All in it together? (2010)

From the December 2010 issue of the Socialist Standard

Some are less in it than others.
The gap between those at the top of society, and the rest of us, is actually getting bigger. That applies throughout capitalism, and it is the case even in Britain, after thirteen years of Labour Governments – which promised to run capitalism in the interests of all of us. This inequality has even got Conservatives worried. So much so that sometimes you see an article in The London Times, the house-journal of British capitalism, which make you wonder if some disgruntled sub-editor has put it in as a joke. Michael Portillo, former Tory M.P. and indeed former aspirant for the job of Tory leader, has just made a speech about the way things are going. Anatole Kaletsky, the London Times economics expert (who, clearly, is very far from being a Socialist), complained that the inequality “is putting democracy in danger” (London Times, 10 November). Portillo (wrote Kaletsky) denounced the “greedy, irresponsible behaviour of Britain’s wealthy financial and managerial elite”.

“The chief executives of middle-sized financial companies [who of course are also large shareholders] receive average salaries of £2 million and continue to vote themselves pay increases, at a time when ordinary workers face cuts in their pay and pensions. Such disparities could prove incompatible with democracy, according to Mr Portillo.”

Reports from other countries suggest that this is a general trend in capitalism throughout the world. What about America, self-appointed world’s policeman, raising the banner of freedom and a fair society across the globe?

“Another shocking statistic quoted by Mr Portillo: inequality has now become so extreme that America’s 74 richest citizens receive more income than the bottom 19 million combined.”

David Cameron says “we are all in this together”. As usual, some are more in it than others. And what very many people are in, up to the neck, is the muck and slime at the bottom of society.

Why do Portillo and Kaletsky, both enthusiastic supporters of capitalism, fear this trend in society? It’s simple. In the end, if you take a typical worker, whose head has been filled since he was born with propaganda that the capitalist system is the best system of society ever devised by man, and is indeed the only possible system – if you take him and kick him hard enough, finally even he will turn round and kick you back. If there were a lot of extremely poor people, then a well-to-do person could hardly walk down the street without the fear of a physical attack by someone demanding money.

There is a story that in the days of Charles II a settler in the American colonies returned to London for a visit, and he brought two Native Americans with him, to impress them with the flaunting displays of wealth in the capital city. When the visit ended, he proudly asked them that they thought of the ostentatious spectacle. They were greatly puzzled. “Why”, they asked, “don’t the poor people kill all the rich people?” Clearly there were a lot more poor than rich: and since the majority could easily overcome a small minority, why did they not take such an obvious step to put an end to such manifest unfairness? The answer, of course, is the unremitting barrage of propaganda in all “civilized” societies to persuade everyone that rich people are rich because they are in some way better than the rest of us. (The Native Americans had not been subject to that kind of bombardment.)

Why is this making some supporters of capitalism unhappy? It’s simple. If you refuse benefits to someone who “refuses to take a job”, what will he do? Lie down somewhere out of sight and quietly die? Or try and knock some richer people over the head and grab their money?

If you go to South Africa, you can see what might happen. Because of government policies during the half century after the war, when apartheid regimes kept down the great majority of South Africans who didn’t have a white skin, and refused them any worthwhile education, and any equal chance in the job market with whites, not to mention any reasonable place to live, etc – because of all that there is a great gap between the richest and the poorest. Well-to-do South Africans travel along the well-constructed broad roads in their expensive air-conditioned cars, passing black South Africans who are walking along the hard shoulder, and who live often in shacks without water on tap, or electricity, or mains sewage. The result is a very high crime rate. Poor people see wealth all round them, and not surprisingly want to grab a bit for themselves.

South Africa has one of the highest homicide rates per capita, if not the highest, in the world. So you pass large houses surrounded by high brick walls, with prominent notices outside – “Armed Response”: which means that if you dare to offer any threat to the owners of the house (e.g. if you try and pinch anything), they will use guns to try and kill you. If you are driving a car in Johannesburg, you are very unwise to stop at a red light, because this will be an open invitation to someone holding a gun to step into the car, and order you out. The car is then driven off, and you can walk – carjacking, it’s called. An acquaintance of mine, who was an ambulance driver, actually lost his ambulance in just that way – ambulancejacking. Now, of course, apartheid is overthrown, and everyone can vote, but the main change so far is that the new successful black politicians, and their relatives and friends, are all suddenly (surprise, surprise) much richer; so some thousands of black people are now driving expensive air-conditioned cars, and living in houses protected by “Armed Response”. But there is still an enormous discrepancy in wealth between the richest and the poorest, along with the high crime rates which always accompany such inequality.

So the theory among some members or supporters of the upper class is that it may be cheaper in the long run, and certainly more pleasant, to keep social benefits at a level which means that rich people have less fear of being robbed in a personal attack, or of having their houses burgled.

Alwyn Edgar

Can the Tea Party save the American Dream? (2010)

From the December 2010 issue of the Socialist Standard

The right-wing Tea Party movement is, according to some commentators, turning into a mass, ‘grassroots’ movement and revolutionising politics in America. Is it?

If the ‘lame-stream media’, to steal an appropriate phrase, is to be believed, then there has been a ‘massive’, indeed ‘historic’, change in the biggest economy and the most powerful country on the planet. The United States’ mid-term elections, held last month, midway between the four-yearly presidential elections, saw the biggest swing to the Republican Party for 72 years. The Republicans now hold a majority in the House of Representatives, and fell just short of control of the Senate, only four years after voters handed both chambers of the US Congress to the Democrats. A conservative revolution has swept the nation. At least, that’s the lame-stream view. But in truth, nothing much has changed.

The Republicans and the Democrats are essentially two wings of the same party – the Business Party – and there’s very little to choose between them. During election campaigns, significant policy differences are downplayed or ignored completely – largely because they don’t exist – and which wing wins depends on which has succeeded in attracting the most investment from sections of the capitalist class, spent the most money, and delivered the most effective PR/advertising campaign.

As for what voters themselves might be thinking, the election results don’t tell us all that much, as Stefan points out on our American party’s website (See here). The truth is that most voters, and a disproportionate number of Democrat voters, stayed at home, and that the success of the more ‘progressive’ Democrats was at least as noteworthy as the success of the more-right-wing Republicans – in fact, a lower proportion of Americans voted Republican in 2010 than in 2008. In any case, as a result of the way the electoral system works, the votes of just 3 percent of citizens make all the difference between a Democratic and a Republican landslide. So much for the rise of conservatism.

But perhaps the most interesting thing about the election, and the campaign leading up to it, was the growth of the so-called Tea Party movement. This is a network of hundreds of supposedly ‘anti-establishment’ conservative groups across the US, which, if nothing else, energised the Republican Party and made the election campaign slightly more interesting. No one knows just how many Tea Partiers there are – it’s not a single organisation with a membership or leadership – but it has had a significant impact on American politics, if only because the lame-stream media has obligingly given it a voice and credibility.

The relatively lame performance of the Tea Partiers in the election would seem to draw into question the common claim that the Tea Party represents a significant popular force, with a mass ‘grassroots’ following. But last month more than half of Americans in a Rasmussen poll said they view the Tea Party favourably – that’s despite the fact, or perhaps because of the fact, that the Tea Party has no manifesto, no clear policies, and no clearly expressed ideas about what it would do should it win power. Instead, the party makes its stand on reducing the deficit without specifying how, cutting taxes, ‘taking back’ America from a supposedly corrupt ‘establishment’, and abolishing vast swathes of government, including such evils as environmental protection legislation, subsidised healthcare for the poor and elderly, and unemployment benefit.

To the extent that this is a grassroots movement, then, it is a movement of people organising against their economic interest. The reasons why this happens are many, not least of which is that people have been conned into it by a PR campaign funded by billionaire businessmen. But the Tea Party is also saying things – about the bankruptcy of the economy, about the rottenness of government and other institutions – that ordinary people are increasingly interested in hearing.

Why has the Tea Party risen to prominence now?
The context for the rise of the Tea Party is a profound and deep crisis – economic and ideological. Let’s take the economic aspect first. It is certainly true, as apologists for capitalism will be quick to tell you, that capitalism has continued to be very good at creating massive amounts of wealth. But whose wealth? The wealth of the nation is now concentrated in fewer hands than it has been for 80 years, says Robert Reich, a professor of public policy at the University of California at Berkeley, and former secretary of labour under Bill Clinton (See here). Almost a quarter of total income generated in the United States is going to the top 1 per cent; and the top one-tenth of one per cent of Americans now rake in as much as the bottom 120 million. In 1973, chief executives were on average paid 26 times the median income. Now the multiple is 300. That’s what they mean when they say nothing can match capitalism for creating wealth.

