Bolshevising the Red Flag (2025)

Book Review from the July 2025 issue of the Socialist Standard

Raising the Red Flag. Marxism, Labourism, and the Roots of British Communism 1884-1921. By Tony Collins, Haymarket Books.

In his 1969 pioneering work The Revolutionary Movement in Britain 1900-1921: The Origins of British Communism (reviewed July 1969), Walter Kendall advanced the view that Bolshevism-Leninism was something that was alien to the formally democratic traditions of the working class movement in Britain, introduced from an economically and politically backward part of the world where conditions were quite different. Collins, writing as a Leninist, argues that in fact those who founded the British Communist Party were all too much in the tradition of reformist labourism. Both views have some merit.

The main constituents of the CPGB when it was founded in January 1921 were the British Socialist Party (BSP), part of the De Leonist Socialist Labour Party (SLP), Workers Dreadnought (Sylvia Pankhurst), and some from the Shop Stewards Movement and the left-wing of the Independent Labour Party (ILP).

The British Socialist Party was the name the Social Democratic Federation adopted when it amalgamated with some branches of the ILP in 1911. It was essentially the same organisation from which the SLP and the SPGB broke away in 1903 and 1904 respectively over its lack of democracy, and its reformism and opportunism. It was to provide the bulk of the original membership of the CPGB and, Collins argues, its political approach too of seeing itself as the left wing of the Labour movement.

Collins examines the origin and practice of the founding factions and finds them all wanting in one way or another from a Leninist point of view. The defect they all (except the Shop Stewards Movement) share, he says, is what he calls ‘abstract propagandism’ as opposed to seeking to lead a discontented but non-socialist majority in an insurrection against the capitalist state. The Shop Stewards Movement is criticised for restricting itself to purely industrial matters and the 1911 pamphlet The Miners Next Step for advancing the slogan of ‘no leaders’. His view is that, on the contrary, new leaders were required, but the leaders of a vanguard party of dedicated revolutionaries. In fact, he argues that it was the absence of this ‘subjective’ factor that was the reason why there was no workers’ revolution in Britain just before and just after the First World War.

Tendentious

Explaining his criticism, Collins writes:

‘The SLP’s answer to the syndicalists was that a party was necessary to win a parliamentary majority which would then support the workers as they took over industry, whereupon parliament would hand over state power to the industrial unions. … Shorn of its industrial militancy, this was not very different from the SDF or the SPGB, who believed in the manner of The Ragged Trousered Philanthropists that the working class would come to socialism through being educated about its benefits and thus vote for socialists in parliamentary elections’ (p. 58).

‘The Bolshevik conception’, Collins goes on to bemoan, ‘… did not exist in Britain’.

His criticism is a caricature, and tendentious in suggesting that ‘education’ meant something other than the action of workers, who had become socialist through their experience of capitalism, persuading their fellow workers to realise, on the basis of the same experience, that socialism was the only solution. It was true, though, that the implication was that a majority of workers who wanted and understood socialism was needed before socialism could be established and that, if that majority existed, workers should, among other things, vote for it. The Bolshevik conception rejects the principle that a socialist majority is necessary, indeed even possible, as it teaches that workers can only reach a trade-union consciousness and so require a vanguard party to lead them politically.

Although the SPGB is mentioned in passing a number of times, as here, only one short paragraph is devoted to our political position:

‘By this time the SDF leadership had completed its purge of leftists with the expulsion of the leaders of the London opposition, who formed the Socialist Party of Great Britain in 1904. Once out of the SDF, its leftism proved to be a chimera. The SPGB declared its object to be ‘the conquest of the powers of government, national and local, in order that this machinery [of government] including [those] armed forces, may be converted from an instrument of oppression into the agent of emancipation’, and pursued a grim messianic parliamentary reformism for the next hundred years and more’ (pp. 30-1).

None of our opponents at the time (and even our honest opponents today) would have accused us of ‘parliamentary reformism’, as what characterised us was a refusal to advocate reforms to capitalism (called ‘palliatives’ at the time). We did advocate using parliament but not to try to reform capitalism but to deprive the capitalist class of their ownership of the means of production and their ability to use the armed forces of the state to maintain it.

Collins’s accusation is outrageous, obviously biased and possibly dishonest. It is also ignorant. The term ‘instrument of emancipation’ was consciously taken from the preamble to the 1880 programme of the Parti Ouvrier Français, a preamble that Marx himself had drafted and which speaks of the working class needing to form themselves into a political party which should use ‘universal suffrage which will thus be transformed from the instrument of deception that it has been until now into an instrument of emancipation’ (tinyurl.com/bdf7vmj8). Clause Six of our Declaration of Principles which Collins is misinterpreting is saying the same — that to end capitalism the workers need to gain control of the machinery of government (state power) which currently upholds capitalist ownership of the means of production. It is a call for the revolutionary, not the reformist, use of parliament.

It also makes Collins a bad historian as the views of the SPGB are just as relevant, if only in terms of the numbers who held them, to his subject of Marxism during the period he is studying as are those of the SLP, John Maclean and Sylvia Pankhurst. In fact, five of the people mentioned by him either were to become or had been members of the SPGB (Jack Fitzgerald, E. J. B. Allen, T. A. Jackson, Valentine McEntee and George Hicks).

Because he didn’t bother to go into the matter in detail, Collins seems to think that the SPGB favoured participation in elections and nothing else. Actually, like the SLP, the SPGB was (and still is) in favour of industrial as well as political action, the difference being over which was the more important. The SLP said industrial, we said political. Ironically, this is the position Collins himself takes up in criticising The Miners’ Next Step and the Shop Stewards Movement, though, as a Leninist, by political action he envisages a vanguard party staging an armed insurrection to seize state power in a period of acute industrial unrest.

He doesn’t list the Socialist Standard as among the contemporary publications he looked at. Which will explain how he missed that in March 1915 we published an anti-war statement by the Bolshevik representative in Britain, Maxim Litvinov, when he couldn’t find anyone else prepared to do so . He also ignores, while noting that the BSP, the SLP and Keir Hardie wobbled on the outbreak of the war, that the SPGB immediately denounced it in a manifesto dated 25 August 1914. Nor does he mention that our members were among those imprisoned or going on the run for refusing to be conscripted.

Two issues

The groups which founded the CPGB initially disagreed on two issues which Collins examines in detail — affiliation to the Labour Party and participation in elections. The BSP was in favour of both. Sylvia Pankhurst was against both, while the SLPers favoured electoral action but not affiliation (which would have been our position but we are proud to have had nothing to do with the founding of the CPGB). In the end Lenin and the Communist International decreed that the new party should accept both, which was easy enough to ensure as the bulk of its members had come from the BSP (born SDF).

Collins’s point about the early CPGB being a continuation of the reformism of the SDF/BSP is valid, as we recognised at the time from having opposed for the previous sixteen years the views and actions of those involved. However, in the mid-1920s the Communist International decided to ‘bolshevise’ the CPGB and imposed on it a strictly Leninist organisational form with a leadership that told its members what to do and which way to turn (and which itself took orders from the rulers of state-capitalist Russia). This was, as Kendall had pointed out, quite alien to the traditions of working-class organisations in Britain. Unfortunately, it resulted in the ‘Bolshevik conception’ getting established here and in Leninist theory and tactics passing as Marxism and revolutionary socialism, as Collins’s book itself bears witness. It was left to us, alone for most of the time, to keep the standard of anti-Leninist Marxism flying high.

