as Marx noted, long before the development of capitalism generally. Money lenders in one part of the world would make loans to borrowers in other parts of the world, relying on the recipients’ need for further loans to guarantee repayment with interest. So it was that Italian bankers could finance the French absolute monarchy and south German bankers the Spanish absolute monarchy. Financiers did not need to be tied to a particular state to flourish provided they could find ways of making sure the state did not actually confiscate their wealth.

Commodity capital could also flourish in all sorts of political structures – in slave societies of medieval antiquity, amid the battling lordships of the early feudal period, in the centralised absolutist states of late feudalism. Yet the more it developed, the more it came to require the protection of state structures it could influence. Otherwise those who controlled states could present obstacles to it: pillaging merchant convoys on the road, allowing pirates to intercept seaborne traffic, imposing local customs dues that prevented the growth of a truly national, let alone international, market, imposing price controls that restricted the potential for profit making.

So from quite an early period onwards, merchants tended to encourage the growth of political structures under their own control. As Braudel tells of the medieval period, there arose: ... business rivalries between individuals, between cities and between “nations” as a national group of merchants was called. Sixteenth century Lyons was dominated by ...organised rival groups, each living as “nation” ... Their presence meant the establishment of empires, networks and colonies in certain areas. Trade circuits and communications were regularly dominated by powerful groups who appropriated them and who might forbid other groups to use them. Such groups are easy to find when one starts looking for them, in Europe and even outside Europe. [16] Productive capital is necessarily much more dependent than merchants’ capital upon state power. It cannot function without, on the one hand, a guarantee of its own control of means of production (a guarantee which, in the last resort, relies upon “armed bodies of men”), and, on the other, a labour force which has been “freed” from coercion by any other social group (slave owners or feudal lords) and from any control over means of production.

If local state power prevents these conditions arising, the development of productive capital is stunted: there were absolutist states in which finance capital flourished but productive capitalism barely took root, and medieval cities in which artisans produced commodities for the market without the separation of workers from the means of production which was required to move from simple commodity production to capitalist production. [17] When Marx wrote about the “primitive accumulation of capital” he was not just describing the (very barbaric) means by which the early capitalists built up their fortunes. More importantly, he was pointing to the social and political measures which were needed to concentrate means of production in capitalist hands and to “free” the labour force. The full development of capitalism requires that productive capital subjugate commodity and money capital to itself. Only productive capital – the exploitation of workers in the labour process – guarantees a continually growing pool of surplus value and, with it, a source of ever larger profits for capitalists of all sorts.

162

If the development of productive capital, and to a lesser extent commodity capital, is entangled with the development of the geographic state, then so is the development of capitalism as a whole – even if in the form of money capital capitalism seems to have no need for the state.

The point is important – money capital often seems to be the “pure” form of capital, the form in which the self expansion of value is most vividly to be seen. But like the other forms of capital, it is in reality, as Marx put it, “not a thing but a relation”, a relation which involves the exploitation of people at the point of production. And that exploitation needs to be underpinned by the political structures of the state.

Any productive capital grows up within the confines of a particular territory, alongside other sibling capitals (they are, as Marx describes them, “warring brothers”). They are mutually dependent on each other for resources, finance and markets. And they act together to try to shape the social and political conditions in that territory to suit their own purposes.

This involves an effort to “free” labour from the control of other classes, to remove obstacles to the sales of their products, to create an infrastructure (ports, roads, canals, railways) to fit their requirements, to establish sets of rules for regulating their relations with each other (bourgeois property laws) and to create an armed power which will protect their property both from domestic and external threats. Their efforts to achieve all these things will be aided if they can supplant a mass of local dialects and languages with a single form of spoken and written speech. Their aim, in short, has to be to create a national state power – and with it a national consciousness and language.

The national state and different nationally based capitals grow up together, like children in a single family. The development of one inevitably shapes the development of the others. This does not mean that the structures of the state are an immediate product of the needs of capital. Many of the elements of the pre-capitalist state are restructured to fit in with the needs of the capitals that arise within them, rather than simply being smashed and replaced. But they we actively remoulded, so as to function in a very different way than previously, a way that corresponds to the logic of capitalist exploitation.

Capitalist production began in Western Europe in the late medieval period. Industrial and agrarian capitals were usually not nearly powerful enough to shape the whole of the political structure. But their presence could be a significant counterweight to the old baronies, so making it easier for kings to replace the decentralised feudalism of the early medieval period with absolute monarchies. The “mercantilist” policies of these monarchies then provided the impetus towards a wide development of commercial capital and a much more limited development of productive capital within the confines of each state.

This growing weight of capitalist interests became decisive when the absolutist states themselves entered into crisis. In England in the 1640s and France in the late 1780s and early 1790s they were able to ensure that the social and political crisis was resolved by the establishment of unitary national state structures that would serve their interests. The only viable alternatives to the crisis were those which encouraged capitalist development (even if those, like Cromwell in Britain and the Jacobins in France, who imposed these alternatives did so in opposition to the immediate desires of some powerful capitalist interests).

These national states then became the model for those elsewhere who wanted to break out of the backwardness of decaying feudalism or to escape foreign colonial control. Sometimes this was a case of already developing bourgeois or petty bourgeois groups seeking to establish a national state under their own control; on other occasions intellectuals or army officers saw their own interests as best advanced by using state power to impose capitalist forms of exploitation and accumulation on the rest of the population.

In every case the development of groups of industrial and agrarian capitals is inseparable from the transformation of the geographic area in which they are based into a national state with its own language, system of laws, banking system and so on.

Article Index

163

Stages in the development of the state and capital Classical economics provided an account of capitalism in which the state played a negligible role. It was a theory of pure capital, of self expanding capital which took no regard of national frontiers. It was this theoretical account which Marx took up in Capital and carded through to its logical conclusion, showing how capitalism contained inbuilt contradictions even when considered in the most abstract manner. [18] But the real, concrete history of capitalism was always very much intertwined with the history of the state. Classical economics was, in fact, an empirical description of only one, historically limited, phase of the system, that of the mid- 19th century. Things were very different when Adam Smith wrote, as he himself recognised when he complained about the devotion of Britain’s business classes to its empire: To found an empire for the sole purpose of raising up a people of customers may at first sight appear a project fit only for a nation of shop keepers. It is, however, a project altogether unfit for a nation of shop keepers, but extremely fit for a nation whose government is influenced by shop keepers. [19] The growth of British capitalism in the two centuries before Smith had, in fact, been very dependent upon sponsorship by the state and the economic activities of governments. The enclosure acts, the navigation laws, the great state sponsored monopolies headed by the East India Company, state expenditures on equipping the armed forces, especially the navy, all played a vital part in that growth. A very long spell of state sponsorship, of “mercantilism”, was necessary for British capitalism to develop sufficiently to be able to dominate the world on the basis of the free trade urged by Smith.

The Smithian doctrine did not become the practice of British capitalism until the 1840s and 1850s (with the repeal of the Corn Laws and the removal of India from the control of the East India Company) and even then the forces of the British state still played a central role in imposing free trade on other parts of the world. The Opium Wars are just one example.

What is more, this “classical” phase did not in practice last much more than half a century.

By the 1880s and 1890s British governments were carving out new colonies in Africa to supplement their old ones in Asia and the West Indies. And although there were not to be formal measures (tariffs, quotas) tying the colonial economies to Britain until the establishment of “imperial preference” in the 1930s, there were a mass of informal links.

Capitals had established themselves in Britain through close links with the national state.

Once established they had then used this national base to encompass the rest of the world. And when, after a few decades, capitals from other countries began to challenge their dominating role, they then turned once again to their own national state to establish areas of privileged access for them.

The newer centres of capital accumulation that emerged alongside Britain in the 19th century were as dependent upon national state support as British capitalism had been previously. German, Italian and Yankee capitalists all looked to a national state which would use its power to impose protectionist measures against outside competition: the rise of indigenous capitalist firms in these countries was closely tied to the establishment of unitary states prepared to accede to their demands (the unification of Italy, the victory of the North in the American Civil War, the establishment of the German Empire under Bismarck).

Capitals aided the creation of the unified state – and success in the struggle for unification usually gave an enormous boost to indigenous capital (e.g. the tremendous growth of American capitalism in the decades after the Civil War and of German capitalism after the Franco-Prussian War).

Historically, then, capitals have never developed according to the anti-statist schemas of classical economics. They have influenced and been influenced by the state structures in which they have found themselves. This has left its impact on the specific features of the individual capitals.

Regarded simply as accumulations of wealth, all capitals may have the same character, differing only in their size. But each individual capital, like each individual commodity, has a 164

twofold character. As well as being measurable in terms of exchange value, it is also a concrete use value – a concrete set of relations between individuals and things in the process of production. Each particular capital has its concrete ways of bringing together labour power, raw materials and means of production in the production process, of raising finance and getting credit, of establishing networks for distributing and selling its output.

It inevitably turns for assistance in all of these tasks to other local capitals and to the state in which it is located. Capitals in a particular geographical location do not merely compete with each other; they also co-operate with each other and with the state to establish mechanisms for achieving mutual goals. And this co-operation inevitably leaves its imprint on the internal make up of each capital, so that a particular capital would find it very difficult to cope if it were suddenly to be torn apart from the other capitals and the state with which it has co-existed in the past.

The groups of capitals and the state with which they are associated form a system in which each affects the others. The specific character of each capital is influenced by its interaction with the other capitals and the state. It reflects not only the general drive to expand value, to accumulate, but also the specific environment in which it has grown up. The state and the individual capitals are intertwined, with each feeding off the other.

This interaction takes place in different ways. The legal code of the state and the way it raises revenue, influence, and are influenced by, the internal organisation of each capital – the relationship between owners and managers, accounting procedures, even the ease with which it can recruit and lay off labour. They also affect and are affected by the relations between capitals – the extent to which there is a fusion between productive capital and merchant capitals (with firms doing their own marketing), or between finance capital and productive capital (with firms depending on “their” banks to raise money).

Neither the state nor the particular capitals can easily escape this structural interdependence.

The particular capitals find it easier to operate within one state rather than another, because they may have to profoundly restructure both their internal organisation and their relations with other capitals if they move their operations. The state has to adjust to the needs of particular capitals because it depends on them for the resources – particularly the revenues from taxation – it needs to keep going: if it goes against their interests, they can move their liquid assets abroad.

This structural interdependence explains why the capitals that grow up in one particular state tend to differ in certain ways to those that grow up in other states. For instance, the level of monopolisation of British capital tended to be less than that of German and American capital in the early years of the 20th century; the role of the banks tended to be different in pre-First World War Britain to their role in Germany or France; the state was much more important in the formation of a skilled labour force in Germany than in Britain in the 19th century; today Japanese firms typically raise finance in a rather different way to British or American firms; the influence of the state on private capital investment is much greater in Japan or France than in the US. Such structural adjustment of states and capitals to each other is necessarily accompanied by something else – the intermingling of their personnel so emphasised by the “instrumental” view of the state. The relationship between the capitals based in a particular country and their state is not simply a relationship between impersonal structures. It is a relationship between people, between those engaged in exploiting the mass of the population and those who control bodies of armed men.

Personal contact with the leading personnel of the state is something every capitalist aims at – just as every capitalist seeks to cultivate ties of trust and mutual support with certain other capitalists.

Relations between the rulers of the state and the capitalists who have accumulated wealth within its orbit tend to be much closer than either’s relations with outsiders. The fact that the leading personnel of the state went to the same schools as the leading capitalists, go to the same clubs, and are intermarried with each other, is very important to the individual capitalists in much the same way as are interlocking directorships between firms, their suppliers and their bankers. To deny this, as some critics of the “instrumental” account of the state do, is not to take account of the fact that both the state and the capitals are concrete complexes of social relationships, in which the character of the leading personnel is of enormous importance.

165

The market models of classical and neo-classical economics portray capitals as isolated atoms which engage in blind competition with other capitals. In the real world, capitalists have always tried to boost their competitive positions by establishing alliances with each other and with ambitious political figures – alliances cemented by money but also by intermarriage, old boy networks, mutual socialising. [20] Knowing the right people is an important complement to adequate finance for any successful capitalist – indeed, often an indispensable precondition for getting that finance.

The networks of who knows whom have grown up within the orbit of particular national states, usually around particular major cities. For instance, in the United States in the mid-1970s there was a “concentration of corporate head offices”, with most of the top 500 corporations being located in the “mid-Atlantic” and “East North Central” regions. Despite the growth of “sunbelt” industry, only 12 percent of head offices were in the South. [21] Even in multinational corporations, what is sometimes called “the headquarters effect” is at work. As one commentator has noted: Multinationals tend to locate the activities which create the greatest added value and which give them the greatest competitive edge as close as possible to their headquarters. [22] The extent of the linkages which have grown up between national states and the capitals within their boundaries is shown by the difficulties the European Community has in overcoming: the refusal by governments, utilities and monopoly industries to purchase from suppliers outside their own countries. At stake is a market valued at £281 billion, or 10 percent of European Community economic output. It is a big—and sometimes sole—source of demand for products ranging from turbine generators to telephone exchanges and has long been used by governments to promote national champion industries at the expense of foreign rivals ... Fewer than 5 percent of all central, regional and local public orders go to bidders from other countries and many are awarded on a non-competitive single tender basis. [23] Article Index The “autonomy” of the state There are cases in which those who control the state break with those who control the capitals within their territory. The Nazis did confiscate Thyssen’s wealth and establish their own Hermann Goering Werke as an important component of the German economy. Peron’s first government in Argentina did seize the super-profits of the agrarian capitalists and redirect them into state controlled industrial development. Nasser in Egypt and the Ba’athists in Syria did dispossess big capital (both indigenous and foreign) and transform it into state capital. Those who controlled the state machines of Eastern Europe after the Second World War did use them to impose almost complete statification of the means of production.

There are also many cases in which the individual capitals behave in ways detrimental to the interests of “their” state – moving funds and investment abroad, doing deals with foreign capitalists that undercut other local capitals, even selling weapons to states fighting their own. Yet there are limits to the extent to which the state can break free of its capitals, and capitals of their state.

The limiting case for the state is that, even if it overrides the interests of particular capitalists, it cannot forget that its own revenues and its own ability to defend itself against other states depend, at the end of the day, on the continuation of capital accumulation. Thus the Nazis could expropriate Thyssen, they could seize the wealth of Jewish capitalists, they could establish the horrific machinery of the death camps without it providing any appreciable benefit to German capital, they could even insist on continuing the war after it was clearly going to be lost and the interests of German capitalism would have been served by attempts at a negotiated peace. But they could only do all of these things so long as they ensured that capitalist exploitation took place on the most favourable terms for capital (state and private) and, therefore, that accumulation continued. The same applies to Peron, Nasser, the Ba’athists, the East European regimes and so on.

The limiting case for the individual capital is that though it can, with considerable difficulty, uproot itself from one national state terrain and plant itself in another, it cannot operate for any length of time without having some state to do its will. It is too vulnerable to try to operate in a 166

“Wild West” situation in which there is no effective state, leaving it prey both to forces below which might disrupt its normal rhythms of exploitation and to other capitals and their states.

A break, either of the state with its capitals or of the capitals with their state, is a difficult and risky business. If the state turns on private capital, it can create a situation in which people begin to challenge not merely private capital but capital accumulation as such and, with it, the hierarchies of the state. If a private capital breaks with “its” state it risks being left to fend alone in a hostile and dangerous world. So there is neither an easy, peaceful road to state capitalism nor an easy shift of industrial capitals from one metropolitan centre to another.

Article Index The class character of the state bureaucracy Most discussions of the state and capitalism never even touch one major question – the class character of the state bureaucracy itself. The assumption is usually that it is simply a passive creature of a capitalist class whose own position is defined by its private ownership of the means of production. Sometimes the bureaucracy is presented as having interests of its own which may make marginal encroachments on the interests of private capital, but this is rarely spelt out: it is usually no more than an ad hoc assumption thrown in so as to make sense of individual events.

Such a view made a certain sense when Marx was looking at mid-19th century British capitalism with its minimal “nightwatchman” state. State expenditure was at very low levels and taxation only marginally affected the pricing of goods or the level of people’s disposable incomes.

However, this account of the state can make no sense of the absolutist period which witnessed the rise of “productive” capitalism or of capitalism in the present century. In both cases, the state bureaucracy itself is a very significant social layer, state expenditures play a very important part in determining the way society develops, and state taxation and borrowing decisively influence the general structure of prices and the disposable incomes of the different classes.

Marx went far beyond the view he put forward in the Communist Manifesto when, in 1871, he wrote that “the complicated state machinery ...with its ubiquitous and complicated military, bureaucratic, clerical and judiciary organs, encoils the living society like a boa constrictor ... Every minor social interest engendered by the relations of social groups was separated from society itself, fixed and made independent of it and opposed to it in the form of state interest, administered by state priests with exactly determined hierarchical functions.”

He emphasised that such a state bureaucracy did not merely live off exploitation by separate, private interests, but superimposed on them its own exploitative activities. The state was “not only a means of the forcible domination of the middle class” but also “a means of adding to the direct economic exploitation a second exploitation of the people, by assuring to their [i.e. the middle class’s – CH] families all the rich places in the state household.” The state bureaucracy arises to assure the domination of the existing ruling class, but in the process becomes a “parasite” which is capable of “humbling under its sway even the interests of the ruling classes ...” [24] Under ageing capitalism, the proportion of the total income of society passing through the hands of the state is usually much greater than income going directly to private capital as profits, interest and rent. Investment directly undertaken by the state is often more than half total investment.

[25] The state bureaucracy directly disposes of a very big portion of the fruits of exploitation and oversees a great amount of economic activity. Its class character is very important to the whole functioning of society.

There is enormous confusion among many professed Marxists as to what constitutes a class.

They argue that class depends on individual ownership (or non-ownership) of property, and that therefore the state bureaucracy cannot be an exploiting class or part of an exploiting class – hence the claim that the ruling stratum in the Eastern states has not in the past been a class, although it is conceded that privatisation might now be transforming it into one.

But classes, for Marx himself, were aggregates of people whose relationship to material production and exploitation forced them to act together collectively against other aggregates. In an unfinished final chapter to volume three of Capital Marx insists that classes cannot be identified simply by the “sources of revenues” since this would lead to an infinite division into classes, 167

paralleling the infinite fragmentation of interests and rank into which the division of social labour splits labourers as well as capitalists and landlords – the latter, e.g., into owners of vineyards, farm owners, owners of forests, mine owners and owners of fisheries.” [26] What makes such diverse groups come together into the great classes of modem society, he argues elsewhere, is the way in which the revenues of one set of groups arise out of the exploitation of those who make up other groups. The social relations of production and exploitation divide society into two great groupings, one of which exploits the other. The historic opposition between them forces each to band together against the other, to behave as a class. [27] Feudal lords form a class because each depends for his survival on the surplus which he forces the serfs to hand over to him and therefore will unite with other feudal lords against all serfs: whether he participates in the exploitation of the serfs as an individual landowner, as a dignitary in a religious order or as a royal official, is a secondary matter compared to this fundamental definition of his class position. For this reason, holders of high office in a state based upon feudal relations of exploitation are part of the feudal ruling class: both their own existence and the functions they fulfil in the state depend upon them identifying with the prevailing form of exploitation.

In the same way, under mature capitalism, the directing layer in the state bureaucracy is dependent upon successful capitalist exploitation and accumulation. It cannot get the revenues it requires if this is not happening. And so it is forced to provide conditions which will encourage capital accumulation within the boundaries of its state – on the one hand to make sure that resistance to exploitation by the mass of the population is kept to a minimum, on the other to enhance the competitiveness of nationally based capital as opposed to capital that is based abroad.

Any state bureaucracy which fails to accomplish this is going to see the resources it needs for its own privileges and its own functioning dry up. Whether it likes it or not, it is compelled to act as an agent of capital accumulation and to identify its own interests as national capitalist interests in opposition both to the interests of foreign capital and the working class.

It is this requirement which sets the most fundamental limits on the “autonomy” of the state.

Just as the individual capitalist can choose to enter in one line of business rather than another, but cannot avoid the compulsion to exploit and accumulate in whatever line he goes into, so the state bureaucracy can move in one direction or another, but cannot ignore the needs of national capital accumulation without risking its own longer term future. Its “autonomy” consists in a limited degree of freedom as to how it enforces the needs of national capital accumulation, not in any choice as to whether to enforce these or not.

The dependence of the state bureaucracy on capitalist exploitation is often concealed by the way in which it raises its revenues – by taxation of incomes and expenditure, by government borrowing or by “printing money”. All of these activities seem, on the surface, to be quite different from capitalist exploitation at the point of production. The state therefore seems like an independent entity which can raise the resources it needs by levying funds from any class in society.

But this semblance of “independence” disappears when the state’s activities are seen in a wider context. State revenues are raised by taxing individuals. But individuals will attempt to recoup their loss of purchasing power by struggles at the point of production – the capitalists by trying to enforce a higher rate of exploitation, the workers by attempting to get wage increases. The balance of class forces determines the leeway which exists for the state to increase its revenues. These are part of the total social surplus value – part of the total amount by which the value of workers’ output exceeds the cost of reproducing their labour power (i.e. their take home wages). [28] In this sense, state revenues are comparable to the other revenues that accrue to different sections of capital – to the rents accruing to landowners, the interest going to money capital, the profits from trade going to commodity capital and so on. Just as there is continual conflict between the different sections of capital over the sizes of these different revenues, so there is continual conflict between the state bureaucracy and the rest of the capitalist class over the size of its cut from the total surplus value.

The state bureaucracy will, on occasions, use its own special position, with its monopoly of armed force, to make gains for itself at the expense of others. In response to this, the other sections of 168

capital will use their own special position – industrial capital its ability to postpone investment, money capital its ability to move overseas – to fight back. Yet in all this the different sections of capital cannot forget their mutual interdependence.

The state, money capital and commodity capital cannot increase their revenues unless surplus value is being generated in the domain of production. Productive capital cannot get surplus value unless the state ensures a plentiful supply of “free” labour with sufficient skills, and provides means of physical defence. It also requires that commodity capital ensures realisation of the surplus value and that money capital can provide the funds for further expanding production. Commodity capital cannot function effectively unless the state lays the basis for the operation of a stable national market and uses its influence to open up foreign markets.

Each element branches out on its own, like nerves in a human body. but still cannot escape its dependence upon huge ganglions where it intertwines with all the others.

These ganglions, knots where the mass of different capitals are entangled with the state bureaucracy they sustain and depend upon, are the national capitalist economies.

Those who run the different elements can act, up to a certain point, as if they had complete autonomy. In particular, money capital and commodity capital can act as if they had no dependence upon the geographically rooted means of production of industrial capital. In the same way, those who run the state can act, up to a certain point, as if their revenues did not depend upon successful capitalist exploitation and accumulation. This is what happens when reformists, populists or even fascists get control of pans of the state structure and use them to carry through social change.

Yet at the end of the day the mutual interdependence of the different elements asserts itself in the most dramatic fashion, through crises – the sudden collapse of the system of credit, the sudden inability to sell the commodities, sudden balance of payment crises or even the threat of state bankruptcy. The “autonomy” of those who run the state is, in this sense, a bit like the “autonomy” of the banker, the commodity speculator or the individual industrialist. Each is able, up to a certain point, to act as if the overall drive to exploit and accumulate can be ignored.

The banker can lend without any real consideration of the ability of the debtor to pay back.

The commodity speculator forgets the dependence of his profits on consumption that can only take place if there is an expansion of capitalist production. The individual entrepreneur can be lulled by temporary success and allow his enterprise to lag behind in the drive for further investment and innovation. Those who command the state can embark on all sorts of ambitious schemes that weaken the ability of nationally based capital to compete with its rivals elsewhere. But all are eventually forced back into line by the pressures of the total system.

This has very important implications for the class position of those who direct the bureaucracies of the state. They may not own individual chunks of capital. But they are forced to behave as agents of capital accumulation, to become, according to Marx’s definition, part of the capitalist class.

Marx points out in Capital that with the advance of capitalist production there takes place a division of function within the capitalist class. The owners of capital tend to play a less direct part in the actual organisation of production and exploitation, leaving this to highly paid managers. But, insofar as these managers continue to be agents of capital accumulation, they remain capitalists. The Austrian Marxist Hilferding developed the argument further, pointing to the divisions within a single capitalist class between the mass of rentier capitalists, who rely on a more or less fixed rate of return on their shares, and “promoter” capitalists who gain extra surplus value by gathering together the capital needed by the giant corporations. [29] We can add a further distinction, between those who manage the accumulation of individual capitals and those who, through the state, seek to promote the development of the sibling capitals operating within an individual state – what may be called state capitalists or political capitalists.

There are many finance capitalists who are also merchant capitalists and productive capitalists. There are many entrepreneurial capitalists who are also share owning capitalists. In the same way, those who concern themselves with accumulation at the nation state level often come from the ranks of entrepreneurial or shareholding capitalists and will often return there at a later date.

169

So it is that in Britain the heads of giant private companies have included individuals who made their careers first by rising to the top of nationalised corporations: in two well known cases, those of Alf Robens and Richard Marsh, using political success within the Labour Party as a stepping stone to running the state corporations and then moving into the private sector. So it is that in France the career of Calvet, the head of the giant private sector car firm Peugeot, has involved spells in both public and private sector. So it is that in Japan it is normal for people who have made careers in public agencies of accumulation, like the powerful Ministry of International Trade and Industry, to move to top jobs in the private sector. So it is in Italy that the management structure of the key nationalised enterprises, IRI and ENI, has long been intertwined with the political hierarchies of the governmental parties, particularly the largest, the Christian Democrats.

One account of a notorious Italian financial scandal, by a Financial Times journalist, tells: To raise money in Italy is to secure a loan from a bank. The banks, however, can in turn be heavily conditioned by the politicians ... [In the early 1980s] some three quarters of the Italian banking system was owned by the state. And in many cases the senior posts are politically conditioned appointments, the accepted spoils of power. [30] In the 1960s, “the Christian Democratic Party ... moved to increase its control of the banking system and the constellation of public sector corporations ...” [31] With the formation of “centre left coalitions” there was an intensifying struggle for top public sector jobs’ between the different governmental parties: The Christian Democrats and Socialists have split into factions competing as much against each other as against the theoretical Communist opposition ... These factions and cliques...have found their new battleground in the banks and other appendages of the state.

[32] A new breed of entrepreneur was emerging. Technically its members represented state enterprise and the public sector; but in practice they moved like financial barracuda, acting sometimes on their own behalf sometimes for their political patrons, but unfailingly with money from the public purse ...

The fiercest of the barracuda was Eugenio Cefis, chairman of ENI, the state oil group.

And his hand was behind the most dramatic example of this “politicisation” of industry in 1968, when ENI secretly built up a controlling shareholding in Montedison, Italy’s biggest, and hitherto privately owned, chemical concern. [33] Years before this the first head of ENI, Enrico Mattei, had used the funds under his control “to dominate the politicians ... to the extent he was considered the most powerful single figure in Italy” [34] even setting up – with funds that theoretically belonged to the state-his own newspaper, Il Giorno. [35] Today ENI is estimated to be the fourth biggest industrial corporation in the world outside the US. [36] The individual “political capitalists” do not owe their highly privileged position in society to the size of their individual holdings of stocks and shares. Political influence and personal guile are usually the key. But they have in common with shareholders and private entrepreneurs an interest in maintaining the level of exploitation and accumulation. The Financial Times recently noted of France: The chairmen of state owned companies are appointed for three year terms. These days the best way of ensuring your appointment is renewed – whatever your political friendships – is to produce profits. [37] In behaving like this, the state appointees behave as much like capitalists – as living embodiments of capital accumulation at the expense of workers – as do private entrepreneurs or shareholders.

Article Index 170

Imperialism: the merger of finance capital, industrial capital and the state We are now in a position to make sense of the “merging of the state and capital” which was so central to the writings on imperialism of Lenin and Bukharin. The logic of capitalism leads to the growing concentration and centralisation of capital – the replacement of many small capitals by a few large ones. The groups of these that operate within any single country are dependent on each other and the national state, laying the basis for a new integration of industrial, commercial and finance capital around the state. Each national state becomes the nodal point around which capitals cluster, even when their activities lead them to branch out from it to penetrate the rest of the world.

But that is not the end of the matter. The mutual interdependence of each national state and a few large capitals gives rise to a tendency for the boundaries between the state and the capitals to break down. The capitals turn increasingly to the direct use of personal influence (rather than the indirect use of market pressures) to determine how the state acts, and the state bureaucracy increasingly interferes in the internal management of particular firms.

The interpenetration of national capitals and the national state finds expression in an important change in the way in which capitalist competition itself takes place. It is increasingly regulated within national boundaries, while assuming the form of military, as well as (or even instead of) market competition internationally.

This “new dimension of competition” does not at all negate the dependence of the capitals and the state bureaucracy upon capitalist exploitation and accumulation. Acquisition of the means of destruction on the necessary scale to assure success in war depends upon the same drives as acquisition of the means of production on the necessary scale to assure success in the struggle for markets – the driving down of wages to the cost of reproduction of labour power, the driving up of the productivity of labour to the level which prevails on a world scale (so that nothing is lost in translating national concrete labour into international abstract labour), and the drive to use the surplus for accumulation.

The only difference, in this respect, between military and economic competition is the form the accumulation takes – whether it is in terms of an accumulation of use values that can be used to produce new goods or of use values that can be used to wage war. In either case the importance of these use values to those controlling them is determined by comparison with use values elsewhere in the system, a comparison which transmutes them into exchange values. As Lenin emphasised, periods of “peaceful” competition prepare the way for periods of all out war, and periods of all out war prepare the way for periods of “peaceful” competition. [38] So even in periods of “peace” the relations between the different capitals are not simply dependent, as in Marx’s model in Capital, on their market relations. Conditions are those of an “armed peace” in which the relative influence of the different states helps determine the relative success of the different blocs of capital associated with them. And this relative influence depends at the end of the day on their ability to accumulate military hardware: it is this which determines their ability to build empires, acquire client states and create alliances.

I have outlined the history of this phase of capitalist development in Explaining the Crisis and there is no point in repeating it here. [39] It suffices to say that the trend towards the merger of state and industry – the “imperialism” of Lenin and Bukharin – began in the late 19th century. But it did not reach its fullest development until the 1930s, when individual “private” capitals seemed incapable of recovering from economic crisis if simply left to their own devices. Then for more than 40 years the march of statification seemed unstoppable. Everywhere the state sector grew remorselessly, with state control or ownership of basic older industries like coal, steel, transport and electricity generation, and state sponsorship (and sometimes ownership) of the most technologically advanced industries.

The process went furthest, of course, in the bureaucratic state capitalisms of the USSR, Eastern Europe and China. But in countries as diverse as Japan and Brazil, Argentina and Italy the state exercised an enormous degree of influence over the activities of the great corporations, “private” or nationalised, with people flitting from high positions inside ruling parties or state 171

bureaucracies to the management of the great corporations and back again. To be a power in the Japanese Liberal Democrats, the Italian Christian Democrats or the Argentine Peronist Movement was to influence the decision making – and gain from the revenues – of industry as well as the state.

Even in the most “liberal” of the Western capitalisms, that of the US, the key role of the military sector gave the state enormous leverage and cabinets tended to be to a large extent staffed with corporation heads. What was good for General Motors was good for the United States, and a Robert McNamara could move from helping to run Ford to bombing Vietnam and then to trying, as head of the World Bank, to create successful capitalisms in the Third World.

The rise of state capitalism was accompanied by a decline in the proportion of economic transactions that crossed state frontiers. Each national capitalist complex attempted to undertake as wide a range as possible of economic and military functions within its own boundaries, each trying to build national steel, car, chemical, shipbuilding, electronic, munitions and aircraft industries.

Trade in manufactures as a proportion of world output had risen from an index figure of 1.0 in 1900 to 1.2 in 1914. It fell back to 1.1 by 1920 arid 1.0 in 1930 and then slumped to 0.7 in 1940 and 0.6 in 1950. [40] Merchandise trade was equal to 43.5 percent of Britain’s national product before 1914. In the 1950s it was down at 30.4 percent. There was a similar decline for other countries: from 11.0 to 7.9 percent for the US, from 29.5 to 18.8 percent for Japan, from 38.3 to 35.1 percent for Germany, from 28.1 to 25 percent for Italy. [41] It reached its low point after the great slump of the 1930s, when all the major powers and many of the minor ones took the path of military state capitalism.

For a generation, then, trade and financial flows between capitalist powers were subordinated to the demands of competitive accumulation within national state boundaries. Transactions across state boundaries were dependent upon negotiations at the state level. The national state provided each of the rival sections of capital with: i.

A geographic base for accumulation of means of production and destruction – i.e. provision of trained labour power, privileges as against other “foreign” capitals within a certain terrain through subsidies, tariffs, exclusion of foreign produce, cheap state produced raw materials etc. ii.

Military force to protect them against foreign state capitals and to open up new areas of privileged access. iii.

The orderly regulation of commercial relations with other capitals (through a stable legal system) and the provision of nationally based currency which can be manipulated against other currencies. iv.

Protection against the sudden harm done to important sections of nationally based capital if other sections with which they were integrated suddenly collapsed.

Mike Kidron’s picture of a world of self contained, competing state capitals is very much an abstraction from this period. Yet as an abstraction it misses out very important elements of concrete reality. For the different phases in the cycle of capital continue to exist even in .a world of state capitals, and the need to fulfil them leads to divergent pressures within the state-industrial complex.

Thus even a self contained state capital can accumulate more quickly if it can gain access to funds, to money capital, outside its boundaries. And some state capitals can increase their own rates of accumulation if they can invest outside the national state – especially if this provides privileged access to commodity markets. The fact that state diplomacy mediates the flow of money capital and commodities does not mean such flows do not occur.

So even where there is a complete merger of the state and capital the different phases capital goes through create different interest groups within the single state capitalist class. Where a complete merger was never achieved in the first place, there are tendencies towards fission as well as fusion.

The different elements of capital and the state will be bound together, but will also be continually trying to pull apart.

The differing pressures of military and economic competition will likewise produce a combination of divergent and convergent interests: sections of the state apparatus will identify with accumulation of military hardware and will succeed in getting sections of the industrial structure to 172

make the same identification. Other sections of industry will be more interested in accumulation directed at market competition and will endeavour to win sections of the state bureaucracy to their side.

The result is that even at the high point of state capitalism “national planning” was very much a myth: what in reality occurred was a continual jockeying for position between different interest groups, each using political influence to get its way. Yet there could never be a complete breakdown of the national entity since access to political influence meant putting forward a programme which seemed to relate to the interests of the whole state capital. The divergent particular interests of different sections of capital and the state were still bound together by a mutual dependence on national accumulation and national state power.

CONTINUATION Article Index Notes 1. M. Kidron, Two Insights Do Not Make a Theory, International Socialism (old series) 100; C. Harman, Better a Valid Insight Than a Wrong Theory, a reply to M. Kidron, in International Socialism (old series) 100, and Explaining the Crisis, ch.3; N. Harris, Of Bread and Guns and The End of the Third World; A. Callinicos, Imperialism, Capitalism and the State Today – a review of Nigel Harris’s The End of the Third World, Internationalism Socialism 2:35.

2. H. Gulalp quite rightly observes that the discussion between Miliband and Poulantzas over the “autonomy” of the capitalist state accepts “the liberal theory of the state”. They both “start from the premise of an analytical distinction between the economic and the political. This leads to the conception of the state as an independent entity with a power distinct from the relations of class domination”, while in reality the state has the job of maintaining the overall conditions for capital accumulation. Capital Accumulation, Classes and the Relative Autonomy of the State, Science and Society, vol.51 no.3, Fall 1987.

3. See R. Miliband, The State in Capitalist Society; Reply to Nicos Poulantzas, New Left Review 59, January-February 1970; Analysing the Bourgeois State, New Left Review 82, NovemberDecember 1972; Debates on the State, New Left Review 138, March-April 1983.

4. N. Poulantzas, Political Power and Social Classes; The problem of the Capitalist State, New Left Review 58, November-December 1970; Controversy over the State, New Left Review 95, JanuaryFebruary 1976; Dual Power and the State, New Left Review 109, May-June 1978. This is what I take to be Poulantzas’ argument. But I have to admit that Poulantzas’ way of writing was so convoluted and obscure I could be wrong. I suspect few people will take the pointless labour of ploughing through his prose to see if that is so.

5. This was, for instance, the sense of the contributions by P. Anderson and F. Halliday to the discussion after Robert Brenner’s 1987 Isaac Deutscher Memorial Lecture in London.

6. This, essentially, is what A. Barnett argues in his Soviet Freedom, 1988.

7. N. Harris in Socialist Worker Review (London, September 1987). He is referring specifically to the demonstrations in South Korea of August 1987, but it is clear that he sees his comments as having wider implications, as being part of a trend towards the emergence of a genuinely international capitalist class.

8. V.I. Lenin, imperialism: the Highest Stage of Capitalism; N. Bukharin, Imperialism and the World Economy (with and introduction by Lenin) and The Economics of the Transformation Period (with marginal notes by Lenin).

9. State Capitalism in Russia, which originally appeared in cyclostyled form in 1948.

10. Deflected Permanent Revolution, which originally appeared in the old series of IS in 1963 and has since been reprinted in Neither Washington Nor Moscow 1982.

11. M. Kidron, Two Insights Don’t Make a Theory, op. cit.

12. This is a criticism Cohn Barker makes on them in his articles The State as Capital, International Socialism 2:1, 1978; A Note on the Theory of the Capitalist State, Capital and Class, no.4, Spring 1978.

173

13. “A blow against the boss is a blow against the bomb” was the slogan of the International Socialists in the early 1960s.

14. This is effectively what M. Kidron argues in Two Insights Don’t Make a Theory, and a somewhat similar view is present in S. Clarke, Althusser’s Marxism, in S. Clarke and others, One Dimensional Marxism (London, 1980).

15. In fact, as the case of some of the Italian “workerists” shows, revolutionary “spontaneism” often passes over into movementist reformism: the same development was visible in Britain in the case of the small group Big Flame and the publishing house, Pluto Press when it was partly run by Kidron.

16. F. Braudel, The Wheels of Commerce (Civilisation and Capitalism, vol.II), London, 1982, p.213.

17. See the account of 16th century Lille and Leiden in R.S. DuPlessis and M.C. Howell, Reconsidering the Early Modem Economy: The Case of Leiden and Lille, Past and Present, February 1982.

18. His original 1857 draft outline for Capital includes plans for a fifth and sixth book on the state and on foreign trade. But he never had time to do any work on these, and in the parts of the work he completed he consciously excluded “competition in the world market” from the scope of his studies.

See the account of Marx’s work in R. Rosdolsky, The Making of Marx’s Capital, London 1980, pp.14 and 22.

19. The Wealth of Nations, quote in Financial Times, 21 July 1990.

20. For a useful discussion on the literature about these networks, see J. Scott, Corporations, Classes and Capitalism, London 1985.

21. D. Clark, Post Industrial America, 1984, p93.

22. C. Lorenz in the Financial Times, 20 June 1988. The issue has recently been much discussed in relation to R. Reich’s, The Work of Nations: Preparing Ourselves for 21st Century Capitalism.

See the review of this book by P. Riddell in Financial Times, 14 March 1991, and the criticism of the book by C. Lorenz, Financial Times, 15 March 1991.

23. Financial Times, 13 November 1989.

24. All quotes from first draft of The Civil War in France.

25. In countries like Italy or Brazil this can be half of total productive investment; in the case of the US arms expenditure, an “unproductive” form of investment, has been equal to total productive investment for long periods of time.

26. Capital, vol.III, Moscow 1962, pp.862-3.

27. As Marx put it in his notebooks for Capital: “Capital and wage labour only express two factors of the same relations. The capitalist is only a capitalist insofar as he embodies the self-expansion of value, insofar as he is the personification of accumulation”; the worker is a worker only insofar as “the objective conditions of labour” confront him or her as capital.

28. To be absolutely accurate, it is the total state revenues minus that portion of them that flows back to the working class in terms of welfare benefits, subsidies etc that is part of the total surplus value; and the value of labour power is total take home wages plus these benefits, subsidies etc.

29. R. Hilferding, Finance Capital, London 1981.

30. R. Cornwell, God’s Banker: an Account of the Life and Death of Roberto Calvi, London 1983, p.24.

31. R. Cornwell, ibid.

32. R. Cornwell, ibid., p.25.

33. R. Cornwell, ibid., p.40.

34. R. Cornwell, ibid., p.113.

35. R. Cornwell, ibid., pp.75-6.

36. R. Cornwell, ibid., p.113.

37. Financial Times, 9 May 1990.

38. See, for instance, Imperialism: the Highest Stage of Capitalism, London 1933, p.108.

39. C Harman, Explaining the Crisis, London 1984.

40. Calculation by A. Winters, contained in Financial Times, 16 November 1987.

174

41. Figures, based on S. Kuznets, given in Financial Times, 16 November 1987. W.W. Rostow provides figures which show similar trends, with world output growing 80 percent between 1929 and 1950, but world trade falling about 8 percent. [Quoted in Hobsbawm, The Age of Imperialism, London 1989, p.319].

Top of the page Last updated on 27.10.2002

STATE AND REVOLUTION Preface to the First Edition The question of the state is now acquiring particular importance both in theory and in practical politics. The imperialist war has immensely accelerated and intensified the process of transformation of monopoly capitalism into state-monopoly capitalism. The monstrous oppression of the working people by the state, which is merging more and more with the all-powerful capitalist associations, is becoming increasingly monstrous. The advanced countries - we mean their hinterland - are becoming military convict prisons for the workers.

The unprecedented horrors and miseries of the protracted was are making the people's position unbearable and increasing their anger. The world proletarian revolution is clearly maturing. The question of its relation to the state is acquiring practical importance.

