Unsocialist (2024)

Book Review from the December 2024 issue of the Socialist Standard

State Socialism in Eastern Europe: History, Theory, Anti-capitalist Alternatives. Edited by Eszter Bartha, Tamás Krausz and Bálint Mezei. Palgrave Macmillan, 2023. 356pp.

The term ‘State Socialism’ in the title of this book is used to refer to the system that existed in the Soviet Union and the regimes of the Soviet bloc from the late 1940s until the whole edifice crumbled from 1989 onwards. Though it is clear that this system was not socialism as we would understand it but rather repressive state capitalism masquerading as socialism, this has not prevented many academics who study the history of that era from continuing to refer to it as socialism and indeed as ‘really existing socialism’. And this is precisely what we find in this collection of 14 essays, which focus predominantly on aspects of how those regimes, especially Hungary, were organised in the period when they were part of the Soviet bloc. The way the editors describe it is as an attempt ‘to address the long theoretical, conceptual and political debate on the interpretation of “actually existing socialism” in the Soviet Union and Eastern Europe’.

But while such debate may give academics something to occupy their minds with, in reality the single most important thing to know is that the regimes in question were not in any sense socialist but simply represented a different – and invariably more repressive – way of managing the buying and selling system known as capitalism. That system, wherever it exists or has existed, is one of money and wages, economic inequality, and a small class of employers ruling the roost over a large class of employees, even if this consideration seems far from the minds of most of those contributing to this volume. The chapter by Susan Zimmerman on work and gender politics in ‘State-Socialist Hungary’, for example, while clearly the product of comprehensive and painstaking research, confines itself to description and analysis of how those particular aspects of capitalism manifested themselves in post-war Hungary and in no way challenges the idea of whether ‘socialism’ can exist within the framework of an economic system of buying and selling and production for the market. In his essay on Hungary between 1963 and 1985 (sometimes referred to as the period of ‘goulash Communism’), Bálint Mezei discusses what he calls ‘Hungary’s third road experiment of socialism’. Another chapter, jointly written by the editors as an introduction to the anthology and entitled ‘From Socialism to Neo-Liberalism: Lessons from Eastern Europe and Hungary’, states the book’s intention ‘to draw a historical lesson from the state socialist experiment in Eastern Europe and Hungary, which can be instructive in the search for an alternative to the global neoliberal capitalism’. Yet this too, despite its title, shows few signs of appreciating that the main lesson to be learned from the topic under discussion is that the passage from one system to another in Eastern Europe with the fall of the Soviet bloc was in fact a passage from one kind of capitalism (state capitalism) to another (private capitalism) and that the only viable alternative to either cannot be some form of ‘socialist state’, since socialism is by definition a worldwide, stateless society as well as one without classes, markets and contractual relations.

Close to 40 years ago (and so before the collapse of the Soviet-backed regimes of Eastern Europe), a book entitled State Capitalism: the Wages System Under New Management was published by Palgrave Macmillan, the same publisher as for the volume currently under review (State Capitalism – libcom.org). It stated the unerring truth that ‘private capitalism and state capitalism are equally suitable institutional arrangements for allowing capital to exploit wage-workers’, a truth vindicated by history since that time yet still not fully grasped by many academics. In addition, as an alternative to either form of capitalism, the book’s authors, Adam Buick and John Crump, also stated the need for a society that abolishes both the wages system and the production of goods and services for the market, replacing it with a system of voluntary cooperative work and production for use. The collection of essays currently under review also claims to ‘contribute to the discussion about anti-capitalist alternatives’, but its overwhelming focus is on the organisational variants of capitalism and, looking forward, with a nod to perhaps minor changes to the ‘neoliberal’ regimes that have now taken over that may allow a few more crumbs to fall from the table. A look back at Buick and Crump’s analysis would surely help the contributors to this volume to see the wood for the trees.

Howard Moss

How we live and how we might live (part 4) (2024)

From the December 2024 issue of the Socialist Standard

(Continued from last month)

In his 1884 talk, ‘How We Live And How We Might Live’, William Morris set out to describe what socialism can offer to working people that capitalism can’t. He began by inviting his audience to imagine a world without the miseries of poverty and war, curses that class societies like capitalism inflict upon us. In earlier articles in this series we explored how, in the modern world, the source of those ills lies in the deep structure of capitalism itself. This month we will explore those causes a little further and look at some of their consequences.