At the other end of the scale things are getting pretty desperate. Wages for the majority of the population have stayed flat since 1973, while work hours and insecurity have increased. And that’s for those ‘lucky’ enough to have a job. America is facing ‘the worst jobs crisis in generations’, says Andy Kroll in a report for TomDispatch.com (5 October), with the number of unemployed exploding by over 400 percent – from 1.3 million in December 2007, when the recession began, to 6.8 million this June. As a result, 11 million borrowers – or nearly 23 percent of all homeowners with a mortgage – now find themselves ‘underwater’, that is, owing more on their mortgages than their houses are worth. In June of this year, over 41 million Americans were relying on food stamps from the Federal government to feed themselves. That’s an 18 per cent year on year increase. Thirty cents of every dollar in personal income now comes from some form of government support.

In short, capitalism is in its biggest crisis since the Great Depression. This means that wealth is returning to its ‘rightful owners’, the capitalist class; the workers, meanwhile, must make do with austerity.

The American Dream
Meanwhile, the related ideological crisis is presenting itself as the ‘end of the American dream’, or, as Edward Luce in the Financial Times (30 July) puts it, a crisis in the consciousness of the middle class. Lame-stream media commentators often have lots to say about the ‘middle class’, but they will very rarely define what they mean by the term. This is very wise on their part, because it would quickly become obvious that the ‘middle class’ includes just about everybody, which would make people think about just what it is they’re supposed to be in the middle of. The ‘middle-class’ couple Luce interviews for his article work as a ‘warehouse receiver’ (he lugs stuff around a warehouse) and an ‘anaesthesia supply technician’ (she makes sure nurses and doctors have the stuff they need) – surely working-class jobs by any definition. Hilariously, Luce cannot even bring himself to describe the woman’s father – an uneducated miner – as working class without wrapping scare quotes around the term. ‘Working class’ is clearly a taboo term – the working class is not supposed to exist.

Still, it’s not a taboo socialists respect. As working -class people, with jobs, living in the richest country on the planet, and with a joint income about a third above the US median, Luce’s interviewees could think themselves not too badly off, relatively speaking. They lived in a house on a nice, tree-lined street, never went hungry, and turned on the air-conditioning when it got too hot. Once upon a time, says Luce, ‘this was called the American Dream’. Now, it’s a different story. Their house is under threat of repossession, their son was kicked off his mother’s health insurance and only put back on at crippling cost, and, as the couple say themselves, they are only ever ‘a pay cheque or two from the streets’. Who isn’t? We’re all middle class now, after all. This ‘economic strangulation’, as Luce puts it, began long before the recession – as we pointed out above, wages have been flat since 1973 – but is only now being really felt as the credit cards are cut up, jobs lost, and state spending on social services cut back.

But it’s not just that things are bad. Americans are also losing confidence that things will get any better: a growing majority of parents do not think their children will end up better off than they are, for example. Another important ingredient in the American Dream has gone off. It is this growing majority of disaffected working-class people, who had been convinced that they were middle class and doing pretty well, who are looking for answers. And unless they look very hard indeed, beyond the lame-stream, the only answers they’re hearing with any coherence at all are coming from the Tea Party.

The appeal of the Tea Party
It can’t be denied that Tea Party ideas have some superficial appeal. The Tea Party was described by Ben McGrath in The New Yorker as a collection of, among other things, “Atlas Shruggers”. No doubt McGrath could be confident that his American audience would understand what he meant by this. Atlas Shrugged is a novel by Ayn Rand and, according to an often-quoted American survey of readers, was ranked second only to the Bible as a book that had most influenced their lives. It was a tiny, unrepresentative and biased survey, but still, there’s no doubt that the book provokes strong feelings among its readers and admirers and is a best-seller in the US – no small achievement given the book’s length and the fact that it is explicitly a novel exploring abstract philosophical ideas. The strong feeling it provokes in most socialists is revulsion – it is a manifesto for unrestrained capitalism, proclaims the virtues of selfishness, and the characters we are supposed to look up to as models of human moral virtue are vile, self-serving monomaniacs and workaholics.

But it’s not hard to see the appeal of Rand’s ideas either. She is committed, at least in theory, to individual freedom, independence from all authority, and writes inspiringly of human achievement – in Rand, human life is not a pit of despair, but an exciting adventure, full of possibility. The best social and economic system for realising human potential, according to Rand, is capitalism. But not really-existing capitalism – more a utopian vision of what a free market, laissez faire future might be like if only people acted rationally and according to their own interest, and the state got off people’s backs. Rand was interesting, but wrong. Marx’s Capital shows that capitalism – even when it is operating perfectly well, without corruption or unnecessary state interference – must necessarily produce misery and exploitation; and that the state, far from standing in the way of free markets, was an absolutely essential tool for creating and maintaining them.

The truth is that, whatever the appeal of the Tea Party or Ayn Rand to working-class people, the ideas are unlikely to have the desired impact for one good reason: the business elite and the capitalists, who Rand and the Tea Party hold up as models of human virtue, don’t like them either. As Lisa Lerer and John McCormick put it in a cover story in Bloomberg Business Week (13 October), Tea Party ideas:

“… may sound like a corporate dream come true – as long as the corporation in question doesn't have international operations, rely on immigrant labour, see the value of national monetary policy, or find itself in need of a subsidy to boost exports or an emergency loan from the Fed to survive the worst recession in seven decades. Business leaders who favour education reform, immigration reform, or investment in infrastructure can likely say goodbye to those ideas for the short term as well.”

So there’s little danger of capitalists going too far in supporting “free market” or “laissez faire” capitalism – they understand their own business interests too well. The only remaining danger is that these ideas will continue to have a poisonous appeal for the working class, and to radical movements genuinely searching for answers to social problems. It’s up to socialists to provide better answers and get them out there. Can the Tea Party save the American Dream? Probably not. Socialists certainly hope not. The American Dream has always been just that – a dream. Now, though, the dream is turning into a nightmare. It’s time to wake up.

Stuart Watkins

Cooking the Books: Zero-sum games (2010)

The Cooking the Books column from the December 2010 issue of the Socialist Standard

  “Currency trading,” wrote Anatole Kaletsky in the (London) Times (8 September), “is undoubtedly a zero-sum game for the world as a whole, in the sense that every currency trader’s profit represents a cost borne by some other trader, business or consumer. Despite this, however, currency trading can be hugely profitable for Britain, if most of the profits are made in the City of London and most of the losses are borne in some other country”.

This is very true but it doesn’t just apply to currency trading. It applies to all profit-chasing.

The source of all profits is surplus value arising from the unpaid labour of productive wage and salary workers. Although this surplus value is created in production it is only “realised” (i.e. converted into money) on the market, but each capitalist firm does not realise the surplus value produced by its own workers. If this were the case then labour-intensive industries would tend to be the most profitable. In fact, however, they are no more profitable than industries which employ more machinery and less labour.

The tendency under capitalism is for the same amount of capital to realise the same profit. This comes about through an averaging of the rate of profit, the average being the total amount of surplus value produced divided by the total amount of capital invested.

As Marx explained in Volume 3 of Capital:

“Thus although the capitalists in the different spheres of production get back on the sale of their commodities the capital values consumed to produce them, they do not secure the surplus-value and hence profit that is produced in their own sphere in connection with the production of these commodities.” (Chapter 9).

In effect the whole capitalist class exploits the whole working class:

“The basic notion in this connection is that of average profit itself, the idea that capitals of equal size must yield equal profits in the same period of time. This is based in turn on the notion that capital in each sphere of production has to participate according to its size in the total surplus value extorted from the workers by the total social capital; or that each particular capital should be viewed simply as a fragment of the total capital and each capitalist in fact as a shareholder in the whole social enterprise, partaking in the overall profit in proportion to the size of his share of capital.” (chapter 12).