The elements of opportunism that accumulated over the decades of comparatively peaceful development have given rise to the trend of social-chauvinism which dominated the official socialist parties throughout the world. This trend - socialism in words and chauvinism in deeds (Plekhanov, Potresov, Breshkovskaya, Rubanovich, and, in a slightly veiled form, Tsereteli, Chernov and Co. in Russia; Scheidemann. Legien, David and others in Germany; Renaudel, Guesde and Vandervelde in France and Belgium; Hyndman and the Fabians in England, etc., etc.) - is conspicuous for the base, servile adaptation of the "leaders of socialism" to the interests not only of "their" national bourgeoisie, but of "their" state, for the majority of the so-called Great Powers have long been exploiting and enslaving a whole number of small and weak nations. And the imperialist war is a war for the division and redivision of this kind of booty. The struggle to free the working people from the influence of the bourgeoisie in general, and of the imperialist bourgeoisie in particular, is impossible without a struggle against opportunist prejudices concerning the "state".

First of all we examine the theory of Marx and Engels of the state, and dwell in particular detail on those aspects of this theory which are ignored or have been distorted by the opportunists. Then we deal specially with the one who is chiefly responsible for these distortions, Karl Kautsky, the bestknown leader of the Second International (1889-1914), which has met with such miserable bankruptcy in the present war. Lastly, we sum up the main results of the experience of the Russian revolutions of 1905 and particularly of 1917. Apparently, the latter is now (early August 1917) completing the first stage of its development; but this revolution as a whole can only be understood as a link in a chain of socialist proletarian revolutions being caused by the imperialist war. The question of the relation of the socialist proletarian revolution to the state, therefore, is acquiring not only practical political importance, but also the significance of a most urgent problem of the day, the problem of explaining to the masses what they will have to do before long to free themselves from capitalist tyranny.

The Author August 1917

175

Preface to the Second Edition The present, second edition is published virtually unaltered, except that section 3 had been added to Chapter II.

The Author Moscow December 17, 1918

Class Society and the State The State and Revolution Index

The State: a Product of the Irreconcilability of Class Antagonisms Special Bodies of Armed Men, Prisons, etc.

The State: an Instrument for the Exploitation of the Oppressed Class The "Withering Away" of the State, and Violent Revolution

1. The State: A Product of the Irreconcilability of Class Antagonisms What is now happening to Marx's theory has, in the course of history, happened repeatedly to the theories of revolutionary thinkers and leaders of oppressed classes fighting for emancipation. During the lifetime of great revolutionaries, the oppressing classes constantly hounded them, received their theories with the most savage malice, the most furious hatred and the most unscrupulous campaigns of lies and slander. After their death, attempts are made to convert them into harmless icons, to canonize them, so to say, and to hallow their names to a certain extent for the "consolation" of the oppressed classes and with the object of duping the latter, while at the same time robbing the revolutionary theory of its substance, blunting its revolutionary edge and vulgarizing it. Today, the bourgeoisie and the opportunists within the labor movement concur in this doctoring of Marxism.

They omit, obscure, or distort the revolutionary side of this theory, its revolutionary soul. They push to the foreground and extol what is or seems acceptable to the bourgeoisie. All the social-chauvinists are now "Marxists" (don't laugh!). And more and more frequently German bourgeois scholars, only yesterday specialists in the annihilation of Marxism, are speaking of the "national-German" Marx, 176

who, they claim, educated the labor unions which are so splendidly organized for the purpose of waging a predatory war!

In these circumstances, in view of the unprecedently wide-spread distortion of Marxism, our prime task is to re-establish what Marx really taught on the subject of the state. This will necessitate a number of long quotations from the works of Marx and Engels themselves. Of course, long quotations will render the text cumbersome and not help at all to make it popular reading, but we cannot possibly dispense with them. All, or at any rate all they most essential passages in the works of Marx and Engels on the subject of the state must by all means be quoted as fully as possible so that the reader may form an independent opinion of the totality of the views of the founders of scientific socialism, and of the evolution of those views, and so that their distortion by the "Kautskyism" now prevailing may be documentarily proved and clearly demonstrated.

Let us being with the most popular of Engels' works, The Origin of the Family, Private Property and the State, the sixth edition of which was published in Stuttgart as far back as 1894. We have to translate the quotations from the German originals, as the Russian translations, while very numerous, are for the most part either incomplete or very unsatisfactory.

Summing up his historical analysis, Engels says:

"The state is, therefore, by no means a power forced on society from without; just as little is it 'the reality of the ethical idea', 'the image and reality of reason', as Hegel maintains. Rather, it is a product of society at a certain stage of development; it is the admission that this society has become entangled in an insoluble contradiction with itself, that it has split into irreconcilable antagonisms which it is powerless to dispel. But in order that these antagonisms, these classes with conflicting economic interests, might not consume themselves and society in fruitless struggle, it became necessary to have a power, seemingly standing above society, that would alleviate the conflict and keep it within the bounds of 'order'; and this power, arisen out of society but placing itself above it, and alienating itself more and more from it, is the state." (pp.177-78, sixth edition) This expresses with perfect clarity the basic idea of Marxism with regard to the historical role and the meaning of the state. The state is a product and a manifestation of the irreconcilability of class antagonisms. The state arises where, when and insofar as class antagonism objectively cannot be reconciled. And, conversely, the existence of the state proves that the class antagonisms are irreconcilable.

It is on this most important and fundamental point that the distortion of Marxism, proceeding along two main lines, begins.

On the one hand, the bourgeois, and particularly the petty-bourgeois, ideologists, compelled under the weight of indisputable historical facts to admit that the state only exists where there are class antagonisms and a class struggle, "correct" Marx in such a way as to make it appear that the gate is an organ for the reconciliation of classes. According to Marx, the state could neither have arisen nor maintained itself had it been possible to reconcile classes. From what the petty-bourgeois and 177

philistine professors and publicists say, with quite frequent and benevolent references to Marx, it appears that the state does reconcile classes. According to Marx, the state is an organ of class rule, an organ for the oppression of one class by another; it is the creation of "order", which legalizes and perpetuates this oppression by moderating the conflict between classes. In the opinion of the pettybourgeois politicians, however, order means the reconciliation of classes, and not the oppression of one class by another; to alleviate the conflict means reconciling classes and not depriving the oppressed classes of definite means and methods of struggle to overthrow the oppressors.

For instance, when, in the revolution of 1917, the question of the significance and role of the state arose in all its magnitude as a practical question demanding immediate action, and, moreover, action on a mass scale, all the Social-Revolutionaries and Mensheviks descended at once to the pettybourgeois theory that the "state" "reconciles" classes. Innumerable resolutions and articles by politicians of both these parties are thoroughly saturated with this petty-bourgeois and philistine "reconciliation" theory. That the state is an organ of the rule of a definite class which cannot be reconciled with its antipode (the class opposite to it) is something the petty-bourgeois democrats will never be able to understand. Their attitude to the state is one of the most striking manifestations of the fact that our Socialist- Revolutionaries and Mensheviks are not socialists at all (a point that we Bolsheviks have always maintained), but petty-bourgeois democrats using near-socialist phraseology.

On the other hand, the "Kautskyite" distortion of Marxism is far more subtle. "Theoretically", it is not denied that the state is an organ of class rule, or that class antagonisms are irreconcilable. But what is overlooked or glossed over is this: if the state is the product of the irreconcilability of class antagonisms, if it is a power standing above society and "alienating itself more and more from it", it is clear that the liberation of the oppressed class is impossible not only without a violent revolution, but also without the destruction of the apparatus of state power which was created by the ruling class and which is the embodiment of this "alienation". As we shall see later, Marx very explicitly drew this theoretically self-evident conclusion on the strength of a concrete historical analysis of the tasks of the revolution. And — as we shall show in detail further on — it is this conclusion which Kautsky has "forgotten" and distorted.

2. Special Bodies of Armed Men, Prisons, etc.

Engels continues:

"As distinct from the old gentile [tribal or clan] order, the state, first, divides its subjects according to territory...."

This division seems "natural" to us, but it costs a prolonged struggle against the old organization according to generations or tribes.

"The second distinguishing feature is the establishment of a public power which no longer directly coincides with the population organizing itself as an armed force. This special, public power is necessary because a self-acting armed organization of the population has become impossible since the split into classes.... This public power exists in every state; it consists not merely of armed men but also of material adjuncts, prisons, and institutions of coercion of all kinds, of which gentile [clan] society knew nothing...."

178

Engels elucidates the concept the concept of the "power" which is called the state, a power which arose from society but places itself above it and alienates itself more and more from it. What does this power mainly consist of? It consists of special bodies of armed men having prisons, etc., at their command.

We are justified in speaking of special bodies of armed men, because the public power which is an attribute of every state "does not directly coincide" with the armed population, with its "self-acting armed organization".

Like all great revolutionary thinkers, Engels tries to draw the attention of the class-conscious workers to what prevailing philistinism regards as least worthy of attention, as the most habitual thing, hallowed by prejudices that are not only deep-rooted but, one might say, petrified. A standing army and police are the chief instruments of state power. But how can it be otherwise?

From the viewpoint of the vast majority of Europeans of the end of the 19th century, whom Engels was addressing, and who had not gone through or closely observed a single great revolution, it could not have been otherwise. They could not understand at all what a "self-acting armed organization of the population" was. When asked why it became necessary to have special bodies of armed men placed above society and alienating themselves from it (police and a standing army), the WestEuropean and Russian philistines are inclined to utter a few phrases borrowed from Spencer of Mikhailovsky, to refer to the growing complexity of social life, the differentiation of functions, and so on.

Such a reference seems "scientific", and effectively lulls the ordinary person to sleep by obscuring the important and basic fact, namely, the split of society into irreconcilable antagonistic classes.

Were it not for this split, the "self-acting armed organization of the population" would differ from the primitive organization of a stick-wielding herd of monkeys, or of primitive men, or of men united in clans, by its complexity, its high technical level, and so on. But such an organization would still be possible.

It is impossible because civilized society is split into antagonistic, and, moreover, irreconcilably antagonistic classes, whose "self-acting" arming would lead to an armed struggle between them. A state arises, a special power is created, special bodies of armed men, and every revolution, by destroying the state apparatus, shows us the naked class struggle, clearly shows us how the ruling class strives to restore the special bodies of armed men which serve it, and how the oppressed class strives to create a new organization of this kind, capable of serving the exploited instead of the exploiters.

In the above argument, Engels raises theoretically the very same question which every great revolution raises before us in practice, palpably and, what is more, on a scale of mass action, namely, the question of the relationship between "special" bodies of armed men and the "self-acting armed organization of the population". We shall see how this question is specifically illustrated by the experience of the European and Russian revolutions.

But to return to Engel's exposition.

He points out that sometimes — in certain parts of North America, for example — this public power is weak (he has in mind a rare exception in capitalist society, and those parts of North America in its pre-imperialist days where the free colonists predominated), but that, generally speaking, it grows stronger:

"It [the public power] grows stronger, however, in proportion as class antagonisms within the state become more acute, and as adjacent states become larger and more populous. We have only to look at our present-day Europe, where class struggle and rivalry in conquest have tuned up the public power to such a pitch that it threatens to swallow the whole of society and even the state."

179

This was written not later than the early nineties of the last century, Engel's last preface being dated June 16, 1891. The turn towards imperialism — meaning the complete domination of the trusts, the omnipotence of the big banks, a grand-scale colonial policy, and so forth — was only just beginning in France, and was even weaker in North America and in Germany. Since then "rivalry in conquest" has taken a gigantic stride, all the more because by the beginning of the second decade of the 20th century the world had been completely divided up among these "rivals in conquest", i.e., among the predatory Great Powers. Since then, military and naval armaments have grown fantastically and the predatory war of 1914-17 for the domination of the world by Britain or Germany, for the division of the spoils, has brought the "swallowing" of all the forces of society by the rapacious state power close to complete catastrophe.

Engels' could, as early as 1891, point to "rivalry in conquest" as one of the most important distinguishing features of the foreign policy of the Great Powers, while the social-chauvinist scoundrels have ever since 1914, when this rivalry, many time intensified, gave rise to an imperialist war, been covering up the defence of the predatory interests of "their own" bourgeoisie with phrases about "defence of the fatherland", "defence of the republic and the revolution", etc.!

3. The State: an Instrument for the Exploitation of the Oppressed Class The maintenance of the special public power standing above society requires taxes and state loans.

"Having pubic power and the right to levy taxes," Engels writes, "the officials now stand, as organs of society, above society. The free, voluntary respect that was accorded to the organs of the gentile [clan] constitution does not satisfy them, even if they could gain it...." Special laws are enacted proclaiming the sanctity and immunity of the officials. "The shabbiest police servant" has more "authority" than the representative of the clan, but even the head of the military power of a civilized state may well envy the elder of a clan the "unrestrained respect" of society.

The question of the privileged position of the officials as organs of state power is raised here. The main point indicated is: what is it that places them above society? We shall see how this theoretical question was answered in practice by the Paris Commune in 1871 and how it was obscured from a reactionary standpoint by kautsky in 1912.

"Because the state arose from the need to hold class antagonisms in check, but because it arose, at the same time, in the midst of the conflict of these classes, it is, as a rule, the state of the most powerful, economically dominant class, which, through the medium of the state, becomes also the politically dominant class, and thus acquires new means of holding down and exploiting the oppressed class...." The ancient and feudal states were organs for the exploitation of the slaves and serfs; 180

likewise, "the modern representative state is an instrument of exploitation of wage-labor by capital. By way of exception, however, periods occur in which the warring classes balance each other so nearly that the state power as ostensible mediator acquires, for the moment, a certain degree of independence of both...." Such were the absolute monarchies of the 17th and 18th centuries, the Bonapartism of the First and Second Empires in France, and the Bismarck regime in Germany.

Such, we may add, is the Kerensky government in republican Russia since it began to persecute the revolutionary proletariat, at a moment when, owing to the leadership of the petty-bourgeois democrats, the Soviets have already become impotent, while the bourgeoisie are not yet strong enough simply to disperse them.

In a democratic republic, Engels continues, "wealth exercises its power indirectly, but all the more surely", first, by means of the "direct corruption of officials" (America); secondly, by means of an "alliance of the government and the Stock Exchange" (France and America).

At present, imperialism and the domination of the banks have "developed" into an exceptional art both these methods of upholding and giving effect to the omnipotence of wealth in democratic republics of all descriptions. Since, for instance, in the very first months of the Russian democratic republic, one might say during the honeymoon of the "socialist" S.R.s and Mensheviks joined in wedlock to the bourgeoisie, in the coalition government. Mr. Palchinsky obstructed every measure intended for curbing the capitalists and their marauding practices, their plundering of the state by means of war contracts; and since later on Mr. Palchinsky, upon resigning from the Cabinet (and being, of course, replaced by another quite similar Palchinsky), was "rewarded" by the capitalists with a lucrative job with a salary of 120,000 rubles per annum — what would you call that? Direct or indirect bribery? An alliance of the government and the syndicates, or "merely" friendly relations?

What role do the Chernovs, Tseretelis, Avksentyevs and Skobelevs play? Are they the "direct" or only the indirect allies of the millionaire treasury-looters?

Another reason why the omnipotence of "wealth" is more certain in a democratic republic is that it does not depend on defects in the political machinery or on the faulty political shell of capitalism. A democratic republic is the best possible political shell for capitalism, and, therefore, once capital has gained possession of this very best shell (through the Palchinskys, Chernovs, Tseretelis and Co.), it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it.

We must also note that Engels is most explicit in calling universal suffrage as well an instrument of bourgeois rule. Universal suffrage, he says, obviously taking account of the long experience of German Social-Democracy, is

"the gauge of the maturity of the working class. It cannot and never will be anything more in the present-day state."

The petty-bourgeois democrats, such as our Socialist-Revolutionaries and Mensheviks, and also their twin brothers, all the social-chauvinists and opportunists of Western Europe, expect just this "more" from universal suffrage. They themselves share, and instil into the minds of the people, the false notion that universal suffrage "in the present-day state" is really capable of revealing the will of the majority of the working people and of securing its realization.

Here, we can only indicate this false notion, only point out that Engels' perfectly clear statement is distorted at every step in the propaganda and agitation of the "official" (i.e., opportunist) socialist

181

parties. A detailed exposure of the utter falsity of this notion which engels brushes aside here is given in our further account of the views of Marx and Engels on the "present-day" state.

Engels gives a general summary of his views in the most popular of his works in the following words:

"The state, then, has not existed from all eternity. There have been societies that did without it, that had no idea of the state and state power. At a certain stage of economic development, which was necessarily bound up with the split of society into classes, the state became a necessity owing to this split. We are now rapidly approaching a stage in the development of production at which the existence of these classes not only will have ceased to be a necessity, but will become a positive hindrance to production. They will fall as they arose at an earlier stage. Along with them the state will inevitably fall. Society, which will reorganize production on the basis of a free and equal association of the producers, will put the whole machinery of state where it will then belong: into a museum of antiquities, by the side of the spinning-wheel and the bronze axe."

We do not often come across this passage in the propaganda and agitation literature of the presentday Social-Democrats. Even when we do come across it, it is mostly quoted in the same manner as one bows before an icon, i.e., it is done to show official respect for Engels, and no attempt is made to gauge the breadth and depth of the revolution that this relegating of "the whole machinery of state to a museum of antiquities" implies. In most cases we do not even find an understanding of what Engels calls the state machine.

4. The "Withering Away" of the State, and Violent Revolution Engel's words regarding the "withering away" of the state are so widely known, they are often quoted, and so clearly reveal the essence of the customary adaptation of Marxism to opportunism that we must deal with them in detail. We shall quote the whole argument from which they are taken.

"The proletariat seizes from state power and turns the means of production into state property to begin with. But thereby it abolishes itself as the proletariat, abolishes all class distinctions and class antagonisms, and abolishes also the state as state.

Society thus far, operating amid class antagonisms, needed the state, that is, an organization of the particular exploiting class, for the maintenance of its external conditions of production, and, 182

therefore, especially, for the purpose of forcibly keeping the exploited class in the conditions of oppression determined by the given mode of production (slavery, serfdom or bondage, wagelabor). The state was the official representative of society as a whole, its concentration in a visible corporation. But it was this only insofar as it was the state of that class which itself represented, for its own time, society as a whole: in ancient times, the state of slave-owning citizens; in the Middle Ages, of the feudal nobility; in our own time, of the bourgeoisie. When at last it becomes the real representative of the whole of society, it renders itself unnecessary. As soon as there is no longer any social class to be held in subjection, as soon as class rule, and the individual struggle for existence based upon the present anarchy in production, with the collisions and excesses arising from this struggle, are removed, nothing more remains to be held in subjection — nothing necessitating a special coercive force, a state. The first act by which the state really comes forward as the representative of the whole of society — the taking possession of the means of production in the name of society — is also its last independent act as a state. State interference in social relations becomes, in one domain after another, superfluous, and then dies down of itself. The government of persons is replaced by the administration of things, and by the conduct of processes of production. The state is not 'abolished'. It withers away. This gives the measure of the value of the phrase 'a free people's state', both as to its justifiable use for a long time from an agitational point of view, and as to its ultimate scientific insufficiency; and also of the so-called anarchists' demand that the state be abolished overnight."

(Herr Eugen Duhring's Revolution in Science [Anti-Duhring], pp.301-03, third German edition.)

183

It is safe to say that of this argument of Engels', which is so remarkably rich in ideas, only one point has become an integral part of socialist thought among modern socialist parties, namely, that according to Marx that state "withers away" — as distinct from the anarchist doctrine of the "abolition" of the state. To prune Marxism to such an extent means reducing it to opportunism, for this "interpretation" only leaves a vague notion of a slow, even, gradual change, of absence of leaps and storms, of absence of revolution. The current, widespread, popular, if one may say so, conception of the "withering away" of the state undoubtedly means obscuring, if not repudiating, revolution.

Such an "interpretation", however, is the crudest distortion of Marxism, advantageous only to the bourgeoisie. In point of theory, it is based on disregard for the most important circumstances and considerations indicated in, say, Engels' "summary" argument we have just quoted in full.

In the first place, at the very outset of his argument, Engels says that, in seizing state power, the proletariat thereby "abolishes the state as state". It is not done to ponder over over the meaning of this. Generally, it is either ignored altogether, or is considered to be something in the nature of "Hegelian weakness" on Engels' part. As a matter of fact, however, these words briefly express the experience of one of the greatest proletarian revolutions, the Paris Commune of 1871, of which we shall speak in greater detail in its proper place. As a matter of fact, Engels speaks here of the proletariat revolution "abolishing" the bourgeois state, while the words about the state withering away refer to the remnants of the proletarian state after the socialist revolution. According to Engels, the bourgeois state does not "wither away", but is "abolished" by the proletariat in the course of the revolution. What withers away after this revolution is the proletarian state or semi-state.

Secondly, the state is a "special coercive force". Engels gives this splendid and extremely profound definition here with the utmost lucidity. And from it follows that the "special coercive force" for the suppression of the proletariat by the bourgeoisie, of millions of working people by handfuls of the rich, must be replaced by a "special coercive force" for the suppression of the bourgeoisie by the proletariat (the dictatorship of the proletariat). This is precisely what is meant by "abolition of the state as state". This is precisely the "act" of taking possession of the means of production in the name of society. And it is self-evident that such a replacement of one (bourgeois) "special force" by another (proletarian) "special force" cannot possibly take place in the form of "withering away".

Thirdly, in speaking of the state "withering away", and the even more graphic and colorful "dying down of itself", Engels refers quite clearly and definitely to the period after "the state has taken possession of the means of production in the name of the whole of society", that is, after the socialist revolution. We all know that the political form of the "state" at that time is the most complete democracy. But it never enters the head of any of the opportunists, who shamelessly distort Marxism, that Engels is consequently speaking here of democracy "dying down of itself", or "withering away".

This seems very strange at first sight. But is is "incomprehensible" only to those who have not thought about democracy also being a state and, consequently, also disappearing when the state disappears. Revolution alone can "abolish" the bourgeois state. The state in general, i.e., the most complete democracy, can only "wither away".

Fourthly, after formulating his famous proposition that "the state withers away", Engels at once explains specifically that this proposition is directed against both the opportunists and the anarchists.

In doing this, Engels puts in the forefront that conclusion, drawn from the proposition that "the state withers away", which is directed against the opportunists.

One can wager that out of every 10,000 persons who have read or heard about the "withering away" of the state, 9,990 are completely unaware, or do not remember, that Engels directed his conclusions from that proposition not against anarchists alone. And of the remaining 10, probably nine do not know the meaning of a "free people's state" or why an attack on this slogan means an attack on opportunists. This is how history is written! This is how a great revolutionary teaching is imperceptibly falsified and adapted to prevailing philistinism. The conclusion directed against the anarchists has been repeated thousands of times; it has been vulgarized, and rammed into people's heads in the shallowest form, and has acquired the strength of a prejudice, whereas the conclusion directed against the opportunists has been obscured and "forgotten"!

184

The "free people's state" was a programme demand and a catchword current among the German Social-Democrats in the seventies. this catchword is devoid of all political content except that it describes the concept of democracy in a pompous philistine fashion. Insofar as it hinted in a legally permissible manner at a democratic republic, Engels was prepared to "justify" its use "for a time" from an agitational point of view. But it was an opportunist catchword, for it amounted to something more than prettifying bourgeois democracy, and was also failure to understand the socialist criticism of the state in general. We are in favor of a democratic republic as the best form of state for the proletariat under capitalism. But we have no right to forget that wage slavery is the lot of the people even in the most democratic bourgeois republic. Furthermore, every state is a "special force" for the suppression of the oppressed class. Consequently, every state is not "free and not a "people's state".

Marx and Engels explained this repeatedly to their party comrades in the seventies.

Fifthly, the same work of Engels', whose arguments about the withering away of the state everyone remembers, also contains an argument of the significance of violent revolution. Engels' historical analysis of its role becomes a veritable panegyric on violent revolution. This, "no one remembers". It is not done in modern socialist parties to talk or even think about the significance of this idea, and it plays no part whatever in their daily propaganda and agitation among the people. And yet it is inseparably bound up with the 'withering away" of the state into one harmonious whole.

Here is Engels' argument:

"...That force, however, plays yet another role [other than that of a diabolical power] in history, a revolutionary role; that, in the words of Marx, it is the midwife of every old society which is pregnant with a new one, that it is the instrument with which social movement forces its way through and shatters the dead, fossilized political forms — of this there is not a word in Herr Duhring. It is only with sighs and groans that he admits the possibility that force will perhaps be necessary for the overthrow of an economy based on exploitation — unfortunately, because all use of force demoralizes, he says, the person who uses it. And this in Germany, where a violent collision — which may, after all, be forced on the people — would at least have the advantage of wiping out the servility which has penetrated the nation's mentality following the humiliation of the Thirty Years' War. And this person's mode of thought — dull, insipid, and impotent — presumes to impose itself on the most revolutionary party that history has ever known! (p.193, third German edition, Part II, end of Chap.IV) How can this panegyric on violent revolution, which Engels insistently brought to the attention of the German Social-Democrats between 1878 and 1894, i.e., right up to the time of his death, be combined with the theory of the 'withering away" of the state to form a single theory?

185

Usually the two are combined by means of eclecticism, by an unprincipled or sophistic selection made arbitrarily (or to please the powers that be) of first one, then another argument, and in 99 cases out of 100, if not more, it is the idea of the "withering away" that is placed in the forefront. Dialectics are replaced by eclecticism — this is the most usual, the most wide-spread practice to be met with in present-day official Social-Democratic literature in relation to Marxism. This sort of substitution is, of course, nothing new; it was observed even in the history of classical Greek philosophy. In falsifying Marxism in opportunist fashion, the substitution of eclecticism for dialectics is the easiest way of deceiving the people. It gives an illusory satisfaction; it seems to take into account all sides of the process, all trends of development, all the conflicting influences, and so forth, whereas in reality it provides no integral and revolutionary conception of the process of social development at all.

We have already said above, and shall show more fully later, that the theory of Marx and Engels of the inevitability of a violent revolution refers to the bourgeois state. The latter cannot be superseded by the proletarian state (the dictatorship of the proletariat) through the process of 'withering away", but, as a general rule, only through a violent revolution. The panegyric Engels sang in its honor, and which fully corresponds to Marx's repeated statements (see the concluding passages of The Poverty of Philosophy and the Communist Manifesto, with their proud and open proclamation of the inevitability of a violent revolution; see what Marx wrote nearly 30 years later, in criticizing the Gotha Programme of 1875, when he mercilessly castigated the opportunist character of that programme) — this panegyric is by no means a mere "impulse", a mere declamation or a polemical sally. The necessity of systematically imbuing the masses with this and precisely this view of violent revolution lies at the root of the entire theory of Marx and Engels. The betrayal of their theory by the now prevailing social-chauvinist and Kautskyite trends expresses itself strikingly in both these trends ignoring such propaganda and agitation.

The supersession of the bourgeois state by the proletarian state is impossible without a violent revolution. The abolition of the proletarian state, i.e., of the state in general, is impossible except through the process of "withering away".

A detailed and concrete elaboration of these views was given by Marx and Engels when they studied each particular revolutionary situation, when they analyzed the lessons of the experience of each particular revolution. We shall now pass to this, undoubtedly the most important, part of their theory.

The Experience of 1848-51 The State and Revolution Index

The Eve of Revolution The Revolution Summed Up The Presentation of the Question by Marx in 1852

1. The Eve of Revolution The first works of mature Marxism — The Poverty of Philosophy and the Communist Manifesto — appeared just on the eve of the revolution of 1848. For this reason, in addition to presenting the general principles of Marxism, they reflect to a certain degree the concrete revolutionary situation of 186

the time. It will, therefore, be more expedient, perhaps, to examine what the authors of these works said about the state immediately before they drew conclusions from the experience of the years 1848-51.

In The Poverty of Philosophy, Marx wrote:

"The working class, in the course of development, will substitute for the old bourgeois society an association which will preclude classes and their antagonism, and there will be no more political power groups, since the political power is precisely the official expression of class antagonism in bourgeois society." (p.182, German edition, 1885) It is instructive to compare this general exposition of the idea of the state disappearing after the abolition of classes with the exposition contained in the Communist Manifesto, written by Marx and Engels a few months later - in November 1847, to be exact:

"... In depicting the most general phases of the development of the proletariat, we traced the more or less veiled civil war, raging within existing society up to the point where that war breaks out into open revolution, and where the violent overthrow of the bourgeoisie lays the foundation for the sway of the proletariat.... "... We have seen above that the first step in the revolution by the working class is to raise the proletariat to the position of the ruling class to win the battle of democracy.

"The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class; and to increase the total productive forces as rapidly as possible." (pp.31 and 37, seventh German edition, 1906) Here we have a formulation of one of the most remarkable and most important ideas of Marxism on the subject of the state, namely, the idea of the "dictatorship of the proletariat" (as Marx and Engels began to call it after the Paris Commune); and, also, a highly interesting definition of the state, which is also one of the "forgotten words" of Marxism: "the state, i.e., the proletariat organized as the ruling class."

This definition of the state has never been explained in the prevailing propaganda and agitation literature of the official Social-Democratic parties. More than that, it has been deliberately ignored, for it is absolutely irreconcilable with reformism, and is a slap in the face for the common opportunist prejudices and philistine illusions about the "peaceful development of democracy".

The proletariat needs the state — this is repeated by all the opportunists, social-chauvinists and Kautskyites, who assure us that this is what Marx taught. But they "forget" to add that, in the first place, according to Marx, the proletariat needs only a state which is withering away, i.e., a state so 187

constituted that it begins to wither away immediately, and cannot but wither away. And, secondly, the working people need a "state, i.e., the proletariat organized as the ruling class".

The state is a special organization of force: it is an organization of violence for the suppression of some class. What class must the proletariat suppress? Naturally, only the exploiting class, i.e., the bourgeoisie. The working people need the state only to suppress the resistance of the exploiters, and only the proletariat can direct this suppression, can carry it out. For the proletariat is the only class that is consistently revolutionary, the only class that can unite all the working and exploited people in the struggle against the bourgeoisie, in completely removing it.

The exploiting classes need political rule to maintain exploitation, i.e., in the selfish interests of an insignificant minority against the vast majority of all people. The exploited classes need political rule in order to completely abolish all exploitation, i.e., in the interests of the vast majority of the people, and against the insignificant minority consisting of the modern slave-owners — the landowners and capitalists.

The petty-bourgeois democrats, those sham socialists who replaced the class struggle by dreams of class harmony, even pictured the socialist transformation in a dreamy fashion — not as the overthrow of the rule of the exploiting class, but as the peaceful submission of the minority to the majority which has become aware of its aims. This petty-bourgeois utopia, which is inseparable from the idea of the state being above classes, led in practice to the betrayal of the interests of the working classes, as was shown, for example, by the history of the French revolutions of 1848 and 1871, and by the experience of "socialist" participation in bourgeois Cabinets in Britain, France, Italy and other countries at the turn of the century.

All his life Marx fought against this petty-bourgeois socialism, now revived in Russia by the Socialist-Revolutionary and Menshevik parties. He developed his theory of the class struggle consistently, down to the theory of political power, of the state.

The overthrow of bourgeois rule can be accomplished only by the proletariat, the particular class whose economic conditions of existence prepare it for this task and provide it with the possibility and the power to perform it. While the bourgeoisie break up and disintegrate the peasantry and all the petty-bourgeois groups, they weld together, unite and organize the proletariat. Only the proletariat — by virtue of the economic role it plays in large-scale production — is capable of being the leader of all the working and exploited people, whom the bourgeoisie exploit, oppress and crush, often not less but more than they do the proletarians, but who are incapable of waging an independent struggle for their emancipation.

The theory of class struggle, applied by Marx to the question of the state and the socialist revolution, leads as a matter of course to the recognition of the political rule of the proletariat, of its dictatorship, i.e., of undivided power directly backed by the armed force of the people. The overthrow of the bourgeoisie can be achieved only by the proletariat becoming the ruling class, capable of crushing the inevitable and desperate resistance of the bourgeoisie, and of organizing all the working and exploited people for the new economic system.

The proletariat needs state power, a centralized organization of force, an organization of violence, both to crush the resistance of the exploiters and to lead the enormous mass of the population — the peasants, the petty bourgeoisie, and semi-proletarians — in the work of organizing a socialist economy.

By educating the workers' party, Marxism educates the vanguard of the proletariat, capable of assuming power and leading the whole people to socialism, of directing and organizing the new system, of being the teacher, the guide, the leader of all the working and exploited people in organizing their social life without the bourgeoisie and against the bourgeoisie. By contrast, the opportunism now prevailing trains the members of the workers' party to be the representatives of the better-paid workers, who lose touch with the masses, "get along" fairly well under capitalism, and sell their birthright for a mass of pottage, i.e., renounce their role as revolutionary leaders of the people against the bourgeoisie.

188

Marx's theory of "the state, i.e., the proletariat organized as the ruling class", is inseparably bound up with the whole of his doctrine of the revolutionary role of the proletariat in history. The culmination of this rule is the proletarian dictatorship, the political rule of the proletariat.

But since the proletariat needs the state as a special form of organization of violence against the bourgeoisie, the following conclusion suggests itself: is it conceivable that such an organization can be created without first abolishing, destroying the state machine created by the bourgeoisie for themselves? The Communist Manifesto leads straight to this conclusion, and it is of this conclusion that Marx speaks when summing up the experience of the revolution of 1848-51.

2. The Revolution Summed Up Marx sums up his conclusions from the revolution of 1848-51, on the subject of the state we are concerned with, in the following argument contained in The Eighteenth Brumaire of Louis Bonaparte:

"But the revolution is throughgoing. It is still journeying through purgatory. It does its work methodically. By December 2, 1851 [the day of Louis Bonaparte's coup d'etat], it had completed one half of its preparatory work. It is now completing the other half. First it perfected the parliamentary power, in order to be able to overthrow it. Now that it has attained this, it is perfecting the executive power, reducing it to its purest expression, isolating it, setting it up against itself as the sole object, in order to concentrate all its forces of destruction against it. And when it has done this second half of its preliminary work, Europe will leap from its seat and exultantly exclaim: well grubbed, old mole!

"This executive power with its enormous bureaucratic and military organization, with its vast and ingenious state machinery, with a host of officials numbering half a million, besides an army of another half million, this appalling parasitic body, which enmeshes the body of French society and chokes all its pores, sprang up in the days of the absolute monarchy, with the decay of the feudal system, which it helped to hasten." The first French Revolution developed centralization, "but at the same time" it increased "the extent, the attributes and the number of agents of governmental power. Napoleon completed this state

189

machinery". The legitimate monarchy and the July monarchy "added nothing but a greater division of labor".... "... Finally, in its struggle against the revolution, the parliamentary republic found itself compelled to strengthen, along with repressive measures, the resources and centralization of governmental power. All revolutions perfected this machine instead of smashing it. The parties that contended in turn for domination regarded the possession of this huge state edifice as the principal spoils of the victor."

(The Eighteenth Brumaire of Louis Bonaparte pp.98-99, fourth edition, Hamburg, 1907) In this remarkable argument, Marxism takes a tremendous step forward compared with the Communist Manifesto. In the latter, the question of the state is still treated in an extremely abstract manner, in the most general terms and expressions. In the above-quoted passage, the question is treated in a concrete manner, and the conclusion is extremely precise, definite, practical and palpable: all previous revolutions perfected the state machine, whereas it must be broken, smashed.

This conclusion is the chief and fundamental point in the Marxist theory of the state. And it is precisely this fundamental point which has been completely ignored by the dominant official SocialDemocratic parties and, indeed, distorted (as we shall see later) by the foremost theoretician of the Second International, Karl Kautsky.

The Communist Manifesto gives a general summary of history, which compels us to regard the state as the organ of class rule and leads us to the inevitable conclusion that the proletariat cannot overthrow the bourgeoisie without first winning political power, without attaining political supremacy, without transforming the state into the "proletariat organized as the ruling class"; and that this proletarian state will begin to wither away immediately after its victory because the state is unnecessary and cannot exist in a society in which there are no class antagonisms. The question as to how, from the point of view of historical development, the replacement of the bourgeois by the proletarian state is to take place is not raised here.

This is the question Marx raises and answers in 1852. True to his philosophy of dialectical materialism, Marx takes as his basis the historical experience of the great years of revolution, 1848 to 1851. Here, as everywhere else, his theory is a summing up of experience, illuminated by a profound philosophical conception of the world and a rich knowledge of history.

The problem of the state is put specifically: How did the bourgeois state, the state machine necessary for the rule of the bourgeoisie, come into being historically? What changes did it undergo, what evolution did it perform in the course of bourgeois revolutions and in the face of the independent actions of the oppressed classes? What are the tasks of the proletariat in relation to this state machine?

The centralized state power that is peculiar to bourgeois society came into being in the period of the fall of absolutism. Two institutions most characteristic of this state machine are the bureaucracy and the standing army. In their works, Marx and Engels repeatedly show that the bourgeoisie are connected with these institutions by thousands of threads. Every worker's experience illustrates this connection in an extremely graphic and impressive manner. From its own bitter experience, the working class learns to recognize this connection. That is why it so easily grasps and so firmly learns the doctrine which shows the inevitability of this connection, a doctrine which the petty-bourgeois democrats either ignorantly and flippantly deny, or still more flippantly admit "in general", while forgetting to draw appropriate practical conclusions.

190

The bureaucracy and the standing army are a "parasite" on the body of bourgeois society - a parasite created by the internal antagonisms which rend that society, but a parasite which "chokes" all its vital pores. The Kautskyite opportunism now prevailing in official Social-Democracy considers the view that the state is a parasitic organism to be the peculiar and exclusive attribute of anarchism. It goes without saying that this distortion of Marxism is of vast advantage to those philistines who have reduced socialism to the unheard-of disgrace of justifying and prettifying the imperialist war by applying to it the concept of "defence of the fatherland"; but it is unquestionably a distortion, nevertheless.

The development, perfection, and strengthening of the bureaucratic and military apparatus proceeded during all the numerous bourgeois revolutions which Europe has witnessed since the fall of feudalism. In particular, it is the petty bourgeois who are attracted to the side of the big bourgeoisie and are largely subordinated to them through this apparatus, which provides the upper sections of the peasants, small artisans, tradesmen, and the like with comparatively comfortable, quiet, and respectable jobs raising the holders above the people. Consider what happened in Russia during the six months following February 27, 1917. The official posts which formerly were given by preference to the Black Hundreds have now become the spoils of the Cadets, Mensheviks, and SocialRevolutionaries. Nobody has really thought of introducing any serious reforms. Every effort has been made to put them off "until the Constituent Assembly meets", and to steadily put off its convocation until after the war! But there has been no delay, no waiting for the Constituent Assembly, in the matter of dividing the spoils of getting the lucrative jobs of ministers, deputy ministers, governors-general, etc., etc.! The game of combinations that has been played in forming the government has been, in essence, only an expression of this division and redivision of the "spoils", which has been going on above and below, throughout the country, in every department of central and local government. The six months between February 27 and August 27, 1917, can be summed up, objectively summed up beyond all dispute, as follows: reforms shelved, distribution of official jobs accomplished and "mistakes" in the distribution corrected by a few redistributions.

But the more the bureaucratic apparatus is "redistributed" among the various bourgeois and pettybourgeois parties (among the Cadets, Socialist-Revolutionaries and Mensheviks in the case of Russia), the more keenly aware the oppressed classes, and the proletariat at their head, become of their irreconcilable hostility to the whole of bourgeois society. Hence the need for all bourgeois parties, even for the most democratic and "revolutionary-democratic" among them, to intensify repressive measures against the revolutionary proletariat, to strengthen the apparatus of coercion, i.e., the state machine. This course of events compels the revolution "to concentrate all its forces of destruction" against the state power, and to set itself the aim, not of improving the state machine, but of smashing and destroying it.

It was not logical reasoning, but actual developments, the actual experience of 1848-51, that led to the matter being presented in this way. The extent to which Marx held strictly to the solid ground of historical experience can be seen from the fact that, in 1852, he did not yet specifically raise the question of what was to take the place of the state machine to be destroyed. Experience had not yet provided material for dealing with this question, which history placed on the agenda later on, in 1871. In 1852, all that could be established with the accuracy of scientific observation was that the proletarian revolution had approached the task of "concentrating all its forces of destruction" against the state power, of "smashing" the state machine.

Here the question may arise: is it correct to generalize the experience, observations and conclusions of Marx, to apply them to a field that is wider than the history of France during the three years 184851? Before proceeding to deal with this question, let us recall a remark made by Engels and then examine the facts.

In his introduction to the third edition of The Eighteenth Brumaire, Engels wrote:

"France is the country where, more than anywhere else, the historical class struggles were each time fought out to a finish, and where, consequently, the changing political forms within 191

which they move and in which their results are summarized have been stamped in the sharpest outlines. The centre of feudalism in the Middle Ages, the model country, since the Renaissance, of a unified monarchy based on social estates, France demolished feudalism in the Great Revolution and established the rule of the bourgeoisie in a classical purity unequalled by any other European land. And the struggle of the upward-striving proletariat against the ruling bourgeoisie appeared here in an acute form unknown elsewhere." (p.4, 1907 edition) The last remark is out of date insomuch as since 1871 there has been a lull in the revolutionary struggle of the French proletariat, although, long as this lull may be, it does not at all preclude the possibility that in the coming proletarian revolution France may show herself to be the classic country of the class struggle to a finish.