Adam Buick

Movements for socialism? (2022)

Book Review from the November 2022 issue of the Socialist Standard

Struggle Makes Us Human. Learning from Movements for Socialism. By Vijay Prashad. Edited by Frank Barat. Haymarket Books. 2022. 162pp.

‘An incisive and inspiring call to look beyond capitalism and chart a road map for a planet ravaged by pandemic, climate crises, and wars’. This is how this book, made up of a conversation between two long-term left-wing activists, Vijay Prashad and Frank Barat, is described on its back cover. It takes the form of a series of brief questions by Barat on a wide range of subjects followed by answers at some length by Prashad. Subjects include ‘The capitalist use of crisis’, ‘Resistance and rebellion’, ‘The real meaning of unemployment’, ‘History is a series of experiments’, ‘Transition to the future’, ‘Confidence comes from building movements’, ‘The long effect of the fall of the Soviet Union’, ‘Utopia is not a place but a project’. One of its main concerns, as suggested by the book’s title, is to examine and evaluate what are seen by Prashad as ‘movements for socialism’, those having taken place historically and others taking place now. So he traces, for example, in broad brush strokes and largely admiringly, the Haitian Peasant Revolution of 1804, the Paris Commune, the Bolshevik Revolution leading to the Soviet Union, the Vietnam War, Castro’s Cuba, the Venezuela of Chavez and Maduro, and modern Kerala, referring to them all as ‘pro-people’ movements. But can all or any of these truly be called ‘movements for socialism’?

There is no doubt that some of them at least can only elicit admiration for the attempts they constitute to combat naked oppression and to move the status quo in a progressive direction. But others not so. The Bolshevik state, for example, authoritarian and oppressive from its very beginnings, bore no relation to socialism (a democratically organised stateless and leaderless society of free access to all goods and services). In the same way, Cuba, Vietnam, China and Venezuela, all of which the author is a strong supporter of, are essentially ‘top-down’ regimes integrated into the world capitalism system of markets, trade, money and wages, buying and selling. And they are more oppressive than more ‘liberal’ capitalist states in that they keep a closer check on their populations and in some cases don’t even offer them meaningful elections to vote in. The book puts the poor economic conditions in some of these countries (eg, Venezuela) down to political plotting and economic pressure by the Western powers (‘immense sanctions and hybrid war’), in particular the US. And any view of them as autocratic and oppressive is said to be ‘a fiction of the information war’ against countries which are said to be ‘socialist experiments’. However, whereas the US government may indeed see it in its interests to disparage a country like Venezuela as much as possible, there is still a patent blindness on the part of Prashad and others with similar views, to the manifestly oppressive, kleptocratic nature of the Maduro regime. It cannot just be the influence of America that has caused 6.8 million out of Venezuela’s population of 28 million to flee the country in recent years.

Kerala, on the other hand, a state in Prashad’s native India, governed by a left-wing coalition which the author also lauds, is clearly rather different. It has a government democratically elected and much more representative than places like Cuba or Venezuela, and it has a more advanced capitalist economy than almost anywhere on the Indian sub-continent. Yet the fact that its government is left-wing and may claim to be socialist does not, in any sense, make it some kind of experiment in socialist organisation, or as Prashad would have it, ‘a socialist state project’. At best it is a more advanced, less oppressive and arguably more humane form of capitalist administration than found in most other parts of the Asian continent.

Two sections of this book deal specifically with the future as seen through the author’s lens (‘The Future is Here’ and ‘The Future Will Contain What You Put into It Now’). They talk about ways forward but limit themselves to what can only be described as small beer, suggesting such things as ‘cooperatives’, ‘neighbourhood committees’ and ‘land reclamation’ as well as referring admiringly to the ‘universal housing planning’ of the former USSR and proposing that medicines, food and education should be ‘non-commodified’. A truly utopian wish, this last one, within the framework of capitalism and something again that could only happen in the context of a complete change in the structure of society to free access rather than buying and selling on the market. All the more surprising this, as Prashad is an acute observer and often good at providing incisive commentary into the workings of the capitalism system. His comments on the atomising effects of ‘platform capitalism’ for example, are apt and thought-provoking, as is his analysis of the predatory workings of the IMF and, as a kind of case study, the way in which the mining of copper for iPhones by children in Zambia affects the lives of those children and how that copper then does various commodity journeys around the globe to be transformed into smartphones and packaged for sale. But rather than the ‘impassioned and studied case for socialism’, claimed in ‘praise’ comments from one of the author’s supporters at the beginning of this book, what we have rather are recipes for reformism (‘to defend the gains of modest reforms and even fight for greater reforms’), a suite of proposals for managing capitalism in a less harsh, more worker-friendly way. All this, though referred to as part of the struggle for socialism, is in fact tinkering at the edges and does not get us any closer to the real qualitative transformation needed to establish a society in which all goods and services are truly ‘non-commodified’, ie, freely accessible to all according to need.

Howard Moss 

Fascism as history (2019)

Book Review from the May 2019 issue of the Socialist Standard

‘Marxists in the Face of Fascism: Writings by Marxists on Fascism from the inter-war period’. Edited by David Beetham (Haymarket Books. 2019. 380 pages)

In his introduction to this reprint of a book that first came out in 1984, the editor points out that fascism is not a contemporary threat as historical conditions are not the same as they were between the last century’s two world wars. The word ‘fascist’, however, is still frequently bandied about today and not just by ‘anti-fascists’ as it has come to be used to describe any authoritarian individual or action. It was even misused at the time, as Togliatti, a leader of the Italian Communist Party pointed out in 1928 in one of his articles reprinted here: ‘It has become customary to use it to designate every form of reaction. (…) [W]henever the so-called democratic freedoms sanctified by bourgeois constitutions are attacked or violated, one hears the cry: “Fascism is here, fascism has arrived.”’

The book is a collection of articles from the period by mainstream Communists, dissident Communists, and Social Democrats. The original fascists were the followers of Mussolini who came to power in Italy in 1922 but the word was soon used to describe any reactionary, openly anti-working-class movement anywhere. The official Comintern line was that fascism was a mass mobilisation of the ‘petty bourgeoisie’ to further the interests of ‘finance capital’ that arose because of the failure of other countries to emulate the Bolsheviks’ seizure of power in Russia in 1917. After Hitler came to power in Germany in 1933 it was seen as a particular threat to Russia whose foreign policy interests the Comintern was committed to defending.

Despite what Togliatti said, the Comintern did describe, as can be seen from their writings here, any policy of attacking working class living standards as ‘fascist.’ It was on this basis that, for a period, they denounced the Social Democrats as ‘social fascists’ because, when in government on their own or in coalition, they felt they had no choice but to support such a policy. As Otto Bauer, the leader of the Austrian Social Democrats quoted in the introduction, said in its defence: ’if you won’t create a socialist society, then you must do nothing to disturb the mechanism of the capitalist order, under pain of economic catastrophe.’

It was not until 1933 that fascists (though that is not what the Nazis called themselves) came to power in Germany. The myth has grown up that this could have been prevented if only the Social Democrats and Communists had united to oppose it. This did not happen as the Communists had only just stopped calling the Social Democrats ‘social fascists’, while the Social Democrats pursued the policy of ‘tolerating’ as the lesser evil any government as long as it didn’t include the Nazis. This policy failed as the non-Nazi right-wing parties did eventually allow Hitler to come to power constitutionally.