At the heart of modern capitalist societies lies a property system of universal competition based on the employer/employee relationship. This is a relatively recent development. Earlier ways of making a living by common access to the land or through small-scale craft work, for example, were largely extinguished as capitalism advanced and came to dominate Western Europe and America, and then later, the world. Today, everyone born into a capitalist society is forced to rely on the market to obtain what they need. According to their circumstances, they are forced into the role of an employer or an employee. If they are members of a cooperative or the owners of a small business, they must take on both roles, and manage the conflict between them.

Maximising profits

The aim of any capitalist business is to make a profit. It uses money capital to purchase materials, part-finished goods, machinery, office equipment, and other physical means of production. Crucially also, it buys human labour-power. It sets this and machinery to work on its purchased materials in order to produce goods for sale on the market. If the business has judged the market correctly, it will receive back from the sale of its products a sum of money equal to the capital sum originally advanced plus an additional amount — its profit — derived from workers’ labour. A portion of this money it will put into a fund for reinvestment in future production. Another portion will be used to pay taxes, rent and overhead costs like insurance. A third portion will be taken as revenue by the owners of the business or allocated as interest to shareholders.

If a business wants to stay in the market it must continuously receive back more money than it initially advanced. This is not just an aim but a necessity imposed by capitalism’s competitive property system. This additional sum, the business’s profit, is what allows it to grow. Growth, like profit, is not a choice, but a necessity enforced by the system. Let’s say our business owner has a very simple, inexpensive lifestyle (just for the sake of argument. Bear with us!). Could they not choose to keep their business small and make a minimal profit? For some small businesses who have found a niche market, that might be possible, at least for a while, but capitalism is a competitive society. Businesses compete for the money in your pocket. They know that if they do not grow by introducing labour-saving machinery, for example, or by taking advantage of economies of scale, then their competitors will, and they will be in danger of being priced out of the market. Competition drives growth in a capitalist economy.

To ensure that businesses stay competitive in the market, they must not only grow, but they must also maximise their profits. If at any time our frugal business-owner needs to replace less efficient or worn-out equipment, their low profit levels could well be a liability. If they need to borrow for this same purpose or simply to bridge the gap between investment and return, they may find themselves in difficulty. Lenders and investors aim, like other capitalists, to maximise their revenue, and will not be attracted to invest in businesses which cannot pay a going rate of interest. Thames Water, in the UK, is currently in just such a quandary. It is in dire need of inward investment, yet its inability to generate sufficient profit in the future has led its potential investors to declare it ‘uninvestable’.

To maximise income, businesses need to minimise their costs. In particular, they need to minimise their labour costs by keeping down their workers’ wages. Capitalist competition tends to result in businesses each making the same average rate of profit with respect to their invested capitals. By lacking direct competition, however, near-monopolies and cartels can often raise their individual rate of profit above the average. Exceptionally innovative businesses like those in the high-tech sector can often do the same, at least temporarily. Raised profits in these industries give their highly trained and creative workers scope for negotiating higher wages, especially, as is often the case, if their skills are in short supply on the labour market.

Below average

The bigger the front, however, the bigger the back. While some businesses can raise their profits above the average, others must operate below it. These need to keep wages down more firmly. Businesses of this sort often rely on a lot of partially skilled labour, which is often more plentiful and cheaper to buy in the market place. To get the maximum productivity out of their workers for minimum cost, their work regimes are often pressured, tedious and exhausting, leaving employees dispirited and lacking in self-esteem. Businesses of this kind tend to rely on a heavy disciplinary management style. They can demand long, irregular or unsocial hours of work. And if the law of the country permits, they tend to provide low levels of sick and maternity leave, and scant holiday pay. They often provide workers with little training or career development, giving them fewer chances to better their situation. When the market is in one of its cyclical declines and profits fall, their workers, being easily replaceable, are quickly laid off and find themselves surviving on minimal state benefits or, in the worst case, unable to pay rent and becoming homeless. And so the downward spiral continues.