This is why profit-chasing by all capitalist firms is a zero-sum game. The total amount of profits that can be realised by all firms together is limited by the total amount of surplus value that has been produced. Each capitalist firm – more accurately, each block of capital – strives to secure the maximum amount of profit it can. It is in fact through this that the averaging of the rate of profit comes about as capital leaves low-profit fields to flow into fields with higher profits.

The more profit one firm realises the less there is for the others. This means that firms are competing not only against other firms in the same field of activity but against all other firms. It’s a competitive struggle for profits amongst all blocks of capital.

On the world level, as Kaletsky pointed out about currency trading, the more profit the capitalist firms in one country can secure the less there is for the capitalist firms of other countries. Which is why international rivalry and downward pressures to be “competitive” are built-in to capitalism and why world cooperation for the common good is ruled out.

50 Years Ago: Kennedy to run U.S. capitalism (2010)

The 50 Years Ago column from the December 2010 issue of the Socialist Standard

Mr. Kennedy’s victory at the American polls came as the culmination of years of patient ambition and at the end of a campaign of open cynicism, such as we have come expect from capitalist political parties.

When he started his attempt to win the Democratic nomination, Mr. Kennedy had several question marks against him. The principal of these was whether he could unite the trade unions, the industrial cities and the backward Southerners into supporting him. We now know how skilfully he did this, by the careful choice of his Vice-Presidential candidate and by the promises and opinions which he uttered. Such was the success of these tactics that, long before election day, many on-the-spot correspondents were prophesying that Kennedy's campaign would be irresistible.

Mr. Nixon showed a similar determination to win the presidency. Here is a man with an established reputation for single-minded ambition which has led him into some unsavoury actions. Many people will remember Mr. Nixon introducing his pet dog into a television programme in which he was offering evidence of his integrity as a servant of the American public.

Mr. Kennedy based some of his case upon an appeal to the patriotism of American workers, alleging that United States' influence abroad has steeply declined during the Eisenhower presidency. Nixon's reply—similarly an appeal to patriotism—was that it was insulting even to suggest that U.S.A. is a second-rate power.

This, then, was an election campaign of by no means an unusual kind, in which members of the working class were asked to vote on issues of personality, nationalism and capitalist power politics, none of which has the slightest effects upon their basic interest (…)

It is depressing that American workers should be impressed by—indeed be part of—slick, high pressure salesmanship and cynical drives for power. For after the shouting and the ballyhoo have died, capitalism, in America and the rest of the world, remains unscathed.

(From editorial, Socialist Standard, December 1960)

Greasy Pole: Woolas – another fine mess (2010)

The Greasy Pole column from the December 2010 issue of the Socialist Standard

There are limits. As Phil Woolas, until recently the MP for Oldham East and Saddleworth, was confronted when the Election Court found that during his campaign in May 2010 he lied about his Liberal Democrat opponent. Rather more complicated and exciting, if the Court judgement stands there will be a succulently fascinating by-election which promises to expose the ruthless assassinatory tactics of the participating parties, including the fact that, for all their mock indignation at Woolas' methods, the LibDems are not noted for having any more scruples than the rest. It will also provide the LibDems with an opportunity to explain to their angry, bewildered supporters why, in their euphoria at being part of the Coalition, they betrayed the election pledges they made – such as on child benefit and university tuition fees. It is likely to be an ugly, if entertaining, experience in which it has to be borne in mind that the whole process, for example Woolas and his mangling of truth, happens in order to transform one of the mendacious, grovelling candidates into an Honourable Member who, for example, cannot henceforth be denounced as a liar because the worst that is allowed to be said about anyone who gets to sit on those benches is that they suffer from some confusion over reality. Those are the kinds of limits which Woolas is said to have offended against.

Lumley
There are some significant differences of opinion about Woolas' conduct of his career as an MP and a Minister. On the one hand a Labour Party member who contested for the candidature in the 1995 by-election saw him as “...a hard-working member and a decent and conscientious person”. But a political correspondent prefers “a political bruiser, not universally liked, whom some colleagues think got what he deserved at the election court...” And in the Guardian Julian Glover weighs in with “...an unpleasant authoritarian and parliament will be better off without him...” That first election campaign in 1995 was notable for the rancour of Labour's personal attacks on the LibDem candidate as being “high on tax and soft on drugs”. This designed exploitation of some nasty, deep-rooted prejudices impressed even Peter Mandelson, who admitted “...not only our opponents but some in Labour would denounce our 'negative' tactics...For tactical reasons, I felt we had little choice”. Woolas won the re-arranged seat in 1997 and thereafter rose steadily up the greasy pole until in October 2008 he became minister responsible for Borders and Immigration. It was then, in May 2009, that he was trapped into a confrontation, before a horde of ravenous TV cameras, with the popular actor Joanna Lumley to answer for the Labour government effectively refusing Gurkha ex-soldiers to settle in this country. Woolas wordlessly squirmed in embarrassment – Lumley breathes rather than speaks and was using hazy concepts like fairness and gratitude while he had to have regard for his budgets – and agreed to re-open the matter.

Cable
One inconvenient outcome of Woolas' electoral misdemeanour was the stimulus it gave to the pressing question of why similar penalties are not unvaryingly applied to any MP who employs false promises to smooth their way to Westminster (although if that were the case there would be very, very few bottoms on the green benches). The actual response has been worked to exhaustion by LibDems fearfully insecure of their place in the Coalition. Here, for one, is Vince Cable in the House of Commons on 12 October: “Yes I signed the pledge (on university tuition fees). But the current financial situation is appalling, truly appalling. All pledges have to be re-examined from first principles”. But this is the man who was promoted to us by his party as not just an agile ballroom dancer but an economist so deeply learned as to be able to see beyond the economic horizon to what is approaching and to take the necessary steps to avert any crisis such as the one which is now gripping the world. So it is necessary to ask: are there any other disasters which Cable has failed to see? And from the prolix depths of this ignorance did he offer any other pledges, attractive to a spellbound electorate, which he is now about to renege on?

Clegg
And what about the LibDem leader who, smugly satisfied at having outsmarted all rivals – including Cable – for the top job, felt able to patronise him as the most hopeful therapist for British capitalism? Since the LibDems slithered into partnership with the Tories Clegg has been under the most severe pressure about the party's disowned promises. This is how on 23 October he referred to child benefits and tuition fees: “I feel very bad. I have had to eat those words...this is not capricious, it is not ideological, it is not happening overnight, it is thoughtful and it is a plan over four years...” And in the Commons on 10 November: “I of course acknowledge that this is an extraordinarily difficult issue ... Because of the financial situation we have had to put forward a different policy...” But Clegg has been touted around the political scene as a hugely knowledgeable, clever operator. With such a glowing reputation how could he have been so insensitive to the gathering storm that he not only made those pledges but allowed the rest of his party to do likewise? Why should we have any confidence that he will become any more hopeful over the next four years?

Clegg and Cable now pose as serious politicians, relieved and grateful to have been put right about the election pledges which, they now admit, were recklessly ill-informed. Are their excuses really the best they can offer to cover their impotence and dishonesty? Are there any other pledges which they will betray in the hope of nurturing their sleazy ambitions? Should we, in other words, believe anything they and their like say? Is it not preferable to treat then all with the contempt they deserve while we work on for the revolutionary change in society.

Ivan

Dancing with dynamite (2010)

Book Review from the December 2010 issue of the Socialist Standard

Dancing with dynamite. Social movements and the State in Latin America. By Benjamin Dangl. AK Press. $12.

Anarchists and anti-parliamentarists are always pointing to the overthrow of Allende in Chile in 1973 as an example of how the ruling class will not accept defeat at the polls, not even by leftwing reformists let alone by the election of a majority of socialist MPs.

They are behind the times. The last 15 or so years have seen the election and survival of leftwing presidents in a number of South American countries (Bolivia, Venezuela, Brazil, Ecuador, Argentina, Uruguay and even Paraguay), some of them with programmes more radical than Allende’s. There was indeed an attempt to overthrow one of them (Chavez in Venezuela in 2002) but this failed due to popular resistance and the refusal of the armed forces to back it.

Of course this doesn’t show that the ruling class might not stage a coup in the event of a socialist election victory, but it does rather undermine the argument that elections can never be a way to win control of political power.