In Austria the Social Democrats did pursue, as Bauer pointed out, the different policy of refusing to ‘tolerate’ any government that didn’t include them. But they too were crushed, though by a different reactionary group to the Nazis. It was left to Kautsky to make the point that, as the Social Democrats and Communists together still represented only a minority of the population, there was not much they could have done to stop a government in control of political power and enjoying majority acquiescence.

It has to be said that the Social Democrats represented here, Bauer and Kautsky in particular, came up with a better analysis than the Communists. In fact it is surprising how ‘Marxist’ they were compared to the Leninists. Apart from Togliatti, the official Communists (who like the fascists also stood for a totalitarian, one-party dictatorship) didn’t have much interesting to say, while the dissident Communists Trotsky and Thalheimer only confused things by irrelevantly describing ‘fascism’ as a form of ‘Bonapartism’ (after Napoleon’s nephew who ruled France as dictator between 1852 and 1870).

Bauer, in the last article he wrote before his death in 1938, saw what was coming and why:

  With the new division of power brought about by the treaties of 1919 British and French imperialism achieved their war aims, and since then they have successfully defended the position of power won by conquest in the war. The imperialism of Great Britain and France is the imperialism of the satisfied, of the satiated. For this reason it is conservative and peaceful. In Germany and Italy, in contrast, there developed an aggressive, warlike imperialism, which seeks to revise the global distribution of economic and political power.

This is one reason why fascism was a product of a specific period of twentieth-century history which is highly unlikely to be repeated, however much some may still cry ‘fascist’.

Adam Buick

Marx, Co-operatives and Capitalism (2014)

Book Review from the January 2014 issue of the Socialist Standard

The recent failure of the co-operative bank and its rescue by hedge funds seems an apt time to review Richard Wolff’s latest book, Democracy at Work: A Cure for Capitalism (Haymarket Books), which advocates co-operatives as the way towards economic democracy for the working class.   Wolff rejects the label ‘co-operative’, perhaps because of its historical baggage, and chooses another term, ‘workers self-directed enterprises’ (WSDEs), to describe what he advocates.  In practice, though, what Wolff advocates is indistinguishable from the historical aims of the co-operative movement to re-distribute profit amongst its members.  Wolff is also an open advocate for long-established co-operative projects such as Mondragon in Spain.  Wolff’s aims, though, run deeper than support for extending the popularity of co-operatives as presently understood.  What Wolff seeks to do in Democracy at Work is to redefine working-class co-operative production as socialism in action:

  ‘ . . . in a socialist economy, workers – who produce the surplus – themselves appropriate and distribute the surplus . . .  socialism and communism are differentiated from capitalism in terms of being non-exploitative, since the producers of surpluses also appropriate and distribute them.’ (p.105)

The case against regarding co-operatives as a definition of, or even a route to, socialism is best dealt with by quoting from Wolff’s recent book where he sets out how his workers self-directed firms may co-exist with other capitalist firms:

  ‘WSDEs and capitalist enterprises will . . .  manage their challenges and disappointments differently. Consider a WSDE troubled by the problem of falling revenues (because of lack of demand, technological backwardness, or shortage of inputs). That WSDE could well decide to lower individual wages and salaries and thereby enlarge the surplus available to solve the problem (via advertising, installing advanced equipment, securing new input sources, and so on). The workers who collectively lowered their individual wages would be the same workers who received and the used the enlarged surplus to solve the problem.  In contrast, workers in a capitalist enterprise would more likely resist such a solution since other people – the capitalists who exploit them – would receive and decide what to do with any extra surplus realized by lowering individual wages.  Distrust accumulated from conflicts and struggles between capitalists and workers would contribute to such a result.  Thus WSDEs and capitalist enterprises would likely find and implement different responses to similar enterprise problems.’

Wolff is, of course, describing the actions not of two different types of social organisation (one allegedly socialist and one capitalist) but of two models of capitalist firm.  The solutions to the problems faced by the different types of firm are not different solutions but the same solution.  The difference is that one in scenario the solution (cutting wages, increasing intensity of labour and mechanisation) is enforced by the workers as a collective employer on themselves and in the other scenario enforced by a single employer owner or board of directors.  

Wolff’s incredible suggestion is that capitalism run by the workers would avoid the conflict between an employing class and an employed class – the problem is cured, the conflict resolved, by the workers becoming their own employer.  It will be quite clear to anyone with a cursory acquaintance with the with the work of Karl Marx that Wolff’s cure for capitalism is quite different from anything that Marx worked for or that could reasonably be derived from his writings.  However, this is precisely what Wolff claims for his WSDEs – that they are derived from Marxian economic theory:

  ‘The alternative economic system that begins to emerge in Marx’s writings differs from capitalism in how it organises the production and distribution of the surplus. . . . [In WSDEs] it is the workers –and not a separate, small group of persons, as in capitalism – who play the key roles of appropriating and distributing the surpluses they generate in production. The producers and appropriators of the surplus are then identical…’ (p.105)

Here we must beware of  a Wolff in Marxian clothing as Wolff’s ‘surplus theory’ supplants Marxian analysis.  To prove the point let’s take a quick look at what Marx actually said about co-operatives in his own lifetime.  Marx was enthusiastic about the emergence of co-operatives and what they portended for capitalism.  Writing for the International Working Men’s Association (IWMA) in 1864, he wrote:

   ‘The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands . . .’

Again for the IWMA in 1866:

  ’We acknowledge the co-operative movement as one of the transforming forces of the present society based upon class antagonism. Its great merit is to practically show, that the present pauperising, and despotic system of the subordination of labour to capital can be superseded by the republican and beneficent system of the association of free and equal producers.’ 

In Volume 3 of Capital Marx argued of co-operatives that ‘the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.’

However, in each case Marx also described the limitations of co-operatives:

  ‘ . . . however . . .  excellent in principle and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. . . .  To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defence and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour. . . . To conquer political power has, therefore, become the great duty of the working classes.’ (IWMA 1864) 

  ‘Restricted, however, to the dwarfish forms into which individual wages slaves can elaborate it by their private efforts, the co-operative system will never transform capitalist society. To convert social production into one large and harmonious system of free and co-operative labour, general social changes are wanted, changes of the general conditions of society, never to be realised save by the transfer of the organised forces of society, viz., the state power, from capitalists and landlords to the producers themselves.’ (IWMA 1866) 

  ‘The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system’ (Capital, Vol.3)

So Marx was saying that workers taking control of their own productive work processes, of organising co-operatively in firms, appeared to be a positive reaction on the part of workers to private capitalism.  As such it was a source of growing confidence for the working class, proof that the historically progressive role of private capitalists had come to an end:

  ‘Co-operative factories furnish proof that the capitalist has become no less redundant as a functionary in production as he himself, looking down from his high perch, finds the big landowner redundant.’ (Capital, Vol. 3)

Of itself, though, co-operatives represented an accommodation of workers to capitalism and not a social transformation.  Through the experience of engaging in co-operative enterprises Marx believed that workers would come to realise their limitations as a force for social change and grasp the need for political action in order to socialise production generally.  From Marx’s viewpoint in the middle of the second half of the nineteenth-century this was probably a reasonable, if optimistic, assessment.  By the early twentieth-century, however, it was far clearer that co-operatives were not evolving into a revolutionary response to capitalism.  Instead they were being seen by some ex-Marxian socialists such as Eduard Bernstein as proof that capitalism was slowly evolving towards socialism from within, that revolutionary political action was not required. 