Workers living on the poverty line and with few prospects sometimes gravitate towards the informal ‘black’ economy. This consists of businesses often operating in a highly competitive market that are fighting to minimise costs. Under these conditions, operating outside the law becomes a risk worth taking. For workers this has some advantages. If they get paid ‘under the table’ they can avoid deductions for tax and national insurance. The downside is that such companies tend to pay low wages, offer no training or possibility of advancement, and provide no arrangements for holiday or sick pay or other statutory benefits.

Another possibility which has always been an option for those with low skills and poor prospects is the criminal economy. For men, today, this generally means theft or burglary, or selling drugs. Most thieves are young men with few saleable skills. Despite the glamorous image perpetuated by heist films, a life of crime for most has few real rewards and the chances of getting caught are high. Selling drugs on the street is often gang-related and dangerous. And for the average dealer it nets little income. For women, entering the criminal economy generally means sex work or shoplifting where the prospects are even worse. Voluntary sex work is inherently dangerous. It is often illegal and dominated by pimps who skim off significant portions of a woman’s earnings. Shoplifting is stressful, provides low levels of income and again carries a high chance of arrest.

Race to the bottom

Poverty is not an unfortunate accident. It is a built-in feature of capitalism’s competitive property system and its employer/employee relationship. Businesses maximise profits by holding down wages, but they will take whatever means they can find to minimise costs. They will use cheap materials in their products like non-biodegradable plastics, or they will externalise costs by pumping waste into rivers and into the atmosphere. And just as the need to minimise costs drives pollution, so the competitive pressure towards growth fuels climate change. Damage to the human and natural environment is also a built-in feature of the capitalist system.

In 2005, Gordon Brown, then UK Chancellor of the Exchequer, commissioned Nicholas Stern to conduct research and report back on how moving to a low-carbon economy in the UK might be managed. The Stern Review, when it was finally delivered in October of the following year, was a vast, 700-page monster of a document. It has since spawned a significant academic industry. Today, however, its arguments seem ridiculously optimistic. It concluded that if states were to cooperate, the drivers of climate change could be economically managed, and CO2 levels kept below a threshold that at that time was thought to be sustainable. Skimming through its summary today, what stands out is the political naiveté on which it rested, its entire weight pirouetting on one tiny, innocent-sounding word: ‘if’ – ‘If states collaborate…’

Capitalism is not a collaborative system, nor is it designed to solve common problems. It is a system of ruthless competition. In the years before and since The Stern Review it has demonstrated over and again just how impossible it is for capitalist states to achieve the level of international cooperation Stern hoped for. Every year since 1995 thousands of scientists, politicians, and ‘stakeholders’ have sat closeted together in the UN’s COP meetings, thrashing out the issues. The effective outcome of all this activity has been negligible. Beyond a legally binding commitment of each participating country to implement its own greenhouse gas reduction measures, little has been achieved. Globally capitalism is still pumping CO2 into the atmosphere like there is no tomorrow. This year alone, CO2 levels have been soaring.

In 2013, George Osborne, Chancellor of the Exchequer in the Cameron government, summarised the problem in a carefully worded statement: ‘I want to provide for the country the cheapest energy possible, consistent with… playing our part in an international effort to tackle climate change. But I don’t want us to be the only people out there in front of the rest of the world’. And there we have it. Cheap energy is the key to keeping businesses competitive in the global marketplace. In a world of international competition, no country can afford to commit to using more expensive forms of energy unless all do. Finding anything but the loosest and most ineffective agreements on this issue has proven impossible. At the opening of the 29th meeting of COP last month in oil-rich Baku, Azerbaijan, Simon Stiell, the Climate Change Executive Secretary for the UN, made yet another plea for international cooperation to stem the rise in global temperatures. It is a plea that over thirty years has yet to generate meaningful results.

And so, here we are. War, poverty, pollution and climate change are just a few of the features damaging human life and disfiguring our world, all of them rooted in capitalism’s wage-labour/capital relationship which sits like a supermassive black hole at our economy’s galactic core. The only real and permanent solution to capitalism’s woes lies in its elimination. Yet, what kind of a society would that produce? In his talk 140 years ago last month, William Morris considered what kind of a world might result from eliminating capitalism’s class society. Yet we can ask, what would such a world look like in its own terms, and what might we be able to say about it? Is it feasible? How would it operate? These are the questions we will turn to next month in the Socialist Standard.