In this book, brought out by an anarchist publishing house, Dangl examines the relationship – the “dance” – between “social movements” (in favour of land rights, legalising factory occupations, getting amenities in shanty towns) and the elected leftwing governments. He argues that the social movements should not put up candidates themselves nor let themselves be dominated by leftwing parties; instead, they should maintain their independence and continue to employ “direct action” to try to get what they want.

However, he is unable to take up a strict anti-parliamentarist stance because he can’t deny the logic of the movements preferring a government that will help them to leaving political power in the hands of those opposed to their aims. None of the movements have, as Dangl is obliged to record, adopted this stance but have voted and even campaigned for the leftwing presidents.

The case for a mass socialist movement not taking electoral action is just as weak since this would be to leave the apparatus of the state in enemy hands. A socialist movement is no more likely to do this than the present-day social movements in South America have.

Adam Buick

Marx and Engels and the 'Collapse' of Capitalism (1969)

From the April 1969 issue of the Socialist Standard

In 1786, three years before the outbreak of the French Revolution, Gracchus Babeuf wrote:

"The majority is always on the side of routine and immobility, so much is it unenlightened, encrusted, apathetic . . . Those who do not want to move forward are the enemies of those who do, and unhappily it is the mass which persists stubbornly in never budging at all."

The events of 1789 disproved his gloomy predictions but, by the time Babeuf became prominent, the reaction was already setting in. His slogan of "The revolution is not finished, because the rich absorb ail wealth and rule exclusively, while the poor work like veritable slaves, languishing in poverty and counting for nothing in the State" was not taken up by the peasants and artisans. Faced with this, Babeuf and his followers planned an insurrection in which they would seize power, constitute themselves as the 'Insurrectionary Committee of Public Safety', crush all opposition and — only then — introduce democracy. It was this method of conspiracy and coup d'etat which became the standard technique for 19th-century insurrectionaries such as Blanqui and which formed the inspiration for their innumerable secret societies and abortive rebellions.

From the start, Marx and Engels were scathing about this concept of revolution. For them it was self-evident that "the emancipation of the working class must be the act of the working class itself" and that, in any case, "revolutions are not made intentionally and arbitrarily" as the plotters imagined.

"It goes without saying that these conspirators by no means confine themselves to organising the revolutionary proletariat. Their business consists in forestalling the process of revolutionary development, spurring it in to artificial crises, making revolutions extempore without the conditions for revolution. For them the only condition required for the revolution is a sufficient organisation of their own conspiracy. They are the alchemists of the revolution." [See here.]

Yet, however devastating the attack which Marx might make on the Blanquists and others, in one aspect he and Engels were in a very weak position. If they maintained that it was the entire working class which would be responsible for establishing socialism, how would they square this with the obvious fact that the mass of workers still gave every sign of being as "unenlightened, encrusted, apathetic" as they had been in Babeuf's time? To counter this, Marx and Engels fell back on the theory that it was the crisis in capitalist production which would galvanise the masses into revolutionary activity.

Even in their earliest writings both Marx and Engels attached great importance to crises: but over the years their observations caused them to modify their ideas, especially in relation to the business cycle. In his Outlines of a Critique of Political Economy (Deutsche-Franzosische Jahrbucher. 1844) Engels mentioned that slumps occur every five to seven years, "just as regularly as the great plagues did in the past". He repeated this in Principles of Communism (1847) while, in the Condition of the Working Class in England in 1844 (1845), there are references to five-year and five to six-year cycles. Marx held similar views during this period. for in an Address on Free Trade delivered in Brussels in 1848 he drew attention to "the average period of from six to seven years — a period of time during which modern industry passes through the various phases of prosperity, overproduction, stagnation, crisis and completes its inevitable cycle". At the same time they both expected crises to become "more frequent and more violent" Wage Labour and Capital. Marx. 1847) and "more serious and more universal" (Outlines of a Critique of Political Economy Engels. 1844).

Ten-year cycle

By the time Marx came to publish Capital (Volume I. 1867) he was writing that "the course characteristic of modern industry" was "a decennial cycle (interrupted by smaller oscillations" — and adding that as accumulation advanced the "irregular oscillations" would follow each other more and more quickly. This perspective was echoed by Engels in most of his writings in the 1870s and early 80s as well. (See Dialectics of Nature. Anti-Duhring (1878), articles in the Labour Standard (1881), for example). Although Engels continued to put this line for some time after Marx's death (see his letter to Kautsky. November 8 1884) there was a new development during his last ten years in that more and more he came to maintain that an era of chronic stagnation had overwhelmed capitalism. As early as January 1884 in a letter to Bebel (January 18 1884), he wrote that "the ten-year cycle seems to have broken down" and, that same year, he made a similar point — although more hesitantly — in his Preface to Marx's Poverty of Philosophy:

"The period of general prosperity proceeding the crisis still fails to appear. If it should fail altogether, then chronic stagnation would necessarily become the normal condition of modern industry, with only insignificant fluctuations."

From then until his death in 1895 his writings were full of references to "permanent and chronic depression" (Preface to the English edition of Capital, Volume I. 1886), to the "chronic state of stagnation in all dominant branches of industry" (Preface to the English edition of The Condition of the Working Class in England. 1892) and to "chronic overproduction, depressed prices, falling or disappearing profits" (Capital, Volume III, 1894).

Parallel to this development of their ideas on the business cycle, Marx's and Engels' theories on the relationship between crises and revolution also went through a number of phases. As we have seen, in their early writings both held that the crises in capitalist production would become "more frequent and more violent". But, if this is seen as an absolute tendency, it must mean that eventually capitalism will be brought to a point where it can no longer recover. At any rate, this was certainly Engels' interpretation of the trends taking place in the 1840s and he repeatedly implied that crises would produce a revolution independently of the level of socialist consciousness reached by the working class:

Every new crisis must be more serious and more universal than the last. Every fresh slump must ruin more small capitalists and increase the workers who live only by their labour. This will increase the number of the unemployed and this is the main problem that worries economists. In the end commercial crises will lead to a social revolution far beyond the comprehension of the economists with their scholastic wisdom. (Outlines of a Critique of Political Economy, 1844.) 

The revolution must come; it is already too late to bring about a peaceful solution: but it can be made more gentle than that prophesied in the foregoing pages. This depends, however, more upon the development of the proletariat than upon that of the bourgeoisie. In proportion, as the proletariat absorbs socialistic and communistic elements, will the revolution diminish in bloodshed, revenge, and savagery. (Condition of the Working Class in England, 1845).

Thus, although the extent to which socialist ideas had penetrated the working class might be important in influencing the revolution which Engels thought he saw emerging in England, that was the limit of their role. In both these works, it is the increase in misery of the workers which Engels stresses as the vital factor in the development of their revolutionary activity — rather than their growing understanding of socialism as an alternative method of organising society to capitalism. This contrasts sharply with some of Marx's writings of the same period, where he puts all his emphasis on the spread of socialist concepts among the working class:

"It is true that, in its economic development, private property advances towards its own dissolution; but it only does this through a development which is independent of itself, unconscious and achieved against its will — solely because it produces the proletariat as proletariat, poverty conscious of its moral and physical poverty, degradation conscious of its degradation, and for this reason trying to abolish itself." (Holy Family, 1845.)

In fact, socialist consciousness was considered of such vital importance by Marx that he grossly exaggerated its depth and extent

"There is no need to dwell here upon the fact that a large part of the English and French proletariat is already conscious of its historical task and is constantly working to develop that consciousness into complete clarity." [In 1845!]

The upheavals in France, Germany, and elsewhere in Europe in 1848, however, had a profound influence on Marx, and for a time at any rate his enthusiasm got the better of him and he was evidently prepared to suspend his former commitment to socialist consciousness. His writings of this period suggest that it is the commercial crisis and the resulting hardship of the workers which are the critical factors in inducing the working class to turn to revolution. The articles he wrote for the Neue Rheinische Zeitung in 1850 all revolve around the axiom that "crises produce revolution", and since the revolutionary tide had by then ebbed away, that "a new revolution is only possible as a result of a new crisis". Naturally, Engels' earlier ideas readily accommodated themselves to this new development in Marx's thought and together they wrote:

"With this general prosperity, in which the productive forces of bourgeois society develop as luxuriantly as is at all possible within bourgeois relationships, there can be no talk of a real revolution. Such a revolution is only possible in periods when both these factors, the modern productive forces and the bourgeois productive forms, come in collision with each other."