Let us, however, cast a general glance over the history of the advanced countries at the turn of the century. We shall see that the same process went on more slowly, in more varied forms, in a much wider field: on the one hand, the development of "parliamentary power" both in the republican countries (France, America, Switzerland), and in the monarchies (Britain, Germany to a certain extent, Italy, the Scandinavia countries, etc.); on the other hand, a struggle for power among the various bourgeois and petty-bourgeois parties which distributed and redistributed the "spoils" of office, with the foundations of bourgeois society unchanged; and, lastly, the perfection and consolidation of the "executive power", of its bureaucratic and military apparatus.

There is not the slightest doubt that these features are common to the whole of the modern evolution of all capitalist states in general. In the last three years 1848-51 France displayed, in a swift, sharp, concentrated form, the very same processes of development which are peculiar to the whole capitalist world.

Imperialism - the era of bank capital, the era of gigantic capitalist monopolies, of the development of monopoly capitalism into state- monopoly capitalism - has clearly shown an unprecedented growth in its bureaucratic and military apparatus in connection with the intensification of repressive measures against the proletariat both in the monarchical and in the freest, republican countries.

World history is now undoubtedly leading, on an incomparably larger scale than in 1852, to the "concentration of all the forces" of the proletarian revolution on the "destruction" of the state machine.

What the proletariat will put in its place is suggested by the highly instructive material furnished by the Paris Commune.

3. The Presentation of the Question by Marx in 1852 In 1907, Mehring, in the magazine Neue Zeit (Vol.XXV, 2, p.164), published extracts from Marx's letter to Weydemeyer dated March 5, 1852. This letter, among other things, contains the following remarkable observation:

"And now as to myself, no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had 192

described the historical development of this class struggle and bourgeois economists, the economic anatomy of classes. What I did that was new was to prove: (1) that the existence of classes is only bound up with the particular, historical phases in the development of production (historische Entwicklungsphasen der Produktion), (2) that the class struggle necessarily leads to the dictatorship of the proletariat, (3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to a classless society."

In these words, Marx succeeded in expressing with striking clarity, first, the chief and radical difference between his theory and that of the foremost and most profound thinkers of the bourgeoisie; and, secondly, the essence of his theory of the state.

It is often said and written that the main point in Marx's theory is the class struggle. But this is wrong. And this wrong notion very often results in an opportunist distortion of Marxism and its falsification in a spirit acceptable to the bourgeoisie. For the theory of the class struggle was created not by Marx, but by the bourgeoisie before Marx, and, generally speaking, it is acceptable to the bourgeoisie. Those who recognize only the class struggle are not yet Marxists; they may be found to be still within the bounds of bourgeois thinking and bourgeois politics. To confine Marxism to the theory of the class struggle means curtailing Marxism, distorting it, reducing it to something acceptable to the bourgeoisie. Only he is a Marxist who extends the recognition of the class struggle to the recognition of the dictatorship of the proletariat. That is what constitutes the most profound distinction between the Marxist and the ordinary petty (as well as big) bourgeois. This is the touchstone on which the real understanding and recognition of Marxism should be tested. And it is not surprising that when the history of Europe brought the working class face to face with this question as a practical issue, not only all the opportunists and reformists, but all the Kautskyites (people who vacillate between reformism and Marxism) proved to be miserable philistines and pettybourgeois democrats repudiating the dictatorship of the proletariat. Kautsky's pamphlet, The Dictatorship of the Proletariat, published in August 1918, i.e., long after the first edition of the present book, is a perfect example of petty-bourgeois distortion of Marxism and base renunciation of it in deeds, while hypocritically recognizing it in words (see my pamphlet, The Proletarian Revolution and the Renegade Kautsky, Petrograd and Moscow, 1918).

Opportunism today, as represented by its principal spokesman, the ex-Marxist Karl Kautsky, fits in completely with Marx's characterization of the bourgeois position quoted above, for this opportunism limits recognition of the class struggle to the sphere of bourgeois relations. (Within this sphere, within its framework, not a single educated liberal will refuse to recognize the class struggle "in principle"!) Opportunism does not extend recognition of the class struggle to the cardinal point, to the period of transition from capitalism to communism, of the overthrow and the complete abolition of the bourgeoisie. In reality, this period inevitably is a period of an unprecedently violent class struggle in unprecedentedly acute forms, and, consequently, during this period the state must inevitably be a state that is democratic in a new way (for the proletariat and the propertyless in general) and dictatorial in a new way (against the bourgeoisie).

Further. The essence of Marx's theory of the state has been mastered only by those who realize that the dictatorship of a single class is necessary not only for every class society in general, not only for the proletariat which has overthrown the bourgeoisie, but also for the entire historical period which separates capitalism from "classless society", from communism. Bourgeois states are most varied in form, but their essence is the same: all these states, whatever their form, in the final analysis are inevitably the dictatorship of the bourgeoisie. The transition from capitalism to communism is 193

certainly bound to yield a tremendous abundance and variety of political forms, but the essence will inevitably be the same: the dictatorship of the proletariat.

Next: Experience of the Paris Commune of 1871 The State and Revolution Index

What Made the Communards' Attempt Heroic?

What is to Replace the Smashed State Machine?

Abolition of Parliamentarism Organisation of National Unity Aboloition of the Parasite State

1. What Made the Communards' Attempt Heroic?

It is well known that in the autumn of 1870, a few months before the Commune, Marx warned the Paris workers that any attempt to overthrow the government would be the folly of despair. But when, in March 1871, a decisive battle was forced upon the workers and they accepted it, when the uprising had become a fact, Marx greeted the proletarian revolution with the greatest enthusiasm, in spite of unfavorable auguries. Marx did not persist in the pedantic attitude of condemning an "untimely" movement as did the ill-famed Russian renegade from marxism, Plekhanov, who in November 1905 wrote encouragingly about the workers' and peasants' struggle, but after December 1905 cried, liberal fashion: "They should not have taken up arms."

Marx, however, was not only enthusiastic about the heroism of the Communards, who, as he expressed it, "stormed heaven". Although the mass revolutionary movement did not achieve its aim, he regarded it as a historic experience of enormous importance, as a certain advance of the world proletarian revolution, as a practical step that was more important than hundreds of programmes and arguments. Marx endeavored to analyze this experiment, to draw tactical lessons from it and reexamine his theory in the light of it.

The only "correction" Marx thought it necessary to make to the Communist Manifesto he made on the basis of the revolutionary experience of the Paris Commune.

The last preface to the new German edition of the Communist Manifesto, signed by both its authors, is dated June 24, 1872. In this preface the authors, Karl Marx and Frederick Engels, say that the programme of the Communist Manifesto "has in some details become out-of-date", and the go on to say:

"... One thing especially was proved by the Commune, viz., that 'the working class cannot simply lay hold of the ready-made state machinery and wield it for its own purposes'...."

The authors took the words that are in single quotation marks in this passage from Marx's book, The Civil War in France.

194

Thus, Marx and Engels regarded one principal and fundamental lesson of the Paris Commune as being of such enormous importance that they introduced it as an important correction into the Communist Manifesto.

Most characteristically, it is this important correction that has been distorted by the opportunists, and its meaning probably is not known to nine-tenths, if not ninety-nine-hundredths, of the readers of the Communist Manifesto. We shall deal with this distortion more fully farther on, in a chapter devoted specially to distortions. Here it will be sufficient to note that the current, vulgar "interpretation" of Marx's famous statement just quoted is that Marx here allegedly emphasizes the idea of slow development in contradistinction to the seizure of power, and so on.

As a matter of fact, the exact opposite is the case. Marx's idea is that the working class must break up, smash the "ready-made state machinery", and not confine itself merely to laying hold of it.

On April 12, 1871, i.e., just at the time of the Commune, Marx wrote to Kugelmann:

"If you look up the last chapter of my Eighteenth Brumaire, you will find that I declare that the next attempt of the French Revolution will be no longer, as before, to transfer the bureaucratic-military machine from one hand to another, but to smash it [Marx's italics - the original is zerbrechen], and this is the precondition for every real people's revolution on the Continent. And this is what our heroic Party comrades in Paris are attempting."

(Neue Zeit, Vol.XX, 1, 1901-02, p.709.)

(The letters of Marx to Kugelmann have appeared in Russian in no less than two editions, one of which I edited and supplied with a preface.)

The words, "to smash the bureaucratic-military machine", briefly express the principal lesson of Marxism regarding the tasks of the proletariat during a revolution in relation to the state. And this is the lesson that has been not only completely ignored, but positively distorted by the prevailing, Kautskyite, "interpretation" of Marxism!

As for Marx's reference to The Eighteenth Brumaire, we have quoted the relevant passage in full above.

It is interesting to note, in particular, two points in the above-quoted argument of Marx. First, he restricts his conclusion to the Continent. This was understandable in 1871, when Britain was still the model of a purely capitalist country, but without a militarist clique and, to a considerable degree, without a bureaucracy. Marx therefore excluded Britain, where a revolution, even a people's revolution, then seemed possible, and indeed was possible, without the precondition of destroying "ready-made state machinery".

Today, in 1917, at the time of the first great imperialist war, this restriction made by Marx is no longer valid. Both Britain and America, the biggest and the last representatives — in the whole world — of Anglo-Saxon "liberty", in the sense that they had no militarist cliques and bureaucracy, have completely sunk into the all-European filthy, bloody morass of bureaucratic-military institutions which subordinate everything to themselves, and suppress everything. Today, in Britain and America, too, "the precondition for every real people's revolution" is the smashing, the destruction of the "ready-made state machinery" (made and brought up to the "European", general imperialist, perfection in those countries in the years 1914-17).

195

Secondly, particular attention should be paid to Marx's extremely profound remark that the destruction of the bureaucratic-military state machine is "the precondition for every real people's revolution". This idea of a "people's revolution seems strange coming from Marx, so that the Russian Plekhanovites and Mensheviks, those followers of Struve who wish to be regarded as Marxists, might possibly declare such an expression to be a "slip of the pen" on Marx's part. They have reduced Marxism to such a state of wretchedly liberal distortion that nothing exists for them beyond the antithesis between bourgeois revolution and proletarian revolution, and even this antithesis they interpret in an utterly lifeless way.

If we take the revolutions of the 20th century as examples we shall, of course, have to admit that the Portuguese and the Turkish revolutions are both bourgeois revolutions. Neither of them, however, is a "people's" revolution, since in neither does the mass of the people, their vast majority, come out actively, independently, with their own economic and political demands to any noticeable degree. By contrast, although the Russian bourgeois revolution of 1905-07 displayed no such "brilliant" successes as at time fell to the Portuguese and Turkish revolutions, it was undoubtedly a "real people's" revolution, since the mass of the people, their majority, the very lowest social groups, crushed by oppression and exploitation, rose independently and stamped on the entire course of the revolution the imprint of their own demands, their attempt to build in their own way a new society in place of the old society that was being destroyed.

In Europe, in 1871, the proletariat did not constitute the majority of the people in any country on the Continent. A "people's" revolution, one actually sweeping the majority into its stream, could be such only if it embraced both the proletariat and the peasants. These two classes then constituted the "people". These two classes are united by the fact that the "bureaucratic-military state machine" oppresses, crushes, exploits them. To smash this machine, to break it up, is truly in the interest of the "people", of their majority, of the workers and most of the peasants, is "the precondition" for a free alliance of the poor peasant and the proletarians, whereas without such an alliance democracy is unstable and socialist transformation is impossible.

As is well known, the Paris Commune was actually working its way toward such an alliance, although it did not reach its goal owing to a number of circumstances, internal and external.

Consequently, in speaking of a "real people's revolution", Marx, without in the least discounting the special features of the petty bourgeois (he spoke a great deal about them and often), took strict account of the actual balance of class forces in most of the continental countries of Europe in 1871.

On the other hand, he stated that the "smashing" of the state machine was required by the interests of both the workers and the peasants, that it united them, that it placed before them the common task of removing the "parasite" and of replacing it by something new.

By what exactly?

2. What is to Replace the Smashed State Machine?

In 1847, in the Communist Manifesto, Marx's answer to this question was as yet a purely abstract one; to be exact, it was an answer that indicated he tasks, but not the ways of accomplishing them.

The answer given in the Communist Manifesto was that this machine was to be replaced by "the proletariat organized as the ruling class", by the "winning of the battle of democracy".

Marx did not indulge in utopias; he expected the experience of the mass movement to provide the reply to the question as to the specific forms this organisation of the proletariat as the ruling class would assume and as to the exact manner in which this organisation would be combined with the most complete, most consistent "winning of the battle of democracy."

Marx subjected the experience of the Commune, meagre as it was, to the most careful analysis in The Civil War in France. Let us quote the most important passages of this work. [All the following quotes in this Chapter, with one exception, are so citied - Ed.]

196

Originating from the Middle Ages, there developed in the 19th century "the centralized state power, with its ubiquitous organs of standing army, police, bureaucracy, clergy, and judicature."

With the development of class antagonisms between capital and labor, "state power assumed more and more the character of a public force organized for the suppression of the working class, of a machine of class rule. After every revolution, which marks an advance in the class struggle, the purely coercive character of the state power stands out in bolder and bolder relief." After the revolution of 1848-49, state power became "the national war instruments of capital against labor". The Second Empire consolidated this.

"The direct antithesis to the empire was the Commune." It was the "specific form" of "a republic that was not only to remove the monarchical form of class rule, but class rule itself."

What was this "specific" form of the proletarian, socialist republic? What was the state it began to create?

"The first decree of the Commune, therefore, was the suppression of the standing army, and the substitution for it of the armed people."

This demand now figures in the programme of every party calling itself socialist. The real worth of their programme, however, is best shown by the behavior of our Social-Revolutionists and mensheviks, who, right after the revolution of February 27, refused to carry out this demand!

"The Commune was formed of the municipal councillors, chosen by universal suffrage in the various wards of the town, responsible and revocable at any time. The majority of its members were naturally working men, or acknowledged representatives of the working class.... The police, which until then had been the instrument of the Government, was at once stripped of its political attributes, and turned into the responsible, and at all times revocable, agent of the Commune. So were the officials of all other branches of the administration. From the members of the Commune downwards, the public service had to be done at workmen's wages. The privileges and the 197

representation allowances of the high dignitaries of state disappeared along with the high dignitaries themselves.... Having once got rid of the standing army and the police, the instruments of physical force of the old government, the Commune proceeded at once to break the instrument of spiritual suppression, the power of the priests.... The judicial functionaries lost that sham independence... they were thenceforward to be elective, responsible, and revocable."

The Commune, therefore, appears to have replaced the smashed state machine "only" by fuller democracy: abolition of the standing army; all officials to be elected and subject to recall. But as a matter of fact this "only" signifies a gigantic replacement of certain institutions by other institutions of a fundamentally different type. This is exactly a case of "quantity being transformed into quality": democracy, introduced as fully and consistently as is at all conceivable, is transformed from bourgeois into proletarian democracy; from the state (= a special force for the suppression of a particular class) into something which is no longer the state proper.

It is still necessary to suppress the bourgeoisie and crush their resistance. This was particularly necessary for the Commune; and one of the reasons for its defeat was that it did not do this with sufficient determination. The organ of suppression, however, is here the majority of the population, and not a minority, as was always the case under slavery, serfdom, and wage slavery. And since the majority of people itself suppresses its oppressors, a 'special force" for suppression is no longer necessary! In this sense, the state begins to wither away. Instead of the special institutions of a privileged minority (privileged officialdom, the chiefs of the standing army), the majority itself can directly fulfil all these functions, and the more the functions of state power are performed by the people as a whole, the less need there is for the existence of this power.

In this connection, the following measures of the Commune, emphasized by Marx, are particularly noteworthy: the abolition of all representation allowances, and of all monetary privileges to officials, the reduction of the remuneration of all servants of the state to the level of "workmen's wages". This shows more clearly than anything else the turn from bourgeois to proletarian democracy, from the democracy of the oppressors to that of the oppressed classes, from the state as a "special force" for the suppression of a particular class to the suppression of the oppressors by the general force of the majority of the people - the workers and the peasants. And it is on this particularly striking point, perhaps the most important as far as the problem of the state is concerned, that the ideas of Marx have been most completely ignored! In popular commentaries, the number of which is legion, this is not mentioned. The thing done is to keep silent about it as if it were a piece of old-fashioned "naivete", just as Christians, after their religion had been given the status of state religion, "forgot" the "naivete" of primitive Christianity with its democratic revolutionary spirit.

The reduction of the remuneration of high state officials seem "simply" a demand of naive, primitive democracy. One of the "founders" of modern opportunism, the ex-Social-Democrat Eduard Bernstein, has more than once repeated the vulgar bourgeois jeers at "primitive" democracy. Like all opportunists, and like the present Kautskyites, he did not understand at all that, first of all, the transition from capitalism to socialism is impossible without a certain "reversion" to "primitive" democracy (for how else can the majority, and then the whole population without exception, proceed to discharge state functions?); and that, secondly, "primitive democracy" based on capitalism and capitalist culture is not the same as primitive democracy in prehistoric or precapitalist times.

Capitalist culture has created large-scale production, factories, railways, the postal service, telephones, etc., and on this basis the great majority of the functions of the old "state power" have become so simplified and can be reduced to such exceedingly simple operations of registration, 198

filing, and checking that they can be easily performed by every literate person, can quite easily be performed for ordinary "workmen's wages", and that these functions can (and must) be stripped of every shadow of privilege, of every semblance of "official grandeur".

All officials, without exception, elected and subject to recall at any time, their salaries reduced to the level of ordinary "workmen's wages" — these simple and "self-evident" democratic measures, while completely uniting the interests of the workers and the majority of the peasants, at the same time serve as a bridge leading from capitalism to socialism. These measures concern the reorganization of the state, the purely political reorganization of society; but, of course, they acquire their full meaning and significance only in connection with the "expropriation of the expropriators" either bring accomplished or in preparation, i.e., with the transformation of capitalist private ownership of the means of production into social ownership.

"The Commune," Marx wrote, "made the catchword of all bourgeois revolutions, cheap government, a reality, by abolishing the two greatest sources of expenditure - the army and the officialdom."

From the peasants, as from other sections of the petty bourgeoisie, only an insignificant few "rise to the top", "get on in the world" in the bourgeois sense, i.e., become either ell-to-do, bourgeois, or officials in secure and privileged positions. In every capitalist country where there are peasants (as there are in most capitalist countries), the vast majority of them are oppressed by the government and long for its overthrow, long for "cheap" government. This can be achieved only by the proletariat; and by achieving it, the proletariat at the same time takes a step towards the socialist reorganization of the state.

3. Abolition of Parliamentarism

"The Commune," Marx wrote, "was to be a working, not a parliamentary, body, executive and legislative at the same time....

"Instead of deciding once in three or six years which member of the ruling class was to represent and repress [ver- and zertreten] the people in parliament, universal suffrage was to serve the people constituted in communes, as individual suffrage serves every other employer in the search for workers, foremen and accountants for his business."

Owing to the prevalence of social-chauvinism and opportunism, this remarkable criticism of parliamentarism, made in 1871, also belongs now to the "forgotten words" of Marxism. The professional Cabinet Ministers and parliamentarians, the traitors to the proletariat and the "practical" socialists of our day, have left all criticism of parliamentarism to the anarchists, and, on this wonderfully reasonable ground, they denounce all criticism of parliamentarism as "anarchism"!! It is not surprising that the proletariat of the "advanced" parliamentary countries, disgusted with such "socialists" as the Scheidemanns, Davids, Legiens, Sembats, Renaudels, Hendersons, Vanderveldes, Staunings, Brantings, Bissolatis, and Co., has been with increasing frequency giving its sympathies to anarcho-syndicalism, in spite of the fact that the latter is merely the twin brother of opportunism.

199

For Marx, however, revolutionary dialectics was never the empty fashionable phrase, the toy rattle, which Plekhanov, Kautsky and others have made of it. Marx knew how to break with anarchism ruthlessly for its inability to make use even of the "pigsty" of bourgeois parliamentarism, especially when the situation was obviously not revolutionary; but at the same time he knew how to subject parliamentarism to genuinely revolutionary proletarian criticism.

To decide once every few years which members of the ruling class is to repress and crush the people through parliament - this is the real essence of bourgeois parliamentarism, not only in parliamentaryconstitutional monarchies, but also in the most democratic republics.

But if we deal with the question of the state, and if we consider parliamentarism as one of the institutions of the state, from the point of view of the tasks of the proletariat in this field, what is the way out of parliamentarism? How can it be dispensed with?

Once again, we must say: the lessons of Marx, based on the study of the Commune, have been so completely forgotten that the present-day "Social-Democrat" (i.e., present-day traitor to socialism) really cannot understand any criticism of parliamentarism other than anarchist or reactionary criticism.

The way out of parliamentarism is not, of course, the abolition of representative institutions and the elective principle, but the conversion of the representative institutions from talking shops into "working" bodies. "The Commune was to be a working, not a parliamentary, body, executive and legislative at the same time."

"A working, not a parliamentary body" - this is a blow straight from the shoulder at the present-day parliamentarian country, from America to Switzerland, from France to Britain, Norway and so forth in these countries the real business of "state" is performed behind the scenes and is carried on by the departments, chancelleries, and General Staffs. parliament is given up to talk for the special purpose of fooling the "common people". This is so true that even in the Russian republic, a bourgeoisdemocratic republic, all these sins of parliamentarism came out at once, even before it managed to set up a real parliament. The heroes of rotten philistinism, such as the skobelevs and tseretelis, the Chernovs and Avksentyevs, have even succeeded in polluting the Soviets after the fashion of the most disgusting bourgeois parliamentarism, in converting them into mere talking shops. In the Soviets, the "socialist" Ministers are fooling the credulous rustics with phrase-mongering and resolutions. In the government itself a sort of permanent shuffle is going on in order that, on the one hand, as many Socialist-Revolutionaries and Mensheviks as possible may in turn get near the "pie", the lucrative and honorable posts, and that, on the other hand, the "attention" of the people may be "engaged". meanwhile the chancelleries and army staffs "do" the business of "state".

Dyelo Naroda, the organ of the ruling Socialist-Revolutionary Party, recently admitted in a leading article - with the matchless frankness of people of "good society", in which "all" are engaged in political prostitution - that even in the ministeries headed by the "socialists" (save the mark!), the whole bureaucratic apparatus is in fact unchanged, is working in the old way and quite "freely" sabotaging revolutionary measures! Even without this admission, does not the actual history of the participation of the Socialist-Revolutionaries and Mensheviks in the government prove this? It is noteworthy, however, that in the ministerial company of the Cadets, the Chernovs, Rusanovs, Zenzinovs, and other editors of Dyelo Naroda have so completely lost all sense of shame as to brazenly assert, as if it were a mere bagetelle, that in "their" ministeries everything is unchanged!!

Revolutionary-democratic phrases to gull the rural Simple Simons, and bureaucracy and red tape to "gladden the hearts" of the capitalists - that is the essence of the "honest" coalition.

The Commune substitutes for the venal and rotten parliamentarism of bourgeois society institutions in which freedom of opinion and discussion does not degenerate into deception, for the parliamentarians themselves have to work, have to execute their own laws, have themselves to test the results achieved in reality, and to account directly to their constituents. Representative institutions remain, but there is no parliamentarism here as a special system, as the division of labor between the legislative and the executive, as a privileged position for the deputies. We cannot imagine democracy, even proletarian democracy, without representative institutions, but we can and must imagine democracy without parliamentarism, if criticism of bourgeois society is not mere 200

words for us, if the desire to overthrow the rule of the bourgeoisie is our earnest and sincere desire, and not a mere "election" cry for catching workers' votes, as it is with the Mensheviks and SocialistRevolutionaries, and also the Scheidemanns and Legiens, the Smblats and Vanderveldes.

It is extremely instructive to note that, in speaking of the function of those officials who are necessary for the Commune and for proletarian democracy, Marx compares them to the workers of "every other employer", that is, of the ordinary capitalist enterprise, with its "workers, foremen, and accountants".

There is no trace of utopianism in Marx, in the sense that he made up or invented a "new" society.

No, he studied the birth of the new society out of the old, and the forms of transition from the latter to the former, as a mass proletarian movement and tried to draw practical lessons from it. He "Learned" from the Commune, just as all the great revolutionary thinkers learned unhesitatingly from the experience of great movements of the oppressed classes, and never addressed them with pedantic "homilies" (such as Plekhanov's: "They should not have taken up arms" or Tsereteli's: "A class must limit itself").

Abolishing the bureaucracy at once, everywhere and completely, is out of the question. It is a utopia.

But to smash the old bureaucratic machine at once and to begin immediately to construct a new one that will make possible the gradual abolition of all bureaucracy - this is not a utopia, it is the experience of the Commune, the direct and immediate task of the revolutionary proletariat.

Capitalism simplifies the functions of "state" administration; it makes it possible to cast "bossing" aside and to confine the whole matter to the organization of the proletarians (as the ruling class), which will hire "workers, foremen and accountants" in the name of the whole of society.

We are not utopians, we do not "dream" of dispensing at once with all administration, with all subordination. These anarchist dreams, based upon incomprehension of the tasks of the proletarian dictatorship, are totally alien to Marxism, and, as a matter of fact, serve only to postpone the socialist revolution until people are different. No, we want the socialist revolution with people as they are now, with people who cannot dispense with subordination, control, and "foremen and accountants".

The subordination, however, must be to the armed vanguard of all the exploited and working people, i.e., to the proletariat. A beginning can and must be made at once, overnight, to replace the specific "bossing" of state officials by the simple functions of "foremen and accountants", functions which are already fully within the ability of the average town dweller and can well be performed for "workmen's wages".

We, the workers, shall organize large-scale production on the basis of what capitalism has already created, relying on our own experience as workers, establishing strict, iron discipline backed up by the state power of the armed workers. We shall reduce the role of state officials to that of simply carrying out our instructions as responsible, revocable, modestly paid "foremen and accountants" (of course, with the aid of technicians of all sorts, types and degrees). This is our proletarian task, this is what we can and must start with in accomplishing the proletarian revolution. Such a beginning, on the basis of large-scale production, will of itself lead to the gradual "withering away" of all bureaucracy, to the gradual creation of an order - an order without inverted commas, an order bearing no similarity to wage slavery - an order under which the functions of control and accounting, becoming more and more simple, will be performed by each in turn, will then become a habit and will finally die out as the special functions of a special section of the population.

A witty German Social-Democrat of the seventies of the last century called the postal service an example of the socialist economic system. This is very true. At the present the postal service is a business organized on the lines of state-capitalist monopoly. Imperialism is gradually transforming all trusts into organizations of a similar type, in which, standing over the "common" people, who are overworked and starved, one has the same bourgeois bureaucracy. But the mechanism of social management is here already to hand. Once we have overthrown the capitalists, crushed the resistance of these exploiters with the iron hand of the armed workers, and smashed the bureaucratic machinery of the modern state, we shall have a splendidly-equipped mechanism, freed from the "parasite", a mechanism which can very well be set going by the united workers themselves, who will hire technicians, foremen and accountants, and pay them all, as indeed all "state" officials in general, 201

workmen's wages. Here is a concrete, practical task which can immediately be fulfilled in relation to all trusts, a task whose fulfilment will rid the working people of exploitation, a task which takes account of what the Commune had already begun to practice (particularly in building up the state).

To organize the whole economy on the lines of the postal service so that the technicians, foremen and accountants, as well as all officials, shall receive salaries no higher than "a workman's wage", all under the control and leadership of the armed proletariat - that is our immediate aim. This is what will bring about the abolition of parliamentarism and the preservation of representative institutions.

This is what will rid the laboring classes of the bourgeoisie's prostitution of these institutions.

4. Organisation of National Unity

"In a brief sketch of national organization which the Commune had no time to develop, it states explicitly that the Commune was to be the political form of even the smallest village...." The communes were to elect the "National Delegation" in Paris. "... The few but important functions which would still remain for a central government were not to to be suppressed, as had been deliberately mis-stated, but were to be transferred to communal, i.e., strictly responsible, officials. "... National unity was not to be broken, but, on the contrary, organized by the communal constitution; it was to become a reality by the destruction of state power which posed as the embodiment of that unity yet wanted to be independent of, and superior to, the nation, on whose body it was but a parasitic excrescence. While the merely repressive organs of the old governmental power were to be amputated, its legitimate functions were to be wrested from an authority claiming the right to stand above society, and restored to the responsible servants of society."

The extent to which the opportunists of present-day Social-Democracy have failed - perhaps it would be more true to say, have refused - to understand these observations of Marx is best shown by that book of Herostratean fame of the renegade Bernstein, The Premises of Socialism and the Tasks of the Social-Democrats. It is in connection with the above passage from Marx that Bernstein wrote that

"as far as its political content", this programme "displays, in all its essential features, the greatest similarity to the federalism of Proudhon.... In spite of all the other points of difference between Marx and the 'petty-bourgeois' Proudhon [Bernstein places the word "petty-bourgeois" in inverted commas, to make it sound 202

ironical] on these points, their lines of reasoning run as close as could be." Of course, Bernstein continues, the importance of the municipalities is growing, but "it seems doubtful to me whether the first job of democracy would be such a dissolution [Auflosung] of the modern states and such a complete transformation [Umwandlung] of their organization as is visualized by Marx and Proudhon (the formation of a National Assembly from delegates of the provincial of district assemblies, which, in their turn, would consist of delegates from the communes), so that consequently the previous mode of national representation would disappear."

(Bernstein, Premises, German edition, 1899, pp.134 and 136) To confuse Marx's view on the "destruction of state power, a parasitic excrescence", with Proudhon's federalism is positively monstrous! But it is no accident, for it never occurs to the opportunist that Marx does not speak here at all about federalism as opposed to centralism, but about smashing the old, bourgeois state machine which exists in all bourgeois countries.

The only thing that does occur to the opportunist is what he sees around him, in an environment of petty-bourgeois philistinism and "reformists" stagnation, namely, only "municipalities"! The opportunist has even grown out of the habit of thinking about proletarian revolution.

It is ridiculous. But the remarkable thing is that nobody argued with Bernstein on this point.

Bernstein has been refuted by many, especially by Plekhanov in Russian literature and by Kautsky in European literature, but neither of them has said anything about this distortion of Marx by Bernstein.

The opportunist has so much forgotten how to think in a revolutionary way and to dwell on revolution that he attributes "federalism" to Marx, whom he confuses with the founder of anarchism, Proudhon. As for Kautsky and Plekhanov, who claim to be orthodox Marxists and defenders of the theory of revolutionary Marxism, they are silent on this point! Here is one of the roots of the extreme vulgarization of the views on the difference between Marxism and anarchism, which is characteristic of both the Kautskyites and the opportunists, and which we shall discuss again later.

There is not a trace of federalism in Marx's above-quoted observation on the experience of the Commune. Marx agreed with Proudhon on the very point that the opportunist Bernstein did not see.

Marx disagreed with Proudhon on the very point on which Bernstein found a similarity between them.

Marx agreed with Proudhon in that they both stood for the "smashing" of the modern state machine.

Neither the opportunists nor the Kautskyites wish to see the similarity of views on this point between Marxism and anarchism (both Proudhon and Bakunin) because this is where they have departed from Marxism.

Marx disagreed both with Proudhon and Bakunin precisely on the question of federalism (not to mention the dictatorship of the proletariat). Federalism as a principle follows logically from the petty-bourgeois views of anarchism. Marx was a centralist. There is no departure whatever from centralism in his observations just quoted. Only those who are imbued with the philistine "superstitious belief" in the state can mistake the destruction of the bourgeois state machine for the destruction of centralism!

Now if the proletariat and the poor peasants take state power into their own hands, organize themselves quite freely in communes, and unite the action of all the communes in striking at capital, 203

in crushing the resistance of the capitalists, and in transferring the privately-owned railways, factories, land and so on to the entire nation, to the whole of society, won't that be centralism? Won't that be the most consistent democratic centralism and, moreover, proletarian centralism?

Bernstein simply cannot conceive of the possibility of voluntary centralism, of the voluntary fusion of the proletarian communes, for the sole purpose of destroying bourgeois rule and the bourgeois state machine. Like all philistines, Bernstein pictures centralism as something which can be imposed and maintained solely from above, and solely by the bureaucracy and military clique.

As though foreseeing that his views might be distorted, Marx expressly emphasized that the charge that the Commune had wanted to destroy national unity, to abolish the central authority, was a deliberate fraud. Marx purposely used the words: "National unity was... to be organized", so as to oppose conscious, democratic, proletarian centralism to bourgeois, military, bureaucratic centralism.

But there are none so deaf as those who will not hear. And the very thing the opportunists of presentday Social-Democracy do not want to hear about it the destruction of state power, the amputation of the parasitic excrescence.

5. Aboloition of the Parasite State We have already quoted Marx's words on the subject, and we must now supplement them.

"It is generally the fate of new historical creations," he wrote, "to be mistaken for the counterpart of older and even defunct forms of social life, to which they may bear a certain likeness.

Thus, this new Commune, which breaks [bricht, smashes] the modern state power, has been regarded as a revival of the medieval communes... as a federation of small states (as Montesquieu and the Girondins visualized it)... as an exaggerated form of the old struggle against overcentralization.... "... The Communal Constitution would have restored to the social body all the forces hitherto absorbed by that parasitic excrescence, the 'state', feeding upon and hampering the free movement of society. By this one act it would have initiated the regeneration of France.... "... The Communal Constitution would have brought the rural producers under the intellectual lead of the central towns of their districts, and there secured to them, in the town working men, the natural trustees of their interests. The very existence of the Commune involved, as a matter of course, local self-government, but no longer as a counterpoise to state power, now become superfluous."

204

"Breaking state power", which as a "parasitic excrescence"; its "amputation", its "smashing"; "state power, now become superfluous" - these are the expressions Marx used in regard to the state when appraising and analyzing the experience of the Commune.

All this was written a little less than half a century ago; and now one has to engage in excavations, as it were, in order to bring undistorted Marxism to the knowledge of the mass of the people. The conclusions drawn from the observation of the last great revolution which Marx lived through were forgotten just when the time for the next great proletarian revolution has arrived.

"... The multiplicity of interpretations to which the Commune has been subjected, and the multiplicity of interests which expressed themselves in it show that it was a thoroughly flexible political form, while all previous forms of government had been essentially repressive. Its true secret was this: it was essentially a working-class government, the result of the struggle of the producing against the appropriating class, the political form at last discovered under which the economic emancipation of labor could be accomplished....

"Except on this last condition, the Communal Constitution would have been an impossibility and a delusion...."

The utopians busied themselves with "discovering" political forms under which the socialist transformation of society was to take place. The anarchists dismissed the question of political forms altogether. The opportunists of present-day Social-Democracy accepted the bourgeois political forms of the parliamentary democratic state as the limit which should not be overstepped; they battered their foreheads praying before this "model", and denounced as anarchism every desire to break these forms.

Marx deduced from the whole history of socialism and the political struggle that the state was bound to disappear, and that the transitional form of its disappearance (the transition from state to non-state) would be the "proletariat organized as the ruling class". Marx, however, did not set out to discover the political forms of this future stage. He limited himself to carefully observing French history, to analyzing it, and to drawing the conclusion to which the year 1851 had led, namely, that matters were moving towards destruction of the bourgeois state machine.

And when the mass revolutionary movement of the proletariat burst forth, Marx, in spite of its failure, in spite of its short life and patent weakness, began to study the forms it had discovered.

The Commune is the form "at last discovered" by the proletarian revolution, under which the economic emancipation of labor can take place.

The Commune is the first attempt by a proletarian revolution to smash the bourgeois state machine; and it is the political form "at last discovered", by which the smashed state machine can and must be replaced.

We shall see further on that the Russian revolutions of 1905 and 1917, in different circumstances and under different conditions, continue the work of the Commune and confirm Marx's brilliant historical analysis.

The Housing Question Controversy with the Anarchists 205

Letter to Bebel Criticism of the Draft of the Erfurt Programme The 1891 Preface to Marx's "The Civil War in France" Engels on the Overcoming of Democracy

Marx gave the fundamentals concerning the significance of the experience of the Commune. Engels returned to the same subject time and again, and explained Marx's analysis and conclusions, sometimes elucidating other aspects of the question with such power and vividness that it is necessary to deal with his explanations specially.

1. The Housing Question In his work, The Housing Question (1872), Engels already took into account the experience of the Commune, and dealt several times with the tasks of the revolution in relation to the state. It is interesting to note that the treatment of this specific subject clearly revealed, on the one hand, points of similarity between the proletarian state and the present state - points that warrant speaking of the state in both cases - and, on the other hand, points of difference between them, or the transition to the destruction of the state.

"How is the housing question to be settled then? In presentday society, it is settled just as any other social question: by the gradual economic levelling of demand and supply, a settlement which reproduces the question itself again and again and therefore is no settlement. How a social revolution would settle this question not only depends on the circumstances in each particular case, but is also connected with much more farreaching questions, one of the most fundamental of which is the abolition of the antithesis between town and country. As it is not our task to create utopian systems for the organization of the future society, it would be more than idle to go into the question here. But one thing is certain: there is already a sufficient quantity of houses in the big cities to remedy immediately all real 'housing shortage', provided they are used judiciously. This can naturally only occur through the expropriation of the present owners and by quartering in their houses homeless workers or workers overcrowded in their present homes. As soon as the 206

proletariat has won political power, such a measure prompted by concern for the common good will be just as easy to carry out as are other expropriations and billetings by the present-day state."

(German edition, 1887, p.22) The change in the form of state power is not examined here, but only the content of its activity.

Expropriations and billetings take place by order even of the present state. From the formal point of view, the proletarian state will also "order" the occupation of dwellings and expropriation of houses.

But it is clear that the old executive apparatus, the bureaucracy, which is connected with the bourgeoisie, would simply be unfit to carry out the orders of the proletarian state.

"... It must be pointed out that the 'actual seizure' of all the instruments of labor, the taking possession of industry as a whole by the working people, is the exact opposite of the Proudhonist 'redemption'. In the latter case the individual worker becomes the owner of the dwelling, the peasant farm, the instruments of labor; in the former case, the 'working people' remain the collective owners of the houses, factories and instruments of labor, and will hardly permit their use, at least during a transitional period, by individuals or associations without compensation for the cost. In the same way, the abolition of property in land is not the abolition of ground rent but its transfer, if in a modified form, to society. The actual seizure of all the instruments of labor by the working people, therefore, does not at all preclude the retention of rent relations." (p.68) We shall examine the question touched upon in this passage, namely, the economic basis for the withering away of the state, in the next chapter. Engels expresses himself most cautiously. saying that the proletarian state would "hardly" permit the use of houses without payment, "at least during a transitional period". The letting of houses owed by the whole people to individual families presupposes the collection of rent, a certain amount of control, nd the employment of some standard in allotting the housing. All this calls for a certain form of state, but it does not at all call for a special military bureaucratic apparatus, with officials occupying especially privileged positions. The transition to a situation in which it will be possible to supply dwellings rent-free depends on the complete "withering away" of the state.

Speaking of the Blanquists' adoption of the fundamental position of Marxism after the Commune and under the influence of its experience, Engels, in passing, formulates this position as follows:

"... Necessity of political action by the proletariat and of its dictatorship as the transition to the abolition of classes and, with them, of the state...." (p.55) 207

Addicts of hair-splitting criticism, or bourgeois "exterminators of Marxism", will perhaps see a contradiction between this recognition of the "abolition of the state" and repudiation of this formula as an anarchist one in the above passage from Anti-D端hring. It would not be surprising if the opportunists classed Engels, too, as an "anarchist", for it is becoming increasingly common with the social-chauvinists to accuse the internationalists of anarchism.

Marxism has always taught that with the abolition of classes the state will also be abolished. The well-known passage on the "withering away of the state in Anti-D端hring accuses the anarchists not simply of favoring the abolition of the state, but of preaching that the state can be abolished "overnight".

As the now prevailing "Social-Democratic" doctrine completely distorts the relation of Marxism to anarchism on the question of the abolition of the state, it will be particularly useful to recall a certain controversy in which Marx and Engels came out against the anarchists.

Controversy with the Anarchists This controversy took place in 1873. Marx and Engels contributed articles against the Proudhonists, "autonomists" or "anti- authoritarians", to an Italian socialist annual, and it was not until 1913 that these articles appeared in German in Neue Zeit

"If the political struggle of the working class assumes revolutionary form," wrote Marx, ridiculing the anarchists for their repudiation of politics, "and if the workers set up their revolutionary dictatorship in place of the dictatorship of the bourgeoisie, they commit the terrible crime of violating principles, for in order to satisfy their wretched, vulgar everyday needs and to crush the resistance of the bourgeoisie, they give the state a revolutionary and transient form, instead of laying down their arms and abolishing the state."

(Neue Zeit Vol.XXXII, 1, 1913-14, p.40) It was solely against this kind of "abolition" of the state that Marx fought in refuting the anarchists!

He did not at all oppose the view that the state would disappear when classes disappeared, or that it would be abolished when classes were abolished. What he did oppose was the proposition that the workers should renounce the use of arms, organized violence, that is, the state, which is to serve to "crush the resistance of the bourgeoisie".

To prevent the true meaning of his struggle against anarchism from being distorted, Marx expressly emphasized the "revolutionary and transient form" of the state which the proletariat needs. The proletariat needs the state only temporarily. We do not after all differ with the anarchists on the question of the abolition of the state as the aim. We maintain that, to achieve this aim, we must temporarily make use of the instruments, resources, and methods of state power against the exploiters, just as the temporary dictatorship of the oppressed class is necessary for the abolition of classes. Marx chooses the sharpest and clearest way of stating his case against the anarchists: After overthrowing the yoke of the capitalists, should the workers "lay down their arms", or use them against the capitalists in order to crush their resistance? But what is the systematic use of arms by ne class against another if not a "transient form" of state?

Let every Social-Democrat ask himself: Is that how he has been posing the question of the state in controversy with the anarchists? Is that how it has been posed by the vast majority of the official socialist parties of the Second International?