A hundred years ago these arguments took place around the debate in the labour movement as to whether reform or revolution was the way towards socialism.  Today we face similar arguments from Richard Wolff but from a different direction.  Between the early Marxian socialist movement and today occurred the state capitalist revolutions in Russia, China, Cuba and so on.  In rightly rejecting these state capitalist political models, radicals such as Wolff (influenced by post-modernism) have unfortunately felt the need to dispense with the materialist conception of history, arguing it to be irrevocably determinist.  However, rather than leaving Marx behind Wolff engages in the mystifying process of appropriating Marxian clothing for his co-operative strategy for social change.  If there is little enough merit in Wolff’s arguments in Democracy at Work for co-operatives as a route to meaningful economic democracy, they also lacks integrity in attempting to associate WSDEs with Marxian economics.

Colin Skelly

Austrian reformist (2019)

Book Review from the April 2019 issue of the Socialist Standard

‘Otto Bauer (1881-1938). Thinker and Politician’. By Ewa Czerwinska-Schupp. (Haymarket Books paperback. 2018. 350 pages)

The inter-world-war European Social Democrats were a stage in the transformation of the pre-WW1 Social Democrat parties, which proclaimed Marxism, to the post-WW2 parties, which openly presented themselves as alternative managers of capitalism. They participated in governments of capitalism while still retaining some knowledge of Marxism.

Otto Bauer, who was the leader of the Austrian Social Democrats after WW1, was in this position. While involved in parliamentary politics and for a short while Austria’s Foreign Minister, he continued to write pamphlets and articles with a Marxist flavour. He is mainly known amongst English-speaking critics of capitalism for the polemics against his theory of nationalism in the writings of Rosa Luxemburg, Lenin and Pannekoek. He justified working-class nationalism (and so supported Austria in WW1, though he did practise what he preached and joined the army but ended up spending three years in a Russian prisoner-of-war camp, where he continued to write on Marxism). He was in fact a pan-German nationalist who advocated the incorporation of the German-speaking parts of the former Austro-Hungarian Empire into Germany.

The Austrian Social Democrats controlled Vienna city council and used this to improve the housing conditions of workers there but they never achieved a majority in parliament. The state remained under the control of conservative and reactionary parties and in 1934, egged on by Mussolini, the government sent in the army to suppress the Social Democratic party and its trade unions. Perhaps surprisingly for Social Democrats, some of its members, against the advice of the party’s leaders, tried to defend by force of arms working class districts from the assault. But their rifles and machine guns were no match for the big guns of the army, and they were crushed. Executions, jailings and repression followed.

According to the author, Bauer blamed himself for this tragedy, regretting not having sought a deal with the democratic wing of the Christian Democrats instead of relying on the eventual election of a Social Democrat parliamentary majority. Her book, originally a PhD thesis, provides a comprehensive account of Bauer’s life, activities and views.

Adam Buick

Profit crisis? (2019)

Book Review from the March 2019 issue of the Socialist Standard

‘World In Crisis: a global analysis of Marx’s law of profitability’. Edited by Guglielmo Carchedi and Michael Roberts (Haymarket books. 2018)

The stated purpose of this collection of essays is to advance the theory that the tendency of the rate of profit is to fall within the capitalist mode of production, according to Marx. More specifically, that the fall of the rate of profit is an observable long-term trend, and that the rate of profit is the key factor in economic crises. Roberts notes that there is disagreement within Marxian economics as to whether the declining rate of profit can be empirically observed. This book is premised on the fact that it can be.

For Marx the rate of profit is the excess of value of a commodity over its cost price, which he expresses as the formula s/(c+v) (‘s’ is surplus value, ‘c’ is constant capital, the cost of machinery and components, ‘v’ is variable capital, the wages of workers whose labour adds value to the product).

Competition between capitalists tends towards equalising this rate of profit, as each capitalist seeks to invest in those branches of industry that are generating the highest returns. Technological improvement gives a competitive edge to capitalists, so there is a tendency to increase the ‘c’ part of that formula. In the long run this means that the total capital will rise in proportion to the surplus value being produced, and the rate of profit will tend to fall.

What Roberts, Carchedi and their contributors observe in their data is that this is precisely what is happening. There are problems, though, as many of the data tables/graphs are attributed to ‘author’s calculation’ and there are no links given to data sets or any indication of how these representations were derived.

It is difficult to observe the working of these Marxian formulas in the real world, because, even leaving aside any political incentive to misrepresent the reality of the situation, the categories Marx described may not correspond with any specific data set. For example, some surplus value manifests itself as inflated salaries for directors, and ‘profit sharing’ schemes would manifest as profit, rather than being part of wages, as they really are.

This is not necessarily fatal, so long as the data used is consistent, and then at least it is showing some real world trends from which the Marxian categories can emerge as shadows. An observable, consistent decline in the empirical rate of profit, though, does not necessarily mean that Marx’s tendency is observed in action. Other factors may be in play (which these essays sometimes mention, without exploring).

There is little or no discussion of primary accumulation — what the Marxist geographer David Harvey describes as accumulation by dispossession. That is, wealth that is acquired not by market rules, but by fraud or force (the great historical example being slavery). This gap is puzzling, especially as the central plank of the crisis theory presented is that the fire sale of the capital of bankrupts is necessary to restart profitability and accumulation. The nearest any articles come to addressing this matter is by hand-waving mentions of ‘imperialism’. The point is, though, that the logical effects of falling profitability would be for capitalists to abandon market accumulation and resort to other forces, rather than continue to let profits fall through the floor.

One other force is rent seeking. Incredibly, rent is not even mentioned in the index of this book. Carchedi does partially address rent, discussing monopolies as a potential response of capitalists to falling profitability. He correctly notes that the underlying effect of technical compositions of capital (the ratios of capital to labour) means that real surplus profit rates will vary among monopolies. What he misses, however, is that such differential surplus profits will be often invisible, and that the monopolists would lack the means to observe different rates of profit, or to pursue improved ones. This was essentially one of the significant problems historically encountered by Eastern Bloc state capitalism.

The power of the idea of the tendency of the rate of profit to fall lies not in the observed phenomena of declining profitability, but, like the dog that didn’t bark in the night, in the steps the ruling class may take to avoid its effects. Rather than simply pointing to periodic crises of capitalism, we are in some ways better pointing to the inevitable need to periodically disrupt society and dismantle existing social relations in order to engage in a new spurt of profitability for one faction or another of capitalists.

Notwithstanding this, there are useful chapters on derivatives and algorithmic trading which do some useful work in dismantling the idea that crises are caused by bankers and spivs in the city. It also provides a useful overview of the state of worldwide capitalism.

Pik Smeet

Ignominious end (2018)

Book Review from the October 2018 issue of the Socialist Standard

‘The James Connolly Reader’. Edited by Shaun Harkin. (Haymarket Books. 2018. 460 pages)

James Connolly is of interest not just because he is an Irish Nation(alist) Hero who claimed to be a socialist but also because he took part in the ‘impossibilist revolt’ in the Social Democratic Federation. This involved SDF members, mainly in Scotland and London, who were opposed to the autocratic control of the organisation by a clique around its leader, H. M. Hyndman, and to its opportunist policies. It led to a breakaway, in 1903, by those in Scotland to form the Socialist Labour Party of Great Britain and, in 1904, of those in London to form the Socialist Party of Great Britain. Connolly, who was born in Scotland but was then living in Dublin, was associated with the first group and chaired its inaugural meeting. When later in 1903 he emigrated to America he joined the SLP of America.