Hud.

Link to Part 5.

Cooking the Books: No such thing as a workers’ budget (2024)

The Cooking the Books column from the December 2024 issue of the Socialist Standard

‘What would be a workers’ Budget?’ the Trotskyist Workers’ Liberty asked on Budget Day. With graffiti on a wall saying ‘Tax the Rich’ as an illustration, the article expounded:

‘A workers’ budget would tax the rich heavily’. ‘A workers’ budget would rebuild public services and restore real wages and benefits’. ‘Increase corporation tax’. ‘No easing of the rules can square the circle and win the resources needed to rebuild public services and real wages without taking from the millionaires’.

Taxing the rich to increase wages and benefits and provide better public services is fantasy politics. It’s not going to happen and, if it was tried, would precipitate a massive economic crisis.

The article cites a calculation that ‘a wealth tax, increased capital gains tax, and a few other items could raise £50 billion a year’, but that’s only 6.25 percent of the £800 billion currently spent on health, education, and pensions and other benefits. So the bulk of the money ‘to rebuild public services and real wages’ would have to come from taxing profits. The article mentions doubling corporation tax to over 50 percent of profits (but even that wouldn’t raise enough). This would reduce both the incentive and the amount for private corporations to re-invest in maintaining and expanding production. Hence, the reduction in production and a massive increase in unemployment.

The slogan ‘Tax the Rich’ assumes the continued existence of the rich, the continued division of society into the rich and the rest, into a class which owns the means of production and lives off an unearned property income (profit, interest or rent) and a class which, excluded from such ownership, depends on working for an employer for a wage or salary.

The assumption is that the rich should continue to exploit the workers but that part (most) of their income should be taxed away to pay for higher wages and better public services for the rest. It is the fantasy of capitalism being made to serve the interests of the non-capitalist majority.

The absurdity, let alone the infeasibility, of such a social arrangement — the capitalist as capitalist for the benefit of the working class — is obvious.

Some naive leftwingers might believe in this but we doubt if the leaders of Trotskyist groups do. For them, proposals for a ‘workers’ budget’ will be an application of the cynical tactic of proposing something to attract worker support but which they know won’t work, in the expectation that, when it doesn’t, the disillusioned workers who fell for it will turn to them for leadership in an assault on the capitalist state.

Real socialists are honest. We say that under capitalism there can be no such thing as a ‘workers’ budget’ as this implies that capitalism could be made to operate in the interest of the majority class of wage and salary workers and their dependants. But experience has repeatedly shown that it can’t. The only budget that there can be is a capitalists’ budget.

What the Chancellor of the Exchequer, Rachel Reeves, set out on 30 October was what the British capitalist state plans to spend in the next tax year (which in the UK, for some odd historical reason, starts in April) and how it intends to pay for it.

The various measures she announced were based on the supposition that the government can bring about growth. But it can’t. The most it can do is to create conditions that could encourage business investment. This in fact is what all budgets have to try to do and why they must all be capitalists’ budgets. There can be no such thing as a workers’ budget.

Blogger's Note:

A leading member of the Alliance for Workers' Liberty, Martin Thomas, replied to this column on their website.

Fascism: what does it mean? (2024)

From the December 2024 issue of the Socialist Standard

The Oxford University Press blog spot has a place on its website where writers are invited to contribute opinion pieces on topics in which they are considered to have expertise. One such recent piece, The horseshoe theory in practice: how Russia and China became fascist states, by Professor Michael Kort of Boston University, US, argued that the fascism of Germany and Italy in World War 2 has been replicated since then by two other societies that called themselves communist and so saw themselves at the other end of the spectrum from fascism – Russia and China.

The arguments presented are that those governing these countries used ‘massive and brutal force to overhaul the societies they controlled’, set up highly authoritarian states headed by a dictator, encouraged ‘a belligerent racial nationalism’, and controlled ‘a capitalistic economy subject to state control known as state capitalism’. The points made here are actually similar to those to be found in a recent Socialist Standard review of a book by the historian John Foot entitled Blood and Fire, The Rise and Fall of Italian Fascism. In that review, Russia and China are described as ‘the closest things that exist to the kind of system excavated and characterised so expertly by John Foot in his exploration of Italian fascism’.