208

Engels expounds the same ideas in much greater detail and still more popularly. First of all he ridicules the muddled ideas of the Proudhonists, who call themselves "anti-authoritarians", i.e., repudiated all authority, all subordination, all power. Take a factory, a railway, a ship on the high seas, said Engels: is it not clear that not one of these complex technical establishments, based on the use of machinery and the systematic co-operation of many people, could function without a certain amount of subordination and, consequently, without a certain amount of authority or power?

"... When I counter the most rabid anti-authoritarians with these arguments, they only answer they can give me is the following: Oh, that's true, except that here it is not a question of authority with which we vest our delegates, but of a commission!

These people imagine they can change a thing by changing its name...."

Having thus shown that authority and autonomy are relative terms, that the sphere of their application varies with the various phases of social development, that it is absurd to take them as absolutes, and adding that the sphere of application of machinery and large-scale production is steadily expanding, Engels passes from the general discussion of authority to the question of the state.

"Had the autonomists," he wrote, "contented themselves with saying that the social organization of the future would allow authority only within the bounds which the conditions of production make inevitable, one could have come to terms with them. But they are blind to all facts that make authority necessary and they passionately fight the word.

"Why do the anti-authoritarians not confine themselves to crying out against political authority, the state? All socialists are agreed that the state, and with it political authority, will disappear as a result of the coming social revolution, that is, that public functions will lose their political character and become mere administrative functions of watching over social interests.

But the anti-authoritarians demand that the political state be abolished at one stroke, even before the social relations that gave both to it have been destroyed. They demand that the first act of the social revolution shall be the abolition of authority.

"Have these gentlemen ever seen a revolution? A revolution is certainly the most authoritarian thing there is; it is an act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets and cannon, all of which 209

are highly authoritarian means. And the victorious party must maintain its rule by means of the terror which its arms inspire in the reactionaries. Would the Paris Commune have lasted more than a day if it had not used the authority of the armed people against the bourgeoisie? Cannot we, on the contrary, blame it for having made too little use of that authority? Therefore, one of two things: either that anti-authoritarians down't know what they are talking about, in which case they are creating nothing but confusion. Or they do know, and in that case they are betraying the cause of the proletariat. In either case they serve only reaction." (p.39) This argument touches upon questions which should be examined in connection with the relationship between politics and economics during the withering away of the state (the next chapter is devoted to this). These questions are: the transformation of public functions from political into simple functions of administration, and the "political state". This last term, one particularly liable to misunderstanding, indicates the process of the withering away of the state: at a certain stage of this process, the state which is withering away may be called a non-political state.

Against, the most remarkable thing in this argument of Engels' is the way he states his case against the anarchists. Social-Democrats, claiming to be disciples of Engels, have argued on this subject against the anarchists millions of times since 1873, but they have not argued as Marxists could and should. The anarchist idea of abolition of the state is muddled and non-revolutionary - that is how Engels put it. It is precisely the revolution in its rise and development, with its specific tasks in relation to violence, authority, power, the state, that the anarchists refuse to see.

The usual criticism of anarchism by present-day Social-Democrats has boiled down to the purest philistine banality: "We recognize the state, whereas the anarchists do not!" Naturally, such banality cannot but repel workers who are at all capable of thinking and revolutionary-minded. What Engels says is different. He stresses that all socialists recognize that the state will disappear as a result of the socialist revolution. He then deals specifically with the question of the revolution - the very question which, as a rule, the Social-Democrats evade out of opportunism, leaving it, so to speak, exclusively for the anarchists "to work out". And when dealing with this question, Engels takes the bull by the horns; he asks: should not the Commune have made more use of the revolutionary power of the state, that is, of the proletariat armed and organized as the ruling class?

Prevailing official Social-Democracy usually dismissed the question of the concrete tasks of the proletariat in the revolution either with a philistine sneer, or, at best, with the sophistic evasion: "The future will show". And the anarchists were justified in saying about such Social-Democrats that they were failing in their task of giving the workers a revolutionary education. Engels draws upon the experience of the last proletarian revolution precisely for the purpose of making a most concrete study of what should be done by the proletariat, and in what manner, in relation to both the banks and the state.

Letter to Bebel

210

One of the most, if not the most, remarkable observation on the state in the works of Marx and Engels is contained in the following passage in Engels' letter to Bebel dated March 18-28, 1875. This letter, we may observe in parenthesis, was, as far as we know, first published by Bebel in the second volume of his memoirs (Aus meinem Leben), which appeared in 1911, i.e., 36 years after the letter had been written and sent.

Engels wrote to Bebel criticizing the same draft of the Gotha Programme which Marx criticized in his famous letter to Bracke. Referring specially to the question of the state, Engels said:

"The free people's state has been transferred into the free state.

Taken in its grammatical sense, a free state is one where the state is free in relation to its citizens, hence a state with a despotic government. The whole talk about the state should be dropped, especially since the Commune, which was no longer a state in the proper sense of the word. The 'people's state' has been thrown in our faces by the anarchists to the point of disgust, although already Marx's book against Proudhon and later the Communist Manifesto say plainly that with the introduction of the socialist order of society the state dissolves of itself [sich auflost] and disappears. As the state is only a transitional institution which is used in the struggle, in the revolution, to hold down one's adversaries by force, it is sheer nonsense to talk of a 'free people's state'; so long as the proletariat still needs the state, it does not need it in the interests of freedom but in order to hold down its adversaries, and as soon as it becomes possible to speak of freedom the state as such ceases to exist. We would therefore propose replacing the state everywhere by Gemeinwesen, a good old German word which can very well take the place of the French word commune." (pp.321-22 of the German original) It should be borne in mind that this letter refers to the party programme which Marx criticized in a letter dated only a few weeks later than the above (Marx's letter is dated May 5, 1875), and that at the time Engels was living with Marx in London. Consequently, when he says "we" in the last sentence, Engels undoubtedly, in his own as well as in Marx's name, suggests to the leader of the German workers' party that the word "state" be struck out of the programme and replaced by the word "community".

What a howl about "anarchism" would be raised by the leading lights of present-day "Marxism", which has been falsified for the convenience of the opportunists, if such an amendment of the programme were suggested to them!

Let them howl. This will earn them the praises of the bourgeoisie.

211

And we shall go on with our work. In revising the programme of our Party, we must by all means take the advice of Engels and Marx into consideration in order to come nearer the truth, to restore Marxism by ridding it of distortions, to guide the struggle of the working class for its emancipation more correctly. Certainly no one opposed to the advice of Engels and Marx will be found among the Bolsheviks. The only difficulty that may perhaps arise will be in regard to the term. In German there are two words meaning "community", of which Engels used the one which does not denote a single community, but their totality, a system of communities. In Russian there is no such word, and we may have to choose the French word "commune", although this also has its drawbacks.

"The Commune was no longer a state in the proper sense of the word" - this is the most theoretically important statement Engels makes. After what has been said above, this statement is perfectly clear.

The Commune was ceasing to be a state since it had to suppress, not the majority of the population, but a minority (the exploiters). It had smashed the bourgeois state machine. In place of a special coercive force the population itself came on the scene. All this was a departure from the state in the proper sense of the word. And had the Commune become firmly established, all traces of the state in it would have "withered away" of themselves; it would not have had to "abolish" the institutions of the state - they would have ceased to function as they ceased to have anything to do.

"The 'people's state' has been thrown in our faces by the anarchists". In saying this, Engels above all has in mind Bakunin and his attacks on the German Social-Democrats. Engels admits that these attacks were justified insofar as the "people's state" was as much an absurdity and as much a departure from socialism as the "free people's state". Engels tried to put the struggle of the German Social-Democrats against the anarchists on the right lines, to make this struggle correct in principle, to ride it of opportunist prejudices concerning the "state". Unfortunately, Engels' letter was pigeonholed for 36 years. We shall see farther on that, even after this letter was published, Kautsky persisted in virtually the same mistakes against which Engels had warned.

Bebel replied to Engels in a letter dated September 21, 1875, in which he wrote, among other things, that he "fully agreed" with Engels' opinion of the draft programme, and that he had reproached Liebknecht with readiness to make concessions (p.334 of the German edition of Bebel's memoirs, Vol.II). But if we take Bebel's pamphlet, Our Aims, we find there views on the state that are absolutely wrong.

"The state must... be transformed from one based on class rule into a people's state."

(Unsere Ziele, 1886, p.14) This was printed in the ninth (ninth!) edition of Bebel's pamphlet! It is not surprising that opportunist views on the state, so persistently repeated, were absorbed by the German Social-Democrats, especially as Engels' revolutionary interpretations had been safely pigeon-holed, and all the conditions of life were such as to "wean" them from revolution for a long time.

2. Criticism of the Draft of the Erfurt Programme In analyzing Marxist teachings on the state, the criticism of the draft of the Erfurt Programme, sent

by Engels to Kautsky on June 29, 1891, and published only 10 years later in Neue Zeit, cannot be ignored; for it is with the opportunist views of the Social-Democrats on questions of state organization that this criticism is mainly concerned.

We shall note in passing that Engels also makes an exceedingly valuable observation on economic questions, which shows how attentively and thoughtfully he watched the various changes occurring in modern capitalism, and how for this reason he was able to foresee to a certain extent the tasks of our present, the imperialist, epoch. Here is that observation: referring to the word "planlessness" (Planlosigkeit), used in the draft programme, as characteristic of capitalism, Engels wrote:

212

"When we pass from joint-stock companies to trusts which assume control over, and monopolize, whole industries, it is not only private production that ceases, but also planlessness."

(Neue Zeit, Vol. XX, 1, 1901-02, p.8) Here was have what is most essential in the theoretical appraisal of the latest phase of capitalism, i.e., imperialism, namely, that capitalism becomes monopoly capitalism. The latter must be emphasized because the erroneous bourgeois reformist assertion that monopoly capitalism or state-monopoly capitalism is no longer capitalism, but can now be called "state socialism" and so on, is very common. The trusts, of course, never provided, do not now provide, and cannot provide complete planning. But however much they do plan, however much the capitalist magnates calculate in advance the volume of production on a national and even on an international scale, and however much they systematically regulate it, we still remain under capitalism - at its new stage, it is true, but still capitalism, without a doubt. The "proximity" of such capitalism to socialism should serve genuine representatives of the proletariat as an argument proving the proximity, facility, feasibility, and urgency of the socialist revolution, and not at all as an argument for tolerating the repudiation of such a revolution and the efforts to make capitalism look more attractive, something which all reformists are trying to do.

But to return to the question of the state. In his letter Engels makes three particularly valuable suggestions: first, in regard to the republic; second, in regard to the connection between the national question and state organization; and, third, in regard to local self-government.

In regard to the republic, Engels made this the focal point of this criticism of the draft of the Erfurt Programme. And when we recall the importance which the Erfurt Programme acquired for all the Social- Democrats of the world, and that it became the model for the whole Second International, we may say without exaggeration that Engels thereby criticizes the opportunism of the whole Second International.

"The political demands of the draft," engels wrote, "have one great fault. It lacks [Engels' italics] precisely what should have been said."

And, later on, he makes it clear that the German Constitution is, strictly speaking, a copy of the extremely reactionary Constitution of 1850, that the Reichstag is only, as Wilhelm Liebknecht put it, "the fig leaf of absolutism" and that to wish "to transform all the instruments of labor into common property" on the basis of a constitution which legalizes the existence of petty states and the federation of petty German states is an "obvious absurdity".

"To touch on that is dangerous, however," Engels added, knowing only too well that it was impossible legally to include in the programme the demand for a republic in Germany. But he refused to merely accept this obvious consideration which satisfied "everybody". He continued: "Nevertheless, somehow or other, the thing has to be attacked. How necessary this is is shown precisely at the present time by opportunism, which is gaining ground [einreissende] in a large section of the SocialDemocrat press. Fearing a renewal of the Anti-Socialist Law, or recalling all manner of overhasty pronouncements made during 213

the reign of that law, they now want the Party to find the present legal order in Germany adequate for putting through all Party demands by peaceful means...."

Engels particularly stressed the fundamental fact that the German Social-Democrats were prompted by fear of a renewal of the Anti- Socialist Law, and explicitly described it as opportunism; he declared that precisely because there was no republic and no freedom in Germany, the dreams of a "peaceful" path were perfectly absurd. Engels was careful not to tie his hands. He admitted that in republican or very free countries "one can conceive" (only "conceive"!) of a peaceful development towards socialism, but in Germany, he repeated,

"... in Germany, where the government is almost omnipotent and the Reichstag and all other representative bodies have no real power, to advocate such a thing in Germany, where, moreover, there is no need to do so, means removing the fig leaf from absolutism and becoming oneself a screen for its nakedness."

The great majority of the official leaders of the German Social- Democratic Party, which pigeonholed this advice, have really proved to be a screen for absolutism.

"... In the long run such a policy can only lead one's own party astray. They push general, abstract political questions into the foreground,

thereby

concealing

the

immediate

concrete

questions, which at the moment of the first great events, the first political crisis, automatically pose themselves. What can result from this except that at the decisive moment the party suddenly proves helpless and that uncertainty and discord on the most decisive issues reign in it because these issues have never been discussed? ...

"This forgetting of the great, the principal considerations for the momentary interests of the day, this struggling and striving for the success of the moment regardless of later consequences, this sacrifice of the future of the movement for its present may be 'honestly' meant, but it is and remains opportunism, and 'honest' opportunism is perhaps the most dangerous of all....

"If one thing is certain it is that our party and the working class can only come to power in the form of the democratic republic.

This is even the specific form for the dictatorship of the proletariat, as the Great French Revolution has already shown...."

214

Engels realized here in a particularly striking form the fundamental idea which runs through all of Marx's works, namely, that the democratic republic is the nearest approach to the dictatorship of the proletariat. For such a republic, without in the least abolishing the rule of capital, and, therefore, the oppression of the masses nd the class struggle, inevitably leads to such an extension, development, unfolding, and intensification of this struggle that, as soon as it becomes possible to meet the fundamental interests of the oppressed masses, this possibility is realized inevitably and solely through the dictatorship of the proletariat, through the leadership of those masses by the proletariat.

These, too, are "forgotten words" of marxism for the whole of the Second International, and the fact that they have been forgotten was demonstrated with particular vividness by the history of the Menshevik Party during the first six months of the Russian revolution of 1917.

On the subject of a federal republic, in connection with the national composition of the population, Engels wrote:

"What should take the place of the present-day Germany [with its reactionary monarchical Constitution and its equally reactionary division into petty states, a division which perpetuates all the specific features of "Prussianism" instead of dissolving them in Germany as a whole]? In my view, the proletariat can only use the form of the one and indivisible republic. In the gigantic territory of the United States, a federal republic is still, on the whole, a necessity, although in the Eastern states it is already becoming a hindrance. It would be a step forward in Britain where the two islands are peopled by four nations and in spite of a single Parliament three different systems of legislation already exist side by side. In little Switzerland, it has long been a hindrance, tolerable only because Switzerland is content to be a purely passive member of the European state system. For Germany, federalization on the Swiss model would be an enormous step backward. Two points distinguish a union state from a completely unified state: first, that each member state, each canton, has its own civil and criminal legislative and judicial system, and, second, that alongside a popular chamber there is also a federal chamber in which each canton, whether large or small, votes as such." In Germany, the union state is the transition to the completely unified state, and the "revolution from above" of 1866 and 1870 must not be reversed but supplemented by a "movement from below".

215

Far from being indifferent to the forms of state, Engels, on the contrary, tried to analyze the transitional forms with the utmost thoroughness in order to establish, in accordance with the concrete historical peculiarities of each particular case, from what and to what the given transitional form is passing.

Approaching the matter from the standpoint of the proletariat and the proletarian revolution, Engels, like Marx, upheld democratic centralism, the republic - one and indivisible. He regarded the federal republic either as an exception and a hindrance to development, or as a transition from a monarchy to a centralized republic, as a "step forward" under certain special conditions. And among these special conditions, he puts the national question to the fore.

Although mercilessly criticizing the reactionary nature of small states, and the screening of this by the national question in certain concrete cases, Engels, like Marx, never betrayed the slightest desire to brush aside the national question - a desire of which the Dutch and Polish Marxists, who proceed from their perfectly justified opposition to the narrow philistine nationalism of "their" little states, are often guilty.

Even in regard to britain, where geographical conditions, a common language and the history of many centuries would seem to have "put an end" to the national question in the various small divisions of the country - even in regard to to that country, Engels reckoned with the plain fact that the national question was not yet a thing of the past, and recognized in consequence that the establishment of a federal republic would be a "step forward". Of course, there is not the slightest hint here of Engels abandoning the criticism of the shortcomings of a federal republic or renouncing the most determined advocacy of, and struggle for, a unified and centralized democratic republic.

But Engels did not at all men democratic centralism in the bureaucratic sense in which the term is used by bourgeois and petty-bourgeois ideologists, the anarchists among the latter. His idea of centralism did not in the least preclude such broad local self-government as would combine the voluntary defence of the unity of the state by the "communes" and districts, and the complete elimination of all bureaucratic practices and all "ordering" from above. Carrying forward the programme views of Marxism on the state, Engels wrote:

"So, then, a unified republic - but not in the sense of the present French Republic, which is nothing but the Empire established in 1798 without the Emperor. From 1792 to 1798 each French department, each commune [Gemeinde], enjoyed complete self-government on the American model, and this is what we too must have. How self-government is to be organized and how we can manage, without a bureaucracy has been shown to us by America and the first French Republic, and is being shown even today by Australia, Canada and the other English colonies. And a provincial [regional] and communal selfgovernment of this type is far freer than, for instance, Swiss federalism, under which, it is true, the canton is very independent in relation to the Bund [i.e., the federated state as a whole], but is also independent in relation to the district [Bezirk] and the commune. The cantonal governments appoint the district governors [Bezirksstatthalter] and prefects - which is unknown 216

in English-speaking countries and which we want to abolish here as resolutely in the future as the Prussian Landrate and Regierungsrate"

(commissioners,

district

police

chiefs,

governors, and in general all officials appointed from above).

Accordingly, Engels proposes the following words for the selfgovernment clause in the programme:

"Complete self-

government for the provinces [gubernias or regions], districts and communes through officials elected by universal suffrage.

The abolition of all local and provincial authorities appointed by the state."

I have already had occassion to point out - in Pravda (No.68, May 28, 1917), which was suppressed by the government of Kerensky and other "socialist" Ministers - how on this point (of course, not on this point alone by any mens) our pseudo-socialist representatives of pseudo- revolutionary pseudodemocracy have made glaring departures from democracy. Naturally, people who have bound themselves by a "coalition" to the imperialist bourgeoisie have remained deaf to this criticism.

It is extremely important to note that Engels, armed with facts, disproved by a most precise example the prejudice which is very widespread, particularly among petty-bourgeois democrats, that a federal republic necessarily means a greater amount of freedom than a centralized republic. This is wrong. It is disproved by the facts cited by Engels regarding the centralized French Republic of 792-98 and the federal Swiss Republic. The really democratic centralized republic gave more freedom that the federal republic. In other words, the greatest amount of local, regional, and other freedom known in history was accorded by a centralized and not a federal republic.

Insufficient attention has been and is being paid in our Party propaganda and agitation to this fact, as, indeed, to the whole question of the federal and the centralized republic and local self-government.

The 1891 Preface to Marx's "The Civil War in France" In his preface to the third edition of The Civil War in France (this preface is dated March 18, 1891, and was originally published in Neue Zeit), Engels, in addition to some interesting incidental remarks on questions concerning the attitude towards the state, gave a remarkably vivid summary of the lessons of the Commune. This summary, made more profound by the entire experience of the 20 years that separated the author from the Commune, and directed expressly against the "superstitious belief in the state" so widespread in Germany, may justly be called the last word of Marxism on the question under consideration.

In France, Engels observed, the workers emerged with arms from every revolution: "therefore the disarming of the workers was the first commandment for the bourgeois, who were at the helm of the state. Hence, after every revolution won by the workers, a new struggle, ending with the defeat of the workers."

This summary of the experience of bourgeois revolutions is as concise as it is expressive. The essence of the matter - among other things, on the question of the state (has the oppressed class arms?) - is here remarkably well-grasped. It is precisely this essence that is most often evaded by 217

both professors influenced by bourgeois ideology, and by petty-bourgeois democrats. In the Russian revolution of 1917, the honor (Cavaignac honor) of blabbing this secret of bourgeois revolutions fell to the Menshevik, would-be Marxist, Tsereteli. In his "historic" speech of June 11, Tsereteli blurted out that the bourgeoisie were determined to disarm the Petrograd workers - presenting, of course, this decision as his own, and as a necessity for the "state" in general!

Tsereteli's historical speech of June 11 will, of course, serve every historian of the revolution of 1917 as a graphic illustration of how the Social-Revolutionary and Menshevik bloc, led by Mr. Tsereteli, deserted to the bourgeoisie against the revolutionary proletariat.

Another incidental remark of Engels', also connected with the question of the state, deals with religion. It is well-known that the German Social-Democrats, as they degenerated and became increasingly opportunist, slipped more and more frequently into the philistine misinterpretation of the celebrated formula: "Religion is to be declared a private matter." That is, the formula was twisted to mean that religion was a private matter even for the party of the revolutionary proletariat!! It was against this complete betrayal of the revolutionary programme of the proletariat that Engels vigorously protested. In 1891 he saw only the very feeble beginnings of opportunism in his party, and, therefore, he expressed himself with extreme caution:

"As almost only workers, or recognized representatives of the workers, sat in the Commune, its decisions bore a decidedly proletarian character. Either they decreed reforms which the republican bourgeoisie had failed to pass solely out of cowardice, but which provided a necessary basis for the free activity of the working class - such as the realization of the principle that in relation to the state religion is a purely private matter - or the Commune promulgated decrees which were in the direct interest of the working class and in part cut deeply into the old order of society."

Engels deliberately emphasized the words "in relation to the state" as a straight thrust at at German opportunism, which had declared religion to be a private matter in relation to the party, thus degrading the party of the revolutionary proletariat to the level of the most vulgar "free- thinking" philistinism, which is prepared to allow a non-denominational status, but which renounces the party struggle against the opium of religion which stupifies the people.

The future historian of the German Social-Democrats, in tracing the roots of their shameful bankruptcy in 1914, will find a fair amount of interesting material on this question, beginning with the evasive declarations in the articles of the party's ideological leader, Kautsky, which throw the door wide open to opportunism, and ending with the attitude of the party towards the "Los-vonKirche-Bewegung" (the "Leave-the-Church" movement) in 1913.

But let us see how, 20 years after the Commune, Engels summed up its lessons for the fighting proletariat.

Here are the lessons to which Engels attached prime importance:

"... It was precisely the oppressing power of the former centralized government, army, political parties, bureaucracy, which Napoleon had created in 1798 and which every new government had since then taken over as a welcome instrument 218

and used against its opponents - it was this power which was to fall everywhere, just as it had fallen in Paris.

"From the very outset the Commune had to recognize that the working class, once in power, could not go on managing with the old state machine; that in order not to lose again its only justgained supremacy, this working class must, on the one hand, do away with all the old machinery of oppression previously used against it itself, and, on the other, safeguard itself against its own deputies and officials, by declaring them all, without exception, subject to recall at any time...."

Engels emphasized once again that not only under a monarchy, but also under a democratic republic the state remains a state, i.e., it retains its fundamental distinguishing feature of transforming the officials, the 'servants of society", its organs, into the masters of society.

"Against this transformation of the state and the organs of the state from servants of society into masters of society - an inevitable transformation in all previous states - the Commune used two infallible means. In the first place, it filled all posts administrative, judicial, and educational - by election on the basis of universal suffrage of all concerned, subject to recall at any time by the electors. And, in the second place, it paid all officials, high or low, only the wages received by other workers.

The highest salary paid by the Commune to anyone was 6,000 francs. In this way a dependable barrier to place-hunting and careerism was set up, even apart from the binding mandates to delegates to representative bodies, which were added besides...."

Engels here approached the interesting boundary line at which consistent democracy, on the one hand, is transformed into socialism and, on the other, demands socialism. For, in order to abolish the state, it is necessary to convert the functions of the civil service into the simple operations of control and accounting that are within the scope and ability of the vast majority of the population, and, subsequently, of every single individual. And if careerism is to be abolished completely, it must be made impossible for "honorable" though profitless posts in the Civil Service to be used as a springboard to highly lucrative posts in banks or joint-stock companies, as constantly happens in all the freest capitalist countries.

Engels, however, did not make the mistake some Marxists make in dealing, for example, with the question of the right of nations to self- determination, when they argue that is is impossible under capitalism and will be superfluous under socialism. This seemingly clever but actually incorrect statement might be made in regard to any democratic institution, including moderate salaries for officials, because fully consistent democracy is impossible under capitalism, and under socialism all democracy will wither away.

219

This is a sophism like the old joke about a man becoming bald by losing one more hair.

To develop democracy to the utmost, to find the forms for this development, to test them by practice, and so fort - all this is one of the component tasks of the struggle for the social revolution. Taken separately, no kind of democracy will bring socialism. But in actual life democracy will never be "taken separately"; it will be "taken together" with other things, it will exert its influence on economic life as well, will stimulate its transformation; and in its turn it will be influenced by economic development, and so on. This is the dialectics of living history.

Engels continued:

"... This shattering [Sprengung] of the former state power and its replacement by a new and truly democratic one is described in detail in the third section of The Civil War. But it was necessary to touch briefly here once more on some of its features, because in Germany particularly the superstitious belief in the state has passed from philosophy into the general consciousness of the bourgeoisie and even of many workers. According to the philosophical conception, the state is the 'realization of the idea', or the Kingdom of God on earth, translated into philosophical terms, the sphere in which eternal truth and justice are, or should be, realized. And from this follows a superstitious reverence for the state and everything connected with it, which takes root the more readily since people are accustomed from childhood to imagine that the affairs and interests common to the whole of society could not be looked after other than as they have been looked after in the past, that is, through the state and its lucratively positioned officials. And people think they have taken quite an extraordinary bold step forward when they have rid themselves of belief in hereditary monarchy and swear by the democratic republic. In reality, however, the state is nothing but a machine for the oppression of one class by another, and indeed in the democratic republic no less than in the monarchy. And at best it is an evil inherited by the proletariat after its victorious struggle for class supremacy, whose worst sides the victorious proletariat will have to lop off as speedily as possible, just as the Commune had to, until a generation reared in new, free social conditions is able to discard the entire lumber of the state."

220

Engels warned the Germans not to forget the principles of socialism with regard to the state in general in connection with the substitution of a republic for the monarchy. His warnings now read like a veritable lesson to the Tseretelis and Chernovs, who in their "coalition" practice have revealed a superstitious belief in, and a superstitious reverence for, the state!

Two more remarks.

1.

Engels' statement that in a democratic republic, "no

less" than in a monarchy, the state remains a "machine for the oppression of one class by another" by no means signifies that the form of oppression makes no difference to the proletariat, as some anarchists "teach". A wider, freer and more open form of the class struggle and of class oppression vastly assists the proletariat in its struggle for the abolition of classes in general.

2.

Why will only a new generation be able to discard

the entire lumber of the state? This question is bound up with that of overcoming democracy, with which we shall deal now.

Engels on the Overcoming of Democracy Engels came to express his views on this subject when establishing that the term "Social-Democrat" was scientifically wrong.

In a preface to an edition of his articles of the seventies on various subjects, mostly on "international" questions (Internationales aus dem Volkstaat), dated January 3, 1894, i.e., written a year and a half before his death, Engels wrote that in all his articles he used the word "Communist", and not "SocialDemocrat", because at that time the Proudhonists in France and the Lassalleans in Germany called themselves Social-Democrats.

"... For Marx and myself," continued Engels, "it was therefore absolutely impossible to use such a loose term to characterize our special point of view. Today things are different, and the word ["Social-Democrat"] may perhaps pass muster [mag passieren], inexact [unpassend, unsuitable] though it still is for a party whose economic programme is not merely socialist in general, but downright communist, and whose ultimate political aim is to overcome the whole state and, consequently, democracy as well. The names of real political parties, however,

221

are never wholly appropriate; the party develops while the name stays."

The dialectician Engels remained true to dialectics to the end of his days. Marx and I, he said, had a splendid, scientifically exact name for the party, but there was no real party, i.e., no mass proletarian party. Now (at the end of the 19th century) there was a real party, but its name was scientifically wrong. Never mind, it would "pass muster", so long as the party developed, so long as the scientific in accuracy of the name was not hidden from it and did not hinder its development on the right direction!

Perhaps some wit would console us Bolsheviks in the manner of Engels: we have a real party, it is developing splendidly; even such a meaningless and ugly term as "Bolshevik" will "pass muster", although it expresses nothing whatever but the purely accidental fact that at the Brussels-London Congress of 1903 we were in the majority. Perhaps now that the persecution of our Party by republicans and "revolutionary" petty-bourgeois democrats in July and August has earned the name "Bolshevik" such universal respect, now that, in addition, this persecution marks the tremendous historical progress our Party has made in its real development - perhaps now even I might hesitate to insist on the suggestion I made in April to change the name of our Party. Perhaps I would propose a "compromise" to my comrades, namely, to call ourselves the Communist Party, but to retain the word "Bolshevik" in brackets.

But the question of the name of the Party is incomparably less important than the question of the attitude of the revolutionary proletariat to the state.

In the usual argument about the state, the mistake is constantly made against which Engels warned and which we have in passing indicated above, namely, it is constantly forgotten that the abolition of the state means also the abolition of democracy; that the withering away of the state means the withering away of democracy.

At first sight this assertion seems exceedingly strange and incomprehensible; indeed, someone may even suspect us of expecting the advent of a system of society in which the principle of subordination of the minority to the majority will not be observed - for democracy means the recognition of this very principle.

No, democracy is not identical with the subordination of the minority to the majority. Democracy is a state which recognizes the subordination of the minority to the majority, i.e., an organization for the systematic use of force by one class against another, by one section of the population against another.

We set ourselves the ultimate aim of abolishing the state, i.e., all organized and systematic violence, all use of violence against people in general. We do not expect the advent of a system of society in which the principle of subordination of the minority to the majority will not be observed. In striving for socialism, however, we are convinced that it will develop into communism and, therefore, that the need for violence against people in general, for the subordination of one man to another, and of one section of the population to another, will vanish altogether since people will become accustomed to observing the elementary conditions of social life without violence and without subordination.

In order to emphasize this element of habit, Engels speaks of a new generation, "reared in new, free social conditions", which will "be able to discard the entire lumber of the state" - of any state, including the democratic-republican state.

In order to explain this, it is necessary to analyze he economic basis of the withering away of the state.

Next: Economic Basis of the Withering Away of the State The State and Revolution Index Presentation of the Question by Marx The Transition from Captialism to Communism 222

The First Phase of Communist Society The Higher Phase of Communist Society

Marx explains this question most thoroughly in his Critique of the Gotha Programme (letter to Bracke, May 5, 1875, which was not published until 1891 when it was printed in Neue Zeit, vol. IX, 1, and which has appeared in Russian in a special edition). The polemical part of this remarkable work, which contains a criticism of Lassalleanism, has, so to speak, overshadowed its positive part, namely, the analysis of the connection between the development of communism and the withering away of the state.

1. Presentation of the Question by Marx From a superficial comparison of Marx's letter to Bracke of May 5, 1875, with Engels' letter to Bebel of March 28, 1875, which we examined above, it might appear that Marx was much more of a "champion of the state" than Engels, and that the difference of opinion between the two writers on the question of the state was very considerable.

Engels suggested to Bebel that all chatter about the state be dropped altogether, that the word "state" be eliminated from the programme altogether and the word "community" substituted for it. Engels even declared that the Commune was long a state in the proper sense of the word. Yet Marx even spoke of the "future state in communist society", i.e., he would seem to recognize the need for the state even under communism.

But such a view would be fundamentally wrong. A closer examination shows that Marx's and Engels' views on the state and its withering away were completely identical, and that Marx's expression quoted above refers to the state in the process of withering away.

Clearly, there can be no question of specifying the moment of the future "withering away", the more so since it will obviously be a lengthy process. The apparent difference between Marx and Engels is due to the fact that they wealth with different subject and pursued different aims. Engels set out to show Bebel graphically, sharply, and in broad outline the utter absurdity of the current prejudices concerning the state (shared to no small degree by Lassalle). Marx only touched upon this question in passing, being interested in another subject, namely, the development of communist society.

The whole theory of Marx is the application of the theory of development - in its most consistent, complete, considered and pithy form - to modern capitalism. Naturally, Marx was faced with the problem of applying this theory both to the forthcoming collapse of capitalism and to the future development of future communism.

On the basis of what facts, then, can the question of the future development of future communism be dealt with?

On the basis of the fact that it has its origin in capitalism, that it develops historically from capitalism, that it is the result of the action of a social force to which capitalism gave birth. There is no trace of an attempt on Marx's part to make up a utopia, to indulge in idle guess-work about what cannot be known. Marx treated the question of communism in the same way as a naturalist would treat the question of the development of, say, a new biological variety, once he knew that it had originated in such and such a way and was changing in such and such a definite direction.

To begin with, Marx brushed aside the confusion the Gotha Programme brought into the question of the relationship between state and society. He wrote:

"'Present-day society' is capitalist society, which exists in all civilized countries, being more or less free from medieval 223

admixture, more or less modified by the particular historical development of each country, more or less developed. On the other hand, the 'present-day state' changes with a country's frontier. It is different in the Prusso-German Empire from what it is in Switzerland, and different in England from what it is in the United States. 'The present-day state' is, therefore, a fiction.

"Nevertheless, the different states of the different civilized countries, in spite of their motley diversity of form, all have this in common, that they are based on modern bourgeois society, only one more or less capitalistically developed. The have, therefore, also certain essential characteristics in common. In this sense it is possible to speak of the 'present-day state', in contrast with the future, in which its present root, bourgeois society, will have died off.

"The question then arise: what transformation will the state undergo in communist society? In other words, what social functions will remain in existence there that are analogous to present state functions? This question can only be answered scientifically, and one does not get a flea-hop nearer to the problem by a thousandfold combination of the word people with the word state."

After thus ridiculing all talk about a "people's state", Marx formulated the question and gave warning, as it were, that those seeking a scientific answer to it should use only firmly-established scientific data.

The first fact that has been established most accurately by the whole theory of development, by science as a whole - a fact tat was ignored by the utopians, and is ignored by the present-day opportunists, who are afraid of the socialist revolution - is that, historically, there must undoubtedly be a special stage, or a special phase, of transition from capitalism to communism.

2. The Transition from Capitalism to Communism Marx continued:

"Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other.

Corresponding to this is also a political transition period in

224

which the state can be nothing but the revolutionary dictatorship of the proletariat."

Marx bases this conclusion on an analysis of the role played by the proletariat in modern capitalist society, on the data concerning the development of this society, and on the irreconcilability of the antagonistic interests of the proletariat and the bourgeoisie.

Previously the question was put as follows: to achieve its emancipation, the proletariat must overthrow the bourgeoisie, win political power and establish its revolutionary dictatorship.

Now the question is put somewhat differently: the transition from capitalist society - which is developing towards communism - to communist society is impossible without a "political transition period", and the state in this period can only be the revolutionary dictatorship of the proletariat.

What, then, is the relation of this dictatorship to democracy?

We have seen that the Communist Manifesto simply places side by side the two concepts: "to raise the proletariat to the position of the ruling class" and "to win the battle of democracy". On the basis of all that has been said above, it is possible to determine more precisely how democracy changes in the transition from capitalism to communism.

In capitalist society, providing it develops under the most favourable conditions, we have a more or less complete democracy in the democratic republic. But this democracy is always hemmed in by the narrow limits set by capitalist exploitation, and consequently always remains, in effect, a democracy for the minority, only for the propertied classes, only for the rich. Freedom in capitalist society always remains about the same as it was in the ancient Greek republics: freedom for the slaveowners. Owing to the conditions of capitalist exploitation, the modern wage slaves are so crushed by want and poverty that "they cannot be bothered with democracy", "cannot be bothered with politics"; in the ordinary, peaceful course of events, the majority of the population is debarred from participation in public and political life.

The correctness of this statement is perhaps mot clearly confirmed by germany, because constitutional legality steadily endured there for a remarkably long time - nearly half a century (1871-1914) - and during this period the Social-Democrats were able to achieve far more than in other countries in the way of "utilizing legality", and organized a larger proportion of the workers into a political party than anywhere else in the world.

What is this largest proportion of politically conscious and active wage slaves that has so far been recorded in capitalist society? One million members of the Social-Democratic Party - out of 15,000,000 wage-workers! Three million organized in trade unions - out of 15,000,000!

Democracy for an insignificant minority, democracy for the rich - that is the democracy of capitalist society. If we look more closely into the machinery of capitalist democracy, we see everywhere, in the "petty" - supposedly petty - details of the suffrage (residential qualifications, exclusion of women, etc.), in the technique of the representative institutions, in the actual obstacles to the right of assembly (public buildings are not for "paupers"!), in the purely capitalist organization of the daily press, etc., etc., - we see restriction after restriction upon democracy. These restrictions, exceptions, exclusions, obstacles for the poor seem slight, especially in the eyes of one who has never known want himself and has never been inclose contact with the oppressed classes in their mass life (and nine out of 10, if not 99 out of 100, bourgeois publicists and politicians come under this category); but in their sum total these restrictions exclude and squeeze out the poor from politics, from active participation in democracy.

Marx grasped this essence of capitalist democracy splendidly when, in analyzing the experience of the Commune, he said that the oppressed are allowed once every few years to decide which particular representatives of the oppressing class shall represent and repress them in parliament!

But from this capitalist democracy - that is inevitably narrow and stealthily pushes aside the poor, and is therefore hypocritical and false through and through - forward development does not proceed simply, directly and smoothly, towards "greater and greater democracy", as the liberal professors and petty-bourgeois opportunists would have us believe. No, forward development, i.e., development

225

towards communism, proceeds through the dictatorship of the proletariat, and cannot do otherwise, for the resistance of the capitalist exploiters cannot be broken by anyone else or in any other way.

And the dictatorship of the proletariat, i.e., the organization of the vanguard of the oppressed as the ruling class for the purpose of suppressing the oppressors, cannot result merely in an expansion of democracy. Simultaneously with an immense expansion of democracy, which for the first time becomes democracy for the poor, democracy for the people, and not democracy for the money-bags, the dictatorship of the proletariat imposes a series of restrictions on the freedom of the oppressors, the exploiters, the capitalists. We must suppress them in order to free humanity from wage slavery, their resistance must be crushed by force; it is clear that there is no freedom and no democracy where there is suppression and where there is violence.

Engels expressed this splendidly in his letter to Bebel when he said, as the reader will remember, that "the proletariat needs the state, not in the interests of freedom but in order to hold down its adversaries, and as soon as it becomes possible to speak of freedom the state as such ceases to exist".

Democracy for the vast majority of the people, and suppression by force, i.e., exclusion from democracy, of the exploiters and oppressors of the people - this is the change democracy undergoes during the transition from capitalism to communism.

Only in communist society, when the resistance of the capitalists have disappeared, when there are no classes (i.e., when there is no distinction between the members of society as regards their relation to the social means of production), only then "the state... ceases to exist", and "it becomes possible to speak of freedom". Only then will a truly complete democracy become possible and be realized, a democracy without any exceptions whatever. And only then will democracy begin to wither away, owing to the simple fact that, freed from capitalist slavery, from the untold horrors, savagery, absurdities, and infamies of capitalist exploitation, people will gradually become accustomed to observing the elementary rules of social intercourse that have been known for centuries and repeated for thousands of years in all copy-book maxims. They will become accustomed to observing them without force, without coercion, without subordination, without the special apparatus for coercion called the state.

The expression "the state withers away" is very well-chosen, for it indicates both the gradual and the spontaneous nature of the process. Only habit can, and undoubtedly will, have such an effect; for we see around us on millions of occassions how readily people become accustomed to observing the necessary rules of social intercourse when there is no exploitation, when there is nothing that arouses indignation, evokes protest and revolt, and creates the need for suppression.

And so in capitalist society we have a democracy that is curtailed, wretched, false, a democracy only for the rich, for the minority. The dictatorship of the proletariat, the period of transition to communism, will for the first time create democracy for the people, for the majority, along with the necessary suppression of the exploiters, of the minority. communism alone is capable of providing really complete democracy, and the more complete it is, the sooner it will become unnecessary and wither away of its own accord.

In other words, under capitalism we have the state in the proper sense of the word, that is, a special machine for the suppression of one class by another, and, what is more, of the majority by the minority. Naturally,to be successful, such an undertaking as the systematic suppression of the exploited majority by the exploiting minority calls for the utmost ferocity and savagery in the matter of suppressing, it calls for seas of blood, through which mankind is actually wading its way in slavery, serfdom and wage labor.

Furthermore, during the transition from capitalism to communism suppression is still necessary, but it is now the suppression of the exploiting minority by the exploited majority. A special apparatus, a special machine for suppression, the "state", is still necessary, but this is now a transitional state. It is no longer a state in the proper sense of the word; for the suppression of the minority of exploiters by the majority of the wage slaves of yesterday is comparatively so easy, simple and natural a task that it will entail far less bloodshed than the suppression of the risings of slaves, serfs or wage-laborers, and it will cost mankind far less. And it is compatible with the extension of democracy to such an overwhelming majority of the population that the need for a special machine of suppression will 226

begin to disappear. Naturally, the exploiters are unable to suppress the people without a highly complex machine for performing this task, but the people can suppress the exploiters even with a very simple "machine", almost without a "machine", without a special apparatus, by the simple organization of the armed people (such as the Soviets of Workers' and Soldiers' Deputies, we would remark, running ahead).