This was the line they they were to take throughout the 1850s. Living in exile in London and Manchester, they anxiously searched for any signs of the next crisis — and oscillated between wild optimism and more justified impatience in time with the fluctuations in world trade. In September 1852 Engels is writing to Marx that "with the the temporary prosperity ... the workers (in France) seem to have become completely bourgeois after all. It will take a severe chastisement by crises if they are to become good for anything again soon." By April 1853, however. "Europe is admirably prepared; it needs only the spark of a crisis". (Engels to Weydemeyer). When the required spark didn't materialise he became more cautious but in 1857, when a crisis really did develop, they were both certain that "now our time is coming". As early as September 1856, Marx had recognised the symptoms of the approaching disruption in industry and had written to Engels: "This time, moreover, the thing is on a European scale never reached before and I do not think we shall be able to sit here as spectators much longer". The following year, in the midst of the crisis, he is "working like mad all through the nights at putting my economic studies together so that I may at least have the outlines clear before the deluge comes." (Letter to Engels, December 8, 1857). Meanwhile Engels was maintaining that a really chronic crisis would be needed to stir the workers into revolution since "the masses must have got damned lethargic after such long prosperity" (Engels to Marx, November 15, 1857). When trade started to pick up again at the end of December 1857 both of them were sadly disappointed and, a year later, we find Engels returning to a familiar theme: "The English proletariat is 'becoming more and more bourgeois".

The crisis of 1857 and its failure to evoke a revolutionary response from the working class had a big impact on Marx. So when he came to publish Capital (Volume I, 1867), although he outlined the cycle of modern industry as "a series of periods of moderate activity, prosperity, over¬production, crisis and stagnation", there were no references to revolution automatically arising from this sequence. But if Marx seems to have largely shaken himself free of his former romantic notions, they remained well in evidence in Engel's writings. Anti-Duhring (1878) in particular was as outspoken in its commitment to the idea that capitalism would 'collapse' as any of his earlier works had been.

"... this mode of production (capitalism), by virtue of its own development, drives towards the point at which it makes itself impossible."

Anticipating Rosa Luxemburg, Engels wrote that "if the whole of modern society is not to perish, a revolution in the mode of production and distribution must take place" and that the working class would be "forced to accomplish this revolution", "under penalty of its own destruction". Crises, then, were still seen as "means of compelling the social revolution".

Until the early 1880s Engels's ideas on crises and revolution hardly showed any advance on those he had held 30 years before. This is made clear enough by a letter he wrote to Bernstein in January 1882.

"That crises are one of the most powerful levels of revolutionary upheaval was already stated in The Communist Manifesto and was treated in detail up to 1848 inclusive in the review in the Neue Rheinische Zeitung, where, however, it was shown too that returning prosperity also breaks revolutions and lays the basis for the victory of reaction."

But after Marx's death in 1883, with Engels deciding that capitalism might well be entering a phase of chronic stagnation with correspondingly less chance of acute crises occurring, his emphasis naturally shifted from the earlier concept of a crisis-provoked revolution to the view that the capitalist system would be driven into an economic impasse. Thus in his preface to the first German edition of Marx's Poverty of Philosophy (1884) he refers to "the inevitable collapse of the capitalist mode of production which is daily taking place before our eyes to an ever greater degree". Four years later, in his introduction to Marx's Address on Free Trade, he writes that society will be "brought to a deadlock, out of which there is no escaping but by a complete remodelling of the economic structure which forms its basis".

Engels's correspondence during his last ten years is also an interesting record of his tendency to imagine that capitalism would 'collapse'. In a letter to J. P. Becker in June 1885 he assessed the political currents at work in England and concluded that "the masses will turn socialist here too. Industrial over-production will do the rest". As late as 1893, in a letter to Danielson (February 24, 1893), he is still convinced that there are "economic consequences of the capitalist system which must bring it up to the critical point", that "the crisis must come".

Yet although at times during this final period of his life, Engels was to foreshadow the determinism of the leaders of the Second International on this question, at others he came near to the position of the Socialist Party of Great Britain and its companion parties. As we have shown, as long as Marx was alive, it was he rather than Engels who emphasised the need for socialist consciousness as a precondition for the overthrowing of capitalism by the working class. But with Marx dead, Engels seems to have become aware of the need to stress this himself. Although he could not free himself entirely from the ideas which had dominated his thinking on revolution for over 40 years, yet he could also write that:

"... the old bourgeois society might still vegetate on for a while, so long as a shove from outside does not bring the whole ramshackle old building crashing down. A rotten old casing like this can survive its inner essential death for a few decades, if the atmosphere is undisturbed. So I should be very cautious about prophesying such a thing" (the collapse of bourgeois society). (Letter to Bebel, October 24, 1891).

When this is coupled with other statements he was to make, to the effect that "where it is a question of a complete transformation of the social organisation, the masses themselves must also be in it, must themselves have grasped what is at stake, what they are going in for with body and soul" (Introduction to Marx's Class Struggles in France, 1895), one gets an entirely different slant from that conveyed in some of his other writings.

This study of the attitude of Marx and Engels towards crises and the concept of capitalism 'collapsing' shows, then, the extent to which they were influenced by the various phases which capitalism passed through in 19th-century Europe. If we have outlined some of the mistaken attitudes they adopted this is not to detract from the immense contributions they made to socialist thought. What it does mean, however, is that it was left to other socialists to produce a more penetrating analysis of the role of crises in capitalist production. What was most useful in their work on this topic was later summed up in the pamphlet Why Capitalism Will Not Collapse which the Socialist Party published in 1932:

"Until a sufficient number of workers are prepared to organise politically for the conscious purpose of ending capitalism, that system will stagger on indefinitely from one crisis to another."

John Crump

Material World: Beyond “peak oil” – dirty oil (2010)

The Material World Column from the December 2010 issue of the Socialist Standard

It is widely held that the world has reached or possibly passed “peak oil” – the point beyond which oil production is expected to decline. Some suggest that “peak gas” is likely to follow within a few years, while two recent reports claim that even “peak coal” too might be reached by 2025 (energybulletin.net/node/29919). If so, 20 years from now all three hydrocarbons may be in decline.

This is good news, isn’t it? Doesn’t it force the capitalists to switch to cleaner and less harmful sources of energy?

Yes, market forces will push things in this direction, but not very fast. It is projected that even in 2040 oil production will have fallen only to half its current level (peakoil.com). The normal functioning of capitalism will take several decades to complete the transition – much too late to prevent climatic catastrophe.

But there is worse. The main near-term prospect is rapid expansion in “non-conventional” oil extraction from oil sand (or tar sand), oil shale and deep-water offshore deposits. These forms of “dirty” oil are far more damaging to the environment even than the ordinary kind.

A barren moonscape
Oil sand is a thick mixture consisting of 10 percent bitumen (crude oil), 85 percent sand, clay and silt, and 5 percent water. Its first commercial exploitation is proceeding in the Athabasca region of northern Alberta, Canada. This entails removing it from the ground and delivering it to initial processing plants. The output of these “upgraders” is pumped through pipelines to refineries in various parts of the US for further processing. The US already imports more oil from Canada than from any other country.

As Antonia Juhasz says in The Tyranny of Oil (Harper 2008, pp. 291-2), “millions of acres of boreal [subarctic] forest have been transformed into a barren moonscape. Mammoth, lumbering creatures of steel have replaced the wildlife. The machines work 24 hours a day, 365 days a year, ripping vast open pits into the earth, up to 3 miles wide and 200 feet deep. Among the machinery is the world’s biggest dump truck, which stands three stories high.” (See also: Andrew Nikiforuk, Tar Sands: Dirty Oil and the Future of a Continent, Greystone Books 2008; National Geographic, March 2009 for photos; onearth.org/node/2243.)

Fort McMurray, the centre of the industry, attracts workers from Canada’s depressed Maritime Provinces and from as far away as India and China. The pay is high, but so is the cost of living. And so is the level of pollution – even higher than in China’s cities. Many die before their time of cancer or lung disease.