By this time the SLP’s leading figure, Daniel De Leon, had developed the theory of ‘socialist industrial unionism’ according to which, to achieve socialism, the working class had to organise both politically and industrially, but with organisation into industrial unions to take over the means of production being the more important. This was the original position of the IWW when it was founded in 1905, and for which Connolly was an organiser for a while.

During his period in America Connolly held this position, even after leaving the SLP.  It led him away from his earlier position that the socialist political party should be a strictly socialist one towards saying that it only needed to be a party committed to furthering the interests of the working class. Following this up, he joined the Socialist Party of America. His views in this period can be found in his 1909 pamphlet Socialism Made Easy (reproduced here). Also included in this collection, brought out to mark the 150th anniversary of his birth, is his 1910 classic Labour in Irish History.

He returned to Ireland in 1910 and was one of those behind the formation of the Irish Labour Party in 1912, intended to be the equivalent in the coming Home Rule Parliament in Dublin of the Labour Party at Westminster, i.e., a trade union pressure group. Connolly was now an organiser for the Irish Transport and General Workers Union and most of his work from then on was trade union activity, in Belfast as well as Dublin, including during the notorious Dublin Lock-Out of 1913.

In his 80-page introduction Harkin, an SWPer, says that Connolly developed a pioneering view on ‘the relationship between national liberation and socialism’ with his argument that, since in Ireland the propertied classes were too dependent on British imperialism to successfully lead the struggle for Irish independence, this task fell to the Irish working class. He may well have argued this, but he didn’t practise it.  He ended up a ‘Martyr for Old Ireland’ in 1916 in a futile insurrection led, not by the working class, but by non-socialist pure-and-simple Irish Republicans and backed by Imperial Germany. In his written ‘Last Statement’ to his daughter before he was executed by a British Army firing squad he made no mention of socialism, only of Irish freedom and ‘national rights’.

He died not for socialism but for capitalist Irish Republicanism. His sad descent towards this ignominious end can be traced in last hundred pages of Harkin’s selection.

Adam Buick

Anti-imperialist rhetoric (2018)

Book Review from the September 2018 issue of the Socialist Standard

Indefensible. Democracy, Counter-Revolution, and the Rhetoric of Anti-Imperialism. By Rohini Hensman. Haymarket Books. 2018.  380 pages.

This book sets out to expose the hypocrisy of those the author calls ‘pseudo-anti-imperialists’.  She criticises them for their opposition to Western imperialism only and for supporting all sorts of oppressive regimes on the grounds that they are opposed to the West. When the West is involved in military action, these ‘anti-imperialists’ support the opposing side whatever the nature of their regime. She instances and goes into detail about Serbia, Iran, Iraq and Syria. Argentina, Libya and North Korea could be added.

What is odd is that, although Russia doesn’t claim to be socialist any more, some continue to exclude it from anti-imperialist criticism, as she documents in detail over Ukraine and Syria. She has no illusions about the former USSR. It was, she says, state capitalism, making the additional point that a socialist revolution was not possible there in 1917. Not that knowing that Russia was state capitalist necessarily rules out pseudo-anti-imperialism. The Stop the War Coalition is supported by people who know this, yet while it loudly criticises bombing in Syria by the West, Turkey and Israel it is not very vocal about bombing there by Russia and the Syrian government. She mentions Corbyn as being in this tradition.

This is a fair criticism, and one we have long made ourselves.

Anti-imperialism is a slippery concept because its meaning depends on how you define imperialism. This ought to mean the policy of acquiring an empire, which European states joined by the USA and Japan increasingly pursued in the latter part of the 19th century. This was a development that needed analysing. Those in the Marxist tradition tended to give an economic explanation (acquiring a protected market, need to export capital). Lenin elevated imperialism to ‘the highest stage of capitalism’ and that’s when the rot set in.

It wasn’t that his analysis of the First World War as a war between imperialist powers for the re-division of the world was wrong, but the political implications he drew from this once he himself was in control of the Russian state. First, he developed into a full-blown theory his idea that the parties of the Second International had supported their governments in the war because the section of the working class they represented benefitted from imperialism in terms of higher wages and social reforms. Then, the revolution in Europe having failed to materialise (it was never on the cards anyway), he saw in the rising of ‘the peoples of the East’ against imperialism a way to relieve pressure on the Bolshevik regime in Russia.

Hence ‘anti-imperialism’ became the policy of the Russian state and its supporters abroad. Under Stalin after the Second World War, it became opposition to the West, the US-led bloc that was its rival. It was hypocritical because by then Russia too was manifestly an imperialist power, having acquired the Baltic states and parts of Poland under the 1939 Nazi-Soviet Pact and, after the Second World War, Eastern Europe, apart from the empire in Central Asia it had inherited from Tsarism. Hensman aptly writes of ‘the Russian State Capitalist Empire.’

Her starting point is that, as Rosa Luxemburg put it out in a passage she quotes:

  ‘Democracy is indispensable to the working class because only through the exercise of its democratic rights, in the struggle for democracy, can the proletariat become aware of its class interests and its historic task.’

From which she concludes that it is in the interest of workers in countries which do not have political democracy to obtain it, whether or not the government there is ‘anti-imperialist.’ True, but the way to do this is not to support one capitalist group against another either in politics and certainly not in war, nor by the various changes to the UN she naively suggests in the final chapter.

Adam Buick

Breakdown theory (2018)

Book Review from the February 2018 issue of the Socialist Standard

‘Capitalism’s Contradictions. Studies in economic theory before and after Marx’. By Henryk Grossman (Haymarket Paperbacks. Chicago)

For a long while it was only by reputation that Grossman was known in the English-speaking world as a collapse of capitalism theorist, as his 1929 book The Law of Accumulation and Breakdown of the Capitalist System was not available in English translation until 1992, though Paul Mattick had publicised his theory in the 1930s. Grossman was an admirer of state capitalist Russia even under Stalin and died in 1950 in East Germany.

This collection of articles lives up to its subtitle, with a useful article on some of those before Marx who put forward the view that societies differed depending on their particular system of production and changed when this changed, and another on post-Marx bourgeois economists and their theories of marginal utility arguing that left free of government interference capitalism tended towards full-employment equilibrium. Strangely there is no mention of Keynes.

Grossman took it as axiomatic that Marx held a breakdown theory of capitalism, writing in a contribution on Marxism for an encyclopaedia, reprinted here, in a matter of fact way about ‘the fundamental idea of Capital of an absolute limit to the development of the capitalist mode of production’ and of ‘Marx’s theory of the final breakdown of the capitalist system of production.’ In fact he was only promoting his own theory of this since no such theory can be found in Marx.

As exposed here at the end of this contribution, ‘it holds that once a nation’s capital exceeds a definite scale, its accumulation finds no further profitable opportunities for investment and consequently either lies idle or has to be exported.’ Grossman based his theory not so much on the falling rate of profit but on the mass of surplus value in relation to the total social capital becoming insufficient to continue capital accumulation:

   ‘…at high levels of accumulation the part of surplus value required for additional accumulation [as constant capital] will be so large that it finally absorbs almost all the surplus value.’

He seems to have thought that this stage had nearly been reached in the developed capitalist countries.

