Should ‘we’ consume less? (2024)

From the November 2024 issue of the Socialist Standard

In his recently published book Slow Down: How Degrowth Communism Can Save the Earth, Kohei Saito contends that:

‘Almost every one of us living in a developed country belongs to the world’s richest 20 percent’ and that our exploitative ‘imperial mode of living’ allows us enjoy an ‘extravagant lifestyle’ at the expense of workers in the Global South – an echo of the discredited Leninist theory of the ‘labour aristocracy’.

Moreover, suggests Saito, it is ‘we’ who are ‘coddled by the invisibility of our lifestyle’s costs’ who inflict far more damage on the environment than do they – our fellow workers on the other side of the planet. ‘We’ will ‘not be able to truly combat climate change if we all fail to participate, as directly interested parties, in the radical transformation of the Imperial Mode of Living’. That means disengaging, starting now under capitalism, from consumer culture ‘while also reducing the volume of everything we consume’. At the end of the day there seems to be little here to distinguish Saito from what the de-growth eco-pessimists have to say, apart from his invocation of ‘communism’.

Matt Huber and Leigh Phillips make a valid point in their review of Saito’s book:

"Saito also sees this primarily not as a battle between classes of workers and capitalists, but global regions: “the injustice of socially vulnerable people in the Global South countries bearing the brunt of climate change although the carbon dioxide was emitted, for the most part, by the Global North, which brought on this disaster.”

When it comes to who in the Global North is responsible, Saito is more liable to point at himself and other workers than capital: “Our rich lifestyles would be impossible without the plundered natural resources and exploited labor power of the Global South”’ (Jacobin, 9 March 2024,).

Was Marx productivist?

Saito also claims that, as far as Marx was concerned, there was an ‘epistemological break’ in the latter´s writings that began sometimes during the 1860s.

This epistemological break has been characterised as representing a move away from a ‘“linear, progressive view” of history, marked by “productivism” and “Eurocentrism”, and towards a new vision of communism’. Saito does at least accept that ‘communism’ means a moneyless, wageless, classless and stateless alternative to capitalism which is based on the twin principles of free access to socially produced wealth and voluntaristic labour as the basis of wealth production.

In short Marx, according to Saito, abandoned historical materialism and the acceptance of capitalist technological progress in favour of ‘de-growth communism’ in which the needs of the population would be catered for within clear limits imposed by nature itself.

Marx did indeed acknowledge the necessity and importance of capitalist technological progress in preparing the ground for a future communist society, but his standpoint cannot plausibly be called a ‘productivist’ one. There are many passages in the early writings of both Marx and Engels that suggest a deep concern with the environmental impact of economic growth and are hardly compatible with the kind of Promethean or productivist outlook sometimes attributed to them. Their assessment of capitalist technological advancement as being ‘progressive’ was contingent inasmuch as it suggests there will come a point when it could no longer be characterised as such. At this point it would become redundant or even reactionary as a mode of production.

Limits to lifestyle changes

You cannot expect capitalism to gradually disappear through the incremental accumulation of minor adjustments to the way we live and do things. The whole system is fundamentally held together and underpinned by the brute fact of minority ownership and control of the means of wealth production and the consequent alienation of the great majority from these means. It is only when the latter take matters in hand and seek to democratically bring about fundamental change from the bottom up that capitalism will finally disappear.

We cannot hope to bring about the fundamental change required through mere lifestyle changes within the framework of existing capitalist society. This is not meant to discourage individuals from wanting to make such changes. These could conceivably help even if only in symbolic, more than practical, terms. But the basic problem we face as a society is not really the result of individuals somehow having made the wrong lifestyle choice.

Saito is not entirely wrong, however. ‘Lifestyle choices’ matter up to a point insofar as they are bound up with the question of social values. After all, a working class, still receptive or responsive to the values that underpin a capitalist consumer ideology, would surely not yet be ready to undertake the transformation of society itself. Their readiness to do that surely presupposes a transformed worldview on their part. In other words, a shift in values.