Lastly, only communism makes the state absolutely unnecessary, for there is nobody to be suppressed - "nobody" in the sense of a class, of a systematic struggle against a definite section of the population. We are not utopians, and do not in the least deny the possibility and inevitability of excesses on the part of individual persons, or the need to stop such excesses. In the first place, however, no special machine, no special apparatus of suppression, is needed for this: this will be done by the armed people themselves, as simply and as readily as any crowd of civilized people, even in modern society, interferes to put a stop to a scuffle or to prevent a woman from being assaulted. And, secondly, we know that the fundamental social cause of excesses, which consist in the violation of the rules of social intercourse, is the exploitation of the people, their want and their poverty. With the removal of this chief cause, excesses will inevitably begin to "wither away". We do not know how quickly an din what succession, but we do know they will wither away. With their withering away the state will also wither away.

Without building utopias, Marx defined more fully what can be defined now regarding this future, namely, the differences between the lower and higher phases (levels, stages) of communist society.

3. The First Draft of Communist Society In the Critique of the Gotha Programme, Marx goes into detail to disprove Lassalle's idea that under socialism the worker will receive the "undiminished" or "full product of his labor". Marx shows that from the whole of the social labor of society there must be deducted a reserve fund,a fund for the expansion of production, a fund for the replacement of the "wear and tear" of machinery, and so on.

Then, from the means of consumption must be deducted a fund for administrative expenses, for schools, hospitals, old people's homes, and so on.

Instead of Lassalle's hazy, obscure, general phrase ("the full product of his labor to the worker"), Marx makes a sober estimate of exactly how socialist society will have to manage its affairs. Marx proceeds to make a concrete analysis of the conditions of life of a society in which there will be no capitalism, and says:

"What we have to deal with here [in analyzing the programme of the workers' party] is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it comes."

It is this communist society, which has just emerged into the light of day out of the womb of capitalism and which is in every respect stamped with the birthmarks of the old society, that Marx terms the "first", or lower, phase of communist society.

The means of production are no longer the private property of individuals. The means of production belong to the whole of society. Every member of society, performing a certain part of the sociallynecessary work, receives a certificate from society to the effect that he has done a certain amount of work. And with this certificate he receives from the public store of consumer goods a corresponding quantity of products. After a deduction is made of the amount of labor which goes to the public fund, every worker, therefore, receives from society as much as he has given to it.

"Equality" apparently reigns supreme.

227

But when Lassalle, having in view such a social order (usually called socialism, but termed by Marx the first phase of communism), says that this is "equitable distribution", that this is "the equal right of all to an equal product of labor", Lassalle is mistaken and Marx exposes the mistake.

"Hence, the equal right," says Marx, in this case still certainly conforms to "bourgeois law", which,like all law, implies inequality. All law is an application of an equal measure to different people who in fact are not alike, are not equal to one another. That is why the "equal right" is violation of equality and an injustice. In fact, everyone, having performed as much social labor as another, receives an equal share of the social product (after the above-mentioned deductions).

But people are not alike: one is strong, another is weak; one is married, another is not; one has more children, another has less, and so on. And the conclusion Marx draws is:

"... With an equal performance of labor, and hence an equal share in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, the right instead of being equal would have to be unequal."

The first phase of communism, therefore, cannot yet provide justice and equality; differences, and unjust differences, in wealth will still persist, but the exploitation of man by man will have become impossible because it will be impossible to seize the means of production - the factories, machines, land, etc. - and make them private property. In smashing Lassalle's petty-bourgeois, vague phrases about "equality" and "justice" in general, Marx shows the course of development of communist society, which is compelled to abolish at first only the "injustice" of the means of production seized by individuals, and which is unable at once to eliminate the other injustice, which consists in the distribution of consumer goods "according to the amount of labor performed" (and not according to needs).

The vulgar economists, including the bourgeois professors and "our" Tugan, constantly reproach the socialists with forgetting the inequality of people and with "dreaming" of eliminating this inequality.

Such a reproach, as we see, only proves the extreme ignorance of the bourgeois ideologists.

Marx not only most scrupulously takes account of the inevitable inequality of men, but he also takes into account the fact that the mere conversion of the means of production into the common property of the whole society (commonly called "socialism") does not remove the defects of distribution and the inequality of "bourgeois laws" which continues to prevail so long as products are divided "according to the amount of labor performed". Continuing, Marx says:

"But these defects are inevitable in the first phase of communist society as it is when it has just emerged, after prolonged birth pangs, from capitalist society. Law can never be higher than the economic structure of society and its cultural development conditioned thereby."

And so, in the first phase of communist society (usually called socialism) "bourgeois law" is not abolished in its entirety, but only in part, only in proportion to the economic revolution so far attained, i.e., only in respect of the means of production. "Bourgeois law" recognizes them as the private property of individuals. Socialism converts them into common property. To that extent - and to that extent alone - "bourgeois law" disappears.

However, it persists as far as its other part is concerned; it persists in the capacity of regulator (determining factor) in the distribution of products and the allotment of labor among the members of society. The socialist principle, "He who does not work shall not eat", is already realized; the other socialist principle, "An equal amount of products for an equal amount of labor", is also already 228

realized. But this is not yet communism, and it does not yet abolish "bourgeois law", which gives unequal individuals, in return for unequal (really unequal) amounts of labor, equal amounts of products.

This is a "defect", says Marx, but it is unavoidable in the first phase of communism; for if we are not to indulge in utopianism, we must not think that having overthrown capitalism people will at once learn to work for society without any rules of law. Besides, the abolition of capitalism does not immediately create the economic prerequisites for such a change.

Now, there are no other rules than those of "bourgeois law". To this extent, therefore, there still remains the need for a state, which, while safeguarding the common ownership of the means of production, would safeguard equality in labor and in the distribution of products.

The state withers away insofar as there are no longer any capitalists, any classes, and, consequently, no class can be suppressed.

But the state has not yet completely withered away, since thee still remains the safeguarding of "bourgeois law", which sanctifies actual inequality. For the state to wither away completely, complete communism is necessary.

4. The Higher Phase of Communist Society Marx continues:

"In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and with it also the antithesis between mental and physical labor, has vanished, after labor has become not only a livelihood but life's prime want, after the productive forces have increased with the all-round development of the individual, and all the springs of co-operative wealth flow more abundantly - only then can the narrow horizon of bourgeois law be left behind in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!"

Only now can we fully appreciate the correctness of Engels' remarks mercilessly ridiculing the absurdity of combining the words "freedom" and "state". So long as the state exists there is no freedom. When there is freedom, there will be no state.

The economic basis for the complete withering away of the state is such a high state of development of communism at which the antithesis between mental and physical labor disappears, at which there consequently disappears one of the principal sources of modern social inequality - a source, moreover, which cannot on any account be removed immediately by the mere conversion of the means of production into public property, by the mere exploitation of the capitalists.

This expropriation will make it possible for the productive forces to develop to a tremendous extent.

And when we see how incredibly capitalism is already retarding this development, when we see how much progress could be achieved on the basis of the level of technique already attained, we are entitled to say with the fullest confidence that the expropriation of the capitalists will inevitably result in an enormous development of the productive forces of human society. But how rapidly this development will proceed, how soon it will reach the point of breaking away from the division of labor, of doing away with the antithesis between mental and physical labor, of transforming labor into "life's prime want" - we do not and cannot know.

229

That is why we are entitled to speak only of the inevitable withering away of the state, emphasizing the protracted nature of this process and its dependence upon the rapidity of development of the higher phase of communism, and leaving the question of the time required for, or the concrete forms of, the withering away quite open, because there is no material for answering these questions.

The state will be able to wither away completely when society adopts the rule: "From each according to his ability, to each according to his needs", i.e., when people have become so accustomed to observing the fundamental rules of social intercourse and when their labor has become so productive that they will voluntarily work according to their ability. "The narrow horizon of bourgeois law", which compels one to calculate with the heartlessness of a Shylock whether one has not worked half an hour more than anybody else - this narrow horizon will then be left behind. There will then be no need for society, in distributing the products, to regulate the quantity to be received by each; each will take freely "according to his needs".

From the bourgeois point of view, it is easy to declare that such a social order is "sheer utopia" and to sneer at the socialists for promising everyone the right to receive from society, without any control over the labor of the individual citizen, any quantity of truffles, cars, pianos, etc. Even to this day, most bourgeois "savants" confine themselves to sneering in this way, thereby betraying both their ignorance and their selfish defence of capitalism.

Ignorance - for it has never entered the head of any socialist to "promise" that the higher phase of the development of communism will arrive; as for the greatest socialists' forecast that it will arrive, it presupposes not the present ordinary run of people, who, like the seminary students in Pomyalovsky's stories, are capable of damaging the stocks of public wealth "just for fun", and of demanding the impossible.

Until the "higher" phase of communism arrives, the socialists demand the strictest control by society and by the state over the measure of labor and the measure of consumption; but this control must start with the expropriation of the capitalists, with the establishment of workers' control over the capitalists, and must be exercised not by a state of bureaucrats, but by a state of armed workers.

The selfish defence of capitalism by the bourgeois ideologists (and their hangers-on, like the Tseretelis, Chernovs, and Co.) consists in that they substitute arguing and talk about the distant future for the vital and burning question of present-day politics, namely, the expropriation of the capitalists, the conversion of all citizens into workers and other employees of one huge "syndicate" the whole state - and the complete subordination of the entire work of this syndicate to a genuinely democratic state, the state of the Soviets of Workers' and Soldiers' Deputies.

In fact, when a learned professor, followed by the philistine, followed in turn by the Tseretelis and Chernovs, talks of wild utopias, of the demagogic promises of the Bolsheviks, of the impossibility of "introducing" socialism, it is the higher stage, or phase, of communism he has in mind, which no one has ever promised or even thought to "introduce", because, generally speaking, it cannot be "introduced".

And this brings us to the question of the scientific distinction between socialism and communism which Engels touched on in his above-quoted argument about the incorrectness of the name "SocialDemocrat". Politically, the distinction between the first, or lower, and the higher phase of communism will in time, probably, be tremendous. But it would be ridiculous to recognize this distinction now, under capitalism, and only individual anarchists, perhaps, could invest it with primary importance (if there still are people among the anarchists who have learned nothing from the "Plekhanov" conversion of the Kropotkins, of Grave, Corneliseen, and other "stars" of anarchism into social- chauvinists or "anarcho-trenchists", as Ghe, one of the few anarchists who have still preserved a sense of humor and a conscience, has put it).

But the scientific distinction between socialism and communism is clear. What is usually called socialism was termed by marx the "first", or lower, phase of communist society. Insofar as the means of production becomes common property, the word "communism" is also applicable here, providing we do not forget that this is not complete communism. The great significance of Marx's explanations is that here, too, he consistently applies materialist dialectics, the theory of development, and regards communism as something which develops out of capitalism. Instead of scholastically invented, 230

"concocted" definitions and fruitless disputes over words (What is socialism? What is communism?), Marx gives an analysis of what might be called the stages of the economic maturity of communism.

In its first phase, or first stage, communism cannot as yet be fully mature economically and entirely free from traditions or vestiges of capitalism. Hence the interesting phenomenon that communism in its first phase retains "the narrow horizon of bourgeois law". Of course, bourgeois law in regard to the distribution of consumer goods inevitably presupposes the existence of the bourgeois state, for law is nothing without an apparatus capable of enforcing the observance of the rules of law.

It follows that under communism there remains for a time not only bourgeois law, but even the bourgeois state, without the bourgeoisie!

This may sound like a paradox or simply a dialectical conundrum of which Marxism is often accused by people who have not taken the slightest trouble to study its extraordinarily profound content.

But in fact, remnants of the old, surviving in the new, confront us in life at every step, both in nature and in society. And Marx did not arbitrarily insert a scrap of "bourgeois" law into communism, but indicated what is economically and politically inevitable in a society emerging out of the womb of capitalism.

Democracy means equality. The great significance of the proletariat's struggle for equality and of equality as a slogan will be clear if we correctly interpret it as meaning the abolition of classes. But democracy means only formal equality. And as soon as equality is achieved for all members of society in relation to ownership of the means of production, that is, equality of labor and wages, humanity will inevitably be confronted with the question of advancing father, from formal equality to actual equality, i.e., to the operation of the rule "from each according to his ability, to each according to his needs". By what stages, by means of what practical measures humanity will proceed to this supreme aim we do not and cannot know. But it is important to realize how infinitely mendacious is the ordinary bourgeois conception of socialism as something lifeless, rigid, fixed once and for all, whereas in reality only socialism will be the beginning of a rapid, genuine, truly mass forward movement, embracing first the majority and then the whole of the population, in all spheres of public and private life.

Democracy is a form of the state, it represents, on the one hand, the organized, systematic use of force against persons; but, on the other hand, it signifies the formal recognition of equality of citizens, the equal right of all to determine the structure of, and to administer, the state. This, in turn, results in the fact that, at a certain stage in the development of democracy, it first welds together the class that wages a revolutionary struggle against capitalism - the proletariat, and enables it to crush, smash to atoms, wipe off the face of the earth the bourgeois, even the republican-bourgeois, state machine, the standing army, the police and the bureaucracy and to substitute for them a more democratic state machine, but a state machine nevertheless, in the shape of armed workers who proceed to form a militia involving the entire population.

Here "quantity turns into quality": such a degree of democracy implies overstepping the boundaries of bourgeois society and beginning its socialist reorganization. If really all take part in the administration of the state, capitalism cannot retain its hold. The development of capitalism, in turn, creates the preconditions that enable really "all" to take part in the administration of the state. Some of these preconditions are: universal literacy, which has already been achieved in a number of the most advanced capitalist countries, then the "training and disciplining" of millions of workers by the huge, complex, socialized apparatus of the postal service, railways, big factories, large-scale commerce, banking, etc., etc.

Given these economic preconditions, it is quite possible, after the overthrow of the capitalists and the bureaucrats, to proceed immediately, overnight, to replace them in the control over production and distribution, in the work of keeping account of labor and products, by the armed workers, by the whole of the armed population. (The question of control and accounting should not be confused with the question of the scientifically trained staff of engineers, agronomists, and so on. These gentlemen are working today in obedience to the wishes of the capitalists and will work even better tomorrow in obedience to the wishes of the armed workers.)

231

Accounting and control - that is mainly what is needed for the "smooth working", for the proper functioning, of the first phase of communist society. All citizens are transformed into hired employees of the state, which consists of the armed workers. All citizens becomes employees and workers of a single countrywide state "syndicate". All that is required is that they should work equally, do their proper share of work, and get equal pay. the accounting nd control necessary for this have been simplified by capitalism to the utmost and reduced to the extraordinarily simple operations - which any literate person can perform - of supervising and recording, knowledge of the four rules of arithmetic, and issuing appropriate receipts.[1] When the majority of the people begin independently and everywhere to keep such accounts and exercise such control over the capitalists (now converted into employees) and over the intellectual gentry who preserve their capitalist habits, this control will really become universal, general, and popular; and there will be no getting away from it, there will be "nowhere to go".

The whole of society will have become a single office and a single factory, with equality of labor and pay.

But this "factory" discipline, which the proletariat, after defeating the capitalists, after overthrowing the exploiters, will extend to the whole of society, is by no means our ideal, or our ultimate goal. It is only a necessary step for thoroughly cleansing society of all the infamies and abominations of capitalist exploitation, and for further progress.

From the moment all members of society, or at least the vast majority, have learned to administer the state themselves, have taken this work into their own hands, have organized control over the insignificant capitalist minority, over the gentry who wish to preserve their capitalist habits and over the workers who have been thoroughly corrupted by capitalism - from this moment the need for government of any kind begins to disappear altogether. The more complete the democracy, the nearer the moment when it becomes unnecessary. The more democratic the "state" which consists of the armed workers, and which is "no longer a state in the proper sense of the word", the more rapidly every form of state begins to wither away.

For when all have learned to administer and actually to independently administer social production, independently keep accounts and exercise control over the parasites, the sons of the wealthy, the swindlers and other "guardians of capitalist traditions", the escape from this popular accounting and control will inevitably become so incredibly difficult, such a rare exception, and will probably be accompanied by such swift and severe punishment (for the armed workers are practical men and not sentimental intellectuals, and they scarcely allow anyone to trifle with them), that the necessity of observing the simple, fundamental rules of the community will very soon become a habit.

Then the door will be thrown wide open for the transition from the first phase of communist society to its higher phase, and with it to the complete withering away of the state.

Footnotes [1] When the more important functions of the state are reduced to such

accounting and control by the workers themselves, it will cease to be a "political state" and "public functions will lose their political character and become mere administrative functions" (cf. above, Chapter IV, 2, Engels' controversy with the anarchists).

Next: The Vulgarisation of Marxism by Opportunists 232

The State and Revolution Index

Plekhanov's Controversy with the Anarchists Kautsky's Controversy with the Opportunists Kautsky's Controversy with Pannekoek

The question of the relation of the state to the social revolution, and of the social revolution to the state, like the question of revolution generally, was given very little attention by the leading theoreticians and publicists of the Second International (1889-1914). But the most characteristic thing about the process of the gradual growth of opportunism that led to the collapse of the Second International in 1914 is the fact that even when these people were squarely faced with this question they tried to evade it or ignored it.

In general, it may be said that evasiveness over the question of the relation of the proletarian revolution to the state - an evasiveness which benefited and fostered opportunism - resulted in the distortion of Marxism and in its complete vulgarization.

To characterize this lamentable process, if only briefly, we shall take the most prominent theoreticians of Marxism: Plekhanov and Kautsky.

1. Plekhanov's Controversy with the Anarchists Plekhanov wrote a special pamphlet on the relation of anarchism to socialism, entitled Anarchism and Socialism, which was published in german in 1894.

In treating this subject, Plekhanov contrived completely to evade the most urgent, burning, and most politically essential issue in the struggle against anarchism, namely, the relation of the revolution to the state, and the question of the state in general! His pamphlet falls into two distinct parts: one of them is historical and literary, and contains valuable material on the history of the ideas of Stirner, Proudhon, and others; the other is philistine, and contains a clumsy dissertation on the theme that an anarchist cannot be distinguished from a bandit.

It is a most amusing combination of subjects and most characteristic of Plekhanov's whole activity on the eve of the revolution and during the revolutionary period in Russia. In fact, in the years 1905 to 1917, Plekhanov revealed himself as a semi-doctrinaire and semi-philistine who, in politics, trailed in the wake of the bourgeoisie.

We have now seen how, in their controversy with the anarchists, marx and Engels with the utmost thoroughness explained their views on the relation of revolution to the state. In 1891, in his foreword to Marx's Critique of the Gotha Programme, Engels wrote that "we" - that is, Engels and Marx "were at that time, hardly two years after the Hague Congress of the [First] International, engaged in the most violent struggle against Bakunin and his anarchists."

The anarchists had tried to claim the Paris Commune as their "own", so to say, as a collaboration of their doctrine; and they completely misunderstood its lessons and Marx's analysis of these lessons.

Anarchism has given nothing even approximating true answers to the concrete political questions: Must the old state machine be smashed? And what should be put in its place?

But to speak of "anarchism and socialism" while completely evading the question of the state, and disregarding the whole development of Marxism before and after the Commune, meant inevitably 233

slipping into opportunism. For what opportunism needs most of all is that the two questions just mentioned should not be raised at all. That in itself is a victory for opportunism.

2. Kautsky's Controversy with the Opportunists Undoubtedly, an immeasurably larger number of Kautsky's works have been translated into Russian than into any other language. It is not without reason that some German Social-Democrats say in jest that Kautsky is read more in Russia than in Germany (let us say, in parenthesis, that this jest has a far deeper historical meaning than those who first made it suspect. The Russian workers, by making in 1905 an unusually great and unprecedented demand for the best works of the best SocialDemocratic literature and editions of these works in quantities unheard of in other countries, rapidly transplanted, so to speak, the enormous experience of a neighboring, more advanced country to the young soil of our proletarian movement).

Besides his popularization of Marxism, Kautsky is particularly known in our country for his controversy with the opportunists, with Bernstein at their head. One fact, however, is almost unknown, one which cannot be ignored if we set out to investigate how Kautsky drifted into the morass of unbelievably disgraceful confusion and defence of social-chauvinism during the supreme crisis of 1914-15. This fact is as follows: shortly before he came out against the most prominent representatives of opportunism in France (Millerand and Jaures) and in Germany (Bernstein), Kautsky betrayed very considerable vacillation. The Marxist Zarya, which was published in Stuttgart in 1901-02, and advocated revolutionary proletarian views, was forced to enter into controversy with Kautsky and describe as "elastic" the half-hearted, evasive resolution, conciliatory towards the opportunists, that he proposed at the International Socialist Congress in Paris in 1900. Kautsky's letters published in Germany reveal no less hesitancy on his part before he took the field against Bernstein.

Of immeasurably greater significance, however, is the fact that, in his very controversy with the opportunists, in his formulation of the question and his manner of treating it, we can new see, as we study the history of Kautsky's latest betrayal of Marxism, his systematic deviation towards opportunism precisely on the question of the state.

Let us take Kautsky's first important work against opportunism, Bernstein and the Social-Democratic Programme. Kautsky refutes Bernstein in detail, but here is a characteristic thing: Bernstein, in his Premises of Socialism, of Herostratean fame, accuses Marxism of "Blanquism" (an accusation since repeated thousands of times by the opportunists and liberal bourgeoisie in Russia against the revolutionary Marxists, the Bolsheviks). In this connection Bernstein dwells particularly on Marx's The Civil War in France, and tries, quite unsuccessfully, as we have seen, to identify Marx's views on the lessons of the Commune with those of Proudhon. Bernstein pays particular attention to the conclusion which Marx emphasized in his 1872 preface to the Communist Manifesto, namely, that "the working class cannot simply lay hold of the ready-made state machinery and wield it for its own purposes".

This statement "pleased" Bernstein so much that he used it no less than three times in his book, interpreting it in the most distorted, opportunist way.

As we have seen, Marx meant that the working-class must smash, break, shatter (sprengung, explosion - the expression used by Engels) the whole state machine. But according to Bernstein it would appear as though Marx in these words warned the working class against excessive revolutionary zeal when seizing power.

A cruder more hideous distortion of Marx's idea cannot be imagined.

How, then, did Kautsky proceed in his most detailed refutation of Bernsteinism?

He refrained from analyzing the utter distortion of Marxism by opportunism o this point. He cited the above-quoted passage from Engels' preface to Marx's Civil War and said that according to Marx the working class cannot simply take over the ready-made state machinery, but that, generally speaking, it can take it over - and that was all. Kautsky did not say a word about the fact that Bernstein 234

attributed to Marx the very opposite of Marx's real idea, that since 1852 Marx had formulated the task of the proletarian revolution as being to "smash" the state machine.

The result was that the most essential distinction between Marxism and opportunism on the subject of the tasks of the proletarian revolution was slurred over by Kautsky!

"We can quite safely leave the solution of the problems of the proletarian dictatorship of the future," said Kautsky, writing "against" Bernstein. (p.172, German edition) This is not a polemic against Bernstein, but, in essence, a concession to him, a surrender to opportunism; for at present the opportunists ask nothing better than to "quite safely leave to the future" all fundamental questions of the tasks of the proletarian revolution.

From 1852 to 1891, or for 40 years, Marx and Engels taught the proletariat that it must smash the state machine. Yet, in 1899, Kautsky, confronted with the complete betrayal of Marxism by the opportunists on this point, fraudulently substituted for the question whether it is necessary to smash this machine the question for the concrete forms in which it is to be smashed, and then sough refuge behind the "indisputable" (and barren) philistine truth that concrete forms cannot be known in advance!!

A gulf separates Marx and Kautsky over their attitude towards the proletarian party's task of training the working class for revolution.

Let us take the next, more mature, work by Kautsky, which was also largely devoted to a refutation of opportunist errors. It is his pamphlet, The Social Revolution. In this pamphlet, the author chose as his special theme the question of "the proletarian revolution" and "the proletarian regime". He gave much that was exceedingly valuable, but he avoided the question of the state. Throughout the pamphlet the author speaks of the winning of state power - and no more; that is, he has chosen a formula which makes a concession to the opportunists, inasmuch as it admits the possibility of seizing power without destroying the state machine. The very thing which Marx in 1872 declared to be "obsolete" in the programme of the Communist Manifesto, is revived by Kautsky in 1902.

A special section in the pamphlet is devoted to the "forms and weapons of the social revolution".

Here Kautsky speaks of the mass political strike, of civil war, and of the "instruments of the might of the modern large state, its bureaucracy and the army"; but he does not say a word about what the Commune has already taught the workers. Evidently, it was not without reason that Engels issued a warning, particularly to the German socialists. against "superstitious reverence" for the state.

Kautsky treats the matter as follows: the victorious proletariat "will carry out the democratic programme", and he goes on to formulate its clauses. But he does not say a word about the new material provided in 1871 on the subject of the replacement of bourgeois democracy by proletarian democracy. Kautsky disposes of the question by using such "impressive-sounding" banalities as:

"Still, it goes without saying that we shall not achieve supremacy under the present conditions. Revolution itself presupposes

long

and

deep-going

struggles,

which,

in

themselves, will change our present political and social structure."

Undoubtedly, this "goes without saying", just as the fact that horses eat oats of the Volga flows into the Caspian. Only it is a pity that an empty and bombastic phrase about "deep-going" struggles is used to avoid a question of vital importance to the revolutionary proletariat, namely, what makes its revolution "deep-going" in relation to the state, to democracy, as distinct from previous, nonproletarian revolutions.

235

By avoiding this question, Kautsky in practice makes a concession to opportunism on this most essential point, although in words he declares stern war against it and stresses the importance of the "idea of revolution" (how much is this "idea" worth when one is afraid to teach the workers the concrete lessons of revolution?), or says, "revolutionary idealism before everything else", or announces that the English workers are now "hardly more than petty bourgeois".

"The most varied form of enterprises - bureaucratic [??], trade unionist, co-operative, private... can exist side by side in socialist society," Kautsky writes. "... There are, for example, enterprises which cannot do without a bureaucratic [??] organization, such as the railways. Here the democratic organization may take the following shape: the workers elect delegates who form a sort of parliament, which establishes the working regulations and supervises the management of the bureaucratic apparatus. The management of other countries may be transferred to the trade unions, and still others may become co-operative enterprises."

This argument is erroneous; it is a step backward compared with the explanations Marx and Engels gave in the seventies, using the lessons of the Commune as an example.

As far as the supposedly necessary "bureaucratic" organization is concerned, there is no difference whatever between a railway and any other enterprise in large-scale machine industry, any factory, large shop, or large-scale capitalist agricultural enterprise. The technique of all these enterprises makes absolutely imperative the strictest discipline, the utmost precision on the part of everyone in carry out his allotted task, for otherwise the whole enterprise may come to a stop, or machinery or the finished product may be damaged. In all these enterprises the workers will, of course, "elect delegates who will form a sort of parliament".

The whole point, however, is that this "sort of parliament" will not be a parliament in the sense of a bourgeois parliamentary institution. The whole point is that this "sort of parliament" will not merely "establish the working regulations and supervise the management" of the "apparatus", but this apparatus will not be "bureaucratic". The workers, after winning political power, will smash the old bureaucratic apparatus, shatter it to its very foundations, and raze it to the ground; they will replace it by a new one, consisting of the very same workers and other employees, against whose transformation into bureaucrats the measures will at once be taken which were specified in detail by Marx and Engels:

(1) not only election, but also recall at any time; (2) pay not to exceed that of a workman; (3) immediate introduction of control and supervision by all, so that all may become "bureaucrats" for a time and that, therefore, nobody may be able to become a "bureaucrat".

Kautsky has not reflected at all on Marx's words: "The Commune was a working, not parliamentary, body, executive and legislative at the same time."

Kautsky has not understood at all the difference between bourgeois parliamentarism, which combines democracy (not for the people) with bureaucracy (against the people), and proletarian democracy, which will take immediate steps to cut bureaucracy down to the roots, and which will be 236

able to carry these measures through to the end, to the complete abolition of bureaucracy, to the introduction of complete democracy for the people.

Kautsky here displays the same old "superstitious reverence" for the state, and "superstitious belief" in bureaucracy.

Let us now pass to the last and best of Kautsky's works against the opportunists, his pamphlet The Road to Power (which, I believe, has not been published in Russian, for it appeared in 1909, when reaction was at its height in our country). This pamphlet is a big step forward, since it does not deal with the revolutionary programme in general, as the pamphlet of 1899 against Bernstein, or with the tasks of the social revolution irrespective of the time of its occurrence, as the 1902 pamphlet, The Social Revolution; it deals with the concrete conditions which compels us to recognize that the "era of revolutions" is setting in.

The author explicitly points to the aggravation of class antagonisms in general and to imperialism, which plays a particularly important part in this respect. After the "revolutionary period of 17891871" in Western Europe, he says, a similar period began in the East in 1905. A world war is approaching with menacing rapidity. "It [the proletariat] can no longer talk of premature revolution."

"We have entered a revolutionary period." The "revolutionary era is beginning".

These statements are perfectly clear. This pamphlet of Kautsky's should serve as a measure of comparison of what the German Social-Democrats promised to be before the imperialist war and the depth of degradation to which they, including Kautsky himself, sank when the war broke out. "The present situation," Kautsky wrote in the pamphlet under survey, "is fraught with the danger that we [i.e., the German Social-Democrats] may easily appear to be more 'moderate' than we really are." It turned out that in reality the German Social-Democratic Party was much more moderate and opportunist than it appeared to be!

It is all the more characteristic, therefore, that although Kautsky so explicitly declared that the era of revolution had already begun, in the pamphlet which he himself said was devoted to an analysis of the "political revolution", he again completely avoided the question of the state.

These evasions of the question, these omissions and equivocations, inevitably added up to that complete swing-over to opportunism with which we shall now have to deal.

Kautsky, the German Social-Democrats' spokesman, seems to have declared: I abide by revolutionary views (1899), I recognize, above all, the inevitability of the social revolution of the proletariat (1902), I recognize the advent of a new era of revolutions (1909). Still, I am going back on what Marx said as early as 1852, since the question of the tasks of the proletarian revolution in relation to the state is being raised (1912).

It was in this point-blank form that the question was put in Kautsky's controversy with Pannekoek.

3. Kautsky's Controversy with Pannekoek In opposing Kautsky, Pannekoek came out as one of the representatives of the "Left radical" trend which included Rosa Luxemburg, Karl Radek, and others. Advocating revolutionary tactics, they were united in the conviction that Kautsky was going over to the "Centre", which wavered in an unprincipled manner between Marxism and opportunism. This view was proved perfectly correct by the war, when this "Centrist" (wrongly called Marxist) trend, or Kautskyism, revealed itself in all its repulsive wretchedness.

In an article touching on the question of the state, entitled "Mass Action and Revolution" (Neue Zeit, 1912, Vol.XXX, 2), Pannekoek described kautsky's attitude as one of "passive radicalism", as "a theory of inactive expectancy". "Kautsky refuses to see the process of revolution," wrote Pannekoek (p.616). In presenting the matter in this way, Pannekoek approached the subject which interests us, namely, the tasks of the proletarian revolution in relation to the state.

"The struggle of the proletariat," he wrote, "is not merely a struggle against the bourgeoisie for state power, but a struggle 237

against state power.... The content of this [the proletarian] revolution is the destruction and dissolution [Auflosung] of the instruments of power of the state with the aid of the instruments of power of the proletariat. (p.544)

"The struggle will cease only when, as the result of it, the state organization is completely destroyed. The organization of the majority will then have demonstrated its superiority by destroying the organization of the ruling minority." (p.548) The formulation in which Pannekoek presented his ideas suffers from serious defects. But its meaning is clear nonetheless, and it is interesting to note how Kautsky combated it.

"Up to now," he wrote, "the antithesis between the SocialDemocrats and the anarchists has been that the former wished to win the state power while the latter wished to destroy it.

Pannekoek wants to do both." (p.724) Although Pannekoek's exposition lacks precision and concreteness - not to speak of other shortcomings of his article which have no bearing on the present subject - Kautsky seized precisely on the point of principle raised by Pannekoek; and on this fundamental point of principle Kautsky completely abandoned the Marxist position and went over wholly to opportunism. His definition of the distinction between the Social-Democrats and the anarchists is absolutely wrong; he completely vulgarizes and distorts Marxism.

The distinction between Marxists and the anarchists is this:

(1) The former, while aiming at the complete abolition of the state, recognize that this aim can only be achieved after classes have been abolished by the socialist revolution, as the result of the establishment of socialism, which leads to the withering away of the state. The latter want to abolish he state completely overnight, not understanding the conditions under which the state can be abolished.

(2) The former recognize that after the proletariat has won political power it must completely destroy the old state machine and replace it by a new one consisting of an organization of the armed workers, after the type of the Commune. The latter, while insisting on the destruction of 238

the state machine, have a very vague idea of what the proletariat will put in its place and how it will use its revolutionary power. The anarchists even deny that the revolutionary proletariat should use the state power, they reject its revolutionary dictatorship.

(3) The former demand that the proletariat be trained for revolution by utilizing the present state. The anarchists reject this.

In this controversy, it is not Kautsky but Pannekoek who represents Marxism, for it was Marx who taught that the proletariat cannot simply win state power in the sense that the old state apparatus passes into new hands, but must smash this apparatus, must break it and replace it by a new one.

Kautsky abandons Marxism for the opportunist camp, for this destruction of the state machine, which is utterly unacceptable to the opportunists, completely disappears from his argument, and he leaves a loophole for them in that "conquest" may be interpreted as the simple acquisition of a majority.

To cover up his distortion of Marxism, Kautsky behaves like a doctrinaire: he puts forward a "quotation" from Marx himself. In 1850, Marx wrote that a "resolute centralization of power in the hands of the state authority" was necessary, and Kautsky triumphantly asks: does Pannekoek want to destroy "Centralism"?

This is simply a trick, like Bernstein's identification of the views of Marxism and Proudhonism on the subject of federalism as against centralism.

Kautsky's "quotation" is neither here nor there. Centralism is possible with both the old and the new state machine. If the workers voluntarily unite their armed forces, this will be centralism, but it will be based on the "complete destruction" of the centralized state apparatus - the standing army, the police, and the bureaucracy. Kautsky acts like an outright swindler by evading the perfectly wellknown arguments of Marx and Engels on the Commune and plucking out a quotation which has nothing to do with the point at issue.

"Perhaps he [Pannekoek]," Kautsky continues, "wants to abolish the state functions of the officials? But we cannot do without officials even in the party and trade unions, let alone in the state administration. And our programme does not demand the abolition of state officials, but that they be elected by the people.... We are discussing here not the form the administrative apparatus of the 'future state' will assume, but whether our political struggle abolishes [literally dissolves - auflost] the state power before we have captured it. [Kautsky's italics] Which ministry with its officials could be abolished?" Then follows an enumeration of the ministeries of education, justice, finance, and war. "No, not one of the present ministries will be removed by our political struggle against the government.... I repeat, in order 239

to prevent misunderstanding: we are not discussing here the form the 'future state' will be given by the victorious SocialDemocrats, but how the present state is changed by our opposition." (p.725) This is an obvious trick. Pannekoek raised the question of revolution. Both the title of his article and the passages quoted above clearly indicate this. By skipping to the question of "opposition", Kautksy substitutes the opportunist for the revolutionary point of view. What he says means: at present we are an opposition; what we shall be after we have captured power, that we shall see. Revolution has vanished! And that is exactly what the opportunists wanted.

The point at issue is neither opposition nor political struggle in general, but revolution. Revolution consists in the proletariat destroying the "administrative apparatus" and the whole state machine, replacing it by a new one, made up of the armed workers. Kautsky displays a "superstitious reverence" for "ministries"; but why can they not be replaced, say, by committees of specialists working under sovereign, all-powerful Soviets of Workers' and Soldiers' Deputies?

The point is not at all whether the "ministries" will remain, or whether "committees of specialists" or some other bodies will be set up; that is quite immaterial. The point is whether the old state machine (bound by thousands of threads to the bourgeoisie and permeated through and through with routine and inertia) shall remain, or be destroyed and replaced by a new one. Revolution consists not in the new class commanding, governing with the aid of the old state machine, but in this class smashing this machine and commanding, governing with the aid of a new machine. Kautsky slurs over this basic idea of Marxism, or he does not understand it at all.

His question about officials clearly shows that he does not understand the lessons of the Commune or the teachings of Marx. "We cannot to without officials even in the party and the trade unions...."

We cannot do without officials under capitalism, under the rule of the bourgeoisie. The proletariat is oppressed, the working people are enslaved by capitalism. Under capitalism, democracy is restricted, cramped, curtailed, mutilated by all the conditions of wage slavery, and the poverty and misery of the people. This and this alone is the reason why the functionaries of our political organizations and trade unions are corrupted - or rather tend to be corrupted - by the conditions of capitalism and betray a tendency to become bureaucrats, i.e., privileged persons divorced from the people and standing above the people.

That is the essence of bureaucracy; and until the capitalists have been expropriated and the bourgeoisie overthrown, even proletarian functionaries will inevitably be "bureaucratized" to a certain extent.

According to Kautsky, since elected functionaries will remain under socialism, so will officials, so will the bureaucracy! This is exactly where he is wrong. Marx, referring to the example of the Commune, showed that under socialism functionaries will cease to be "bureaucrats", to be "officials", they will cease to be so in proportion as - in addition to the principle of election of officials - the principle of recall at any time is also introduced, as salaries are reduced to the level of the wages of the average workman, and as parliamentary institutions are replaced by "working bodies, executive and legislative at the same time".

As a matter of fact, the whole of Kautsky's argument against Pannekoek, and particularly the former's wonderful point that we cannot do without officials even in our party and trade union organizations, is merely a repetition of Bernstein's old "arguments" against Marxism in general. In his renegade book, The Premises of Socialism, Bernstein combats the ideas of "primitive" democracy, combats what he calls "doctrinaire democracy": binding mandates, unpaid officials, impotent central representative bodies, etc. to prove that this "primitive" democracy is unsound, Bernstein refers to the experience of the British trade unions, as interpreted by the Webbs. Seventy years of development "in absolute freedom", he says (p.137, German edition), convinced the trade 240

unions that primitive democracy was useless, and they replaced it by ordinary democracy, i.e., parliamentarism combined with bureaucracy.

In reality, the trade unions did not develop "in absolute freedom" but in absolute capitalist slavery, under which, it goes without saying, a number of concessions to the prevailing evil, violence, falsehood, exclusion of the poor from the affairs of "higher" administration, "cannot be done without". Under socialism much of "primitive" democracy will inevitably be revived, since, for the first time in the history of civilized society the mass of population will rise to taking an independent part, not only in voting and elections, but also in the everyday administration of the state. Under socialism all will govern in turn and will soon become accustomed to no one governing.

Marx's critico-analytical genius saw in the practical measures of the Commune the turning-point which the opportunists fear and do not want to recognize because of their cowardice, because they do not want to break irrevocably with the bourgeoisie, and which the anarchists do not want to see, either because they are in a hurry or because they do not understand at all the conditions of great social changes. "We must not even think of destroying the old state machine; how can we do without ministries and officials>" argues the opportunist, who is completely saturated with philistinism and who, at bottom, not only does not believe in revolution, in the creative power of revolution, but lives in mortal dread of it (like our Mensheviks and Socialist-Revolutionaries).

"We must think only of destroying the old state machine; it is no use probing into the concrete lessons of earlier proletarian revolutions and analyzing what to put in the place of what has been destroyed, and how," argues the anarchist (the best of the anarchist, of course, and not those who, following the Kropotkins and Co., trail behind the bourgeoisie). Consequently, the tactics of the anarchist become the tactics of despair instead of a ruthlessly bold revolutionary effort to solve concrete problems while taking into account the practical conditions of the mass movement.

Marx teaches us to avoid both errors; he teaches us to act with supreme boldness in destroying the entire old state machine, and at the same time he teaches us to put the question concretely: the Commune was able in the space of a few weeks to start building a new, proletarian state machine by introducing such-and-such measures to provide wider democracy and to uproot bureaucracy. Let us learn revolutionary boldness from the Communards; let us see in their practical measures the outline of really urgent and immediately possible measures, and then, following this road, we shall achieve the complete destruction of bureaucracy.

The possibility of this destruction is guaranteed by the fact that socialism will shorten the working day, will raise the people to a new life, will create such conditions for the majority of the population as will enable everybody, without exception, to perform "state functions", and this will lead to the complete withering away of every form of state in general.

"Its object [the object of the mass strike]," Kautsky continues, "cannot be to destroy the state power; its only object can be to make the government compliant on some specific question, or to replace a government hostile to the proletariat by one willing to meet it half-way [entgegenkommende]... But never, under no circumstances can it [that is, the proletarian victory over a hostile government] lead to the destruction of the state power; it can lead only to a certain shifting [verschiebung] of the balance of forces within the state power.... The aim of our political struggle remains, as in the past, the conquest of state power by winning a

241

majority in parliament and by raising parliament to the ranks of master of the government." (pp.726, 727, 732) This is nothing but the purest and most vulgar opportunism: repudiating revolution in deeds, while accepting it in words. Kautsky's thoughts go no further than a "government... willing to meet the proletariat half-way" - a step backward to philistinism compared with 1847, when the Communist Manifesto proclaimed "the organization of the proletariat as the ruling class".

Kautsky will have to achieve his beloved "unity" with the Scheidmanns, Plekhanovs, Potresovs, Tseretelis, and Chernovs, who are quite willing to work for the "shifting of the balance of forces within the state power", for "winning a majority in parliament", and "raising parliament to the ranks of master of the government". A most worthy object, which is wholly acceptable to the opportunists and which keeps everything within the bounds of the bourgeois parliamentary republic.