One reason why he (and Rosa Luxemburg too, though her breakdown theory was different) believed that a breakdown theory was essential was that, without it, the case for socialism would be weakened and just become a matter of moral choice, a view associated with the revisionists and reformists within the German and Austrian Social Democratic movement.  One such reformist was Rudolf Hilferding, the author of Finance Capital, who after the war became German Finance Minister on a couple of occasions. Grossman writes of him:

  ‘After the war (1927) Hilferding declared that he had always “repudiated every theory of economic breakdown”. Marx had also considered them to be false. The overthrow of the capitalist system would “not happen because of internal laws of this system” but had to be the conscious will of the working class”.’

Despite his reformism, Hilferding was right here. But it wasn’t just reformists who held this view. Anton Pannekoek, whose anti-reformist credentials are impeccable, wrote a pamphlet in 1934 refuting breakdown theories in general and Grossman’s in detail, expressing a similar point of view. It is also the view expressed in our 1932 pamphlet Why Capitalism Will Not Collapse and in our articles on this subject ever since.

Adam Buick

Dutch Left (2018)

Book Review from the December 2018 issue of the Socialist Standard

‘The Dutch and German Communist Left (1900–68)’ By Philippe Bourrinet. (Haymarket Books, 2018, 636 pages)

Bourrinet traces the origin of the subject of this detailed study – ‘council communism’ – to the breakaway in 1909 from the mainstream Dutch Social Democrat party (the Social Democratic Workers Party – SDAP) of a group critical of its open revisionism and parliamentary reformism, to set up the Social Democratic Party (SDP) as a more orthodox Marxist party. What they objected to was the SDAP’s exclusive reliance, to improve the lot of the working class within capitalism, on parliamentary action, including deals with bourgeois parties. The SDP envisaged the workers using strikes and other forms of mass action to further their interests as well as parliamentary activity that excluded deals with other parties.

Bourrinet concentrates on the views of two of their prominent members, the poet Herman Gorter and the astronomer Anton Pannekoek (though he was active in the German party at the time and up to the outbreak of the First World War). The SDP was not anti-parliamentary. As a Left Communist himself, Bourrinet sees Pannekoek’s advocacy of mass strike action to try to obtain a more democratic franchise in Prussia as ‘paradoxal’ but that’s with hindsight. At the time Pannekoek was not anti-elections. Nor was Gorter, who stood for Parliament in 1913 (and got 196 votes). In 1918, by which time the whole political situation had changed, the SDP got two MPs elected.

In November 1918 it changed its name to the Communist Party. Gorter and Pannekoek remained members but, having become by this time anti-parliamentarists, were not in the majority. They both eventually resigned to support the Communist Workers Party of Germany (KAPD) formed in 1920 by people expelled from the German Communist Party for, among other things, taking up an anti-election and anti-trade-union position.

This earned Gorter a place in Lenin’s 1921 polemic Leftwing Communism: An Infantile Disorder. Pannekoek had received a more favourable mention in Lenin’s 1917 State and Revolution for his view that the aim of the socialist revolution was to overthrow the state.

Pannekoek, however, did not share Lenin’s view that a new ‘workers’ state’ should be set up to replace the old state. Believing that the Russian revolution had really been the ‘soviet’ (i.e. council) revolution the Bolsheviks claimed it was, he advocated that, after the revolution, power should be in the hands of workers’ councils.

Bourrinet goes on to recount the rise of the KAPD, which at its height in 1921 had over 40,000 members, and its subsequent decline as it split into different groups over the roles of trade unions, workers councils and the party. Some were virtually anarcho-syndicalists. While the KAPD disappeared after 1933, the Dutch Communist Left survived as the Group of International Communists and after the Second World War as the Spartacusbond. But by then there weren’t any more of them than of us – fewer in fact.

Apart from their anti-parliamentarism, their post-war position was very close to ours, especially with regard to the need for the socialist revolution to involve majority democratic self-organisation. Their final position on Bolshevism can be seen from the titles of two of their books in English: Otto Rühle’s 1939 The Struggle Against Fascism Begins with the Struggle Against Bolshevism and Paul Mattick’s 1978 Anti-Bolshevik Communism. Some of them came to see Russia not only as state capitalist but the Bolshevik seizure of power in November 1917 as a state capitalist revolution.

Adam Buick

Misreading fascism (2018)

Book Review from the April 2018 issue of the Socialist Standard

‘Fighting Fascism’. By Clara Zetkin, (edited by Mike Taber and John Riddell. Haymarket, £10.99)

This booklet reproduces two main writings of Zetkin on fascism: her report and resolution presented at the Third Enlarged Plenum of the Communist International’s Executive Committee in June 1923, and her speech to the German Reichstag in 1932.

Clara Zetkin was an iconic left-wing German Marxist and close friend of Rosa Luxemburg who opted for the political line taken by Lenin and the Bolsheviks, becoming a champion of the Third International. She stayed on the side of the Third International although not without some regrets, even during the rise and ‘splendour’ of Stalinism.

In order to appreciate the historical and political relevance of Zetkin’s analysis, the reader should consider that this came less than one year after the report (Rapporto sul Fascismo) presented by the then leader of the Communist Party of Italy (PCd’I) Amadeo Bordiga. His report at the Fourth Congress of the Communist International came a few days after Mussolini had come to power. The fascists’ Marcia su Roma had taken placed while the Italian delegates were away at that congress. This is not a negligible detail if we consider that eight days after Bordiga’s Report on Fascism the Central Committee of the Russian Communist Party sent a letter to the Italian delegation, signed by Lenin, Trotsky, Zinoviev, Radek and Bukharin to impose the fusion between the PCd’I and the Italian Socialist Party (PSI), from which the PCd’I had split only a little less than two years earlier. Bordiga was a tenacious opponent of the reunification imposed by the International in the name of the ‘united front’. This tactic and the interpretation and attitude toward fascism were very much interlinked. So in June 1923, while Bordiga was in jail, and the change of guard at the leadership of the Italian Party – its Bolshevisation – was coming about, an adjusted interpretation of fascism would strengthen and justify the new direction. This re-interpretation was in fact Zetkin’s report and resolution.

To be fair, Zetkin’s interpretation of fascism, and Italian fascism in particular, is in many respects truthful and in line with Bordiga’s report. However, her version is studded with assumptions and convictions that served the political plan of discrediting Bordiga’s ‘infantile’ position (e.g. of no compromises with social-democrats and Massimalists), and winning the new leadership under Antonio Gramsci over to the united front story. For Zetkin ‘Fascism arrives . . . as punishment because the proletariat has not carried and driven forward the revolution’ and that ‘Fascism [is] an expression of decay and disintegration of the capitalist economy . . . bourgeois state’s dissolution’. ‘The weaknesses of the Communist Party [of Italy] also played a role here . . . policy error in viewing fascism solely as a military phenomenon and overlooking its ideological and political side’.  According to Zetkin’s view, the violent struggle against fascism would allow the proletariat to ‘grow conscious, stronger, and more purposeful’. Thus, ‘To the masses! . . . but maintaining Communist Ideology . . .  Meet violence with violence’.

Fascism did not arrive as a punishment because the workers and their leaders shied away from revolution. As already pointed out by Bordiga in his report, fascism was adopted by the industrial and agrarian bourgeoisie to violently physically repress the workers who occupied factories and fields in the turmoil following WWI. Looking a bit closer, one can see that fascism was in fact generated by the bourgeoisie itself. Money for Mussolini’s journal and the creation of his pseudo-anti-parliamentary-pro-worker patriotic movement (Fasci Italiani di Combattimento) came mainly from the Italian bourgeoisie.