It is difficult to see how a strategy of, today within capitalism, ‘reducing the volume of everything we consume’ is going to succeed. Reducing consumption means reducing the market demand for the good in question. Normally, the response of businesses in these circumstances would be to reduce the price of this good. In other words, to reboot or stimulate market demand.

You as one individual might indeed have the strength of will and moral resolve to resist the lure of a bargain offer but there is nothing to say that your neighbour will follow suit. This is the problem with the system; it has the uncanny knack of being able to pick us off one by one so long as we confine our thinking to its conceptual parameters.

We cannot buck the market while we live in a market economy. It is this that sets limits on what we can achieve by way of lifestyle changes. Only by eliminating capitalism will we be in a position to adapt how we produce and consume in ways that suit ourselves and our long-term future on this planet.

Robin Cox

Letter: Imperialism (2010)

Letter to the Editors from the September 2024 issue of the Socialist Standard

Imperialism

Dear Editors

It was reported on Sunday 11 July 2010 that a boy of seven works a 98-hour week in Delhi to supply products to the British high street chain Poundland.

What is the SPGB position on the conception of imperialism through Lenin, Bukharin and Luxemburg and the idea of an aristocracy of labour?

Wirral Socialists 

(http://www.wirralsocialists.com)

Reply:

We have never accepted the view that a section of the working class in the developed capitalist countries – the so-called “aristocracy of labour” of skilled workers – shares in the proceeds of the exploitation of colonial and now ‘Third World’ countries, The wages paid to skilled workers here reflect the higher quality – due to more education, training and skill – of the labour power they have to sell.

It was only in 1920, in a preface to the French and German editions, of his Imperialism, the Highest Stage of Capitalism that Lenin introduced the idea that a section of the working class in the imperialist countries shared in the booty extracted from capitalists, workers and peasants in the rest of the world. This was to try to secure the support of anti-colonial movements for his beleaguered regime in Russia. It was a political manoeuvre – “workers and colonial peoples unite” – that went against the basic principle of Marxian economics that wages represent the value of the labour-power a worker sells and contain no element of surplus value.

The original 1916 edition of the pamphlet did not contain this. It was a fairly run-of-the-mill analysis of imperialism and colonialism as put forward by Social Democrats of the time: that it was due to the higher profits to be made in the colonies and less developed countries than at home. The only real objection was to its subtitle of “the highest stage of capitalism” since capitalism had been “imperialist” in the 18th century too.

Rosa Luxemburg’s Accumulation of Capital (1912), however, was based on a faulty analysis of capitalism: that it suffered from a chronic shortage of home purchasing power that drove capitalist countries to seek markets outside capitalism, in the less developed parts of the world. Apart from its descriptive parts it is of little value.

The Bolshevik Bukharin’s Imperialism and the World Economy (1916) developed the idea of a single capitalist world economy and anticipated the role that the state was to play in supporting the overseas economic interests (markets, raw material resources, investment outlets, trade routes) of the capitalist firms established within its borders.

All three (and others) were trying to analyse the phenomenon of capitalism coming to dominate the whole world, as it did towards the end of the 19th century, to which the term “imperialism” was given. This was not the best term since imperialism is not something separate from capitalism and all capitalist countries, not just those normally labelled “imperialist”, are prepared to use force to further the vital economic interests of their capitalist class. – Editors.

Who benefits from lower ‘Third World’ wages? (2021)

From the March 2021 issue of the Socialist Standard

We conclude our series refuting the view that workers in the developed capitalist parts of the world exploit workers living in the ‘Third World’.

Third Worldist ‘anti-imperialism’ basically contends that the interests of workers in the Global North are objectively aligned with the capitalists there in seeking to perpetuate the ‘super-exploitation’ of the Global South. Allegedly, this super-exploitation has the effect of raising these workers above the status of an exploited class by enabling them, via a process of ‘unequal exchange’, to receive the full value of their labour contribution.