Horseshoe theory

In order to try and account for the similarity between fascism and what Professor Kort variously describes as ‘socialism’, ‘communism’ or ‘Marxism’, he calls upon the so-called ‘horseshoe theory’, which ‘postulates that political similarities and differences should be viewed not as points on a straight line but rather as places on a horseshoe’. He explains that, in the common ‘linear political model’, fascism and communism (or right and left) are commonly placed at opposite ends of the spectrum, therefore appearing radically different, whereas, if political systems are seen as a horseshoe and communism and fascism are at its left and right ends respectively and curving towards each other, they can be seen to be extremely close (‘a narrow horseshoe space’) to each other rather than radically far apart. So, closely facing each other as they do, it is suggested as no surprise that they are not far apart at all in substance.

What socialism is

But is the ‘horseshoe theory’ necessary to explain the similarity which this blog writer correctly notes? Only, we would argue, if you accept his description of the kind of societies existing in Russia and China as socialism (or communism). If we look at the reality of Marx’s own concept of socialism or communism (which Professor Kort seems not to have done), we quickly see that it bears no relation to what happened in Russia under Lenin, Stalin and others, or to China under Mao, Deng Xiaoping and now Xi Jinping. It needs to be understood that, in the writings and ideas of Marx, socialism and communism were terms used synonymously to mean a marketless, moneyless society of voluntary work and free access to all goods and services based on the principle: from each according to ability, to each according to need. Since Marx’s day, these terms socialism and communism have undergone much distortion and misrepresentation, a process which began largely in the early part of the last century with the Bolshevik revolution in Russia and then later in China under Mao. Both terms became equated with state ownership of all productive forces and services and repressive dictatorial state control, these arrangements being called ‘socialism’ as the supposed prelude to an alleged later stage, ‘communism’ – a distinction never made by Marx. Following this, any kind of regime leaning towards the same kind of totalitarian set-up was readily labelled socialist or communist, and since Marx was assumed to have planned all this in theory (he didn’t), any such society it was also called Marxist.

Myth and reality

This is the myth unfortunately espoused by Professor Kort. But he manages to entangle things even more. He tries to argue that what caused China in particular to become – and still to be – a fascist state (as in the title of his piece) was that it had been, wait for it, ‘communist’. Yet it is far from clear what he means by this, since at the same time he describes China as ‘a tightly controlled state capitalist economy’. He also states that the Chinese Communist Party has ‘abandoned socialism’, yet that it still practises a form of ‘Chinese Marxism’. The mind reels here, and even more so when, in a triumphant flourish, the writer concludes that ‘to communism’s (or Marxist socialism’s) horrific record of economic failure, totalitarian tyranny, and death on a genocidal scale must now be added another grim legacy: fascism’. And this even though none of the negative, ‘fascist’ features he quite accurately attributes to the regimes that have ruled Russia and China has anything whatever to do with communism, socialism or Marxism.

Clearly, despite Professor Kort’s authorship of a number of books about Russia, China, the cold war and similar subjects which the OUP blog informs us of, here at least he fails to demonstrate a clear and comprehensible view of certain key concepts necessary to understanding the history and politics of recent times.

Howard Moss

Obituary: Graham Taylor (2024)

Obituary from the December 2024 issue of the Socialist Standard

We have just learned of the death of Graham Taylor in Denmark. He joined the Central Branch of the Party in 1988 as a teenager. Originally from Gillingham in Kent he later moved to Denmark where his mother hailed from. Besides being our contact there, he contributed the occasional article to the Socialist Standard as well as transcribing articles and pamphlets to go on the internet, an essential part of our current activity. A sad loss to the socialist movement at the comparatively early age of 52.

Blogger's Note:

Such sad news about Graham's premature death. A really lovely guy who did a lot of good work putting forward the case for socialism in the early days of the internet on both the various socialist forums, and on his blog, The Ragged Trousered Philanthropist.