We, however, shall break with the opportunists; and the entire class-conscious proletariat will be with us in the fight - not to "shift the balance of forces", but to overthrow the bourgeoisie, to destroy bourgeois parliamentarism, for a democratic republic after the type of the Commune, or a republic of Soviets of Workers' and Soldiers' Deputies, for the revolutionary dictatorship of the proletariat.

To the right of Kautsky in international socialism there are trends such as Socialist Monthly in Germany (Legien, David, Kolb, and many others, including the Scandinavian Stauning and Branting), Jaures' followers and Vandervelde in France and Belgium; Turait, Treves, and other Right-wingers of the Italian Party; the Fabians and "Independents" (the Independent labor Party, which, in fact, has always been dependent on the Liberals) in Britain; and the like. All these gentry, who play a tremendous, very often a predominant role in the parliamentary work and the press of their parties, repudiate outright the dictatorship of the proletariat and pursue a policy of undisguised opportunism. In the eyes of these gentry, the "dictatorship" of the proletariat "contradicts" democracy!! There is really no essential distinction between them and the petty-bourgeois democrats.

Taking this circumstance into consideration, we are justified in drawing the conclusion that the Second International, that is, the overwhelming majority of its official representatives, has completely sunk into opportunism. The experience of the Commune has been not only ignored but distorted. far from inculcating in the workers' minds the idea that the time is nearing when they must act to smash the old state machine, replace it by a new one, and in this way make their political rule the foundation for the socialist reorganization of society, they have actually preached to the masses the very opposite and have depicted the "conquest of power" in a way that has left thousands of loopholes for opportunism.

The distortion and hushing up of the question of the relation of the proletarian revolution to the state could not but play an immense role at a time when states, which possess a military apparatus expanded as a consequence of imperialist rivalry, have become military monsters which are exterminating millions of people in order to settle the issue as to whether Britain or Germany - this or that finance capital - is to rule the world.

PostScript The State and Revolution Index

242

Russia – How the Revolution was Lost Chris Harman

(1967) First published in International Socialism 30, Autumn 1967.

Transcribed by Michael Gavin.

Marked up by Einde O’Callaghan for REDS – Die Roten.

1. The Two Revolutions The period between the two revolutions of February and October 1917 was moulded by two concurrent processes. The first occurred in the towns, and was a very rapid growth of working-class consciousness. By the July days, the industrial workers at least seem to have arrived at an understanding of the different interests of the classes in the revolution. In the countryside, a different form of class differentiation took place. This was not between a propertied class and a class that could not even aspire to individual ownership of property. Rather it was between two propertyowning classes. On the one hand the landowners, on the other the peasants. The latter were not socialist in intention. Their aim was to seize the estates of the landowners, but to divide these upon an individualistic basis. In this movement even Kulaks, wealthy farmers, could participate.

The revolution could not have taken place without the simultaneous occurrence of these two processes. What tied them together was not however an identity of ultimate aim. Rather it was the fact that for contingent historical reasons the industrial bourgeoisie could not break politically with the large landowners. Its inability to do this pushed the peasantry (which effectively included the army) and the workers into the same camp: “In order to realise the soviet state, there was required the drawing together and mutual penetration of two factors belonging to completely different historic species: a peasant war – that is a movement characteristic of the dawn of bourgeois development – and a proletarian insurrection, the movement signalising its decline.” [1] The urban insurrection could not have succeeded but for the sympathy of the largely peasant army. Nor could the peasants have waged a successful struggle unless led and welded together by a centralised, external force. In Russia of 1917 the only possible such force was the organised working class. It was this possibility of drawing the peasantry behind it at the crucial moment that made it possible for the workers to hold power in the towns.

The bourgeoisie and its land-owning allies were expropriated. But the classes which participated in this expropriation shared no simple long-term common interest. In the towns was a class whose very existence depended upon collective activity. In the countryside a class whose members would only unite even amongst themselves momentarily to seize the land, but would then till it individually. Once the act of seizure and defence of that seizure was over, only external inducements could bind them to any State.

The revolution, then, was really a dictatorship of the workers over other classes in the towns – in the major towns the rule of the majority in Soviets – and a dictatorship of the towns over the country. In the first period of the division of the estates this dictatorship could rely upon peasant support, indeed, was defended by peasant bayonets. But what was to happen afterwards?

This question had preoccupied the Russian socialists themselves long before the revolution.

The realisation that a socialist revolution in Russia would be hopelessly lost in the peasant mass was one reason why all the Marxists in Russia (including Lenin, but excluding Trotsky and at first Parvus) had seen the forthcoming revolution as a bourgeois one. When Parvus and Trotsky first suggested that the revolution might produce a socialist government, Lenin wrote 243

“This cannot be, because such a revolutionary dictatorship can only have stability ... based on the great majority of the people. The Russian proletariat constitutes now a minority of the Russian population.”

He maintained this view right up to 1917. When he did come to accept and fight for the possibility of a socialist outcome for the revolution, it was because he saw it as one stage in a worldwide revolution that would give the minority working class in Russia protection against foreign intervention and aid to reconcile the peasantry to its rule. Eight months before the October revolution he wrote to Swiss workers that “the Russian proletariat cannot by its own forces victoriously complete the socialist revolution.” Four months after the revolution (on 7 March 1918) he repeated, “The absolute truth is that without a revolution in Germany we shall perish.”

2. The Civil War The first years of Soviet rule seemed to bear out the perspective of world revolution. The period 1918-19 was characterised by social upheavals unseen since 1948. In Germany and Austria military defeat was followed by the destruction of the monarchy. Everywhere there was talk of Soviets. In Hungary and Bavaria Soviet Governments actually took power – although only briefly. In Italy the factories were occupied. Yet the heritage of fifty years of gradual development was not to be erased so rapidly. The old Social-Democratic and trade-union leaders moved into the gap left by the discredited bourgeois parties. The Communist. Left on the other hand still lacked the organisation to respond to this. It acted when there was no mass support; when there was mass support it failed to act.

Even so the stabilisation of Europe after 1919 was at best precarious. In every European country, the social structure received severe threats within the subsequent fifteen years. And the experience of both the Communist Parties and the working class had put them into a far better position to understand what was happening.

The Russian Bolsheviks did, not however, intend to wait upon the revolution abroad. The defence of the Soviet Republic and incitement to revolution abroad seemed inseparable. For the time being anyway, the tasks at hand in Russia were determined, not by the Bolshevik leaders, but by the international imperialist powers. These had begun a “crusade” against the Soviet Republic. White and foreign armies had to be driven back before any other questions could be considered. In order to do this, every resource available had to be utilised.

By a mixture of popular support, revolutionary ardour, and, at times, it seemed, pure will, the counter-revolutionary forces were driven out (although in the Soviet Far East they continued to operate until 1924). But the price paid was enormous.

This cannot be counted in merely material terms. But in these alone it was great. What suffered above all was industrial and agricultural production. In 1920, the production of pig iron was only 3 per cent of the pre-war figure; of hemp 10 per cent; flax, 25 per cent; cotton, 11 per cent; beets, 15 per cent. This implied privation, hardship, famine. But much more. The dislocation of industrial production was also the dislocation of the working class. It was reduced to 43 per cent of its former numbers. The others were returned to their villages or dead on the battlefield. In purely quantitative terms, the class that had led the revolution, the class whose democratic processes had constituted the living core of Soviet power, was halved in importance. In real terms the situation was even worse. What remained was not even half of that class, forced into collective action by the very nature of its life situation. Industrial output was only 18 per cent of the pre-war figure, labour productivity was only one third of what it had been. To keep alive, workers could not rely on what their collective product would buy. Many resorted to direct barter of their products – or even parts of their machines – with peasants for food. Not only was the leading class of the revolution decimated, but the ties linking its members together were fast disintegrating. The very personnel in the factories were not those who had constituted the core of the revolutionary movement of 1917. The most militant workers had quite naturally fought most at the front, and suffered most casualties. Those that survived were needed not only in the factories, but as cadres in the army, or as commissars to keep

244

the administrators operating the State machine. Raw peasants from the countryside, without socialist traditions or aspirations, took their place.

But what was to be the fate of the revolution if the class that made it ceased to exist in any meaningful sense? This was not a problem that the Bolshevik leaders could have foreseen. They had always said that isolation of the revolution would result in its destruction by foreign armies and domestic counter-revolution. What confronted them now was the success of counterrevolution from abroad in destroying the class that had led the revolution while leaving intact the State apparatus built up by it. The revolutionary power had survived; but radical changes were being produced in its internal composition.

3. Soviet Power to Bolshevik Dictatorship The revolutionary institutions of 1917 – above all, the Soviets – were organically connected with the class that had led the revolution. Between the aspirations and intentions of their members and those of the workers who elected them, there could be no gap. While the mass were Menshevik, the Soviets were Menshevik; when the mass began to follow the Bolsheviks, so did the Soviets. The Bolshevik party was merely the body of coordinated class-conscious militants who could frame policies and suggest causes of action alongside other such bodies, in the Soviets as in the factories themselves. Their coherent views and self-discipline meant that they could act to implement policies effectively – but only if the mass of workers would follow them.

Even consistent opponents of the Bolsheviks recognised this. Their leading Menshevik critic wrote: “Understand please, that before us after all is a victorious uprising of the proletariat – almost the entire proletariat supports Lenin and expects its social liberation from the uprising ...” [2] Until the Civil War was well under way, this democratic dialectic of party and class could continue. The Bolsheviks held power as the majority party in the Soviets. But other parties continued to exist there too. The Mensheviks continued to operate legally and compete with the Bolsheviks for support until June 1918.

The decimation of the working class changed all this. Of necessity the Soviet institutions took on a life independently of the class they had arisen from. Those workers and peasants who fought the Civil War could not govern themselves collectively from their places in the factories. The socialist workers spread over the length and breadth of the war zones had to be organised and coordinated by a centralised governmental apparatus independent of their direct control – at least temporarily.

It seemed to the Bolsheviks that such a structure could not be held together unless it contained within it only those who wholeheartedly supported the revolution – that is, only the Bolsheviks. The Right Social Revolutionaries were instigators of the counter-revolution. The Left Social Revolutionaries were willing to resort to terror when they disagreed with government policy.

As for the Mensheviks, their policy was one of support of the Bolsheviks against the counterrevolution, with the demand that the latter hand over power to the Constituent Assembly (one of the chief demands of the counter-revolution). In practice this meant that the party contained both supporters and opponents of the Soviet power. Many of its members went over to the side of the Whites (e.g. Menshevik organisations in the Volga area were sympathetic to the counterrevolutionary Samara government, and one member of the Menshevik central committee, Ivan Maisky – later Stalin’s ambassador – joined it). [3] The response of the Bolsheviks was to allow the party’s members their freedom (at least, most of the time), but to prevent them acting as an effective political force – e.g. they were allowed no press after June 1918 except for 3 months in the following year.

In all this the Bolsheviks had no choice. They could not give up power just because the class they represented had dissolved itself while fighting to defend that power. Nor could they tolerate the propagation of ideas that undermined the basis of its power – precisely because the working class itself no longer existed as an agency collectively organised so as to be able to determine its own interests.

245

Of necessity the Soviet State of 1917 had been replaced by the single-party State of 1920 onwards. The Soviets that remained were increasingly just a front for Bolshevik power (although other parties, e.g. the Mensheviks, continued to operate in them as late as 1920). In 1919, for instance, there were no elections to the Moscow Soviet for over 18 months. [4]

4. Kronstadt and the NEP Paradoxically, the end of the Civil War did not alleviate this situation, but in many ways aggravated it. For with the end of the immediate threat of counter-revolution, the cord that had bound together the two revolutionary processes – workers’ power in the towns and peasant uprisings in the country – was cut. Having gained control over the land, the peasants lost interest in the collectivist revolutionary ideals of October. They were motivated by individual aspirations arising out of their individualistic form of work. Each sought to maximise his own standard of living through his activities on his own plot of land. Indeed, the only thing which could now unite peasants into a coherent group was opposition to the taxes and forcible collections of grain carried out in order to feed the urban populations.

The high point of this opposition came a week before the tenth party Congress. An uprising of sailors broke out in the Kronstadt fortress, which guarded the approaches to Petrograd. Many people since have treated what happened next as the first break between the Bolshevik regime and its socialist intentions. The fact that the Kronstadt sailors were one of the main drives of the 1917 revolution has often been used as an argument for this. Yet at the time no one in the Bolshevik Party – not even the workers’ opposition which claimed to represent the antipathy of many workers to the regime – had any doubts as to what it was necessary to do. The reason was simple. Kronstadt in 1920 was not Kronstadt of 1917. The class composition of its sailors had changed. The best socialist elements had long ago gone off to fight in the army in the front line. They were replaced in the main by peasants whose devotion to the revolution was that of their class. This was reflected in the demands of the uprising: Soviets without Bolsheviks and a free market in agriculture. The Bolshevik leaders could not accede to such demands. It would have meant liquidation of the socialist aims of the revolution without struggle. For all its faults, it was precisely the Bolshevik party that had alone whole-heartedly supported Soviet power, while the other parties, even the socialist parties, had vacillated between it and the Whites. It was to the Bolsheviks that all the best militants had been attracted. Soviets without Bolsheviks could only mean Soviets without the party which had consistently sought to express the socialist, collectivist aims of the working class in the revolution.

What was expressed in Kronstadt was the fundamental divergence of interest, in the long run, between the two classes that had made the revolution. The suppression of the uprising should be seen not as an attack on the socialist content of the revolution, but as a desperate attempt, using force, to prevent the developing peasant opposition to its collectivist ends from destroying it. [5] Yet the fact that Kronstadt could occur was an omen. For it questioned the whole leading role of the working class in the revolution. This was being maintained not by the superior economic mode that the working class represented, not by Its higher labour productivity, but by physical force. And this force was not being wielded directly by the armed workers, but by a party tied to the working class only indirectly, by its ideas, not directly as in the days of 1917.

Such a policy was necessary. But there was little in it that socialists could have supported in any other situation. Instead of being “the self-conscious, independent movement of the immense majority in the interest of the immense majority,” the revolution in Russia had reached the stage where it involved the exploitation of the country by the towns, maintained through naked physical force. It was clear to all groups in the Bolshevik party that this meant the revolution must remain in danger of being overthrown by peasant insurrections.

There seemed to be only one course open. This was to accept many of the peasant demands, while maintaining a strong, centralised socialist State apparatus. This the New Economic Policy (NEP) attempted to do. Its aim was to reconcile peasants to the regime and to encourage economic development by giving a limited range of freedom to private commodity production. The State and the State-owned industries were to operate as just one element in an economy governed by the needs of peasant production and the play of market forces.

246

5. The Party, the State and the working class 1921-8 In the period of the NEP the claim of Russia to be in any way “socialist” could no longer be justified either by the relationship of the working class to the State it had originally created or by the nature of internal economic relations. The workers did not exercise power and the economy was not planned. But the State, the “body of armed men” that controlled and policed society was in the hands of a party that was motivated by socialist intentions. The direction of its policies, it seemed, would be socialist.

Yet the situation was more complex than this. First, the State institutions that dominated Russian society were far from identical with the militant socialist party of 1917. Those who had been in the Bolshevik Party at the time of the February revolution were committed socialists who had taken enormous risks in resisting Tsarist oppression to. express their ideals. Even four years of civil war and isolation from the working masses could not easily destroy their socialist aspirations. But in 1919 these constituted only a tenth of the party, by 1922 a fortieth. In the revolution and Civil War, the party had undergone a continuous process of growth. In part this reflected the tendency of all militant workers and convinced socialists to join in. But it was also a result of other tendencies. Once the working class itself had been decimated, the party had had to take it upon itself to control all Soviet-run areas. This it could only do by increasing its own size. Further, once it was clear who was winning the Civil War, many individuals with little or no socialist convictions attempted to enter the party. The party itself was thus far from being a homogeneous socialist force. At best, only its leading elements and most militant members could be said to be really part of the socialist tradition.

This internal dilution of the party was paralleled by a corresponding phenomenon in the State apparatus itself. In order to maintain control over Russian society, the Bolshevik party had been forced to use thousands of members of the old Tsarist bureaucracy in order to maintain a functioning governmental machine. In theory the Bolsheviks were to direct the work of these in a socialist direction. In practice, old habits and methods of work, pre-revolutionary attitudes towards the masses in particular, often prevailed. Lenin was acutely aware of the implications of this: “What we lack is clear enough,” he said at the March 1922 Party Congress. “The ruling stratum of the communists is lacking in culture. Let us look at Moscow. This mass of bureaucrats – who is leading whom? The 4,700 responsible communists, the mass of bureacrats, or the other way round? I do not believe you can honestly say the communists are leading this mass. To put it honestly, they are not the leaders but the led.”

At the end of 1922, he described the State apparatus as “borrowed from Tsarism and hardly touched by the Soviet world ... a bourgeois and Tsarist mechanism.” [6] In the 1920 controversy over the role of the trade unions he argued “Ours is not actually a workers’ state, but a workers’ and peasants’ State ... But that is not all. Our party programme shows that ours is a workers’ state with bureaucratic distortions.” [7] The real situation was even worse than this. It was not just the case that the old Bolsheviks were in a situation where the combined strength of hostile class forces and bureaucratic inertness made their socialist aspirations difficult to realise. These aspirations themselves could not remain forever uncorrupted by the hostile environment. The exigencies of building a disciplined army out of an often indifferent peasant mass had inculcated into many of the best party members authoritarian habits. Under the NEP the situation was different, but still far from the democratic interaction of leaders and led that constitutes the essence of socialist democracy. Now many party members found themselves having to control society by coming to terms with the small trader, the petty capitalist, the kulak. They had to represent the interests of the workers’ State as against these elements – but not as in the past through direct physical confrontation. There had to be limited co-operation with them.

Many party members seemed more influenced by this immediate and very tangible relationship with petty bourgeois elements than by their intangible ties with a weak and demoralised working class.

247

Above all the influence of the old bureaucracy in which its members were immersed penetrated the party. Its isolation from class forces outside itself that would sustain its rule meant that the party had to exert over itself an iron discipline. Thus at the Tenth Party Congress, although it was presumed that discussion would continue within the party [8], the establishment of formal factions was “temporarily” banned. But this demand for inner cohesion easily degenerated into an acceptance of bureaucratic modes of control within the party. There had been complaints about these by opposition elements in the party as early as April 1920. By 1922 even Lenin could write that “we have a bureaucracy not only in the Soviet institutions, but in the institutions of the party.”

The erosion of inner-party democracy is best shown by the fate of successive oppositions to the central leadership. In 1917 and 1918 free discussion within the party, with the right of different groups to organise around platforms, was taken for granted. Lenin himself was in a minority in the party on at least two occasions (at the time of his April Theses and nearly a year later during the Brest Litovsk negotiations). In November 1917 it was possible for those Bolsheviks who disagreed with the party taking power alone, to resign from the government so as to force its hand without disciplinary action being taken against them. Divisions within the party over the question of the advance on Warsaw and over the role of the trade unions were discussed quite openly in the party press. As late as 1921 the Programme of the Workers’ Opposition was printed in a quarter of a million copies by the Party itself, and two members of the opposition elected to the Central Committee. In 1923 when the Left Opposition developed, it was still possible for it to express its views in Pravda, although there were ten articles defending the leadership to every one opposing it.

Yet throughout this period the possibilities of any opposition acting effectively were diminished. After the tenth Party Congress the Workers’ Opposition was banned. By 1923 the opposition Platform of the 46 wrote that “the secretarial hierarchy of the Party to an ever greater extent recruits the membership of conferences and congresses.” [9] Even a supporter of the leadership and editor of Pravda, Bukharin, depicted the typical functioning of the party as completely undemocratic: “... the secretaries of the nuclei are usually appointed by the district committees, and note that the districts do not even try to have their candidates accepted by these nuclei, but content themselves with appointing these or those comrades. As a rule, putting the matter to a vote takes place according to a method that is taken for granted. The meeting is asked: ‘Who is against?’ and in as much as one fears more or less to speak up against, the appointed candidate finds himself elected ... [10] The real extent of bureaucratisation was fully revealed when the “triumvirate” that had taken over the leadership of the Party during the illness of Lenin split. Towards the end of 1925 Zinoviev, Kamenev and Krupskaya moved into opposition to the party centre, now controlled by Stalin.

Zinoviev was head of the party in Leningrad. As such he controlled the administrative machine of the northern capital and several influential newspapers. At the fourteenth Party Congress every delegate from Leningrad supported his opposition to the centre. Yet within weeks of the defeat of his opposition, all sections of the Party in Leningrad, with the exception of a few hundred inveterate oppositionists, were voting resolutions supporting Stalin’s policies. All that was required to accomplish this was the removal from office of the heads of the City Party administration. Who controlled the bureaucracy controlled the Party. When Zinoviev controlled it, it was oppositional.

Now that Stalin had added the city to the nation-wide apparatus he controlled, it became an adherent of his policies. With a change of leaders a Zinovievist monolith was transformed into a Stalinist monolith.

This rise of bureaucracy in the Soviet apparatus and the Party began as a result of the decimation of the working class in the civil war. But it continued even when industry began to recover and the working class began to grow with NEP. Economic recovery rather than raising the position of the working class within the “workers’ state” depressed it.

In purely material terms the concessions made to the peasant in the NEP worsened the (relative) position of the worker.

248

“Everywhere acclaimed under war communism as the eponymous hero of the dictatorship of the proletariat, he was in danger of becoming the step-child of the NEP. In the economic crisis of 1923 neither the defenders of the official policy nor those who contested it in the name of the development of industry found it necessary to treat the grievances or the interests of the industrial worker as a matter of major concern.” [11] But it was not only vis-a-vis the peasant that the status of the worker fell; it also fell compared with that of the directors and managers of industry. Whereas in 1922, 65 per cent of managing personnel were officially classified as workers, and 35 per cent as non-workers, a year later these figures were almost reversed, only 36 per cent being workers and 64 per cent nonworkers. [12] The “red industrialists” began to emerge as a privileged group, with high salaries, and through “one-man management” in the factories, able to hire and fire at will. At the same time widespread unemployment became endemic to the Soviet economy, rising to a level of one and a quarter millions in 1923-4.

6. The divisions in the party 1921-29 Men make history, but in circumstances not of their own making. In the process they change both those circumstances and themselves. The Bolshevik Party was no more immune to this reality than any other group in history has been. In attempting to hold together the fabric of Russian society in the chaos of civil war, counter-revolution and famine, their socialist intentions were a factor determining the course of history; but the social forces they had to work with to do this could not leave the Party members themselves unchanged. Holding the Russia of the NEP together meant mediating between different social classes so as to prevent disruptive clashes. The revolution could only survive if the Party and State satisfied the needs of different, often antagonistic, classes.

Arrangements had to be made to satisfy the individualistic aspirations of the peasants, as well as the collectivist democratic aims of socialism. In the process, the Party, which had been lifted above the different social classes, had to reflect within its own structure their differences. The pressures of the different classes on the Party caused different sections of the Party to define their socialist aspirations in terms of the interests of different classes. The one class with the capacity for exercising genuinely socialist pressures – the working class – was the weakest, the most disorganised, the least able to exert such pressures.

7. The Left Opposition There can be no doubt that in terms of its ideas, the Left Opposition was the faction in the Party that adhered most closely to the revolutionary socialist tradition of Bolshevism. It refused to redefine socialism to mean either a slowly developing peasant economy or accumulation for the sake of accumulation. It retained the view of workers’ democracy as central to socialism. It refused to subordinate the world revolution to the demands of the chauvinistic and reactionary slogan of building “socialism in one country.”

Yet the Left Opposition could not be said to be in any direct sense the “proletarian” faction within the Party. For in the Russia of the twenties, the working class was the class that less than any other exerted pressure upon the Party. After the civil war, it was rebuilt in conditions which made its ability to fight for its own ends weak. Unemployment was high; the most militant workers had either died in the civil war or been lifted into the bureaucracy; much of the class was composed of peasants fresh from the countryside. Its typical attitude was not one of support for the opposition, but rather apathy towards political discussions, which made it easily manipulable from above – at least most of the time. The Left Opposition was in the situation, common to socialists, of having a socialist programme for working-class action when the workers themselves were too tired and dispirited to fight.

But it was not only the apathy of the workers that created difficulties for the opposition. It was also its own recognition of economic realities. Its argument emphasised that the objective lack of resources would make life hard whatever policies were followed. It stressed both the need to develop industry internally and the necessity for the revolution to spread as a means to doing this. But in the 249

short term, it could offer little to the workers, even if a correct socialist policy was followed. When Trotsky and Preobrazhensky began to demand increased planning, they emphasised that this could not be done without squeezing the peasants and without the workers making sacrifices. The unified opposition of “Trotskyists” and “Zinovievists” in 1926 demanded as first priority certain improvements for the workers. But it was also realistic enough to denounce as utopian promises made to the workers by Stalin that far exceeded its own demands.

There is no space here to discuss the various platforms produced by the Left Opposition. But in outline they had three interlinked central planks.

1.

– The revolution could only make progress in a socialist direction if the economic weight of the towns as against the country, of industry as against agriculture, was increased. This demanded planning of industry and a policy of deliberately discriminating against the wealthy peasant in taxation policy. If this did not happen the latter would accumulate sufficient economic power to subordinate the State to his interests, thus producing a Thermidor, internal counter-revolution.

2.

– This industrial development had to be accompanied by increased workers’ democracy, so as to end bureaucratic tendencies in the Party and State.

3.

– These first two policies could maintain Russia as a citadel of the revolution, but they could not produce that material and cultural level that is the prerequisite of socialism. This demanded the extension of the revolution abroad.

In purely economic terms, there was nothing impossible in this programme. Indeed its demand for planning of industrialisation and a squeezing of the peasant was eventually carried out – although in a manner which contradicted the intentions of the Opposition. But those who controlled the Party from 1923 onwards did not see the wisdom of it. Only a severe economic crisis in 1928 forced them to plan and industrialise. For five years before this they persecuted the Left and expelled its leaders. The second plank in the programme they never implemented. As for the third plank, this had been Bolshevik orthodoxy in 1923 [13]. only to be rejected by the Party leaders for good in 1925.

It was not economics that prevented the Party accepting this programme. It was rather the balance of social forces developing within the Party itself. The programme demanded a break with a tempo of production determined by the economic pressure of the peasantry. Two sorts of social forces had developed within the Party that opposed this.

8. The “Right” and the “Centre” The first was the simplest. This was made up of those elements who did not see concessions to the peasant as being detrimental to socialist construction. They consciously wanted the Party to adjust its programme to the needs of the peasant. But this was not just a theoretical platform. It expressed the interest of all those in the Party and Soviet institutions who found cooperation with the peasants, including the Kulaks and capitalist farmers, and NEPmen, congenial. They found their theoretical expression in Bukharin, with his injunction to the peasants to “enrich themselves”.

The second drew its strength as much from social forces within the Party as outside. Its ostensible concern was to maintain social cohesion. As such it resisted the social tensions likely to be engendered, were there to be conscious effort to subordinate the country to the town, but did not go as far in its pro-peasant pronouncements as the Right. In the main, it was constituted by elements within the Party apparatus itself, whose whole orientation was to maintain Party cohesion through bureaucratic means. Its leader was the chief of the Party apparatus, Stalin.

To the Left Opposition at the time, the faction of Stalin seemed like a centrist group that oscillated between the traditions of the Party (embodied in the Left programme) and the Right. In 1928 when Stalin suddenly adopted the first plank of the opposition’s own programme, turning on the Right as viciously as he had only months before attacked the Left, and beginning industrialisation and the complete expropriation of the peasantry (so-called “collectivisation”), this interpretation received a rude shock. Stalin clearly had a social basis of his own. He could survive when neither the proletariat nor the peasantry exercised power.

250

If the Left Opposition was the result of groups motivated by the socialist and working-class traditions of the Party attempting to embody these in realistic policies, and the Right opposition a result of accommodation to peasant pressures on the Party, the successful Stalinist faction was based upon the Party bureaucracy itself. This had begun life as a subordinate element within the social structure created by the revolution. It merely fulfilled certain elementary functions for the workers’ Party. With the decimation of the working class in the civil war, the Party was left standing above the class. In this situation the role of maintaining the cohesion of the Party and State became central.

Increasingly in the State and then in the Party, this was provided by bureaucratic methods of control – often exercised by ex-Tsarist bureaucrats. The Party apparatus increasingly exercised real power within the Party – appointing functionaries at all levels, choosing delegates to conferences. But if it was the Party and not the class that controlled the State and industry, then it was the Party apparatus that increasingly inherited the gains the workers had made in the revolution.

The first result of this in terms of policies was a bureaucratic inertness. The bureaucrats of the apparatus offered a negative resistance to policies which might disturb their position. They began to act as a repressive force against any group that might challenge their position. Hence their opposition to the programmes of the Left and their refusal to permit any real discussion of them. While the bureaucracy reacted in this negative way to threats of social disturbance, it quite naturally allied itself with the Right and Bukharin. This concealed its increasing existence as a social entity in its own right, with its own relationship to the means of production. Its repression of opposition in the Party seemed to be an attempt to impose a pro-peasant policy on the Party from above, not to be a part of its own struggle to remove any opposition to its own power in State and industry. Even after its proclamation of socialism in one country, its failures abroad seemed to flow more from bureaucratic inertia and the pro-peasant policies at home than from a conscious counter-revolutionary role.

Yet throughout this period the bureaucracy was developing from being a class in itself to being a class for itself. At the time of the inauguration of the NEP, it was objectively the case that power in the Party and State lay in the hands of a small group of functionaries. But these were by no means a cohesive ruling class. They were far from being aware of sharing a common intent. The policies they implemented were shaped by elements in the Party still strongly influenced by the traditions of revolutionary socialism. If at home objective conditions made workers’ democracy nonexistent, at least there was the possibility of those motivated by the Party’s traditions bringing about its restoration given industrial recovery at home and revolution abroad. Certainly on a world scale the Party continued to play its revolutionary role. In its advice to foreign parties it made mistakes – and no doubt some of these flowed from its own bureaucratisation – but it did not commit crimes by subordinating them to its own national interests. Underlying the factional struggles of the twenties is the process by which this social grouping shook off the heritage of the revolution to become a selfconscious class in its own right.

9. Counter-Revolution It is often said that the rise of Stalinism in Russian cannot be called “counter-revolution” because it was a gradual process (e.g. Trotsky said that such a view involved “winding back the film of reformism’). But this is to misconstrue the Marxist method. It is not the case that the transition from one sort of society to another always involves a single sudden change. This is the case for the transition from a capitalist State to a workers’ State, because the working class cannot exercise its power except all at once, collectively, by a clash with the ruling class in which, as a culmination of long years of struggle, the latter’s forces are defeated. But in the transition from feudalism to capitalism there are many cases m which there is not one sudden clash, but a whole series of different intensities and at different levels, as the decisive economic class (the bourgeoisie) forces political concessions in its favour. The counter-revolution in Russia proceeded along the second path rather than the first. The bureaucracy did not have to seize power from the workers all at once. The decimation of the working class left power in its hands at all levels of Russian society. Its members controlled industry and the police and the army. It did not even have to wrest control of the State apparatus to bring it into line with its economic power, as the bourgeoisie did quite successfully in several countries without a sudden confrontation. It merely had to bring a political and industrial 251

structure that it already controlled into line with its own interests. This happened not “gradually,” but by a succession of qualitative changes by which the mode of operation of the Party was brought into line with the demands of the central bureaucracy. Each of these qualitative changes could only be brought about by a direct confrontation with those elements in the Party which, for whatever reason, still adhered to the revolutionary socialist tradition.

The first (and most important) such confrontation was that with the Left Opposition in 1923.

Although the Opposition was by no means decisively and unambiguously opposed to what was happening to the Party (e.g. its leader, Trotsky had made some of the most outrageously substitutionist statements during the trade-union debate of 1920; its first public statement (the Platform of the 46) was accepted by its signatories only with numerous reservations and amendments), the bureaucracy reacted to it with unprecedented hostility. In order to protect its power the ruling group in the Party resorted to methods of argument unheard of before in the Bolshevik party. Systematic denigration of opponents replaced rational argument. The control of the secretariat of the Party over appointments began to be used for the first time openly to remove sympathisers of the opposition from their posts (e.g. the majority of the Komsomol Central Committee were dismissed and sent to the provinces after some of them had replied to attacks on Trotsky). To justify such procedures the ruling faction invented two new ideological entities, which it counterposed to one another. On the one hand it inaugurated a cult of “Leninism” (despite the protests of Lenin’s widow). It attempted to elevate Lenin to a semi-divine status by mummifying his dead body in the manner of the Egyptian pharaohs. On the other, it invented “Trotskyism” as a tendency opposed to Leninism, justifying this with odd quotations from Lenin of ten or even twenty years before, while ignoring Lenin’s last statement (his “Testament”) that referred to Trotsky as “the most able member of the Central Committee” and suggested the removal of Stalin. The leaders of the Party perpetrated these distortions and falsifications consciously in order to fight off any threat to their control of the Party (Zinoviev, at the time the leading member of the “triumvirate” later admitted this). In doing so, one section of the Party was showing that it had come to see its own power as more important than the socialist tradition of free inner-Party discussion. By reducing theory to a mere adjunct of its own ambitions, the Party bureaucracy was beginning to assert its identity as against other social groups.

The second major confrontation began in a different way. It was not at first a clash between members of the Party with socialist aspirations and the increasingly powerful bureaucracy itself. It began as a clash between the ostensible leader of the Party (at the time, Zinoviev) and the Party apparatus that really controlled. In Leningrad Zinoviev controlled a section of the bureaucracy to a considerable extent independently of the rest of the apparatus. Although its mode of operation was in no way different from that prevailing throughout the rest of the country, its very independence was an obstacle to the central bureaucracy. It represented a possible source of policies and activities that might disturb the overall rule of the bureaucracy. For this reason it had to be brought within the ambit of the central apparatus. In the process Zinoviev was forced from his leading position in the party. Having lost this, he began to turn once more to the historical traditions of Bolshevism and to the policies of the Left (although he never lost fully his desire to be part of the ruling bloc, continually wavering for the next ten years between the Left and the apparatus). With the fall of Zinoviev, power lay in the hands of Stalin, who with his unrestrained use of bureaucratic methods of control of the Party, his disregard for theory, his hostility to the traditions of the revolution in which his own role had been a minor one, his willingness to resort to any means to dispose of those who had actually led the revolution, above all epitomised the growing self-consciousness of the apparatus.

All these qualities he exhibited to their full extent in the struggle against the new opposition.

Meetings were packed, speakers shouted down, prominent oppositionists likely to find themselves assigned to minor positions in remote areas, former Tsarist officers utilised as agents provocateur to discredit oppositional groups. Eventually, in 1928, he began to imitate the Tsars directly and deport revolutionaries to Siberia. In the long run, even this was not to be enough. He was to do what even the Romanoffs had been unable to do: systematically murder those who had constituted the revolutionary Party of 1917.

252

By 1928 the Stalinist faction had completely consolidated its control in the Party and State.

When Bukharin and the Right wing split from it, horrified by what they had helped to create, they found themselves with even less strength than the Left Oppositions had. But the Party was not in control of the whole of Russian society. The towns where real power lay were still surrounded by the sea of peasant production. The bureaucracy had usurped the gains of the working class in the revolution, but so far the peasantry remained unaffected. A mass refusal of the peasants to sell their grain in 1928 brought this home sharply to the bureaucracy.

What followed was the assertion of the power of the towns over the countryside that the Left Opposition had been demanding for years. This led certain oppositionists (Preobrazhensky, Radek) to make their peace with Stalin. Yet this policy was in its spirit the opposite of that of the Left. They had argued the need to subordinate peasant production to worker-owned industry in the towns. But industry in the towns was no longer worker-owned. It was under the control of the bureaucracy that held the State. Assertion of the domination of the town over the country was now the assertion not of the working class over the peasantry, but of the bureaucracy over the last part of society lying outside its control. It imposed this dominance with all the ferocity ruling classes have always used. Not only Kulaks, but all grades of peasants, whole villages of peasants, suffered. The “Left” turn of 1928 finally liquidated the revolution of 1917 in town and country.

There can be no doubt that by 1928 a new class had taken power in Russia. It did not have to engage in direct military conflict with the workers to gain power, because direct workers’ power had not existed since 1918. But it did have to purge the Party that was left in power of all those who retained links, however tenuous, with the socialist tradition. When a reinvigorated working class confronted it again, whether in Berlin or Budapest, or in Russia itself (e.g. Novo-Cherkassk in 1962), it used the tanks it had not needed in 1928.

The Left Opposition was far from clear about what it was fighting. Trotsky, to his dying day, believed that that State apparatus that was to hunt him down and murder him was a “degenerated workers’ one”. Yet it was that Opposition alone which fought day by day against the Stalinist apparatus’s destruction of the revolution at home and prevention of revolution abroad. [14] For a whole historical period it alone resisted the distorting effects on the socialist movement of Stalinism and Social Democracy. Its own theories about Russia made this task more difficult, but it still carried it out. That is why today any genuinely revolutionary movement must place itself in that tradition.

Top of the page

Notes 1. Trotsky, The Russian Revolution, p.72.

2. Martov to Axelrod, 19 November 1917, quoted in Israel Getzler, Martov, Cambridge, 1967.

3. Israel Getzler, op. cit., p.183.

4. Ibid., p.199.

5. See Trotsky, Hue and Cry over Kronstadt.

6. Quoted in Max Shachtman, The Struggle for the New Course, New York, 1943, p.150.

7. Lenin, Collected Works, Vol.32, p.24.

8. See Lenin’s response to Riazanov’s demand that the habit of different groups within the Party putting forward “platforms” be prohibited: “We cannot deprive the Party and the members of the central committee of the right to appeal to the Party in the event of disagreement on fundamental issues. I cannot imagine how we can do such a thing!” Lenin, Collected Works, Vol.32, p.261.

9. Appendix to E.H. Carr, The Interregnum, p.369.

10. Quoted in Shachtman, op. cit., p.172.

11. E.H. Carr, op. cit., p.39.

12. Ibid.

13. Cf. Stalin, Lenin and Leninism, Russian ed. 1924, p40: “Can the final victory of socialism in one country be attained without the joint efforts of the proletariats of several advanced countries? No, this is impossible.” (Cited by Trotsky, The Third International after Lenin, p.36.)

253

14. We do not deal here with the earlier oppositions, e.g. the Workers’ Opposition and the Democratic Centralists. Although these arose as a response to the early bureaucratisation and degeneration of the revolution, they were also partly a utopian reaction against objective reality as such (i.e. the real strength of the peasants and the real weakness of the working class). What survived and mattered in the Workers’ Opposition eventually became part of the Left Opposition, while its leaders, Kollontai and Shlyapnikov, capitulated to Stalin.

Tony Cliff

Deflected Permanent Revolution (1963) Tony Cliff, Permanent Revolution, International Socialism 12 (1st series), Spring 1963.

Reprinted in International Socialism 61 (1st series), June 1973.

Published as a pamphlet under the current title as International Socialism Reprint No.5, 1981 (with the introduction included here).

This version has been reprinted numerous times and is available from Bookmarks Publications.

Downloaded from the Marxism Page with thanks.

Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

Introduction Before 1917, most Marxists did no believe that a workers’ revolution was possible in any but the most advanced countries. The experience of the Russian revolution proved otherwise and in light of that, Trotsky updated Marxist theory with his ideas on “Permanent Revolution”. Since then we have seen revolutions in countries as different and as far apart as China and Cuba.

Marx wrote: “Philosophers have explained the word. The point however is to change it.”

Marxists are often accused by our opponents of being dogmatic and doctrinaire theorists. Nothing could be further from the truth. If the point is to change the world then socialist theory must always be changed and updated in the light of experience. This is what Trotsky did and this is what Tony Cliff set out to do in this re-examination of Trotsky’s theory.

1. Three conceptions of revolution 2. Mao’s rise to power 3. Castro’s revolution 4. What went wrong with the theory?

5. The intelligentsia 6. Deflected Permanent revolution

Permanent Revolution Trotsky’s greatest and most original contribution to Marxism was his theory of Permanent Revolution.

254

In this study the theory will first be restated. It will then be considered in the light of the colonial revolution experienced over the last decade or so. We shall be compelled to reject a large part of it. But if the result proves to be a set of ideas which differs quite considerably from Trotsky’s, it nevertheless leans heavily on his.

1. Three concepts of revolution Trotsky developed his theory with the 1905 revolution in the background. Practically all Marxists of the day, from Kautsky to Plekhanov to Lenin, believed that only advanced industrial countries were ready for socialist revolution. To put it crudely, they argued that countries would achieve workers’ power in strict conformity with the stage to which they had advanced technologically. Backward countries could see their future image mirrored in the advanced countries.

Only after a long process of industrial development and a transition through a parliamentary bourgeois regime could the working class mature enough to pose the question of socialist revolution.

All the Russian Social Democrats – Mensheviks as well as Bolsheviks – postulated that Russia was approaching a bourgeois revolution, resulting from a conflict between the productive forces of capitalism on the one hand, and autocracy, landlordism, and other surviving feudal structures on the other. The Mensheviks concluded that the bourgeoisie would necessarily lead the revolution, and would take political power into their own hands. They thought that the Social Democrats should support the liberal bourgeoisie in the revolution, at the same time defending the special interests of the workers within the framework of capitalism by struggling for the eight-hour working day and other social reforms. [1] Lenin and the Bolsheviks agreed that the revolution would be bourgeois in character and that its aim would not overstep the limits of a bourgeois revolution. “The democratic revolution will not extend beyond the scope of bourgeois social-economic relationships ...”, wrote Lenin. [2] Again “... this democratic revolution in Russia will not weaken but will strengthen, the domination of the bourgeoisie.” [3] He returned to the theme again and again.