As Jason Hickel explains:

‘It was the Egyptian economist Samir Amin – a well-known critic of neo-colonialism – who first articulated this argument in the 1970s. He noticed that that if we look at the labour that goes into producing goods for trade between the south and north, we see that workers in the south are paid much less than their northern counterparts – even when adjusted for productivity or units of output per hour. This means that when the north buys goods from the south, they pay far less than those goods would otherwise be worth. In other words, the north effectively siphons uncompensated value out of the south’ (Guardian, 18 May 2017).

While this explanation might seem superficially plausible, there is an intrinsic problem (as we saw last month) with trying to quantify the magnitude of this global transfer of value – let alone quantify the extent to which workers, as opposed to capitalists, in the north allegedly benefit from this transfer – due to value being based on the elusive notion of ‘abstract labour’. Hence the use of price as a surrogate measure. But while the sum of all values must equate with the sum of all prices, for any given commodity, value and price must necessarily diverge under conditions of disequilibrium resulting from the continual adjustment of supply and demand to each other.

Take the commodity, labour power – the skills the worker sells to the capitalist. Its price is the wage that worker receives. However, this transaction is conditional upon the capitalist expecting to make a profit by employing the worker. A business is not a charity. It is not concerned with the well-being of its workforce as such. Competition between businesses pushes such sentiments aside and imposes on all the overriding need to secure a profit.

Without profit the business risks being bankrupted. This is as true in the Global North as in the Global South and it is surely significant that the overwhelming bulk of capital – even foreign direct investment – originating in the North is invested there and not in the South. That wouldn’t happen without the prospect of profit.

Profit is the money form of the economic surplus the worker produces in exchange for a wage. She produces more value than she receives in her wage. Hence she is ‘exploited’. It doesn’t matter whether she is ‘well paid’ or not. Whether she can ‘purchase the product of ten hours of another worker’s labour through one hour of her own’ as Zac Cope puts it, is simply not relevant (Divided World Divided Class: Global Political Economy and the Stratification of Labour Under Capitalism, 2012, p.173) Her means of purchasing that product – her wage – is conditional upon her producing a surplus for her employer in the first instance and, thus, being exploited.

Wage levels and the rate of exploitation

What determines the ‘rate of exploitation’ cannot simply be inferred from the level of wages paid to workers; it must take into account, also, their productivity. Paradoxically, higher paid workers can be subject to a higher rate of exploitation if the ratio of the surplus they produce compared to the size of their wage packet is higher than in the case of a low-paid worker. However, this can change if you reduce the wages of the low-paid worker thereby increasing his rate of exploitation.

Commentators, like John Smith, argue that depressing wages below their value in the Global South – super-exploitation – is now the primary mechanism under capitalism for increasing the rate of exploitation (Imperialism in the Twenty-First Century, 2016). Capital is highly mobile today while labour, hemmed in by national borders, is relatively immobile. This obstructs the equalisation of international wage rates (but not the equalisation of profit rates whereby surplus value is siphoned out of the Global South). Multinational corporations can play one poor country off against another in their quest for lower production costs while a corrupt ‘comprador bourgeoisie’ running these countries assists in this race to the bottom by imposing political repression and banning trade unions.

This argument has merit but, still, we cannot overlook differential rates of productivity. According to Hickel:

‘Southern workers are probably at least as productive since these days many of them work in foreign-owned factories (think of Apple’s iPad factories with highly efficient technology and rigid Taylorist rules, designed to extract as much as possible from every movement).’

Clearly, this is just cherry-picking. The vast majority of Southern workers don’t work in foreign-owned factories. Some do and, doubtless, productivity in these cases matches Western levels. But you have to look at the situation across the country as a whole to get a more realistic picture.

Even in an emerging industrial powerhouse like India, the formal sector accounts for only 10 percent of the workforce, the rest working in the informal sector. Globally ‘a staggering 2 billion workers are in informal employment, accounting for three in five (61 per cent) of the world’s workforce’ (ILO, World Employment Social Outlook: Trends 2019).

These are overwhelmingly concentrated in the Global South. Given the paucity of formal sector jobs and the lack of unemployment benefits, workers here often have little option but to eke out a living in the low-paid informal sector. This is characterised by rampant ‘underemployment’ and relatively inefficient small-scale ‘involutionary’ forms of activity.

