Saturday, January 30, 2016

Labour's logic (1985)

Book Review from the June 1985 issue of the Socialist Standard

Breaking the Nation A Guide to Thatcher's Britain Edited by Tony Manwaring and Nick Sigler. Pluto Press and New Socialist.

This book has been researched and written by fifteen members of the Labour Party Research Department. and its title sums up its purpose — to blame what has happened in Britain since 1979 on the Tories, and in particular Margaret Thatcher. As such it is not a serious political analysis but a 240-page political tract that could provide material for numerous Labour Party political broadcasts.

The authors' approach and their whole attitude to politics can be seriously questioned. They seem to have started with a pre-conceived notion and then only sought information to support it, disregarding other material. The argument is that Thatcher = Tory = Uncaring of social problems; therefore Thatcher is the cause of our problems. This idea that the fault lies with certain personalities in the government can only harm the attempt of socialists to turn workers' minds away from petty party squabbles and to look instead at how society functions regardless of who governs.

There is no doubt that recently the working class in Britain have been suffering cruelly. But this observation can be made of nearly all countries in the world. These other countries do not have Thatchers or Tories and some even have governments that carry out policies identical to those which a future Labour government would apply in Britain. The world economy as a whole has been going through a depression and Britain has been seriously affected because it is more dependent on selling goods on the world market than most other countries.

The book examines many aspects of the Thatcher government and the result is very embarrassing for any Tory. Official government statistics are used to show how the Conservatives have failed miserably in a whole range of the aims and goals published in their election manifestos. Claims to create "real" jobs, to wipe out inflation, reduce taxes, reduce crime, and to decrease centralised bureaucracy by giving people more control over their own lives, are all past promises that hang heavy around the necks of the Thatcher crew. Sadly, the impression is given that these policy aims could have been achieved if only the government was made up of Labour and not Tory politicians.

Because the authors do not envisage a society free from the restrictions of the market their thinking is trapped in the logic of capitalism. To them, what is wrong with society is not the market system but rather a particular version of it — the free market version. In particular, the book shows that the Labour Party embraces the nationalist ideology of most workers:
British industry needs to invest in modem technologies if it is to have any chance of competing in world markets (page 96).
It (the 1984 budget) made manufacturing investment less profitable (page 83)
Tory monetarism has made British industry less competitive than ever before (page 91).
For the first time ever in our industrial history Britain now buys more manufactured goods from abroad than it can sell overseas (page 89)
The Labour Party solution — to rebuild Britain's manufacturing base and sell more goods on the world market, thus stimulating job growth in Britain at the expense of workers abroad — is one that could come from any other capitalist party. Much is also made of the decision of the Tory government to abolish exchange controls, which facilitates British capital investment overseas rather than in Britain. Even more is made of the fact that British goods are about 20 per cent less price-competitive against foreign currencies (other than the dollar) since 1979. Such blatant nationalist propaganda is in direct opposition to the socialist case, which requires the abandonment of workers' nationalist prejudices and an acknowledgement of the interests of their class worldwide. If you accept the logic of the profit system then the Tories seem to have the most logical policies: free movement of capital and labour appears to suit the needs of capital accumulation.

The authors, then, are not against the profit system — they simply attack its inefficient operation in Britain. They barely mention socialism, which, to them, is capitalism with full employment. Britain outselling commercial rivals, plus Labour leaders in power to administer the system on behalf of the "British people". In other words, it is the claim that Labour can make capitalism do what the Tories cannot.
Gareth Thomas

Capitalism and globalization (2002)

Book Review from the November 2002 issue of the Socialist Standard

Marx's Revenge – The Resurgence of Capitalism and the Death of Statist Socialism by Meghnad Desai (Verso Books)
Ever since the collapse of the USSR and the so-called “communist” regimes in Eastern Europe, many column inches have been written and words spoken proclaiming the triumph of capitalism and the demise of socialism. Karl Marx, we are told, has been thoroughly discredited and his theories have been consigned to the dustbin of history. The “End of History” had arrived.
Meghnad Desai, Professor at the London School of Economics and a Labour Peer, however, argues in his latest book Marx's Revenge – The Resurgence of Capitalism and the Death of Statist Socialism (Verso, 358 pages) that, far from discrediting Marx, the events of the last twenty years would have vindicated him. Not only would Marx not have supported the Eastern European regimes, but he would have welcomed their downfall. According to Desai, Marx argued that socialism could only be successfully established when society's productive capacity had been fully developed under capitalism. This was certainly not the case in Russia at the time of the Bolshevik Revolution in 1917. Desai, however, maintains that capitalism is still far from having reached its potential. Although, he entertains the possibility of genuine Marxian Socialism, he relegates it to a distant future.
Desai begins his investigation at the end of the eighteenth century when feudal society was giving way to industrial capitalism. Adam Smith was developing his theories on the historical or “stadial” progress of society, in which Smith considered the newly emerging free market capitalist society as the highest stage. Hegel was propounding his theory of dialectic: the idea that human society would develop greater awareness over time through a process of struggle. This sets the historical context in which Desai discusses Marx's political and economic ideas. He examines Marx's economic theories as set out in Capital and finds that they do not suggest that capitalism will inevitably collapse. On the contrary, capitalism could continue indefinitely. Even the 'Law of the Tendency of the Rate of Profit to Fall' as described in the third volume of Capital only suggests a long-term tendency, with countervailing tendencies against it.
State capitalism