Nor was fascism an expression of capitalist economic disintegration. Italy was thrown into the First World War completely unprepared, by a secret pact involving the king, Vittorio Emanuele III, the Minister of Foreign Affairs Sidney Sonnino and Prime Minister Antonio Salandra, representing the interest of industrial bourgeoisie hoping for easy spoils. By 1922 the country had already covered 79 billion lira of war costs without borrowing anything from other countries. 

When reading Bordiga’s report it is also clear that the Italian Party did not see fascism as a mere military phenomenon.

1919 was in fact a bad year for fascism still stuck with patriotic demagogy. At the end of the war the liberals had some difficulty in keeping control over the army generals. This was evident when the poet Gabriele D’Annunzio, from whom Mussolini later stole completely his style and propaganda, managed to get several generals on his side to occupy the Italian-speaking city of Fiume (now Rijeka, Croatia), which according to the secret negotiations between Sonnino and the Entente was to go to Yugoslavia.

The old fox Giovanni Giolitti also thought he could use Mussolini’s fascists to get rid of the D’Annunzio movement, which was destabilising the army’s hierarchy, and to reduce the spread of working class organisations in particular in rural areas. He was looking for a political entity to go into coalition with. At the end of 1920, with government backing, the fascist ‘punitive expeditions’ started to terrorise the rural north of Italy. At the election of 1921 the fascists finally entered into parliament. They were not enough to serve Giolitti’s plans, who now had PSI and Popolari (Catholics) against him.

Thus, Mussolini’s fascists gained strength when the agrarian bourgeoisie, mainly of Emilia, Lombardy and Tuscany first, and the industrial bourgeoisie of big industrial cities such as Turin and Milan, saw in the fascists’ aversion towards working class organisations a viable anti-working-class weapon, even more effective than the Guardia Regia that up to then had violently repressed any insurrection. The advantage of using para-military fascist squadrons was that they could physically eliminate the leaders of the working class institutions, like the Mafia was doing in Sicily. The demobilisation of the army helped the fascists to recruit veterans who no longer fitted into society. Nevertheless, as we just mentioned, the fascist violence in the country as well as in the urban areas had always been tolerated if not facilitated by the police forces.

When Mussolini took power in 1922, against Giolitti’s calculations, the king did not enforce the state of siege ordered by the then Prime Minister, and permitted this. Hardly a coup d’etat when the Head of State gives his blessing.

Contrary to Zetkin’s, Zinoviev’s and other Third Internationalists’ expectations, Italy was not ready to conduct a successful working class revolution, ‘like in Russia’. This was acknowledged in Bordiga’s report. Instead of being an ‘expression of decay and disintegration of the capitalist economy’ fascism was an authoritarian adaptation of the political representation of capital’s interests.

The risk in adopting Zetkin’s view is to accept the false notion that fighting exclusively against fascism would automatically result in an emancipation of the working class. The danger today is that the ‘fight against fascism’ becomes a fight only against Trumpism, just because his bombastic ego may resemble Mussolini’s. Or that the victory against ISIS (a typical paramilitary ideological movement) is seen as a liberation of the working class in the Middle East from capitalism. The fight against fascism must not become a ‘moral question’. It is a class struggle question just as much as a fight against any other form of representation of capital’s interest is a class struggle question.

Cesco

A Tired Formula (2018)

Book Review from the September 2018 issue of the Socialist Standard

Why Bad Governments Happen to Good People. By Danny Katch (Haymarket Books, 2017.)

This is the follow-up by US satirist Danny Katch to his Socialism . . . Seriously. It is trailed as a ‘sharp-witted indictment of our broken political system and a vision for a socialist alternative that is truly by and for the people’.

This is half-true in that it is indeed perceptive and funny in parts and recognises well enough many of the issues facing a Trump-led America, issues that are replicated to varying degrees in other countries too. But the vision is blurred and is ultimately a prospectus for a state-run capitalism that aims to build on the popular support generated by Bernie Sanders, but which could be expressed through the creation of workers’ councils or soviets. This, of course, is really the tired old formula of the Bolshevik coup in Russia of 1917, a formula more long-lived than Angel Delight or Pot Noodles but ultimately less successful than either.

The problem with this political approach has essentially been twofold. Firstly, the idea that the socialist revolution can be created by a minority vanguard party of professional revolutionaries that can lead the masses to the promised land (though it is noticeable Katch goes a little light on this in full realisation that talk of people power and democratic action is likely to resonate more with his target market). 

Secondly, that what is advanced as ‘socialism’ is really a set of radical reforms of capitalism that the vanguard leadership know can never be enacted within the existing system, and which they hope will then pave the way for mass unrest and their minority coup. This then can bring about the dictatorship of the vanguard party running a nationalised ‘siege’ economy. 

Sadly, as history has shown on many occasions, there’s nothing remotely funny about that at all . . . and the anti-Trump forces in the US would have to be desperate indeed to even consider it.

Dave Perrin

The Transformation Problem (2017)

Book Review from the May 2017 issue of the Socialist Standard

'Money and Totality'. By Fred Moseley. (Haymarket Books, 2017. 400 pages)

The subtitle sums up what the book is about: A Macro-Monetary Interpretation of Marx's Logic in Capital and the End of the 'Transformation Problem'.

We sometimes say that universities neglect Marx on economics. This is not strictly true as there is a sub-section which does look at Marx's views here, from an academic point of view. One of their fields of study is the so-called 'transformation problem'.

In Volume I of Capital Marx assumes, for explanatory purposes, that 'commodities', as items of wealth produced for sale, exchange at their 'value', determined by the amount of necessary labour expended to produce them from start to finish. In Volume III, published after Marx's death by Engels in 1894, he has commodities selling at their 'price of production', defined as their monetary cost + the average rate of monetary profit; which is what tends to happen in practice.

Marx-critics immediately cried 'contradiction' and one of the more mathematically-minded of them used algebra to try to demonstrate that it was impossible to 'transform' values into prices of production without dropping the assumption that total profit = total surplus value; in which case, the labour theory of value was wrong, or at least useless and irrelevant. This became what Moseley calls the 'standard' interpretation and criticism of Marx. Over the years it has provided academics, both those who consider themselves Marxists and those who don't, with plenty to argue about.

Moseley's argument is that, if you understand properly what Marx meant by 'capital', there is no such problem. Marx, he says, meant 'money capital' as 'money that becomes more money', i.e., as Moseley puts it, 'money advanced into circulation in order to extract more money from circulation'.

Capital is not something physical, not 'capital goods' (machinery, buildings, raw materials) but also not labour time. In both Volumes I and III, argues Moseley, capital is assumed to be the same given sum (any sum) of money used to buy physical goods and labour power, whose use leads to the creation of a given amount of surplus value. Volume I explains where this comes from (the unpaid labour of the working class). Volume III explains how this same amount is distributed amongst the various competing capitals (in proportion to size). There is no period of time during which values need to be 'transformed' into prices of production. The basic assumptions in both volumes are the same. There is no 'transformation problem.'

Moseley identifies the false problem as having arisen from a misunderstanding of what Marx meant by 'value' and 'capital'. Capital is a sum of values but value (the amount of necessary labour embodied in a commodity) cannot be measured directly but only via the market as price, i.e. only as money. So capital is in practice a sum of money, one that seeks to grow larger. Like value, capital is a social relation rather than a thing. Contradictions only arise if you assume that it is something physical.