There is some truth in Hickel’s claim that ‘wages are not somehow naturally low in the south – they have been made low by design. Wages are an effect of power’. But his explanation is incomplete. The bargaining power of those workers is, in turn, undermined by the depressing effect on wages caused by mass unemployment and, even more, underemployment, which is much more pronounced in the South.

The much larger ‘industrial reserve army’ also helps to explain the persistence of generally more labour-intensive forms of production there and, by extension, the significantly lower per capita productivity. According to the ILO there is a strong correlation between output per worker and international variations in wage rates (bit.ly/2OhfIK2).

Indeed, Marx himself maintained that ‘The more productive one country is relative to another in the world market, the higher will be its wages as compared with the other’ (Theories of Surplus Value, Ch. 8). Key to this is raising the ‘organic composition of capital’ via mechanisation thereby bringing about a fall in the rate of profit.

Ironically, Cope himself contends that ‘the capitalist system has been able to maintain itself in recent decades’ only because, among other things, ‘industrialisation of large parts of the Third World have ensured the entry of millions of (super-)exploited workers into the global workforce. This has undoubtedly raised the rate of profit by reducing the rate of growth of the organic composition of capital’ (ibid p.201). So he is effectively conceding that production there is more labour-intensive and we can assume this means less productive in per capita terms.

There is a further point to consider. As we saw earlier, part of Cope’s argument rests on the claim that most Northern workers are ‘unproductive’ in the sense that they do not produce, but are financed out of, surplus value. But what of the Global South? While some workers in the small formal sector could be classed as unproductive – for example state employees – in the much larger informal sector the predominant form of labour – 70 percent in sub-Saharan Africa – is ‘self-employment and unpaid family work’. Strictly speaking, this does not constitute productive labour either since it does not involve what Marx called the ‘exchange of capital for labour’ which is a precondition for such labour being considered ‘productive’.

However, to reiterate – being ‘unproductive’ does not mean not being exploited. ‘Being exploited’ does not depend on you being directly involved in producing surplus value but rather on your functional contribution to a wider system of surplus extraction.

Furthermore, even if 80 percent of the world’s productive labour is ‘performed in the Third World by workers earning less than 10% of the wages of First World workers’, as Cope claims, one should bear in mind that at least 80 percent of the world’s population lives in the Third World anyway.

As for workers there earning less than 10 percent of the wages of First World workers we need to relate this to international differences in price levels. In this regard, the position of Third Worldists comes across as muddled.

On the one hand, we find Cope suggesting that workers in the Global North benefit from the ultra-cheap prices for goods produced by super-exploited workers in the Global South; on the other we are told by him that ‘as soon as these goods enter into imperialist-country markets, their prices are multiplied several fold, sometimes by as much as 1,000%’(p. 159). This is because the capitalists there can ‘afford’ to pay their workers higher wages to buy these goods which presumably means they are making a profit by employing them.

Who benefits from lower import prices?

Wages, being the price of labour power, will tend to adjust to changes in the prices of other commodities. Cheapening the price of imports into the North by intensifying the exploitation of Southern workers will not materially benefit workers in the North. Actually, if anything, it has induced capitalists to outsource production to the South and close down factories in the North at the expense of northern workers.

Like water finding its own level wages will ultimately tend to gravitate towards the value of labour power. Marx’s observations on the early nineteenth-century struggle to repeal the Corn Laws which restricted food imports to boost domestic prices are pertinent here:

‘The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists. They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell’ (bit.ly/2LvHt0p).

While it is undeniable that there are marked differences in wage rates between the North and South there are some suggestions that the gap may be closing. A report in the Economist noted that while wage growth in the advanced countries has been slight or stagnant: ‘The crucial change that has taken place over the past decade or so is that wages in low-cost countries have soared’ (19 January 2013). Ironically this has encouraged a limited ‘reshoring’ of manufacturing back to the US where wage stagnation has made US manufacturing slightly more competitive.