The period from the end of the eighteenth century until the First World War is described as the “first episode of modern globalization”. Here the development of capitalism in Western Europe and America is characterised by free trade and minimal state intervention. Classical economic theory was the prevailing philosophy. The First World War changed all this. The use of central planning by the German state in directing the economy towards the war effort, known at the time as “war socialism”, impressed many including Lenin and the Bolsheviks, who used it as a model for the new regime established in Russia in 1917. This, along with the establishment of the Bolshevik regime, set the scene for the next seventy-five years where the state would take a larger, and in some cases predominant, role in directing the national economy. Desai calls this the period of “deglobalization” or “capitalism in one country”.

Desai remarks that Russia, at the time of the revolution, was mainly an agrarian country where the industrial working class constituted a small part of the population. In these conditions, the Bolsheviks were forced to embark on a course of rapid industrialisation. The Bolsheviks and their supporters look to the earlier works of Marx and Engels, which optimistically predict an immediate revolution as justification for the Russian Revolution being a genuine workers' revolution. They overlook the later and more mature works of Marx that argue that capitalism must be fully developed before a socialist revolution can be successful. Thus Leninist ideas on capturing the state through the vanguard party and organising society on state capitalist lines became the orthodox interpretation of Marxism. Although Desai describes, at least in the early years, the Soviet Union as state capitalist, he also rather inconsistently refers to it as an example of “Socialism outside Capitalism”, the attempt to build a state controlled society, alongside the privately run capitalism of the Western countries.
Desai also discusses what he calls “Socialism beyond Capitalism”, what Marx argued in theCommunist Manifesto would supersede capitalism after it outlived its usefulness. Desai describes this as “a self-conscious society, aware now that capitalism as a system of private property profiting from the social division of labour could not offer any further betterment, that would proceed to take control over the economy – society, mind you, not state.” In chapter 12, entitled “Can Socialism Work?”, Desai briefly discusses the theories of Otto Neurath on the feasibility of establishing a moneyless society. But these appear to apply to a centrally planned economy rather than a democratic socialist society. Desai also appears to not fully understand how a genuine socialist would be able to function, when he asks “how such a society would decide about saving and investment”.
Desai contends that the Great Depression in the 1930s undermined the general belief in the free operation of the markets, and Keynes' arguments that markets failed to perform efficiently and that state intervention was required for the smooth running of the economy gained ground. In the years after the Second World War, Keynesian economic theory clearly emerged as the dominant influence in the Western universities and on Western government policies, particularly in Britain and to a lesser extent the US. It heavily influenced the reformist policies of many Western Labour and Social Democratic parties, to which Desai refers as “Socialism within Capitalism”.
At the same time state capitalism expanded its influence with the coming to power in China of the “communists” in 1949 and the inclusion of most East European countries in the Soviet bloc. Many of the new countries that achieved independence from the former European colonial powers in the post-war years looked to the Soviet system as a model for economic development.
The 1970s saw something of an upheaval: the onset of a long-term economic crisis in leading Western countries, involving “stagflation”, where both inflation and unemployment rose together. Conventional Keynesian demand management policies were found wanting. The advocates of free market economics, such as the monetarists, who began the fightback in the universities in the 1960s, gained more credibility and the Keynesians were in retreat. In the late 70s and early 80s, the tide turned in favour of free market economics, with the coming to power of conservative leaders such as Reagan in America, Thatcher in Britain and Kohl in Germany.
Back to 1914

The USSR and Eastern Europe went into terminal economic decline, culminating in the fall of the Berlin wall in 1989. This marked the end of what Desai calls “the short twentieth century” and the beginning of the second period of globalisation, where restrictions in the movement of capital have been removed in the major industrial countries; free trade prevails; the former Soviet countries and many third world countries are integrated into the global capitalist order. The world has returned to where it left off in 1914.