Cooking rocks
Oil shale is a type of rock that when crushed and heated to 430˚ C. releases a solid material called kerogen that yields a heavy oil. There are vast deposits of oil shale in the Green River Formation (GRF), which mostly lies under public lands in the western American states of Colorado, Utah and Wyoming. The rock is mined from deep below the surface, hauled, crushed, and then “cooked” in huge furnaces or “retorts”. However, Shell is working on a new technology to cook the shale in the ground, using electric resistor heaters like those in your toaster, so that the oil can be extracted in liquid form (Juhasz, pp. 296--318).

Oil sand and oil shale still account for under 10 percent of global oil extraction, but this proportion will increase as new deposits are opened to exploitation and conventional oil production declines. The Orinoco oil sands in Venezuela contain at least as much oil as those in Alberta; other countries, such as Trinidad and Madagascar, have smaller deposits. Australia has a substantial amount of oil shale and a processing facility in Queensland.

Being very costly, extraction from oil sand and oil shale is only profitable when oil prices are sufficiently high. This is why operations in the GRF in the 1960s and 1970s were abandoned, only to be resumed in recent years. Unfortunately, continuing high demand for oil and its declining supply is likely to keep prices high.

Impact on global warming
We all know that hydrocarbons are the worst energy source in terms of greenhouse gas emissions. And yet the production and consumption of oil from these non-conventional sources has a much greater total impact on atmospheric greenhouse gas levels even than the use of conventional hydrocarbon sources. Producing a barrel of oil from oil sand is estimated to emit about three times as much greenhouse gas as producing the same barrel by conventional means, largely due to the massive amounts of energy needed to mine, transport, upgrade and refine the oil sand. Another factor is the loss of carbon sink from permanent stripping of the boreal forest. Despite claims to the contrary, the forest is not and cannot be reclaimed after the oil sand is extracted.

Offshore drilling for oil or gas in water deeper than 150 metres – and many rigs drill in much greater depths than this – also adds to global warming, because it releases methane into the atmosphere from methane hydrates (ice-methane compounds) on the seabed. Methane is a greenhouse gas 23 times more potent than carbon dioxide.

Despite all the talk about the need to do something about global warming, despite all the policy strategies, emissions targets and ingenious incentive schemes, governments have failed to constrain the extraction of dirty oil. If even this energy source, the most harmful of all, cannot be ruled off limits, then what can be the purpose of those strategies, targets and schemes? Presumably only to conceal the helpless complicity of governments in face of the blind and relentless drive of capital to expand.

Stefan

Rosa Luxemburg and the Collapse of Capitalism (1969)

From the January 1969 issue of the Socialist Standard

Fifty years ago on 6th January began the hopeless Spartakist rising against the Social Democrat government of Germany. It led to the brutal murder of Karl Liebknecht and Rosa Luxemburg, two well-known and courageous opponents of the first world slaughter. Luxemburg, as an opponent of both reformism and Bolshevism who understood the worldwide and democratic nature of socialism, had views on many subjects near to those of the Socialist Party of Great Britain. However, there were certain basic differences between our views and hers. The following article discusses one of them: the collapse of capitalism.

(1) Rosa Luxemburg was murdered on January 15 1919. Her head was first smashed in with the butt of a soldier's rifle and she was then dumped in the Landwehr Canal. With her death, the uprising of the Spartakus Bund in Berlin collapsed—as it had been doomed to do all along. In fact, the real tragedy of this affair was not its brutality but the waste of it all. Why had Luxemburg allowed herself to become involved in such a useless adventure in the first place?

The only adequate explanation seems to lay in her conviction that capitalism had been driven to an impasse, that its internal contradictions had brought it to the point of breaking down. Speaking to the founding congress of the Communist Party of Germany on 3Oth December 1918, she had outlined her analysis of the current situation:

"I need hardly say that no serious thinker has ever been inclined to fix upon a definite date for the collapse of capitalism; but after the failures of 1848, the day for that collapse seemed to lie in the distant future. We are now in a position to cast up the account, and we are able to see that the time has really been short in comparison with that occupied by the sequence of class struggles throughout history... what has the war left of bourgeois society beyond a gigantic rubbish heap? Formally, of course, all the means of production and most of the instruments of power, practically all the decisive instruments of power, are still in the hands of the dominant classes. We are under no illusions here. But what our rulers will be able to achieve with the powers they possess, over and above frantic attempts to re-establish their system of spoliation through blood and slaughter, will be nothing more than chaos. Matters have reached such a pitch that today mankind is faced with two alternatives: it may perish amid chaos, or it may find salvation in socialism …. Socialism is inevitable, not merely because the proletarians are no longer willing to live under the conditions imposed by the capitalist class, but, further, because if the proletariat fail to fulfil its duties as a class, if it fails to realise socialism, we shall crash down together to a common doom."

This was not a new idea, which Rosa Luxemburg had suddenly come up with in 1918. The implication that at some time capitalism would almost mechanically collapse had run like a thread through her writings over the previous twenty years. At the time of the revisionist controversy, she had used this as one of her main weapons against Bernstein and his supporters. Bernstein had written in Neue Zeit that "with the growing development of society a complete and almost general collapse of the present system of production becomes more and more improbable because capitalist development increases on the one hand the capacity of adaptation and, on the other—that is at the same time—the differentiation of industry." The development of the credit system, of employers' organisations, improved means of communication and information services were all tending to stabilise capitalism suggested Bernstein. Quite apart from his other heresies, Luxemburg was especially indignant about this because it seemed to her that the revisionists were undermining one of the "fundamental supports of scientific socialism". Hitting back in her Reform or Revolution (1899), she put what she took to be the orthodox position:

"Socialist theory up to now declared that the point of departure for a transformation to socialism would be a general and catastrophic crisis…. The fundamental idea consists of the affirmation that capitalism, as a result of its own inner contradictions moves toward a point when it will be unbalanced, when it will simply become impossible . . . Bernstein began his revision of the Social Democracy by abandoning the theory of capitalist collapse. The latter, however, is the corner stone of scientific socialism. Rejecting it, Bernstein also rejects the whole doctrine of socialism . . . Without the collapse of capitalism the expropriation of the capitalist class is impossible."

It ought to be mentioned that Luxemburg is here overstating her case, since Bernstein was not disputing the theory that the capitalist system could collapse but merely suggesting that in practice this possibility had been eliminated by the modifications which capitalism had undergone. However the failure of a major crisis to develop during the years before the First World War served to make the left wing of the German Social Democratic Party (SPD) more adamant than ever that capitalism's breakdown was on the way. This was one of the main points which Luxemburg set out to demonstrate in her principal theoretical work—the Accumulation of Capital—written in 1912. Here she argued that capital was undermining its own ability to accumulate by its inevitable tendency to eliminate the peasantry in the advanced countries and by also destroying the pre-capitalist economies of the colonies. Capital is ruthless in its drive to achieve this end, says Luxemburg. but at the same time it is producing an 'economic impasse', since capitalism is "the first mode of economy which is unable to exist by itself, which needs other economic system as a medium and soil."

Although it strives to become universal, and, indeed, on account of this its tendency, it must break down — because it is immanently incapable of a universal form of production. In its living history it is a contradiction in itself, and its movement of accumulation provides a solution to the conflict and aggravates it at the same time. At a certain stage of development there will be no other way out than the application of socialist principles.

In stressing Luxernburg's emphasis on 'collapse' we must be careful not to attribute too crude a theory to her. Of course, she also pointed out that the working class had a positive role to play in this process and even suggested that the workers might be able to seize power before the actual breakdown stage had been reached. But, while recognising this, it is even more important not to underestimate the grip which this idea had on her. Luxemburg was a woman of immense experience in the German and Polish social-democratic movements and was also one of the foremost Marxist scholars of her day. Her intransigence had even won her the admiration of the Socialist Party of Great Britain. She was altogether superior to the romantic and volatile Liebknecht and yet when it came to the crunch, she was as confused as him in her estimate of the situation. A week before her death she was writing: "The masses are ready to support any revolutionary action, to go through fire and water for Socialism." This, of course, was patent nonsense. The working class in Germany had no clear idea of what Socialism was or how it could be achieved. Not only was there no chance of overthrowing capitalism, but even the limited aim of unseating the government was hopeless—as J. P. Nettl in his sympathetic biography records:

"It was clear probably by the evening of the 6th (January 1919) certainly by the morning of the 7th that there was no chance of overturning the government, and troops were known to be moving steadily into Berlin."