It was not until after the revolution of February 1917 that Lenin discarded this view. In September 1914, for example, he was still writing that the Russian revolution must limit itself to three fundamental tasks: “the establishment of a democratic republic (in which equality of rights and full freedom of self-determination would be granted to all nationalities), confiscation of the estates of the big landowners, and application of the eight-hour day.” [4] Where Lenin differed, fundamentally, from the Mensheviks was in his insistence on the independence of the labour movement from the liberal bourgeoisie, on the need to carry the bourgeois revolution through to victory against their resistance. Instead of the Menshevik-sponsored alliance between the working class and the liberal bourgeoisie – Lenin called for an alliance of the working class with the peasantry. Where the Mensheviks expected a government composed of liberal bourgeois ministers after the revolution, Lenin envisaged a coalition comprised of the workers’ party and a peasant party, a “democratic dictatorship of the workers and peasantry”, in which the peasant party would have the majority. The “democratic dictatorship” would establish a republic, expropriate the large landowners and enforce the eight-hour day. Thereafter the peasantry would cease to be revolutionary, would become upholders of property and of the social status quo, and would unite with the bourgeoisie. The industrial proletariat, in alliance with the proletarian and semi-proletarian village population, would then become the revolutionary opposition, and the temporary phase of “democratic dictatorship” would give way to a conservative bourgeois government within the framework of a bourgeois republic.

Trotsky was as convinced as Lenin that the liberal bourgeoisie could not carry out any revolutionary task consistently, and that the agrarian revolution, a fundamental element in the bourgeois revolution, could only be carried out by an alliance of the working class and peasantry.

But he disagreed with him about the possibility of an independent peasant party, arguing that the peasants were too sharply divided amongst themselves between rich and poor to be able to form a united and independent party of their own.

255

“All the experience of history,” he wrote, “... shows that the peasantry is completely incapable of playing an independent role.” [5] If in all revolutions since the German Reformation the peasants had supported one faction or another of the bourgeoisie, in Russia the strength of the working class and the conservatism of the bourgeoisie would force the peasantry to support the revolutionary proletariat. The revolution itself would not be confined to the carrying out of bourgeois democratic tasks, but would proceed immediately to carry out proletarian socialist measures: The proletariat grows and strengthens together with the growth of capitalism. In this sense, the development of capitalism signifies the development of the proletariat toward the dictatorship.

But the day and hour when the power passes into the hands of the proletariat depend directly not upon the state or the productive forces, but upon the conditions of the class struggle, upon the international situation, finally, upon a series of subjective factors: tradition, initiative, readiness for struggle ...

In an economically backward country, the proletariat can come to power sooner than in the economically advanced countries. In 1871 it had consciously taken into its hands the management of social affairs in petty bourgeois Paris – in truth only for two months – but it did not for one hour take power in the robust capitalist centres of England and the United States. The conception of some sort of automatic dependence of the proletarian dictatorship upon the technical forces and resources of the country is a prejudice derived from an extremely over-simplified “economic” materialism. This view has nothing in common with Marxism.

The Russian revolution, in our opinion, creates such conditions under which the power can pass over to the proletariat (and with a victorious revolution it must) even before the policy of bourgeois liberalism acquires the possibility to bring its state genius to a full unfolding. [6] Another important element in the theory was the international character of the coming Russian revolution. It would begin on a national scale, but could only be completed by the victory of the revolution in the more developed countries: How far, however, can the socialist policy of the working class go in the economic conditions of Russia? Only one thing we can say with certainty: it will run into political obstacles long before it will be checked by the technical backwardness of the country. Without direct state support from the European proletariat the working class of Russia cannot remain in power and cannot convert its temporary rule into a prolonged socialist dictatorship. [7] The basic elements of Trotsky’s theory can be summed up in six points: 1.

A bourgeoisie which arrives late on the scene is fundamentally different from its ancestors of a century or two earlier. It is incapable of providing a consistent, democratic, revolutionary solution to the problem posed by feudalism and imperialist oppression. It is incapable of carrying out the thoroughgoing destruction of feudalism, the achievement of real national independence and political democracy. It has ceased to be revolutionary, whether in the advanced or backward countries. It is an absolutely conservative force.

2.

The decisive revolutionary role falls to the proletariat, even though it may be very young and small in number.

3.

Incapable of independent action, the peasantry will follow the towns, and in view of the first five points, must follow the leadership of the industrial proletariat.

4.

A consistent solution of the agrarian question, of the national question, a break-up of the social and imperial fetters preventing speedy economic advance, will necessitate moving beyond the bounds of bourgeois private property. “The democratic revolution grows over immediately into the socialist, and thereby becomes a permanent revolution.” [8] 5.

The completion of the socialist revolution “within national limits is unthinkable ... Thus, the socialist revolution becomes a permanent revolution in a newer and broader sense of the word; it attains completion only in the final victory of the new society on our entire planet.” [9] It is a reactionary, narrow dream, to try and achieve “socialism in one country”.

256

6.

As a result, revolution in backward countries would lead to convulsions in the advanced countries.

The 1917 revolution in Russia proved all of Trotsky’s assumptions to be right. The bourgeoisie was counter-revolutionary; the industrial proletariat was the revolutionary class par excellence; the peasantry followed the working class; the anti-feudal, democratic revolution grew over immediately into the socialist; the Russian revolution did lead to revolutionary convulsions elsewhere (in Germany, Austria, Hungary, etc.). And finally, alas, the isolation of the socialist revolution in Russia led to its degeneration and downfall.

Another classic confirmation of Trotsky’s theory was the Chinese revolution of 1925-27.

Unfortunately, the confirmation was; to an even larger extent than in the Russian revolution, a negative demonstration. Although points 1-4 were confirmed, Stalinist betrayal ensured that the revolution ended not in the victory of the proletariat, but in its defeat. As a result the peasants were also defeated, and not only was the socialist revolution not consummated, but the democratic neither; nor were the agrarian revolution, the unity of the country and its independence from imperialism achieved. Points 5 and 6 thus did not have the chance of being tested empirically. Since then, however, two events of world importance, Mao’s rise to power in China, and Castro’s in Cuba, seem to challenge practically all the assumptions of the theory.

Back to index 2. Mao’s rise to power The industrial working class played no role whatsoever in the victory of Mao. Even the social composition of the Chinese Communist Party was completely non-working class. Mao’s rise in the party coincided with its transformation from a working class party. Towards the end of 1926 at least 66 per cent of the membership were workers, another 22 per cent intellectuals and only 5 per cent peasants. [10] By November 1928, the percentage of workers had fallen by more than four-fifths, and an official report admitted that the party “did not have a single healthy party nucleus among the industrial workers”. [11] The party admitted that workers comprised only 10 per cent of the membership in 1928, three per cent in 1929, 2.5 per cent in March 1930, 1.6 per cent in September of the same year., and virtually nothing at the end of it. [12] From then and until Mao’s final victory the party had no industrial workers to speak of.

For a number of years the party was confined to insurgent peasant movements deep in the provinces of central China, where it established a Chinese Soviet Republic; later, after a military defeat in the central provinces (1934), it moved to northern Shensi, in the north-west. In both these areas there was no industrial working class to speak of. A Comintern organ was not exaggerating when it wrote that “the Border Region is socially and economically one of the most backward regions of China.” [13] Chu Teh repeated: “The regions under the direction of the Communists are the most backward economically in the whole country ...” [14] Not one real town came under the control of the Communists until a couple of years before the establishment of the Chinese People’s Republic.

So unimportant were workers in Communist Party strategy during the period of Mao’s rise to power that the party did not find it necessary to convene a National Congress of Trade Unions for 19 years after the one held in 1929. Nor did it bother to seek workers’ support, as witnessed in its declaration that it did not intend to maintain any party organisation in the Kuomintang-controlled areas during the crucial years 1937-45. [15] When, in December 1937, the Kuomintang government decreed the death penalty for workers who went on strike or even agitated for a strike while the war was in progress, a Communist Party spokesman told an interviewer that the party was “fully satisfied” with that government’s conduct of the war. [16] Even after the outbreak of civil war between the Communist Party and the Kuomintang, hardly any Communist Party organisations existed in the Kuomintang areas, which included all the industrial centres in the country.

Mao’s conquest of the towns revealed more than anything else the Communist Party’s complete divorce from the industrial working class. Communist leaders did their best to prevent any workers’ uprisings in the towns on the eve of their being taken. Before the fall of Tientsin and 257

Peking, for example, General Lin Piao, commander of the front, issued a proclamation calling on people: to maintain order and continue in their present occupations. Kuomintang officials or police personnel of provincial, city, country or other level of government institution; district, town, village, or pao chia personnel ... are enjoined to remain at their posts ... [17] At the time of the crossing of the Yangtze River, before the great cities of Central and South China (Shanghai, Hankow, Canton) fell to them, Mao and Chu Teh again issued a special proclamation stating among other things: It is hoped that workers and employees in all trades will continue to work and that business will operate as usual ... officials of the Kuomintang Central, Provincial, Municipal or County Governments of various levels, or delegates of the “National Assembly”, members of the Legislative and Control Yuans or People’s Political Council members, police personnel and heads of Pao Chia organisations ... are to stay at their posts, obey the orders of the People’s Liberation Army and People’s Government. [18] The working class obliged and remained inert. A report from Nanking on 22 April 1949, two days before the People’s Liberation Army occupied it, described the situation in this way: Nanking’s populace is showing no signs of excitement. Curious crowds were seen this morning to gather at the river wall to watch the gun duel on the opposite side of the river. Business is going on as usual. Some shops are closed, but it is due to lack of business ... Movie houses are still showing to packed houses. [19] A month later a New York Times correspondent wrote from Shanghai: The Red troops began putting up posters in Chinese instructing the populace to be calm and assuring them they had nothing to fear. [20] In Canton: After their entry the Communists made contact with the police station and instructed the officers and men to remain at their posts to keep order. [21] Back to index 3. Castro’s Revolution A case in which neither the working class nor the peasantry played a serious role, but where middle-class intellectuals filled the whole arena of struggle, is Fidel Castro’s rise to power. C Wright Mills’ book, Listen Yankee, which is a more or less authentic monologue spoken by the Cuban leaders, deals first of all with what the revolution was not: ... the revolution itself was not a fight ... between wage workers and capitalists ... Our revolution is not a revolution made by labour unions or wage workers in the city or by labour parties, or by anything like that. [22] ... the wage workers in the city were not conscious in any revolutionary way; their unions were merely like your North American unions: out for more money and better conditions. That was all that really moved them. And some were even more corrupt than some of yours. [23] Paul Baran, an uncritical supporter of Castro, wrote, after discussions with Cuban leaders, regarding the negligible role of the industrial proletariat in the revolution: It would seem that the employed segment of the industrial working class remained, on the whole, passive throughout the revolutionary period. Forming the “aristocratic” layer of the Cuban proletariat, these workers partook of the profits of monopolistic business – foreign and domestic – were well paid by Latin American standards, and enjoyed a standard of living considerably higher than that of the masses of the Cuban people. The fairly strong trade union movement was dominated by “business unionism”, United States style, and was thoroughly permeated by racketeering and gangsterism. [24] The indifference of the industrial proletariat accounted for the complete failure of Castro’s call for a general strike on 9 April 1958, some sixteen months after the beginning of the uprising and eight months before the fall of the Cuban dictator, Batista. the workers were apathetic, and the Communists sabotaged. (It was some time later that they jumped on Castro’s bandwagon. [25]) 258

The role of the peasantry in Castro’s rise to power has been commented on more positively.

Wright Mills reports that during the insurrection: the peasants played the big role. Together with the young intellectuals, they became the rebel army that won the insurrection. They were the decisive ones, the intellectuals and the campesinos ...

Rebel soldiers [were] formed of peasants and led by young intellectuals ... [26] Who were these peasants? “... really a sort of agricultural wage worker, who, most of the year, were unemployed”. [27] In similar vein Baran reports: “The class that made the revolution is the rural campesinos.” [28] And these were agricultural wage earners, not petty owners. “Not being inhabited by a petty bourgeois stratum of small peasant proprietors, the Cuban countryside ... never became a ‘breeding ground of bourgeois ideology’.” [29] This description, however, is belied by two things: the peasantry was hardly involved in Castro’s army. As late as April 1958, the total number of armed men under Castro numbered only about 180 and at the time of Batista’s fall had only grown to 803. [30] The cadres of Castro’s bands were intellectuals. And peasants that did participate were not agricultural wage earners, collectivist in inspiration, as Mills and Baran state. Witness ‘Che’ Guevara on the peasants who joined Castro in the Sierra Maestra: The soldiers that made up our first guerrilla army of country people came from the part of this social class which shows its love for the possession of land most aggressively, which expresses most perfectly the spirit catalogued as petty bourgeois. [31] The Castro movement was middle-class. The 82 men under Castro who invaded Cuba from Mexico in December 1956 and the 12 who survived to fight in the Sierra Maestra all came from this class. “The heaviest losses were suffered by the largely middle-class urban resistance movement, which created the political and psychological acids that ate into Batista’s fighting force.” [32] Quite characteristically ‘Che’ Guevara raises the weakness and impotence of the industrial working class as a central element in all future socialist revolutions: The campesinos, with an army made up of their own kind fighting for their own great objectives, primarily for a just distribution of land, will come from the country to take the cities ...

This army, created in the countryside, where subjective conditions ripen for the seizure of power, proceeds to conquer the cities from the outside. [33] Industrial advance is described as an impediment to the socialist revolution: It is more difficult to prepare guerrilla bands in those countries that have undergone a concentration of population in great centres and have a more developed light and medium industry, even though not anything like effective industrialisation. The ideological influence of the cities inhibits the guerrilla struggle ... [34] ... even in countries where the predominance of the cities is great, the central political focus of the struggle can develop in the countryside. [35] Paying lip service to the role of the industrial proletariat, Che says that the peasant guerrillas will have to accept “the ideological base of the working class – Marxism” – forgetting that the very heart of Marxism is the fact that the socialist revolution is the act of the working class itself, the result of the proletariat becoming the subject and not the object of history.

From the outset Castro’s programme did not go beyond the horizon of broad liberal reforms acceptable to the middle classes. In an article to the magazine Coronet of February 1958, Castro declared that he had no plans for expropriating or nationalising foreign investments: I personally have come to feel that nationalisation is, at best, a cumbersome instrument. It does not seem to make the state any stronger, yet it enfeebles private enterprise. Even more importantly, any attempt at wholesale nationalisation would obviously hamper the principal point of our economic platform – industrialisation at the fastest possible rate. For this purpose, foreign investments will always be welcome and secure here.

In May 1958, he assured his biographer, Dubois: Never has the 26th of July Movement talked about socialising or nationalising the industries.

This is simply stupid fear of our revolution. We have proclaimed from the first day that we fight for the full enforcement of the Constitution of 1940, whose norms establish guarantees, rights and

259

obligations for all the elements that have a part in production. Comprised therein is free enterprise and invested capital as well as many other economic, civic, and political rights. [36] As late as 2 May 1959, Castro declared to the Economic Council of the Organisation of American States in Buenos Aires: “We are not opposed to private investment ... We believe in, the usefulness, in the experience and in the enthusiasm of private investors... Companies with international investments will have the same guarantees and the same rights as the national firms.”

[37] The impotence of the contending social classes, workers and capitalists, peasants and landlords, the inherent historical weakness of the middle class, and the omnipotence of the new Castro elite, who were not bound by any set of coherent, organised interests, explains the ease with which Castro’s moderate programme of the years 1953-58, based on private enterprise, was cast aside and replaced by a radical programme of state ownership and planning. It was not before 16 April 1961 that Castro announced that the revolution had been socialist. In the words of the President of the Republic, Dr Osvaldo Dorticos Torrado, the people “one fine day ... discovered or confirmed, that what they have been applauding, which was good for the people, was a Socialist Revolution.”

[38] An excellent formulation of the Bonapartist manipulation of the people as the object of history, not its conscious subject!

Back to index 4. What went wrong with the theory?

While the conservative, cowardly nature of a late-developing bourgeoisie (Trotsky’s first point) is an absolute law, the revolutionary character of the young working class (point 2) is neither absolute nor inevitable. The reasons are not difficult to appreciate. The prevailing ideology in the society of which the working class forms a part is that of the ruling class; in many cases the existence of a floating, amorphous majority of new workers with one foot in the countryside creates difficulties for autonomous proletarian organisations; lack of experience and illiteracy add to their weakness.

This leads to yet another weakness: dependence on non-workers for leadership. Trade unions in the backward countries are almost always led by “outsiders”. Thus it is reported from India: Practically all Indian unions are led by persons who have no background in industry, i.e. “outsiders” ... many of the outsiders are associated with more than one union. A national leader of considerable stature remarked that he was president of about 30 unions, but added that obviously there was nothing he could contribute to the work of any of these! [39] Weakness and dependence on outsiders leads to a personality cult.

Many unions are still in the habit of revolving around personalities. A strong personality dominates the union. He determines all its policies and actions. The union becomes known as his union. Workers look up to him to solve all their difficulties and to secure for them all their demands.

They rely upon him as their defender and champion and are prepared to follow him wherever he may lead them. There is a large element of hero worship in this attitude. There is a good number of such heroes in the movement. They are of help in getting for workers some of their demands, but not of much help in developing self-reliant democratic organisations. The latter will not grow unless workers learn to stand on their own legs and not pathetically rely on eminent personalities to solve for them all their problems. [40] Another weakness of the labour movement in many backward countries is its dependence on the state. It was reported from India: The state has already taken upon itself many of the functions which, in a free society, normally belong to trade unions. As things stand at present the state, and not collective bargaining between employers and employees, plays the major part in the determination of wages and other conditions of work. That was inevitable to some extent owing to the background condition of the economy and the weakness of workers and their trade unions. [41] And from French West Africa: ... direct union efforts against employers have rarely brought real wage increases to African labour; it is rather social legislation and the labour movement’s political influence which have been responsible for most of the real wage gains of recent years. [42] 260

And from Latin America: Union representatives seek to achieve their gains through government interference and dictation. [43] The penalty for dependence on the state is subordination to government policies, avoidance of policies antagonistic to the political rulers, and a limitation of trade union activity to narrow “economist” demands, or, to use Lenin’s term, “trade unionist” policies.

This, in turn, leads to alienation of the trade unions from the agricultural toilers’ struggle. The difference between town and country living standards is generally very big in backward countries, much more so than in the advanced countries. Under such conditions, and with the mass rural unemployment and underemployment, the achievement of standards of wages and working conditions in industry depends largely on maintaining the closed shop, that is, hiring of workers for an industry through the union. This could hardly be done without state support – the close alliance of the trade unions with the government – to the neglect of rural toilers. This was the set-up in Peron’s Argentina, Vargas’s Brazil, Batista’s Cuba. The result was a labour movement that was conservative, narrow, bereft of idealism.

The last, but by no means least factor determining whether the working class in the backward countries is actually revolutionary or not is a subjective one, namely, the activities of the parties, particularly the Communist Parties, that influence it. The counterrevolutionary role of Stalinism in backward countries has been dealt with too often to need repetition here.

To sum up, up to now experience has shown both the strength of revolutionary urges amongst industrial workers in the emergent nations, and their fatal weaknesses. An automatic correlation between economic backwardness and revolutionary political militancy does not exist.

Once the constantly revolutionary nature of the working class, the central pillar of Trotsky’s theory, becomes suspect, the whole structure falls to pieces. His third point is not realised, as the peasantry cannot follow a non-revolutionary working class, and all the other elements follow suit.

But this does not mean that nothing happens. A concatenation of national and international circumstances makes it imperative for the productive forces to break the fetters of feudalism and imperialism. Peasant rebellions take on a deeper, broader sweep than ever before. In them is rooted also national rebellion against the economic ruin brought by imperialism and for the higher living standards which it as surely demonstrated.

The needs of the productive forces plus the rebelliousness of the peasantry would not by themselves have been sufficient to break the yoke of landlordism and imperialism. Three other factors helped: 1.

The weakening of world imperialism as a result of increasing contradictions between the powers, and the paralysis affecting their mutual intervention brought about by the existence of the H-bomb.

2.

The growing importance of the state in backward countries. It is one of the tricks of history that when an historical task faces society, and the class that traditionally carries it out is absent, some other group of people, quite often a state power. implements it.

State power, under such conditions, plays a very important role. It reflects not only, or even mainly, the national economic base on which it rises, but the supra-national character of the world economy today.

3.

The growing importance of the intelligentsia as the leader and unifier of the nation, and above all as manipulator of the masses. This last point will need special elaboration.

Back to index 5. The Intelligentsia The importance of the intelligentsia in a revolutionary movement is in direct proportion to the general backwardness-economic, social and cultural-of the masses from whose midst it arises. It is characteristic that the Russian Populist movement, which more than any other emphasised the need to revolutionise the most backward elements of society, the peasants, was also the group to put the greatest premium on the intelligentsia, masters of “critical thinking”.

261

Although all revolutionary movements in Russia were composed largely of intellectuals, Populist intellectuals championing the cause of the peasants, and Marxist intellectuals championing that of the industrial workers, there was a basic difference in the way they saw the relations between “leaders” and “masses”. The workers’ movement, at least during the height of the struggle, was organised; hence the intellectuals were accountable to the workers’ collective, and notwithstanding their inherent tendency to divorce themselves from, and rise above, the masses, they were checked by this collective. The Populist intellectuals’ milieu was less restrictive, hence they showed clearer and much more extreme tendencies towards elitism, arbitrariness, as towards vacillations and splits.

As Lenin said at the time, “No one will undertake to deny that it is precisely its individualism and incapacity for discipline and organisation which in general distinguished the intelligentsia as a separate stratum of modern capitalist society.” [44] The revolutionary intelligentsia has proved itself a much more cohesive factor in the emergent nations of today than in Tsarist Russia. Quite understandably bourgeois private property is bankrupt; imperialism is intolerable; state capitalism – through the weakening of imperialism, the growing importance of state planning, plus the example of Russia, and the organised, disciplined work of the Communist Parties – gives them a new sense of cohesion. As the only non-specialised section of society, the intelligentsia is the obvious source of a “professional revolutionary elite” which appears to represent the interests of the “nation” as against conflicting sectional and class interests. In addition, it is the section of society most imbued with the national culture, the peasants and workers having neither the leisure nor education for it.

The intelligentsia is also sensitive to their countries’ technical lag. Participating as it does in the scientific and technical world of the twentieth century, it is stifled by the backwardness of its own nation. This feeling is accentuated by the “intellectual unemployment” endemic in these countries.

Given the general economic backwardness, the only hope for most students is a government job, but there are not nearly enough of these to go round. [45] The spiritual life of the intellectuals is also in a crisis. In a crumbling order where the traditional pattern is disintegrating, they feel insecure, rootless, lacking in firm values. Dissolving cultures give rise to a powerful urge for a new integration that must be total and dynamic if it is to fill the social and spiritual vacuum, that must combine religious fervour with militant nationalism.

Before their country gains political freedom, the intellectuals find themselves under dual pressure – privileged beyond the majority of their people, yet subordinated to the foreign rulers. This explains the hesitations and vacillations so characteristic of their role in the national movements. But the big changes since have introduced new elements in their attitude – a feeling of guilt, of “debt” towards the “dark” masses, and at the same time a feeling of divorcement from, and superiority to them. The intelligentsia are anxious to belong without being assimilated, without ceasing to remain apart and above. They are in search of a dynamic movement which will unify the nation, and open up broad new vistas for it, but at the same time will give themselves power.

They are great believers in efficiency, including efficiency in social engineering. They hope for reform from above and would dearly love to hand the new world over to a grateful people, rather than see the liberating struggle of a self-conscious and freely associated people result in a new world for themselves. They care a lot for measures to drag their nation out of stagnation, but very little for democracy. They embody the drive for industrialisation, for capital accumulation, for national resurgence. Their power is in direct relation to the feebleness of other classes, and their political nullity.

All this makes totalitarian state capitalism a very attractive goal for intellectuals. And indeed they are the main banner-bearers of communism in the emergent nations. “Communism has found acceptance in Latin America among students and the middle class”, writes a Latin American specialist. [46] In India, at the Congress of the Communist Party in Amritsar (March/April 1958), “approximately 67 per cent of the delegates were from classes other than the proletariat and peasantry (middle class, land-owning class, and ‘small traders’). 72 per cent had some college education.” [47] (In 1943 it was found that 16 per cent of all Party members were full-time functionaries. [48]) 262

Back to index 6. Deflected Permanent Revolution Those forces which should lead to a socialist, workers’ revolution according to Trotsky’s theory can lead, in the absence of the revolutionary subject, the proletariat, to its opposite, state capitalism. Using what is of universal validity in the theory and what is contingent (upon the subjective activity of the proletariat), one can come to a variant that, for lack of a better name, might be called the “Deflected, state capitalist, Permanent Revolution”.

In the same way as the 1905 and 1917 revolutions in Russia and that of 1925-27 in China were classic demonstrations of Trotsky’s theory, Mao’s and Castro’s rise to power are classic, the purest, and most extreme, demonstrations of “Deflected Permanent Revolution”. Other colonial revolutions – Ghana, India, Egypt, Indonesia, Algeria etc. – are deviations from the norm. In these countries, the political and military retreat of imperialism, plus the financial backing of the local ruling classes – quite often including basic sections of the bourgeoisie – plus the hamstringing of the local communist parties by Moscow, have prevented a Simon-pure state capitalism dominated single -handed by a new Stalinist bureaucracy. But, although Nehru’s India, Nkrumah’s Ghana, or Ben Bella’s Algeria deviate more or less from the norm of “Deflected Permanent Revolution”, they can best be understood when approached from the standpoint of, and compared with the norm.

Some strange conclusions follow for the international labour movement from the working out of the “Deflected Permanent Revolution” whether in its pure or its bastard form. First, for the workers in the emergent nations: having failed to carry out the permanent revolution, to lead the democratic revolution on to socialist rails, to combine the national and social struggles, they will now have to fight against their “own” ruling class (and Nehru proved no less harsh when incarcerating striking workers than the British Raj). The industrial workers will nevertheless become more and more ready for the socialist revolution. Under the new national regimes they experience an increase in numbers and hence, in the long run, in cohesion and specific social weight.

For revolutionary socialists in the advanced countries, the shift in strategy means that while they will have to continue to oppose any national oppression of the colonial people unconditionally, they must cease to argue over the national identity of the future ruling classes of Asia, Africa and Latin America, and instead investigate the class conflicts and future social structures of these continents. The slogan of “class against class” will become more and more a reality. The central theme of Trotsky’s theory remains as valid as ever: the proletariat must continue its revolutionary struggle until it is triumphant the world over. Short of this target it cannot achieve freedom. [49] Top of the page

Notes 1. The Menshevik spokesman Martynov wrote on the eve of the 1905 revolution: The coming revolution will be a revolution of the bourgeoisie; and that means that...it will only, to a greater or lesser extent, secure the rule of all or some of the bourgeois classes ... If this is so, it is clear that the coming revolution can on no account assume political forms against the will of the whole of the bourgeoisie, as the latter will be the master of tomorrow. If so, then to follow the path of simply frightening the majority of the bourgeois elements would mean that the revolutionary struggle of the proletariat could lead to only one result – the restoration of absolutism in its original form ...

Martynov’s implied conclusion is that the working class should impose self-restraint on itself so as not to “frighten” the bourgeoisie; but at the same time he states that it should persistently press the bourgeoisie to lead the revolution: “The struggle to influence the course and outcome of the bourgeoisie can be expressed simply in the proletariat’s exerting revolutionary pressure on the will of the liberal and radical bourgeoisie, the more democratic ‘lower’ section of society’s compelling the ‘higher’ section to agree to lead the bourgeois revolution to its logical conclusion.” (A Martynov, Dve Diktatury, Geneva, 1905, pp.57-8).

Similarly the Menshevik paper Iskra wrote at the time: 263

When looking at the arena of struggle in Russia, what do we see? Only two powers: Tsarist autocracy and the liberal bourgeoisie, the latter organised and of tremendous specific weight The working masses are split and can do nothing; as an independent force we do not exist; and therefore our task consists in the support of the second force – the liberal bourgeoisie; we must encourage it, and on no account frighten it by putting forward the independent demands of the proletariat. (Quoted

by G Zinoviev, Istorija Rossiiskoi Kommunisticheskoji Partii (Bolshevikov), Moscow-Leningrad 1923, p.158).

2. V.I. Lenin, Two Tactics of Social Democracy in the Democratic Revolution, 1905 in Sochineniia, 4th Edition, Vol.IX, p.40.

3. Ibid., p.9.

4. Ibid., Vol.XXI, p.17.

5. Trotsky, Perspektivy Russkoi Revoliutsii (Selection from his book Nasha Revoliutsija), Berlin 1917, p.46.

6. Trotsky, Perspektivy etc., op. cit., p.36.

7. Ibid., p.48. Trotsky’s theory was a development, application and expansion of Marx’s analysis of the 1848 revolution. Even before that revolution, the Communist Manifesto had predicted that because of the “advanced conditions” and “developed proletariat” of Germany, “The bourgeois revolution in Germany” would be “but the prelude to an immediately following proletarian revolution”. (Marx, Selected Works, Vol.1, London 1942, p.241). And after the defeat of 1848 Marx stated that, faced with the incapacity of the bourgeoisie to carry out the anti-feudal revolution, the working class had to struggle for the growth of the bourgeois revolution into the proletarian, and of the national revolution into the international revolution. In an address to the Central Council of the Communist League (March 1850) Marx said: While the democratic petty bourgeois wish to bring the revolution to a conclusion as quickly as possible and with the achievement at most of the above demands, it is our interest and our task to make the revolution permanent, until all more or less possessing classes have been displaced from domination, until the proletariat has conquered state power, and the association of the proletarian, not only in one country but in all the dominant countries of the world, has advanced so far that competition among the proletarians of these countries has ceased and that at least the decisive productive forces are concentrated in the hands of the proletarians.

And Marx ended his address with the phrase: “Their [the workers’] battle-cry must be: the permanent revolution!” (K. Marx, Selected Works, London 1942, Vol.III, pp.161-168.

8. Trotsky, Permanent Revolution, Calcutta 1947, p.168.

9. Ibid., p.169.

10. R.C. North, Kuomintang and Chinese Communist Elites, Stanford 1962, p.32.

11. H.R. Isaacs, The Tragedy of the Chinese Revolution, London 1938, p.333.

12. Ibid., p.394.

13. World News and Views, 22 April 1939.

14. S. Gelder, The Chinese Communists, London 1946, p.167.

15. See Communist Manifesto published in Chungking on 23 November 1938, New York Times, 24 November 1938.

16. Isaacs, op. cit., p.456.

17. New China News Agency, 11 January 1949.

18. Ibid., 3 May 1949.

19. North China Daily News, 23 April 1949.

20. New York Times, 25 May 1949.

21. South China Morning Post, 17 October 1949.

22. C. Wright Mills, Listen Yankee, New York 1960, p.46.

23. Ibid., p.47.

24. P.A. Baran, Reflections on the Cuban Revolution, New York 1961. p.17.

25. The Communist Party of Cuba, the People’s Socialist Party, had a lot to live down. It supported Batista’s rule between 1939 and 1946. It participated in Batista’s first Ministry with two 264

Ministers, Juan Marinello and Carlos Rafael Rodriguez. In 1944 the Communist paper Hoy addressed Batista as the “idol of a people, the great man of our national policy, the man who incarnates the sacred deals of a new Cuba”, Castro was declared a petty bourgeois adventurer. As stated above the Communists did not co-operate in the April 1958 strike. As late as 28 June 1958, they were timidly advocating “clean democratic elections” to get rid of Batista.

26. Mills, op. cit., pp 46-8.

27. Ibid., p.44.

28. Baran, op. cit., p.11.

29. Ibid., p.12.

30. Speech by Castro of 1 December 1961, El Mundo La Habana, 22 December 1961.

31. ‘Che’ Guevara, Cuba: Exceptional Case?, Monthly Review, New York, July-August 1961, p.59.

32. T. Draper, Castro’s Cuba. A Revolution Betrayed?, Encounter, London, March 1961.

33. Guevara op. cit., p.63.

34. Ibid., pp.65-6.

35. Ibid., p.68.

36. Quoted by Draper, ibid.

37. Plan for the Advancement of Latin America, Havana 1959, p.32.

38. Osvaldo Dorticos Torrado, The Institutional and Political Changes made by the Cuban Revolution, Cuba, Havana, November 1961.

39. C.A. Mayers, India, in W Galenson (ed.), Labor and Economic Development, New York 1959, pp.41-2.

40. V.B. Karnik, Indian Trade Unionism: A Survey, Bombay 1960, pp.227-8.

41. Ibid., p.236.

42. E. Berg, French West Africa, in Galenson. op. cit., p.227.

43. United States Senate, United States-Latin American Relations, 86th Congress, Second Session, Washington 1960, p.645.

44. V. Lenin, Selected Works, Moscow 1946, Vol.7, p.248.

45. Thus, for instance, a survey made in India showed that about 25 per cent of the students ho received their Master’s degree from Lucknow University in Arts, Science, Commerce and Law between 1949 and 1953 were still unemployed in 1957. The survey also reported that bout 47 per cent of the liberal arts students, 51.4 per cent of the science students, 7 per cent of the commerce students, and 85.7 per cent of the education students said they went to the university to get the necessary qualifications for government service. About 51 per cent of the degree holders concluded that university education was a “waste of time”. (M. Weiner, Party Politics in India, Princeton, NJ 1957, pp.8-10).

46. V. Alba, The Middle Class Revolution, New Politics, New York, Winter 1962, p.71.

47. G.D. Overstreet and M. Windmiller, Communism in India, Berkeley and Los Angeles 1959, p.540.

48. Ibid., p.358.

49. For lack of space the present article has concentrated on the relevance of the theory of Permanent Revolution to the backward countries, and not dealt with its implications in the advanced countries. This second element – that the victory of the colonial revolution must lead to the socialist revolution in the advanced metropolitan countries – was not originally (in 1906) part and parcel of Trotsky’s theory, but has since become grafted upon it. For some of the relevant considerations, see Michael Kidron, Imperialism, Highest Stage But One, International Socialism 9, Summer 1962, reprinted in International Socialism 61, June 1973.

265

Venezuela: many steps to come Issue: 104 Mike Gonzalez At 4am on Monday the Electoral Commission announced the results; 4,991,483 (58.25percent) voted no and 3,576,517 (41.74percent) voted yes. It was obvious where the votes had come from, even before the results were announced. You could measure it by skin colour, what people wore and where they lived.

The majority of well-dressed white people from the wealthier suburbs angrily voted yes, claiming that Chávez has divided Venezuela. The dark-skinned poor of the hillside shanties reply that Venezuela was always divided. The difference now is that the people without a voice can now make themselves heard.1 The referendum was certainly not the terrain that Hugo Chávez, Venezuela’s president, would have chosen as the testing ground to measure the progress of the Bolivarian revolution. The Venezuelan right, bitterly hostile to the government of Hugo Chávez, had exploited an important clause in the new constitution of 1999 which allowed elected politicians, and especially the national president, to be recalled after serving half of the six-year presidential term. This required the collection of some 2.3 million signatures—a process that had taken months of collection, checking, challenge and proof. Once the numbers were found, the total voting for the recall (a yes vote) would need to be greater than the majority who supported Chávez in the presidential elections of 2000.

There were many in the Chávez camp who argued that the referendum was a ploy—a stratagem particularly unfavourable to the Venezuelan poor, a majority of whom would not possess the necessary registration documents to allow them to vote in the peculiarly bureaucratic Venezuelan system. On 15 August each elector would present a credential, have a fingerprint taken both manually and electronically, wait for confirmation and then vote.

The enormous queues that formed at every polling centre from 4am on the morning of that day were just one more gauntlet thrown down to the supporters of Chávez.

In the event, the arguments for abstention did not convince.

Instead Chávez called the referendum the Battle of Santa Inés—a reference to a battle fought in 1859 by Ezequiel Zamora, at the head of a largely peasant army, during a period of civil war.

Zamora pretended to retreat and then surrounded and destroyed the armies of the ruling class on a terrain more favourable to his soldiers. Chávez presented the referendum of 15 August 2004 in similar terms. While it appeared to be a political retreat, it would in fact, he said, be the prelude to an advance in Venezuela’s developing Bolivarian revolution.

From the United States and all those who had steadfastly supported the opposition to Chávez, the demands and

266

denunciations rained down relentlessly on the national palace in Caracas. The opposition accused the government of a failure to observe democratic procedures, describing Chávez’s rule as a dictatorship, despite the fact that he had been elected in untainted presidential elections. This was deeply ironic, of course, given the events of the previous three and a half years. But Chávez’s answer was to accept the challenge.

Those who saw the referendum as a backward step were right.

The advance of a revolutionary process could and should be measured by the pace with which power passes directly into the hands of working people and the degree to which it is the interests of the majority that increasingly shape the distribution of resources. In that sense, a referendum drags politics back onto the terrain of formal democracy, to the matter of institutional arrangements within the system and away from the deepening control from below whose progress, or otherwise, is the key issue for revolution.

In that sense too, the referendum was a small victory for the right. In the event, a high degree of mass mobilisation in the heartlands of Chávez’s support produced a result which confounded the opposition and cleared the way for a deepening radicalisation. The consequences and impact of that result have resonated well beyond Venezuela, and have important implications for the revolutionary left internationally—matters to which we will return in the final section of this account.

The ferocity of the Venezuelan ruling class assault on the Chávez government—of which the referendum is simply the latest chapter—is not some peculiar feature of Latin American politics. It is worth remembering that the Chilean coup of 1973 was sustained and supported by a bourgeoisie which had always proclaimed its devotion to parliamentary democracy. That same class stood by and applauded levels of repression which have made the very word Chile a watchword for state violence. In Venezuela too the procedures of parliamentary order were obeyed in the letter but not in the spirit. Instead Venezuelan political life was shaped by manipulation and a corruption fuelled by the single most important source of Venezuelan wealth—oil.

Black gold Perhaps the most important thing to know about Venezuela is that it is an oil exporting country, the fifth largest in the world, with the largest reserves of conventional oil (light and heavy crude) in the western hemisphere and the largest reserves of non-conventional oil (extra-heavy crude) in the world.2

Oil production in Venezuela began in the early 1920s, during the brutal dictatorship of Juan Vicente Gómez.3 Gómez was much given to spectacular and ostentatious public works projects—a luxury he could allow himself because oil revenues were constantly rising, though by the late 1930s that revenue largely flowed into the coffers of Shell and Standard Oil. In that period oil had come to represent over 90 percent of the country’s income (from 1.9 percent in 1920!). Production levels rose again in the 1950s—between 1958 and 1998 Venezuela’s total income from oil was over $300 billion.

267

The global figures conceal peaks and troughs which produced both economic and political crises, yet throughout the country’s dependence on oil revenues became more and more pronounced.

In 1960, for example, Venezuela promoted the formation of OPEC as the expansion of Middle Eastern oil threatened the high prices of the early 1950s. At the same time, the Venezuelan Oil Corporation was created in an attempt to force the foreign corporations who extracted the oil to pay more to the state. But the first great oil boom had passed and the military ruler who had overseen it, Pérez Jiménez, had fled to Miami with several hundred million dollars safely ensconced in US banks. Caracas itself was the clearest testimony to the massive speculation and graft of those years. Its modern centre of modernist concrete buildings was aesthetically exciting, but represented the squandering of oil revenues. The shanties clinging to the hills around the city said all that needed to be said about who had been the beneficiaries of the boom. While production rose steadily between 1960 and 1964, it was significant that only 8 million cubic metres were consumed within Venezuela (in 1964) and nearly 187 million exported. Those who gained from the boom bought their imported goods and services at a high price—and the cost of living rose to the point where it was said that Caracas was a more expensive city than Chicago—and had more Cadillacs per head of population.4 The expansion took place under the government of Rómulo Betancourt, whose brief flirtation with Fidel Castro before and immediately after the Cuban Revolution of 1959 had contributed to his reputation as a reformer. His promises to raise the levels of income of all poor Venezuelans, however, very quickly dissolved; under pressure from a US government anxious to isolate Cuba and protect its economic interests in Venezuela and the rest of the continent, Betancourt’s government countered street demonstrations and the subsequent occupation of the Central University with repression. At the same time, the new Venezuelan system was forming on the basis of an alliance of the parties of the right, the Punto Fijo Pact, which effectively ensured a system of power sharing between the two major bourgeois parties— Betancourt’s Acción Democrática (AD) and the Christian Democrats of COPEI. The pact, signed in October 1958, created a consensus system to ensure democratic stability. There would be a common economic programme and a ‘spoils’ system that provided for party control of appointments to state bodies… The central role of private enterprise was written in to the government’s plans.5

The pact held for the next 30 years, until the Caracazo of 1989.

And the key to that economic ‘stability’ was the judicious use of oil revenues. The 2 percent of Venezuelans involved in oil production were given highly privileged working conditions and protected status. The oil bureaucrats and all those involved in the trade lived extraordinarily well (they were the Cadillac owners!). The system maintained itself after the repression of the early protest movement through a combination of patronage, repression and occasional investments in social programmes like education and health—particularly during the boom years of the 1970s, when oil prices rose again with the deepening crisis in the Middle East.

Venezuelan oil revenues quadrupled between 1972 and 1974. Like Betancourt a decade earlier, Carlos Andrés Pérez, the newly elected Christian Democratic president, promised protective

268

economic policies, diversification and an end to poverty. Part of this ‘Great Venezuela’ programme was the nationalisation of oil in 1976.

The fact that Venezuela’s oil is run by a nationalised corporation has created much confusion—a confusion cynically and deliberately manipulated for foreign consumption after 2000.The new Venezuelan State Oil Corporation, PDVSA, inherited an industry dominated by a series of foreign oil companies.