Of course, we are still quite a long way off from the ‘equalisation of international wage rates’ but current developments seem to be tending in that direction. In Asia, for example, wages have been growing annually nearly ten times faster than in the world’s richest nations (Nikkei Asian Review, 28 November 2018).

Moreover, if you apply ‘purchasing power parity’ exchange rates to reflect the varying costs of buying an identical basket of goods in different countries, the gap between rich and poor countries narrows considerably. Cope himself notes that ‘according to calculations based on data compiled by the Union Bank of Switzerland, OECD wages have an average 3.4 times more purchasing power than non-OECD wages’ (p.163).

This is far less than the cited ratio of 1:11. This difference can be adequately explained in terms of factors already discussed such as differential productivity rates. But compared to the difference in purchasing power between capitalists and workers everywhere in the world, it is pretty negligible.

It is this fundamental class division that the proponents of Third Worldist ‘anti-imperialism’ wilfully obscure in their pointless pursuit of a reactionary nationalist agenda in an age of global capitalism.

Robin Cox

Unequal exchange: who benefits? (2021)

From the February 2021 issue of the Socialist Standard

We continue our examination of theories which claim the workers in the advanced capitalist countries share in the exploitation of those in ‘The Third World’.

In Imperialism: The Highest Stage of Capitalism (1916) Lenin suggested that some workers in the advanced countries, comprising a ‘labour aristocracy’, were bribed out of the ‘enormous superprofits’ made in the ‘colonies and semi-colonies’. While this claim is questionable at many levels he did at least acknowledge such superprofits were ‘obtained over and above the profits which capitalists squeeze out of the workers of their ‘own’ country’, meaning workers there continued to be exploited in the Marxian sense.

Not so in the case of modern ‘Third Worldist’ exponents of the Labour Aristocracy thesis, like Zac Cope. Cope surpasses even Lenin in putting his own spin on this Leninist version of bourgeois trickle-down economics. In his view, workers in the advanced countries generally are not exploited at all:

‘It is commonly supposed by socialists that if a person earns a wage she must, ipso facto, be exploited. However, if one worker is able to purchase the product of ten hours of another worker’s labour through one hour of her own, then that worker is benefiting materially from the exploitation of the other worker. In other words, where the labour content of the worker’s consumption is in excess of the amount of labour (value) she supplies, she partakes in the exploitation of her fellow worker’ (Divided World Divided Class: Global Political Economy and the Stratification of Labour Under Capitalism, 2012, p.173).

If this worker is not exploited then presumably Cope will agree that her capitalist employer is not making a profit by employing her. Which raises the question: why is she being employed?

According to Cope, producing surplus value is ‘increasingly the sole preserve of superexploited Third World labour’ (p.176). In short, almost all workers in the Global North are ‘unproductive’ meaning they are financed out of, rather than produce, surplus value.

True, most workers involved in manufacturing now reside in the Global South. However, productive labour is not limited to producing physical goods – a point Marx made in criticising Adam Smith’s overly ‘physicalist’ approach to the labour theory of value. Many services have been commodified under capitalism and the workers providing them must be considered productive of new value too.

More importantly, Cope departs radically from Marx in assuming that just because a worker is unproductive they cannot be deemed to be exploited. While unproductive labour may not in itself produce surplus value it is still nevertheless absolutely indispensable to the extraction of surplus value. A commodity’s value is only realised insofar as it can be sold but the labour involved in selling it is technically unproductive as it adds no new value.

Referring to clerks employed by a merchant capitalist, Marx observes:

‘The unpaid labour of these clerks, while it does not create surplus-value, enables him to appropriate surplus-value, which, in effect, amounts to the same thing with respect to his capital. It is, therefore, a source of profit for him. Otherwise commerce could never be conducted on a large scale, capitalistically’ (Capital Volume 3, Ch.17).

Saying unproductive workers are not part of the exploited working class is like saying the battalion signallers back in the army’s HQ do not belong to the army because they don’t do any actual fighting.