Luxemburg, then, had mistaken the economic dislocation following Germany's defeat for the 'collapse' of the capitalist system and since to her the choice seemed one of a desperate gamble for Socialism or else "crashing down to a common doom" she staked her life on the former.

(2) What distinguished Rosa Luxemburg from the other leaders of the Second International was not her emphasis on the theory that capitalism would 'collapse' but rather, her exceptional courage which caused her to pursue her ideas at whatever he risk to herself. In fact, over the years, most prominent leaders of the social-democratic parties had at various times expounded the view that capitalism would crash down in some form of immense economic crisis.

Kautsky, as the principal theoretician of the German Social Democratic Party, deserves special attention in this respect. When the SPD congress adopted a new programme at Erfurt in 1891 this was taken as a model for the other parties of the Second International and Kautsky's commentary on, and elaboration of, this document in Das Erfurter Program (1892) was accepted as one of the classic texts of social democracy. Here he predicted a very grim and uncertain future for world capitalism. The general tendencies he saw, or thought he saw, were a steady rise in the reserve army of the unemployed, a "constant increase in chronic over-production", and a virtually complete saturation of the markets. He conceded the point which Bernstein was later to make, that the credit system is a means of developing capitalist production but remarked that it also causes the ground on which the capitalists stand to "vibrate ever more strongly". His conclusion was that:

"…in short, the moment seems to be near, when the market for European industry not only becomes incapable of expansion but begins to contract. But that would spell the bankruptcy of the entire capitalist society."

By and large, Kautsky stuck to this position—and the revisionist controversy forced him to go even further. For example, in his Krisentheorien (Neut Zeit, 1901-2), he rejected the suggestions of Bernstein and Tugan-Barnovsky that capitalism's periods of depression were becoming milder and maintained instead that they were becoming sharper and more prolonged. Again, he predicted that a period of chronic stagnation was approaching. Only much later was he to put forward a more sophisticated view. In The High Cost of Living (Kerr edition 1914), he admitted that his earlier predictions of chronic overproduction had been wrong. Here he puts far greater stress on the role of the working class in the overthrowing of capitalism, although he still thinks that the business cycle is of vital importance. During boom periods, says Kautsky, the working class is best able to organise itself, but high wages and full employment make it less revolutionary. The subsequent crisis and slump increase the misery of the workers and this gives rise to an upsurge in class consciousness. This alternation of boom and slump would alternately organise and revolutionise the workers, each time leaving them better equipped to establish Socialism, and in the end, the working class would be "compelled to cause the overthrow of the capitalist system on pain of its own destruction."

A particularly crude variant of the collapse' theory is that based on the idea of under consumption—that is, the concept that since the workers' wages are insufficient to buy up all the commodities which they alone produce, this will eventually cause capitalist production to seize up. Although this train of thought suffers from the obvious weakness of completely overlooking the role of the capitalist class as consumers, it was widely accepted among the parties of the Second International. Bogdanov, the principal economist in the Russian social-democratic parties, referred in his Short Course of Economic Science to the 'relative shrinking of the market for articles of consumption' which would set in motion "the conditions which lead to the destruction of the whole system of capitalist production" and Ernest Untermann of the Socialist' Party of America in his Marxian Economics makes the same point:

"the keeping of wages at the lowest level of subsistence threatens periodically to wreck the entire capitalist system, because the working people are the principal consumers, and they cannot begin to absorb the immense quantity of goods made by them."

Hyndman of the Social Democratic Federation was another leader who continually exaggerated the impact of crises. Echoing Kautsky, he predicted that they would "follow one another at ever-shortening distances" and that they would "last longer each time that they come". He also shared the general belief in their magical properties, maintaining that if the workers failed to take conscious action to substitute "organised co-operation for anarchical competition" then this would be achieved anyway ("unconsciously and forcibly") by the commercial crisis and its aftermath.

One could go on indefinitely quoting such examples but perhaps it is more important to spotlight those who criticised the theory of collapse. Louis Boudin in his Theoretical System of Karl Marx more than once pointed out that the "cataclysmic conception of the breakdown of capitalism is not part of the Marxian theory" and that the "theory of a final catastrophe which has been much exploited by Marx-critics is the result of their woeful ignorance of the Marxian philosophy". But, despite this, there are references to capitalism breaking down elsewhere in Boudin's book and presumably inconsistencies are due to the fact that he wrote it as a series of articles for the International Socialist Review over a relatively long period. Apart from Boudin, however, there were two distinct tendencies which consistently opposed the collapse theory.

Revisionists such as Bernstein, Otto Bauer and Hilferding did so because, in this way, they sought to justify and strengthen the reformist tendencies within the social-democratic parties. This accounts for the gusto with which Bauer and Hilferding (and Pannekoek—but for different reasons) attempted to refute the arguments in Luxemburg's Accumulation of Capital. To them it seemed that if it could be demonstrated that capitalism would not break down, then this would he ample justification for abandoning revolution altogether and for simply concentrating on modifying the harsher injustices of capitalist society. Of course, they did not put it as blatantly as this and still clung to the face-saving formula that gradually the expropriators would be expropriated But, arguing theoretically, they were quite prepared to suggest that capitalism could maintain itself indefinetly by adopting what today we would call a state-capitalist form. Thus Otto Bauer wrote in his Finance Capital (Der Kampf. June 1910):

"The entire capitalistic society would be consciously controlled by a single tribunal, by which the extent of production in all departments would be determined, and by, which by means of a scale of prices, the product of labour would be divided between the cartel magnates on the one hand, and the whole mass of the other members of society on the other, The anarchy of production at present prevailing would thus be brought to an end: we should have a consciously regulated society in an antagonistic form."

The most coherent opposition to the theory of capitalist collapse, however, came from the Socialist Party of Great Britain. This is not to imply that in the period before the First World War our early members disregarded the importance of the crises in capitalist production altogether. On the contrary, they were naturally influenced by social-democratic ideas and as result tended to exaggerate the repercussions of the crisis more than we would today. But, despite this, the Socialist Party was clearly distinguished from all shades of social democrats by its emphasis on socialist understanding as the critical factor in any potentially revolutionary situation. Certainly, some statements appearing in the Socialist Standard had mechanistic undertones:

"The revolutionary forces at work within the capitalist society must eventually evolve to the point of upheaval. The result will be the downfall of capitalism and the consequent exhaustion of the forces which have destroyed it. Having accomplished its mission, revolution disappears and the new system starts to grow, not from a revolutionary base, but from an evolutionary base." (June 1907).

and these provoked one correspondent into writing that "the whole of your teaching may, in fact be summed up a 'Preach economic consideration as the sole factor in social development, and wait until the crash comes!' " But the editorial committee made our position quite clear in its reply to this critics:

"It is inevitable that economic development will bring things to a crisis, but whether from out: of this crisis will arise the Socialist Commonwealth depends upon whether sufficient of the working-class have been made Socialists, and have been class consciously organised. Obviously, then, to, ´wait until the crash comes' may be the policy of reform pedlars, but is decidedly not the policy of THE SOCIALIST PARTY OF GREAT BRITAIN."

In other words, even conceding that a crisis might be the most opportune moment for stripping the capitalist class of its wealth and instituting Socialism, the Socialist Party hammered home the simple point which it has since never failed to stress—that there can be no Socialism without a majority of the working class understanding what needs to be done and prepared to take decisive action to establish the new society.

John Crump

Education as tainted by capitalism (2010)

From the December 2010 issue of the Socialist Standard

State schools have always turned out various grades of worker. Now universities are to be allowed to charge the going market rate for their courses.

The Browne review of higher education in England proposes the abolition of the £3,290 cap on tuition fees and declares that there should be no limit on what universities can charge their students. It plans for typical fees of up to £12,000 per year for a degree course, with a continuation of the system of loans. In addition to a loan for the tuition fees, most students would have a further loan (for maintenance) of £3,750 and would have interest to pay on that, as well.

Once in employment, former students would begin to repay the cost of their loans (together with interest) from a salary level of up- to over £9000 per annum, upwards. This is not a high income to have to start paying back the loan, particularly for workers living in cities, where the cost of living is higher. Therefore, huge numbers of young people, on modest salaries will face these loan repayments, on top of either having to pay high rents for accommodation or taking out large mortgages. Economists have been advising people not to get further into debt but the Browne Report will undoubtedly contribute to the level of debt rising significantly for many.