Another valid point made by Moseley (Andrew Kliman disagrees) is that by 'price of production' Marx meant the same as Adam Smith and David Ricardo meant by 'natural price', ie a long-run price around which market prices oscillate (Moseley calls it the 'long-run centre of gravity price') consisting of cost + a mark-up for profit.  Smith and Ricardo just accepted the mark-up as a fact of life. Marx provided an explanation of where it came from and that it wasn't just an arbitrary addition to costs.

Moseley's book, although clearly written, is rather technical, but it does provide a comprehensive guide to all the arguments, for and against, the so-called 'transformation problem'

Adam Buick

Unarmed and Unforgiven (2017)

Book Review from the October 2017 issue of the Socialist Standard

'Prophets Unarmed: Chinese Trotskyists in Revolution, War, Jail and the Return from Limbo'. Edited by Gregor Benton (Haymarket $55)

A 1,200-page volume on a political movement that existed for just twenty-five years and had at most a few thousand supporters (and generally far fewer than that), this is an exhaustive study of Trotskyism in China, from 1927 to 1952. It is based primarily on memoirs written years after the events or interviews with elderly former participants, as there are very few original documents surviving.

In the 1920s, many young Chinese left-wingers spent time in Moscow, being indoctrinated and learning how to organise political activity. Some of them came under ‘Left Opposition’ influences, especially from Karl Radek, who was one of their teachers. Many of those who sympathised with Trotsky, or were thought to do so, were sent back to China, where they tried to build some kind of movement in opposition to the Chinese ‘Communist’ Party (CCP). Later, Trotsky-supporters were kept in Moscow, where they could be more easily controlled.

The best-known of Chinese Trotskyists is Chen Duxiu, one of the founders of the CCP and its first leader. He was held by Stalinists to be responsible for the failure of the Chinese ‘Revolution’ in 1927, when Chiang Kai-shek and the nationalist Guomindang violently clamped down on the CCP and its supporters (though he and others were basically just following the Comintern’s line). He was expelled from the CCP in 1929, and died in 1942.

In the 1930s and 1940s, Trotskyists in China were brutally suppressed by, at various times, the CCP, the Guomindang and the Japanese occupiers: imprisoned, tortured, executed. Many CCP members regarded them as Japanese spies. After the defeat of Japan in the Second World War, there was a civil war between the CCP and the Guomindang, during which the Trotskyists were too weak to be anything other than bystanders. In 1948–9 there were two Trotskyist organisations, with just a couple of hundred members in total. A number left the country when the CCP took power in 1949; those who stayed behind were for the most part not politically active.

In December 1952 the remaining Trotskyists in China were arrested and imprisoned, apparently in order to gain more support for the Mao regime from the USSR. These arrests were not publicised or made part of a wider political campaign. Some prisoners were not released until 1979, and they have never been formally ‘rehabilitated’, even posthumously. Opposition to Trotskyism remains part of the CCP’s political line, perhaps because, Benton suggests, such opposition ‘is a badge of commitment to political monolithism.’

There are some references to disputes among Trotskyists as to whether post-1949 China was state capitalist or bureaucratic-collectivist, but unfortunately there are no details of what these disagreements involved. Presumably this is because, as the editor states, ‘the focus of the volume is on Chinese Trotskyism as an active political force rather than as detached commentary.’ But it would have been good to see more on these theoretical issues, rather than so much on long-forgotten doctrinal disputes and splits.

If you are interested in the topic but cannot face a book of this length, reading the editor’s forty-page introduction would probably suffice.   

Paul Bennett

The Slump (2017)

Book Review from the September 2017 issue of the Socialist Standard

'The Long Depression'. By Michael Roberts. (Haymarket Books. 2016)

There is a tendency within some flavours of Marxism that has been said to have correctly predicted 6 of the last 3 recessions. The temptation to rely on inevitable crisis and the collapse of capitalism has a silvery allure for some. This book does not join that chorus, but it does seek to make crises of capitalism subject to (at least theoretically) predictable laws.

Roberts positions himself as a heterodox within the already heterodox school of Marxian economists. He sees Marx’s examination of the tendency for the rate of profit to decline as the root cause of recessions and depressions (he defines a depression as: 'countries growing at well below their previous rate of output . . . and below their long term average' and he notes the usual definition of a recession is: “two consecutive quarters in real GDP”).

He sees a potential explanation for Kondratiev long waves in his model:

'Depressions…appear when there is a conjunction of downward phases in cycles of capitalism. Every depression has come when the cycle in clusters of innovation have matured and become “saturated”; when world production and commodity prices enter a downward phase, namely, that inflation is slowing and turns into deflation; and above all, when the cycle of profitability is in its downward phase. The conjunction of these different cycles only happens every sixty to seventy years.'

Following Marx, he defines the rate of profit as the surplus value (S) divided by variable capital, wages (V) plus constant capital, the value of machines, tools and ingredients (C). He notes that the tendency is for the organic composition of capital (the ratio of C/V) to increase: that is for machinery and tools to replace human labour, as capitalists compete to improve the productivity of the labour they employ. This then reduces surplus value, leading to a withdrawal of investment.

'The continual process of an upward cycle in profitability –as the rate of surplus value rises faster than the organic composition, in turn replaced by a downward cycle as the law as such gains ascendancy –explains the cyclical nature of capitalist accumulation'.

The problem with this approach is that it lacks explanatory power for why crises involve stranded capital. In his chapter on the rate of profit, Marx discusses how the falling rate of profit is compatible with ongoing growth in the mass of profits (due to expansion, investment, etc.) This is before he identifies the counteracting tendencies (increasing intensity of exploitation; depressing wages below the value of labour power; cheapening elements of constant capital; relative overpopulation; foreign trade; and the increase of stock capital). Roberts does address these counteracting tendencies, but sees crisis arising out of them temporarily being overwhelmed by the rising organic composition of capital.

If it were a falling rate of profit alone, merger and expansion would be sufficient to escape and renew growth for a while longer.

The Socialist Party has tended towards the view that it is disproportionate investment and expansion of production that causes crises and slumps. There are strict conditions to enable capital expansion, accumulation and reproduction going on, requiring all the different branches of industry to broadly grow together. Since each capital is seeking to grow at the fastest possible pace, driven largely by the expectation of profit, it becomes inevitable that one sector over-invests and has its reproduction choked by relative under-investment either in consumption or in key components.

This view of crisis means they are not governed by an underlying regular process, but by an ever increasingly likelihood of accident and happenstance. Even a state-run economy could not overcome these tendencies, since even if it were possible to plan every commodity exchange in such a way as to provide growth: accidents, happenstance and misjudgement would still mean inevitable crises.

Roberts provides a wealth of empirical data showing long run trends towards a declining general rate of profit. He has debated with Paul Mattick Jr. whether official statistics can meaningfully be mapped onto Marx's categories ( Link -- this is worth reading in itself). We agree that they cannot least because of the level of misrepresentation and manipulation that goes into formulating them.

At the least though, if the measures show distinct trends, that is useful for trying to read the developments of the economy. His tables showing all the US recessions since the mid 19th century provide a salutary reminder of how frequent and endemic they are: indeed, we would agree that they are not just inevitable, but essential to capitalism’s ongoing existence, as they are followed by the clearing of bad investments and creation of new room for growth in the economy.

Where we would certainly agree with Roberts is that the only way within capitalism, ultimately, to exit a crisis is the destruction of the value of capital; and, further, that capitalism will eventually find new scope to grow (although at what human cost in misery?) unless the working class take a conscious political choice to abolish capitalism: that is the only way in which it will collapse.

Pik Smeet