Nationalisation created 14 Venezuelan companies—but they were not only the mirror of the former companies. The new managers were recruited from the old private industry, maintained a private enterprise attitude to production and continued their ties and allegiances to their former masters. PDVSA was, as one observer put it, a ‘Trojan horse’.6 The oil workers were locked into the same structures and remained, as they had before, a highly privileged layer of workers, earning their salaries in dollars and enjoying all sorts of privileges. Their union was part of the Venezuelan Workers Congress (CTV) which was an integral component of the Punto Fijo constitutional arrangements.

PDVSA maintained a kind of autonomy which led analysts to describe it as ‘a state within a state’ through the period of high oil prices from the mid-1970s to the mid-1980s. The proportion of its revenues consumed by expenses grew dramatically, and, despite its size and economic weight, it paid less to the government per barrel than did Pemex, the nationalised Mexican oil corporation notorious for its corruption. In fact, the PDVSA management continued to operate in conjunction with multinational corporations and the international oil market, creating its own offshore companies which absorbed the corporate profits in a series of dubious reselling deals and service contracts. For example, it purchased a number of foreign refineries—but for the most part they were unprofitable and PDVSA often found itself providing oil at below market prices to keep them running.

‘Currently it costs PDVSA about three times as much to extract one barrel of oil as it costs other major oil corporations, such as ExxonMobil, Shell or Chevron Texaco’.7 The 1980s were a time, then, when a small elite made millions from oil, when capital fled the country to seek profits abroad and when, despite oil wealth, the Venezuelan GDP fell consistently.

This concentration of wealth and deepening social divide were veiled by the complicity of politicians, bureaucrats and business who passed the spoils from hand to hand and controlled a political system which was little more than a network of patronage and corruption. In the latter part of the decade falling oil prices produced new crises. The Venezuelan government turned to the IMF and the institutions of global capital. This was the era of Thatcher and Reagan, of ‘free market’ economics and the euphemistic ‘structural adjustments’ that withdrew the pitiful subsidies on basic goods, transport and social provision and demanded a return on investment disguised as aid.

The Venezuelan social pact was based on control by a capitalist minority of the Venezuelan state in order to protect a virtually autonomous oil industry which, while ostensibly nationalised, was becoming more and more integrated into the structures of global oil production. Within the country the concentration of wealth proceeded at spectacular pace. Four mass media conglomerates

269

controlled the bulk of communication. They were popularly known as ‘the horsemen of the apocalypse’, with the most prominent, Gustavo Cisnero of Venevisión, involved in a dozen other industries and subsidiaries across South America. At the same time, the pact depended for its ideological impact on an appearance of redistribution, the expenditure of some of the crumbs from the financial banquet on social projects and programmes.

Caracazo: the poor come down from the hills In 1989 Carlos Andrés Pérez’s government adopted the full neoliberal agenda. By then the slow development of the Venezuelan economy had already gone into reverse: The proportion of the population living below the poverty line soared from 36 percent in 1984 to 66 percent in 1995, and the number of those living in extreme poverty trebled, rising from 11 to 35 percent. Over the same period, urban unemployment more than doubled, topping the league for the continent. Yet while the share in national income of the poorest two-fifths of the population fell from 19.1 percent to 14.7 percent between 1981 and 1997, that of the richest tenth jumped from 21.8 percent to 32.8 percent.8

Thus oil-rich Venezuela was also the country of the desperately poor shanty towns clinging to the muddy cliffs around the capital.

For them, Pérez’s attempt to impose the politics of economic shock in 1989 was the last straw. They poured down into the streets in what became known as the Caracazo. Pérez had hinted in his recently successful presidential campaign that he would not accept the instructions of the IMF. Once in office he changed his position—and his political reforms, including direct election of many mayors and state governors, did nothing to persuade the mass of Venezuelans of his good intentions. And their scepticism was well founded.

In late February a rise in the price of petrol, followed by increased fares on public transport, produced protests and occupations. It began with a student bus boycott. It spread like a forest fire throughout the country- but it was most powerful in Caracas.

Pérez’s response was swift. His so-called Plan Avila prepared an overwhelming military response. Troops returned from the provinces. Next day the shooting began. The official figures for the dead were around 100. Although the true number of victims remains uncertain, it is unlikely that fewer than 2,000 were killed in the government’s violent response. More significant still, however, was where the dead were discovered—Petare, 23 de enero, the ramshackle settlements of the urban poor. They, after all, were the most vulnerable of the intended victims of the new economics.

The Caracazo, in some ways, should not be seen as a single event, but rather as the beginning of continuous process of popular resistance.9 From then on, as López-Maya argues, demonstrations, protests and street actions became a regular feature of Venezuelan public life. 1989 also marked a crossroads in the history of Venezuela’s ruling class—for the crisis that began then continued and deepened through the 1990s. The old ruling class, in some senses, went to war in those late February days against the working class and the poor of Venezuela. As the crisis developed, the wealthy elite grew richer, the executives of PDVSA

270

feathered their offshore nests with a greater and greater sense of urgency—and the situation of the poor grew more and more desperate.

In many ways, the failed military coup led by Hugo Chávez in 1992 and the process that it initiated should also be seen as a slow unfolding of the political implications of the Caracazo.

Municipal elections late in 1989 had given a new prominence to the MAS (Movement towards Socialism), a split from the Venezuelan Communist Party. MAS, while radical in its rhetoric, was always an electoral organisation and its leader, Teodoro Petkoff, was careful to distance himself from the insurrectionary implications of the mass mobilisations that began in 1989. The defeat of the guerrilla movements in the mid-1960s had largely removed the armed alternative from the political scenario, although Venezuela’s best known guerrilla leader, Douglas Bravo, continued (and continues) to have a significant role. But MAS and organisations like it were the beneficiaries of a deep and enduring rejection of the traditional adherents to the pact of Punto Fijo, and enjoyed much support among some of those who had participated in the Caracazo. MAS’s political rival, Causa R, also an earlier split from the Communist Party, identified more clearly with the street.

And it was to those demonstrators that Hugo Chávez was to make his most direct appeal.

Enter Hugo Chávez10 Hugo Chávez erupted onto the international political scene on 4 February 1992 when he led an attempted coup which was very rapidly suppressed. Yet it had enjoyed the vocal support of most of Venezuela’s urban poor. They, after all, were still living through the neo-liberal economic strategies imposed by Pérez, and observing with mounting rage the trading in lucrative jobs and the overt corruption of a bankrupt political arrangement.

Chávez was born in 1954 into a lower middle class family—his parents were both teachers. There were some notables in his family line—his great great grandfather had fought with Zamora, the strategist of Santa Inés! The next generation produced the legendary Maisanta, who had famously resisted the dictatorship of Gómez. Enlisting in 1971, Chávez rose rapidly in the ranks of the military. By the early 1980s he was a popular and charismatic lecturer at the Caracas Military Academy. But he saw himself very differently from the officer class that had benefited from and replicated the cronyism and graft that characterised the state as a whole. Chávez’s conception of the role of the military had its reference point in the military reformists like Presidents Torrijos in Panama and Velasco in Peru (which he visited in 1974), both of whom had initiated social reforms after taking power by military coup. They were nationalists who saw the creation of a strong national state as a prerequisite for economic and social development. But they also saw themselves as very separate from political traditions based on mass action. The idea of reform from above merged with the command model of the structures of the military. In both these cases the conquest of the state followed a failed process of political reform, often betrayed by politicians who, at the level of rhetoric at least, proclaimed a commitment to social justice and democracy.

271

In the mid-1970s Chávez was sent to help the suppression of a guerrilla group. In his own words, he felt growing sympathy for the guerrillas and gathered around him a small group of officers who wanted to discuss the possibility of radical transformations, an end to graft and a programme of national development. The group of dissidents called themselves the Bolivarian Revolutionary Movement (MRB 2000), to commemorate the leader of the 19th century Latin American liberation movement, Simón Bolívar. It was at that time that Chávez made contact with Douglas Bravo and with the dissenting communists of Causa R. Chávez summed up the ideology of the Bolivarian movement in a lengthy interview he gave in 1996: The Bolivarian movement was born in the barracks 15 years ago when a group of soldiers came to the conclusion that the enemy was not communism, but imperialism. For many years we worked carefully and gradually to develop a nationalist, patriotic movement with one hand in the barracks and the other in the street… The current political model is mortally wounded and no viable alternative can exist without breaking the bourgeois, neoliberal system that has operated in Venezuela since 1945. In our model of democracy…there has to be direct democracy, people’s government with popular assemblies and congresses where the people retain the right to remove, nominate, sanction and recall their elected delegates.11

Even in this short extract there are signs that seem to point in several different directions. For socialists there is a promise of direct democracy. For nationalists, there is the assertion of a patriotic anti-imperialism. But the heart of the matter is in the specific reference to the collapse of the Venezuelan political system.

The Bolivarian circle drew together a number of currents which shared Chávez’s disgust with corruption and the abuse of national resources. Yet it seems clear that the Caracazo caught Chávez by surprise—at least in the astonishingly rapid spread of popular protest and the ferocity of the state’s response. More tellingly, the traditional political organisations benefited from the growing political dissidence, yet—at least in the case of MAS—seemed willing to compromise with elements of the very system they denounced.

Late in 1991 Chávez informed his political allies of the imminent coup and called for support. When the coup attempt was launched in February 1992, thousands of troops joined the call issued by Chávez, his close friend and later political opponent Francisco Arias, and the Bolivarian movement. The organised civilian support did not materialise, although the ranchos (as the poor marginal communities were called) were vocally behind him. After fierce fighting and a number of deaths, the coup was defeated.

Curiously, Pérez allowed Chávez a minute to call on his supporters to surrender. Instead Chávez used his minute to present his case, and to make an indelible mark on Venezuelan society. The carnival processions that year boasted lots of youngsters wearing Chávez’s characteristic red beret.12 Chávez spent the next two years in jail—but outside the prison the crisis in Venezuela was intensifying. In 1993 an over-confident Pérez was finally impeached for fraud and corruption. The Venezuelan Oil Corporation, meanwhile, signed a new contract for

272

the Christopher Columbus Natural Gas Project with a consortium of multinational corporations—and conceded two thirds of the ownership of the project to them. The administrative costs were escalating at a dramatic rate, so that little over a third of Venezuelan oil revenues found their way into the national economy. Those administrative costs, of course, concealed the export of capital and an effective transference of funds and assets to interests outside Venezuela, many of them run in part or in whole by PDVSA executives. Poverty was increasing and unemployment rising inexorably.

The 1993 presidential elections brought to power Rafael Caldera, an elderly politician with a relatively unsullied reputation. His government, however, ‘lurched from one crisis to the next; a banking collapse led to a state takeover of the banking system at a cost of $8.5 billion or 75 percent of the national budget for 1994’.13 He turned to the IMF in both 1994 and 1996—its loans carried the usual conditions. Petkoff, as economics minister, imposed the conditions.

In the 1993 election Causa R made considerable gains. But within months it was seeking alliances and coalitions with the very parties that had run the old system. Chávez’s call from jail for an active abstention had convinced some 40 percent of the electorate. Subsequent events must have convinced many more.

By 1995 Causa R’s support had collapsed—it split into two warring factions, one of which approached the 1998 presidential elections in support of the reactionary ex beauty queen Irene Sáez. Her candidacy was in many ways evidence of the bankruptcy of Venezuelan politics. The other faction formed Patria Para Todos and entered a long period of debate over who to support in the coming elections. In the end a narrow majority opted to support the candidacy of Hugo Chávez and his Fifth Republic Movement (MVR). The forces that eventually gathered around Chávez were testimony to the breadth and to the ambiguity of his patriotic programme.

On 8 December 1998 Chávez emerged as the elected president of Venezuela with some 56 percent of the vote. The right was stunned, Washington deeply disturbed. His election victory reflected a series of different factors. The Venezuelan bourgeoisie had been unable to come up with a credible presidential candidate other than the beauty queen and the right wing economist Henrique Salas, neither of whom could make any credible claim to represent the interests of the majority of Venezuelans. They were the inheritors and representatives of a political system that was bankrupt and exposed—a system whose public face was the arrogant fraudster Carlos Andrés Pérez. Much of the left, for its part, had colluded with that very same system as the crisis of the 1990s deepened, and had experienced popular rejection as a result. Douglas Bravo, who knew Chávez well and was certainly influential in his political development, was now largely involved with direct action movements on the land.

There was both a power vacuum, and the continuing crisis among the organisations of the left—the ongoing echo of the post-1989 crisis of Stalinism—made them incapable of connecting with, let alone organising or leading, the mass protest movement. Chávez filled that vacuum with a political ideology which was nationalist and anti-imperialist, and identified with the excluded and

273

marginalised sectors of Venezuelan society. His rejection of neoliberal economic strategies and his relentless attacks on the corruption of the old system resonated with the deeply impoverished majority. And his scepticism about political parties, of the left as much as of the right, seemed to fit with the experience, and the disillusionment, of that same majority.

His persona was a subtle expression of his politics. He clearly did not belong to the white-skinned, soft-featured elite of Venezuela.

Irene Sáez, the blonde Miss Venezuela, expressed that bourgeoisie’s ideals perfectly—and it was ironic that when she allowed her hair to return to its normal brown colour in the course of the election campaign she began to lose favour. Chávez’s dark skin, chiselled features and street-wise way of speaking were powerful signs in a country where class and ethnicity had always been so closely interwoven. And his scepticism about traditional political organisation—and not only the discredited bourgeois parties—also found an echo with his base of support among the poor and the marginalised. Bolivarismo was, by its nature, a studiedly ambiguous idea, a mix of nationalism, populism, the language of radical democracy and popular wisdom. And while the historical reference to Bolívar connects directly with an antiimperialist perspective, it is also an ideology of authoritarian leadership.14 The essential question to be asked is not to interrogate the leader’s face for signs of sincerity or his words for internal contradictions, but rather to ask who, in this vision of political change, is the protagonist of the process, the engine of transformation and the central actor in the building of a new society. For Marxists, the revolution is the act of a whole class, in all its diversity and difference—the working class acting to achieve its own liberation. In the ideology of Bolivarismo/Chavismo , who occupies that role?

It is my view that the question is not easily answered—precisely because there are unresolved contradictions at the heart of Chavismo . In the 1996 interview quoted earlier, for example, Chávez commits himself to advanced forms of rank and file democracy. Yet, as will become clear, the organisational expressions of the Bolivarian revolution in power were very far from the ‘popular assemblies and congresses’ he alluded to there.

In the end, of course, it would be paradoxical to argue that the emergence of organs of workers’ democracy should depend on a decision by Chávez—they should, by their very nature, arise in the context of class struggle. Yet the influence and authority of Chávez are beyond question —and therefore the exercise of that influence is a material factor, especially in the context of an absence of left alternatives rooted in the movement and capable of challenging and questioning the president. His weekly intimate conversations with the Venezuelan people—his ‘Aló Presidente’ programmes—are brilliant exercises in political communication, but they are monologues.

These are not abstract questions. In the concrete circumstances of escalating class confrontation, they are strategic questions that shape and direct the interventions and actions of the mass movement.

274

The Bolivarian revolution In the year of Chávez’s election 67 percent of the population of the country earned less than $2 a day, and 36 percent less than $1.50. Within two months he had proposed a referendum for a constituent assembly to draw up a new constitution.15 Of the 131 delegates to the assembly 125 were Chávez supporters—among the losing candidates was the ever-present Carlos Andrés Pérez.

The new document was approved in December 1999. Its main provisions were directed at rebuilding the discredited political system and making elected officials accountable and open to recall (the clause that was used against Chávez in 2004). It set out the obligation of the mass media to be ‘truthful’, which evoked howls of protest before such ‘unjustified intervention in the democratic press’ from the monopoly owner of the Venevisión Corporation and his ilk. The church turned its large guns against the promise to raise subsidies to state schools at the church’s expense and the threat to introduce abortion rights. But it was the plans for the reorganisation of the oil industry that provoked the most vehement hostility. The new constitution introduced a right to health and an entitlement to land for landless peasants, as well as basic trade union rights. Unsurprisingly it was ratified by 71 percent of those who voted in the referendum of December.

The numbers voting might certainly have been higher (56 percent of electors did not vote) had the skies not opened and visited upon Venezuela days of torrential rain. The precarious and fragile houses around Caracas began to fall into the gigantic mudslides the rain produced. Some on the right were cynical enough to claim this as the wrath of god as the second flood claimed somewhere between 30,000 and 50,000 lives. It certainly set back Chávez’s economic and social programmes, as unemployment and poverty figures continued to rise through the first year of his presidency.

The level of popular support for Chávez’s project was beyond question—as was the growing hostility of the Venezuelan bourgeoisie and its allies in Washington. Yet there was some unease even among Chávez’s allies about the character of his organisation: The MRB2000 itself, founded by Chávez in the 1980s, had a very small group of members; and the MVR, founded just to participate in the 1998 presidential elections, is an electoral party that grew like an avalanche bringing with it many opportunists who knew that they would be elected only if associated with Chávez. Nor does the country have any strong social movement: neither the neighbourhood popular movement nor the trade union movem

275

Session 6 :

Learning to win: Tactics and Strategy

276

Session 6 : Learning to win: Tactics and Strategy

WHY DO WE NEED A REVOLUTIONARY PARTY? Tony Cliff Marxism at the Millennium Chapter 2 Uneven consciousness in the working class

Why do we need a revolutionary party? The basic reason is in two statements Marx made. He stated that “the emancipation of the working class is the act of the working class” and at the same time he said that “the prevailing ideas of every society are the ideas of the ruling class.’

There is a contradiction between these two statements. But the contradiction is not in Marx’s head. It exists in reality. If only one of the statements was correct, there would not be a need for a revolutionary party. If the emancipation of the working class is the act of the working class, and that is all, then, to be honest, we need do nothing about fighting for socialism – let’s sit with folded arms and smile. The workers will emancipate themselves!

If, on the other hand, “the prevailing ideas of every society are the ideas of the ruling class”, and that is all, workers will always accept the ideas of the rulers. Then we can sit with folded arms and cry because nothing can be done.

The reality is that the two statements are correct. The class struggle always expresses itself, not just in a conflict between workers and capitalists, but inside the working class itself. On the picket line it is not true that workers are there to try and prevent the capitalist from working. The capitalists never worked in their lives so they will not work during a strike. What the picket line is about is one group of workers trying to prevent another group of workers from crossing the picket line in the interests of the employers.

The question of workers’ power, what Marx called the dictatorship of the proletariat. Why would you need a dictatorship of the proletariat if the whole working class is united and there are only a tiny minority of capitalists in opposition? You could say go home, and we’d finish with the bosses. If the whole working class is united we could spit at them and flood them into the Atlantic!

The reality is that there will be workers on one side and backward workers on the other side. Because “the prevailing ideas of every society are the ideas of the ruling class”, the workers are split between different levels of consciousness.

Not only this. The same worker can have split consciousness in his head. He or she can be a good wages militant, can hate the boss, but when it comes to black people it’s a different story.

I remember we lived with a chap, a printer, in the same house, a very skilled man. He was going on holiday and I asked, “Are you flying tomorrow?” He said, “No, I can’t fly tomorrow. It’s Friday the 13th. We’ll have to wait till Saturday.” This man in the 20th century has some ideas from 1,000 years ago.

Against opportunism and against sectarianism

You can stand on a picket line and next to you is a worker who makes racist comments. You can do one of three things. You can say, “I’m not standing with him on a picket line. I’m going home because there no one makes racist 277

comments.” That is sectarianism because if “the emancipation of the working class is the act of the working class” I have to stand with him on a picket line.

The other possibility is simply avoiding the question. Someone makes a racist comment and you pretend you haven’t heard and you say, “The weather is quite nice today!” That’s opportunism.

The third position is that you argue with this person against racism, against the prevailing ideas of the ruling class. You argue and argue. If you convince him, excellent. But if you don’t, still when the scab lorry comes you link arms to stop the scabs because “the emancipation of the working class is the act of the working class.”

The revolutionary party: university of the working class

The bourgeoisie didn’t have a revolutionary party 20 years before their revolution. The Jacobins in France didn’t exist before 1789.

Why do we have to start 20, 30 or 50 years before the revolution? We have to start to talk about the need for a revolutionary party to lead the working class in struggle, in revolution.

The Jacobins were established during the act of the revolution itself. Why? Because when you look to the relations between the capitalists and the nobility, it is different from the relationship between the capitalists and the working class.

It is true that the capitalists had to overthrow the nobility and the working class has to overthrow the capitalists, but there is a big difference. It is not true the nobility owned all the wealth and the capitalists were paupers. The capitalists were rich even before the revolution. They could turn around to the nobility and say, “All right, you own the land; we own money, we own the banks. When you go bankrupt how do you save yourself? You mix your blue blood with my gold, you try to marry my daughter.” When it came to ideas they could say, “All right, you have priests, we have professors.

You have the Bible – we have the Encyclopaedia. Come on, move over.”

The capitalists were independent intellectually from the ideas of the nobility. They influenced the nobility much more than the other way around.

The French Revolution started with a meeting of les Etats généraux (the Three Estates) – the nobility, the priesthood and the middle classes. When it came to the vote it was the nobility and the priesthood who voted with the capitalists, not the other way around.

Is our position similar? Of course not. We cannot turn to the capitalists and say, “All right, you own Ford, General Motors, ICI, we own a pair of shoes.” In terms of ideas I don’t know how many capitalists are influenced by Socialist Worker. Millions of workers are influenced by the Sun! The revolutionary party of the bourgeoisie could appear during the very act of the revolution. They didn’t have to prepare; they were confident. What happened on 14 July 1789? Robespierre, leader of the Jacobins, suggested they build a statue to Louis XVI on the site of the Bastille. He didn’t know that three years on he’d cut off the head of Louis XVI. Where does the name Jacobins come from? It came from the monastery where they met. If they had known that four years later they were going to expropriate the church lands they wouldn’t have named themselves after a monastery.

They were independent, they were strong and they could deal with the issues. We have a completely different situation. We belong to an oppressed class that lacks the experience of running society, because capitalists don’t only own the material means of production but the mental means of production. Because of that we need a party – the party is the university of the working class. What Sandhurst is to the British Army, the revolutionary party is to the working class.

Marx says in the Communist Manifesto that communists generalise from the historical and international experience of the working class. In other words, you don’t learn from just what you experience. My own experience is tiny. Any one of us has fantastically little experience. You need to generalise and to do that you need an organisation that does it. I can’t myself know about the Paris Commune. I wasn’t there. I was very young in 1871! So you have to have someone who gives you the information.

278

Trotsky therefore wrote that the revolutionary party is the memory of the working class.

Three types of workers’ parties

There are three types of workers’ parties: revolutionary, reformist and centrist.

The Communist Manifesto described the nature of the revolutionary party in these words:

The communists are distinguished from the other working class parties by this only: (1) In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality. (2) In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.

The communists, therefore, are, on the one hand, practically, the most advanced and resolute section of the working class parties of every country, that section which pushes forward all others; on the other hand, theoretically, they have over the great mass of the proletariat the advantage of clearly understanding the line of march, the conditions, and the ultimate general results of the proletarian movement.

The second type of workers’ parties are the reformist parties. In a speech to the Second Congress of the Communist International in 1920 Lenin defined the Labour Party as a “capitalist workers’ party”.

He called it capitalist because the politics of the Labour Party do not break with capitalism. Why did he call it a workers’ party? It is not because the workers voted for it. At that time more workers voted for the Conservative Party; and the Conservative Party is of course a capitalist party. Lenin called the Labour Party a workers’ party because it expressed the urge of workers to defend themselves against capitalism. When one watches the Labour Party conference on television, it is clear that the members of the Labour Party express different urges than the Tory party. At the Tory party conference the applause comes when speakers attack trade unionists and blacks, and praise the army, police, etc. In the Labour Party conference the applause comes when a speaker declares the need for a better health service, better education, housing, etc.

Between the revolutionary parties and reformist parties there is a third kind of party, the centrist parties. Their main characteristic is fudge. They are neither one nor the other. The vacillate between the two. A horse produces horses, a donkey donkeys. When a horse and a donkey mate they produce a mule. A mule does not produce anything; it is sterile. With a revolutionary party there is historical continuity. It can go up or down, but it continues. With a reformist party there is historical continuity. But not with the centrists. In 1936 the POUM party in Spain had 40,000 members. Now the POUM is dead as a dodo. The Independent Labour Party in Britain had four MPs from the 1945 general election. Now there is not even a remnant of the ILP. A similar story attaches to the SAP in 279

Germany, which was a mixture of people who came from the right, Blandlerite, wing of the KPD (German Communist Party), pacifist elements of the SPD and others from a mixed bag. It was quite a large party in the early 1930s. Now there is no sign of it.

A revolutionary teaches and learns from the working class

The revolutionary party has to lead the working class based on all the experience of the past. OK, so the party teaches the workers, but then arises the simple question: “Who teaches the teacher?” It is extremely important to understand that we can be taught by the work ing class. All the great ideas come from the workers themselves.

If you read Marx’s Communist Manifesto he speaks about the need for a workers’ government, the dictatorship of the proletariat. Then in 1871 he writes that the workers cannot take hold of the old state machine: they have to smash it-the old standing army, the bureaucracy, the police. We have to smash all this hierarchical structure and establish a new kind of state-a state without a standing army or a bureaucracy, where every official is elected, where every official gets the same rate of pay as the average worker. Did he find this out be cause he worked so hard in the British Museum? No, no.

What happened was that the workers of Paris had taken power and that’s exactly what they did.

Marx learnt from them. The Stalinists always claim that Lenin invented the idea of the soviet. Of course in the Stalinist literature Lenin invented everything! They had a concept of religious hierarchy. We have the correspondence of Lenin, and when workers established the first soviet in Petrograd in 1905, Lenin wrote four days later – what the hell is that for?

In the struggle the workers needed a new form of organisation. They learnt the hard way that if they had a strike committee in one factory it was not effective in a time of revolution. You need a strike committee which covers all the factories. And that’s what the soviet was: delegates from all the factories meeting together to run the show. They did it. Lenin followed them. The party has always to learn from the class, always.

Is the party always in advance of the class? The answer is that by and large the revolutionary party is in advance of the class. Otherwise it is not a revolutionary party. So when it came to 1914 and the out break of the First World War, the Bolsheviks were far in advance of the class. The Bolsheviks were against the war while the majority of the workers supported it.

Then comes 1917. In 1917 you find Lenin says again and again in August and September that the party is lagging behind the class, the class is more advanced than the party and we have to run quickly to catch up with the class. The reason is a simple one. For such a long time the workers had lacked confidence so they were behind the revolutionary party. Comes a change in the situation and they change very, very speedily.

The problem with revolutionaries is that we need a routine to survive. But the routine enters into you.

You take it for granted that you are in advance of the working class. But when the workers start moving you find you are so bloody backward! The revolutionary party has to catch up with the working class. The party is not just a group of people. They are the revolutionaries and from now on they are always leading. That’s rubbish. You have to fight and fight to lead all the time. You have to learn all the time, to advance all the time.

This is not just in time of revolution. You will find in the workplace that someone can be in the SWP for 20 years, a good comrade, and there’s someone completely new, who joined a few months ago, and when it comes to activity the new comrade is far more advanced than the comrade who joined 20 years ago. You find this again and again.

You don’t win the leadership like you have money in the bank. If you have money in the bank it gains interest. A revolutionary leadership is nothing like this. You have to win the leadership every day, every month. So for revolutionaries what counts is what they did last week, what they’re doing this week and what they’re doing next week. You can learn from all the experience of 100 years but 280

the important thing is what you’re doing this week. You have to fight for leadership.

Members of the reformist parties are passive and accommodating

Because the reformist party wants to get the maximum vote, it looks to the lowest common denominator. It adapts itself to the prevailing ideas.

Do you really believe that none of the Labour MPs know about the oppression of gays and lesbians?

But still during the elections of 1987 Patricia Hewitt, Neil Kinnock’s secretary, leaked to the Sun (of all papers) an attack on the “loony left” in the councils which support gays and lesbians. Why did she do it? Because she thought that was the way to become popular. I have a leaflet from a man called John Strachey. He called himself a Marxist. In the 1929 election he stood for parliament and he had a problem – he looked Jewish. So he issued a leaflet with the heading John Strachey is British and challenged anyone who said he was Jewish to go to court. Why did he say it? I have to say I’m a Jew, but if any member of the SWP is called a Jew they’d say, “Of course I’m a Jew. I’m proud of it.” You don’t deny it.

But if you want the maximum numbers you have to adapt to the prevailing ideas. The reformist parties are therefore large parties but extremely passive. For example, there is a book called Labour’s Grassroots where the age composition is given. In 1984 there were 573 branches of the Labour Party Young Socialists, in 1990 only 15. There were three times more members aged 66 and above than aged 25 and below. Labour Party members were asked how much time they devoted to Labour activities in the month: 50 percent said none, 30 percent said up to five hours a month, an hour a week, and only 10 percent said between five and ten hours.

Extreme passivity – that is the nature of the Labour Party. The other side of the same coin is bureaucratic control. The bureaucrats dominate the party.

Then there is the sect. Its members say quite simply, “We want to march only with people who agree with us. We care only about people who agree with us.”

The revolutionaries are those who are separate from the majority of the working class but at the same time are part of the working class. The question for revolutionaries is how to relate to nonrevolutionary workers. How you relate to people who agree with you 60 percent and how, through the struggle, you can move that to 80 percent. If you are a sectarian you say, “You don’t agree with me on 40 percent, I don’t care about you.” If you are a revolutionary you say, “We agree on 60 per cent, let’s start with that and I’ll argue with you about the 40 percent that we don’t agree and in the struggle try to convince you.”

Democratic centralism

What about the structure of the revolutionary party? Why do we speak about democratic centralism?

Let us first understand why we need democracy. If you want to go from London to Birmingham you need a bus and a driver. You don’t need democratic discussion because we’ve done it before so we need one good driver and one good bus. The problem is that the transition from capitalism to socialism is something we’ve never experienced before. We don’t know.

If you don’t know, there’s only one way to learn-by being rooted in the class and learning from the class. It is not simply that on every thing democracy solves the problem. If you want to know if there’s a decline in the rate of profit, if Marx is right, don’t put it to the vote! It doesn’t mean anything. Either he’s right or he’s wrong. Think about it, read about it and decide.

There are things you must put to the vote. Everything that is connected to our struggle must be put to the test. Because we simply don’t know. Because if “the emancipation of the working class is the act of the working class” the working class through their own experiences will teach us.

281

There is a beautiful description Lenin gives of when he was in hiding after the July Days in 1917 when the Bolshevik Party became illegal and its press was smashed. The Bolsheviks were accused of being German agents. Lenin did not know how far the power of reaction had been consolidated. He describes eating with a worker he was hiding with and the worker gave him bread and said, “The bread is good. They, the capitalist class, are frightened of us.” Lenin says:

The moment I heard him I understood about the class relation of forces. I understood what workers really think-that the capitalists are still frightened of us, although we are illegal, although we are beaten. Still it is not a victory of counter-revolution.

If you want to know if the workers are confident how do you know? You can’t have a ballot in the press, they don’t give you the opportunity. You can’t meet every individual.

You cannot make a working class revolution without a deep democracy. And what the revolution is about is raising the working class to become the ruling class, about creating the most democratic system in history. Unlike under capitalism where every five years you elect someone to misrepresent you, here it is a completely different story. Under capitalism you elect the MPs but not the employers. Under capitalism we don’t vote on whether to close a factory. We don’t elect the army officers or the judges. In a workers’ government everything is under workers’ control. Everything is in workers’ power. It is the most extreme form of democracy.

So if all this is true, why do we need centralism?

First, the experience is uneven, workers have different experiences, you have to collect that experience together. Even in the revolutionary party the members are influenced by different pressures. They are influenced by the general picture and by the section of the workers to which they belong.

To overcome this sectionalism, this narrow experience, you need to centralise all the experience and division. Again you need the centralism because the ruling class is highly centralised. If you are not symmetrical to your enemy you can never win.

I was never a pacifist. If someone uses a stick on me I have to have a bigger stick! I don’t believe a quotation from Marx’s Capital will stop a mad dog attacking me. We have to be symmetrical to our enemies. That is why I cannot understand the anarchists when they come and say they don’t need a state. The capitalists have a state. How do you smash a state without an opposition state?

Anarchists always deny the state. When they had enough strength they joined the government. That’s what they did in Spain during the civil war when they joined the government. Why? Because there is no good denying something unless you smash it and if you smash it you have to replace it. What do you have to replace it with? Armed bodies of workers. And that’s what the workers’ state is.

The need for a mass revolutionary party

When we speak of the party leading the class it is not just a question of experience, knowledge and roots. The leadership must use the language of workers, have the spirit of workers. You have to relate to them because that’s what leadership is about, You talk and listen, you don’t only talk. You talk in language they understand.

But that’s not enough. We need a big party. To lead the working class you need a mass party. The SWP is the smallest mass party in the world. It is a tiny party. The Bolshevik Party in 1914 had 282

4,000 members. After the February 1917 revolution they had 23,000 members. In August 1917 they had a quarter of a million. With a quarter of a million you can lead an industrial working class of three million.

The German Communist Party in 1918 had 4,000 members. Even if they were all geniuses they could not have won the revolution. You need a sizeable party because in order to lead you need to have a base in every factory.

I mentioned the July Days. When Lenin was accused of being a German spy 10,000 workers out of 30,000 at the Putilov factory struck for the day saying they trusted Lenin. Why? Because they had 500 Bolsheviks in Putilov factory.

If you want to lead millions you need hundreds of thousands in the party. Even the ANL Carnival, 150,000-strong, a marvellous achievement, in terms of the revolution was still a small thing. Even for this, we needed six, seven or eight thousand SWP members to organise it.

I detest it when people think Marxism is some sort of intellectual exercise: we interpret things, we understand, we are more clever. Marxism is about action and for action you need size. For action you need power. We need a mass party – of half a million.

Top of the page Last updated on 11.12.2002

MIA > Archive > Hallas

SECTARIANISM Duncan Hallas (1985/87)

From the collection, What do we mean by ...?, Education for Socialists No.6, March 1987.

Published by the Socialist Workers Party (Britain).

Downloaded from REDS – Die Roten.

Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The term sectarianism is used so loosely that it may be as well to start by clarifying what it does not mean. It is sometimes asserted that it is sectarian to try to build your own organisation in the course of intervention in various struggles. This is nonsense. If you believe that your organisation’s politics are correct, or at least more correct than those of others, you will naturally want it to grow and will try to build it. Otherwise you are not politically serious.

Of course, this may sometimes be attempted in an arrogant or insensitive fashion (not, I hope, by SWP members, or not very often), but that is not so much sectarianism as stupidity.

283

Sectarianism refers exclusively to erroneous attitudes to the class struggle.

“By directing socialism towards a fusion with the working class movement,” wrote Lenin, “Karl Marx and Frederick Engels did their greatest service: they created a revolutionary theory that explained the necessity for this fusion and gave socialists the task of organising the class struggle of the proletariat.”

Fusion, in this context, does not mean the dissolution of a revolutionary organisation into a nonrevolutionary one. Lenin was totally committed to building a revolutionary organisation and broke ruthlessly with those, including many of his former collaborators, who wavered on this central point.

The key words are “the class struggle of the proletariat”. It is with this that socialists must “fuse”.

The notion goes back to the Communist Manifesto. Sectarians, for Marx and Engels, were those who created “utopias”, abstract schemes derived from supposed general principles, to which people were to be won by persuasion and example – co-operative “islands of socialism” and suchlike – as opposed to the Marxist emphasis on the real movement’, the actual class struggle. It was with this in mind that Marx wrote: “The sect sees the justification for its existence and its point of honour not in what it has in common with the class movement but in the particular shibboleth which distinguishes it from the movement.” (The emphasis is Marx’s own.)

Class movement is meant literally. It is not a matter, or not primarily a matter, of this or that working class institution but of the course of development of the real class struggle and the development of class consciousness. Marx was a revolutionary. For him revolution was not a “particular shibboleth”, but a necessary stage in the struggle for socialism which, in turn, can only be based on the class struggle, regardless, as he wrote, of “what this or that proletarian, or even the whole of the proletariat at the moment considers as its aim”.

However, sectarianism is not necessarily avoided by formal acceptance of the centrality of the class struggle. As early as the 1880s Engels was ridiculing the German Marxist emigrés in the USA for turning Marxism into “a kind of ‘only-salvation’ dogma and [keeping] aloof from any movement which did not accept that dogma”. Engels had in mind the Knights of Labour, a considerable, although confused, attempt at working class organisation, which, he argued (vainly, as far as the German-American Marxists were concerned) “ought not to be pooh-poohed from without but revolutionised from within”.

The argument applies generally. So, in the early years of the Communist International, a good number of genuine revolutionaries, mainly in Germany but not only there, were opposed to systematic work in the existing unions. Their argument was that these unions were bureaucratised and conservative, if not downright reactionary. It was broadly true. It was also true that these unions organised millions of workers and, however bureaucratised and reactionary their leadership, they were class organisations which necessarily played a role (a bad one) in the class struggle and could not simply be bypassed. As Lenin wrote:

We are waging the struggle against the opportunist and socialchauvinist leaders in order to win the working class over to our side. It would be absurd to forget this most elementary and most self-evident truth. Yet this is the very absurdity that the German “Left Communists” perpetrate when, because of the reactionary 284

and counterrevolutionary character of the trade unions’ top leadership, they jump to the conclusion that – we must withdraw from the trade unions, refuse to work in them, and create new and artificial forms of labour organisation! This is so unpardonable a blunder that it is tantamount to the greatest service Communists could render the bourgeoisie.

The common thread between this mistake by the (for the most part) active and revolutionary “lefts” and all other forms of sectarianism is failure to relate to the concrete struggles of workers, however difficult it may be to do so, and to set up utopian schemes as alternatives.

Thus, the propagandistic forms of sectarianism, very different at first sight, have this same root.

There is a rich (if that is the appropriate word) experience of this in Britain. We may call them “the pure selected few” sectarians after a verse by the late Tommy Jackson, referring to the British Socialist Labour Party: We are the pure selected few And

all

the

rest

are

damned

There’s room enough in hell for you We don’t want heaven crammed.

The SLP, although by no means the worst of its kind, placed excessive emphasis on propaganda and a very high level of formal (Marxist) training as a condition of membership. Not so surprisingly, it also believed in separate “red unions” and had a rule forbidding members to hold union office, although they were allowed to be card holders where “job necessity” (that is, the closed shop) required it.

An obsession with “high quality” members, and fear of “dilution” by “raw workers” also came to characterise some of the Trotskyist groups (though not all) and their offshoots. Why is this attitude sectarian? Again we come back to the class struggle as the heart of the matter. And that cuts both ways.

As Trotsky himself wrote: “Coming from the opportunists the accusation of sectarianism is most often a compliment.” True enough, but this in no way alters the fact that sectarian deviations can be a real danger. Trotsky explained the emergence of sectarianism amongst some of his followers by the circumstances of their origin.

285

Every working class party, every faction, during its initial stages, passes through a period of pure propaganda ... The period of existence as a Marxist circle invariably grafts habits of an abstract approach onto the workers’ movement. Whoever is unable to step in time over the confines of this circumscribed existence becomes transformed into a conservative sectarian.

The sectarian looks upon life as a great school with himself as a teacher there ... Though he may swear by Marxism in every sentence the sectarian is the direct negation of dialectical materialism, which takes experience as its point of departure and always returns to it ... The sectarian lives in a sphere of readymade formulae ... Discord with reality engenders in the sectarian the need to constantly render his formula more precise. This goes under the name of discussion. To a Marxist. discussion is an important but functional instrument of the class struggle. To the sectarian discussion is a goal in itself. However, the more he discusses, the more the actual tasks escape him. He is like a man who satisfies his thirst with salt water; the more he drinks, the thirstier he becomes.

Fortunately this variety of sectarianism is less common now than it was even a few years ago. many of the erstwhile sectarians of this stamp having been absorbed by the Labour Party.

But doesn’t everything that has been said point to the conclusion that revolutionaries ought to intervene in the Labour Party and, to do so more effectively, join it? Isn’t it sectarian, as Militant argue, to stay outside?

Certainly the question cannot be solved by ready-made formulae. The essence of sectarianism is abstentionism, on whatever pretext, from the actual class struggle. Does the class struggle take place, mainly or partly, in or through the Labour Party? Obviously it does not take place directly in the Labour Party. And so far as there is a certain feedback from inner Labour Party struggles, we must seek to influence them – by supporting the left, critically where need be, but still supporting them, against the right.

However, it is not at all the same thing as saying that the SWP ought to dissolve itself into the Labour Party (or to appear to do so whilst secretly maintaining its own organisation). There are three reasons why this would be wrong.

286

First, the main struggle is in the workplaces and, secondarily, in the unions. A revolutionary organisation must, if at all possible, be organised so as to most effectively intervene in them, with its own publication and open presence. There is a qualitative difference between the unions, which organise on a job or industry basis, and the Labour Party which is based on a political idea – reformism, which we reject. And this remains true no matter how reformist or reactionary the union leaders are. Thus, Lenin, in the article quoted above, did not dream of arguing that his supporters should join the Social Democratic Party, although most of the union leaders were Social Democrats.

Secondly. even when the struggle in the workplaces is at a very low ebb, it is still the case that to stand aside from all involvement in the unions would be sectarian. At the lowest points of struggle they retain an organic, even if distant, connection to the class struggle. The Labour Party wards are not remotely comparable in this case.

Thirdly, precisely from the point of view of influencing left-wingers in the Labour Party, revolutionary socialists are far better placed as an open organisation arguing our political ideas because we are not involved in conflicts over positions, the selection of candidates, and such like.

Top of the page

Last updated on 1.10.2002

287