The university guide, Push, estimated in August 2010 that student indebtedness could rise to £25,000 for a degree course. Clearly, for many with the extra expenses of accommodation, books, other course materials, etc, the figure would be substantially higher, quite likely, in access of £30,000.

So, the result of this is that most working class students will have an unenviable choice: either (1) to enter higher education and to be burdened with enormous amounts of debt, especially when accommodation and maintenance are considered, or (2) having to give up higher education altogether, with the probable consequence of stunted intellectual growth, temporarily, at the very least.

This is all capitalism can offer the vast majority of people: a huge burden of debt which induces a form of enslavement or missing important opportunities in life in order to reduce the debt.

As regards schools, dubious methods are being resorted to by more affluent parents in an attempt to get their children into schools which occupy a higher position in the league tables of the exam treadmill. Many of these better off parents often try to segregate their children from those of poorer backgrounds, through the use of tutors, private schools and faith schools. Desperate efforts are made by some parents in an attempt to get their children into the desired schools. The measures employed include moving house into the catchment area of the targeted school or allowing their children to move temporarily into the homes of relatives or friends who live in the sought after catchment area. All of this, in an attempt to deceive the LEA (Local Education Authority).

Then, there are the exams themselves: GCSEs, AS-levels and A2-Levels, with the perennially critical claim that “standards are dropping” in comparison with the past. Lesson time is largely devoted to the demands of passing these exams, rather than giving students a real understanding and appreciation of the subjects which they are supposed to be studying. In fact, many believe that lessons are much more about how to pass the exams rather than learning about the subjects for their own sake. Numerous teachers complain about the rigidity of the syllabus and about how their lesson plans are being constantly supervised, something which previously only applied to those who were in their first six months probationary period.

Aims of the Education System
Political leaders and mainstream educationalists usually claim that the purpose of education is along the following lines:

(1) Acquisition of knowledge, development of mental and physical skills and personality to enhance the life of an individual.

(2) The achievement of the above, it is then declared, will enable individuals to make a contribution towards the overall economic, social and cultural wealth of society.

To a limited extent, in the developed countries at least, much of this has been partially achieved. However, in a class-based society such as capitalism education, like much else, is subordinated to the interests of the ruling class. Those interests fundamentally involve the creation of profit which is a vital source of the wealth of the capitalists.

Although on occasions, mainstream education may refer to isolated ideas which criticise some of the policies of ruling elites (generally policies which took place in the distant past, such as Britain’s involvement in the slave trade from the 16th to the 19th century), the reality is that the education system has rarely radicalised students, apart from a brief period in the 1960s and 1970s. Usually it has taught them to accept the status quo and to fit into it. This lack of radicalisation of students has been maintained through the following factors:

The very limited nature of the education received by many students. Most of that education is geared to the demands of industry and commerce.

Capitalism has so far at least, managed to pressure most students into thinking more about getting employment at the end of their course, rather than to consider becoming radical.

The prevalence of status quo ideas in the education system: the values of religious organisations in feudal times and, since the beginning of the industrial revolution, the values of the capitalist class.

In more recent times most people’s understanding of the society in which they live has been influenced hugely by an expanding media, much of which is controlled by wealthy corporate owners and other commercial interests.

In the present society the main aim of education is to provide the knowledge and skills base necessary for employment in capitalism. A workforce educated according to the demands of the profit system will then maintain and, in favourable trade cycle periods, boost the wealth of the owners of the means of production.

An obvious consequence of these objectives of education has been a strong emphasis on subjects considered to be relevant to employment: maths, English, science, computer and business studies. The Education Reform Act of 1988 set up the National Curriculum which was designed to standardise what was taught in schools. The intention of this was to facilitate assessment and led to the creation of “league tables” showing the academic performance of schools in exams. Most significantly, maths, English, science and information technology were established as compulsory subjects up to the minimum school leaving age of 16. In contrast, under the 2002 Education Act, subjects such as history, geography, foreign languages, art and music could be dropped at the age of 14 since most of them were thought to be less relevant to the employment process.

Education and Income Group
Under capitalism, there has always been a very strong income factor determining educational achievement. Children from better off homes overwhelmingly do better than those from poorer families. The children from deprived backgrounds are frequently and erroneously labelled as being “less able” by those educationalists who are entirely ignorant of the vital socio-economic factors influencing educational development and the gaining of qualifications.

A useful book which refutes the claims of the “less able” educationalists is Education and Working Class by Jackson and Marsden, written in 1962 and which has been on the reading lists of many teacher training courses. The authors concentrate mainly on differing levels of educational achievement within the working class itself (as mainstream sociologists frequently do). They show by statistics and surveys, how children of unskilled manual workers are far more likely to leave school early, with few qualifications. In contrast to this, those with white collar, managerial parents, were more likely to pass a greater number of school exams and then to go on to university. Aspects of the book may be criticised by socialists for its emphasis on the material, social and economic divisions within the working class itself, rather than including a comparison with the children of the capitalist class. Nevertheless, it is still of significant value since it illustrates clearly how a lack of material resources and encouragement can seriously affect a child’s progress in education.

In 2007 a report entitled Chicken and Egg: Child Poverty and Educational Inequalities by Donald Hirsch, shows how little has changed, after another 45 years of capitalism. By the age of three, Hirsch concludes that “being in poverty makes a difference equivalent to nine months’ development in school readiness.” He continues: “At each stage of compulsory schooling, the poverty gap grows. In particular, there is a big jump early in secondary school, with poor children nearly two years behind by the age of 14.”

Hirsch adds: “Children who do badly at primary school are less likely to improve at secondary school, if they are poor. Children who are only slightly below average at primary school are more likely to be among the worst performers at secondary school, if they are poor.

Young people with parents in manual occupations remain far less likely than others to go to university. Even though their prospects have improved, they have not been the main beneficiaries of university expansion. Children of non-manual workers are over two and a half times as likely to go to university than children of manual workers.”

Like Jackson and Marsden, Hirsch is mainly looking here at different layers of the working class. All the same, it is a clear demonstration of how material circumstances in capitalism affect outcomes in education.

In February 2010 the Sutton Trust supported research which showed that “the vocabulary of children from the poorest backgrounds lags more than a year behind that of their classmates from richer homes by the time they start school.”

“Those from the poorest 20 percent of homes, where household annual incomes averaged £10,300 before tax, had an average developmental age of 53.6 months…Children from families in the richest 20 percent, on around £80,000 reached a development age of 69.8 months.”

In other words, children from the more affluent homes had a developmental age more than 16 months ahead of those from poorer homes. This is clearly a result of material circumstances.

Certainly, the demands of the capitalist education system, to restrain monetary expenditure and investment, cause highly significant barriers, particularly for children from more deprived backgrounds. Additionally, these cutbacks create real problems for many other working class children from less deprived backgrounds. The wealthy can purchase places for their children in private schools and universities, usually without any fear of indebtedness. For the rest of the population (the working class), the situation is very different and in recent years these inequalities have been increasing rather than diminishing.

Education in Socialist Society
So, what would education be like in a socialist society? A detailed description obviously cannot be given since it will be up to the people at the time to decide upon exactly which forms education would take. However, it is very clear that, in complete contrast to capitalism, socialism will put human need first. The welfare and needs of people, both as individuals and as a community will be treated as a priority.

The importance of developing to the full, the mental, physical and social abilities and talents of everyone, as individuals, will undoubtedly be recognised. Most significantly, education will inevitably be considered a lifelong process and certainly not something to be compartmentalised into time slots, like happens under the present system. As a result of this, people will be able to lead far more satisfying lives than could ever be even remotely achieved under capitalism. This satisfaction would derive from the contributions to the overall material, intellectual social and cultural wealth of society which people would be able to make and, of course, from the fact that, as individuals, they would be able to enjoy the fruits of the common store.

A quotation from Chapter 2 of the Communist Manifesto sums up the situation well:

“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.”

Here, the term “free development” can be taken to include education. In socialist society, there would be no financial constraints since the monetary system will have been abolished and production will be carried out solely for human need. The stresses and strains of cutbacks and needless austerity measures will finally have been abolished forever and at last, humanity will be able to move forward, considerably through genuine and effective education, towards real progress, both as individuals and as a community.

Vincent Otter