The Leninist regimes in Eastern Europe have fallen. The reformism of the Western Labour and Social Democratic Parties is in retreat. However, Desai will not be joining us in working for world socialism. He declares that “there is no rival mode of production on the horizon as a viable alternative. Capitalism is the only game in town”. He claims that, far from collapsing, capitalism has been rejuvenated. He points to the latest developments in telecommunications and computer technology, and that many third world countries are modernising along capitalist lines. The world is not ready yet ready for real socialism (“Socialism beyond Capitalism”). Desai suggests that Marx would agree with him. He wonders if genuine socialism will ever be achieved.
The main problem with Desai's analysis is that he treats the state capitalist regimes in the USSR, China, Eastern Europe (“Socialism outside Capitalism”) and even the reformist policies of the Social Democratic parties (“Socialism within Capitalism”) as separate modes of production. It is true that the state capitalist regimes attempted to insulate themselves from the world economy in their earlier years. However the economies of these regimes were based on wage labour and production for profit and so were capitalist. The Western Labour and Social Democratic parties introduced policies to regulate capitalism not to replace it. Both were failed attempts to control capitalism. But as Desai well knows, and argues in this book, capitalism is resistant to any attempts to transform it into anything other than a system based on profit.
Looking at capitalism from a global point of view, it has already created the productive capacity world-wide, which would allow a world socialist society to produce abundance for the world's population. All further developments only aid the capacity of capitalist society to further enrich the capitalist minority, while their potential use in enhancing the well-being of the human race is restricted by the profit-seeking structures of capitalist society. What is now required is for the world working class to become class-consciousness and work to replace capitalism with socialism.
The Leninists may have appropriated Marx for the cause of state capitalism. But Desai wishes to appropriate him for free market capitalism. He seems to want to join with other academics and New Labour, in celebrating the triumph of free market capitalism, while at the same staying true to the left-wing idealism of his youth.
Oliver Bond

Goals and penalties (2016)

From the January 2016 issue of the Socialist Standard
In September the UN adopted seventeen Global Goals, intended to build a better world by 2030 ( These include such aims as ending poverty and hunger, promoting clean water and renewable energy, achieving gender equality and combatting climate change. All very worthy, and at least the global nature of problems and solutions is recognised, but let’s step back a bit and look at the background and history of such efforts.
The Global Goals are a follow-up to the Millennium Development Goals (MDGs) set by the UN in 2000 (, though with 1990 often taken as a benchmark. There were just eight MDGs, from eradicating extreme poverty and hunger to reducing child mortality and combatting HIV/AIDS. For a discussion of one aspect of this, see Material World in the August Socialist Standard.
The UN’s report on the progress of the MDGs was published in July this year. This speaks of ‘profound achievements’, but, even if we accept the claims at face value, what emerges is at most a series of qualified successes. Among the achievements (all quoted from the report):
•    The number of people living in extreme poverty has declined by more than half, falling from 1.9 billion in 1990 to 836 million in 2015
•    The number of out-of-school children of primary school age worldwide has fallen by almost half, to an estimated 57 million in 2015, down from 100 million in 2000
•    The global under-five mortality rate has declined by more than half, dropping from 90 to 43 deaths per 1,000 live births between 1990 and 2015
•    Since 1990, the maternal mortality ratio has declined by 45 percent worldwide, and most of the reduction has occurred since 2000
Yet as the report also notes, ‘the poorest and most vulnerable people are being left behind’. For instance (again quoted from the report):
•    About 16,000 children die each day before celebrating their fifth birthday, mostly from preventable causes
•    In the developing regions, children from the poorest 20 percent of households are more than twice as likely to be stunted as those from the wealthiest 20 percent
•    About 800 million people still live in extreme poverty and suffer from hunger
•    In Latin America and the Caribbean, the ratio of women to men in poor households increased from 108 women for every 100 men in 1997 to 117 women for every 100 men in 2012
•    By the end of 2014, conflicts had forced almost 60 million people to abandon their homes – the highest level recorded since the Second World War
Thus it would seem that the fifteen-year project established in 2000 was so successful that another fifteen-year project, covering many of the same aims, was set up when it came to an end. Extreme poverty, for instance, was reduced but it had certainly not been eradicated, as the goals had it.
As far as hunger was concerned, the true aim was not that nobody should go hungry but that the proportion in developing countries suffering from hunger should be halved between 1990 and 2015. The reduction allegedly achieved was in fact from 23.3 percent to 12.9 percent, which is not quite a half. This was against a background of higher food prices, extreme weather events, natural disasters and the economic recession. Much of the reduction was in China, as the economy there saw short-term expansion and the country became a source of cheap labour power for global capitalism. But progress was much slower in the Caribbean, Oceania, Southern Asia and sub-Saharan Africa. South Asia alone has 281 million undernourished people.
So what conclusions do we draw from this? That the new Global Goals will not deliver either? That the whole enterprise is a charade intended to cover up the continuation of poverty and inequality? That the UN is hardly the best organisation to oversee such projects? That yet more such projects will be needed subsequently?
A more appropriate response would be to say that in technological terms it is perfectly possible to meet the real goals of ending poverty and so on, and to do so straightaway: that the planet and its inhabitants are perfectly capable of growing enough food for everyone; that maternal mortality can be significantly reduced if the required resources are put to it; that no child needs to grow up hungry or stunted or illiterate or abused; that the environment can be properly nurtured. In other words, the current suffering and premature deaths are quite simply unnecessary. But it will take a revolution to achieve all this, not tinkering within the present system. 
Paul Bennett