Unequal exchange

Let us now consider the claim that workers in the rich countries allegedly partake in the exploitation of workers in poor countries via a global ‘transfer of value’. This is said to involve various mechanisms – some hidden, some explicit.

These include, ‘transfer pricing’ or ‘trade misinvoicing’ practised within transnational corporations as a means of tax evasion; income flows in the form of repatriated profits, interest on loans, and property rents; ‘seigniorage’ and the profits made from circulating banknotes abroad and, finally, profits made from the buying and selling of financial assets abroad.

However, none of these examples in themselves seem to hold any obvious benefits for the workers in the rich countries. They all seem to work exclusively to the advantage of the capitalist owners of the businesses concerned. As Marx noted with reference to the repatriated profits made from foreign trade: ‘The favoured country recovers more labour in exchange for less labour, although this difference, this excess is pocketed, as in any exchange between labour and capital, by a certain class’ (Capital, Volume 3, Ch. 14).

But what about the mechanism alluded to by Cope – namely, ‘unequal exchange’?

This concept was developed by Arghiri Emmanuel, whose major work, Unequal Exchange: A Study of the Imperialism of Trade was published in 1972. Emmanuel saw unequal exchange as being embedded in various processes that were subjected to a tendency for profit rates to equalise under competitive capitalism.

To briefly explain. Just as the prices of particular commodities do not necessarily coincide with their values, so the profits a particular business makes do not necessarily coincide with the surplus value generated by its workforce. According to Marx, it is only at the economy-wide level (these days the global economy) that ‘the sum of all profits in all spheres of production must equal the sum of the surplus values, and the sum of the prices of production of the total social product equal to the sum of its value’ (Capital Volume 3, Ch. 12).

Since living labour is the sole source of profit – the money form of surplus value – a business with a high ‘organic composition of capital’ (‘capital intensive’) will tend to have a lower rate of profit than one using labour-intensive technology. Indeed, the falling rate of profit accompanying industrialisation of the advanced countries is often cited as a reason, historically, for the imperialist expansion of those countries into parts of the world where an abundant supply of cheap labour was said to make for higher profits to offset the falling profit rate at home.

However, under competitive capitalism these different profit rates will tend to equalise through the interactions of supply and demand for the goods in question. In so doing, commodities produced in labour-intensive industries (or parts of the world) would sell at prices below their values while, for capital-intensive industries, the opposite would be true. In terms of international trade this translates into a redistribution of surplus value from the Global South to the Global North.

This is one example of ‘unequal exchange’ but Emmanuel’s argument goes further: even if the ‘organic composition of capital’ was identical across the world, there could still be a transfer of surplus value from the Global South to the Global North. Why?

The reason lies with the sharp differences in wage rates between them which get to be reflected in the prices of goods exchanged in international trade. High-priced goods from the North are exchanged for low-priced goods from the South (whose capitalists then try to compensate for this by further cutting wages – super-exploitation). In this way some of the surplus value generated in the South is redistributed to the North, depriving the former of the ‘means of accumulation and growth’.

In a world in which capital is mobile but labour is mostly not – think of ‘Fortress Europe’ – the normal competitive process by which wages, the price of labour power, tend to gravitate towards value is effectively blocked by national borders which means other contingent factors can become more prominent in determining wage rates.

Sharing out surplus value

‘Surplus value’ is the key signifier of exploitation under capitalism. The rate of exploitation – s/v or the ratio of the surplus product to the overall wages bill – can be stepped up in several ways: (1) increasing ‘absolute surplus value’ by lengthening the working day; (2) increasing ‘relative surplus value’ by raising productivity (for instance through mechanisation) and (3) by pushing wages more or less permanently below the value of labour power – ‘super-exploitation’.

Marx did not rule out (3) but saw it as being less significant, historically than (1) and (2) in the genesis of capitalism.

While all three modes of increased surplus value extraction can operate concurrently, for modern proponents of the labour aristocracy thesis, super-exploitation (of the Global South) is easily the most dominant mode. However, even if this was the case, it does not follow that super-exploitation is confined to the Global South only; it is arguably to be found in the Global North too, notably in the guise of the low-wage ‘gig economy’.

Moreover, it is one thing to argue that super-exploitation in the Global South aids the redistribution of surplus value to the Global North; it is quite another to argue that workers in the latter benefit from this redistribution and not just the capitalists who in Marx’s words ‘pocket the difference’ arising from unequal exchange.

From a Marxian standpoint (which Cope professes to espouse), exploitation can be inferred from the fact that the working class as a whole produces more value than it receives in the form of wages and salaries. However, value itself is based on the concept of ‘abstract labour’, not concrete labour, and this distinction is absolutely crucial.

A commodity’s value is the ‘socially necessary labour time’ that goes into producing it, from start to finish, which is only revealed in a very approximate sort of way through market prices. It is an industry-wide – meaning global – average. Thus, attempting to isolate one section of the working class (the Global North) from another (the Global South) in order to calculate their relative contributions to the production of value – even if this was feasible – is methodologically suspect since what is then being measured is no longer, strictly speaking, ‘value’. Value is a social construct that only acquires resonance from the standpoint of the economy as a whole.

The point is that you cannot empirically measure a commodity’s ‘value’. It can only be theoretically inferred or guessed at. It is a constantly fluctuating potentiality that can change even after a commodity has been produced precisely because it is a notional average. So focusing exclusively on the labour contributions of workers in the South vis-à-vis the North strips it of that quality of being a notional average.

According to the labour theory of value it is not so much individual capitalists that exploit their own workforce but rather the capitalist class as a whole that exploits the working class as whole. This is because production today is a completely interconnected and globalised process. The fruits of this collective exploitation – surplus value – are, so to speak, pooled and redistributed to different capitals in proportion to their magnitudes as an average rate of profit.

Cope notes:

‘Firstly, of necessity, this essay utilizes statistical data that measure the results of transactions in marketplaces, not value-generation in production processes. GDP, or value-added, figures are obtained by subtracting the cost price of a firm, nation or region’s inputs from the proceeds of the sale of its outputs. This equation of value with price ensures that the process of production itself, and the surplus value arising from it, is rendered invisible and value appears to be generated largely through the circulation of money’ (p.157-8).

But the ‘equation of value with price’ is precisely what Marx himself ruled out, arguing that ‘The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself’ (Capital volume 1, Ch. 3). It is only in their totality that values and prices equate.

Ironically, the very kind of statistical data Cope is forced to rely upon – ‘of necessity’ – refutes his claim that workers in the Global North constitute a non-exploited class. Thus, according to the Bureau of Labor Statistics, US factory workers in 2012 produced on average $73.45 per hour in output whilst the average hourly wage was only $23.32 (bit.ly/3hW62iX).

So approximately two thirds of the added value these workers contributed, they did not receive payment for. Indeed, since the 1970s, while productivity of American workers generally has grown by 69.3 per cent, wages have grown by only 11.6 percent (bit.ly/2LyJAzY).

Very clearly, then, not only are these workers exploited but the rate at which they are exploited has been steadily increasing.

Next month we conclude our series refuting the view that workers in ‘Global North’ share in the exploitation of those in the ‘Global South’.

Robin Cox

Imperialism Part 2: Super-profits and the labour aristocracy (2020)

From the September 2020 issue of the Socialist Standard

We continue our series debunking the view that workers in the First World live off the backs of those in the Third World by examining in further detail Lenin’s mistaken theory.

Link to Part 1

Lenin’s theory of the ‘weakest link’ led him to believe a ‘socialist proletarian revolution’ would most likely occur first in parts of the world still transitioning towards full capitalism, not the advanced capitalist countries themselves. Partly, this arose from his belief that a stratum of workers in the latter – the ‘labour aristocracy’ – had been ‘bribed’ into supporting capitalism out of imperialist ‘super-profits’ produced by a super-exploited colonial workforce.

In Imperialism, the Highest Stage of Capitalism (1917), Lenin quotes the arch-imperialist, Cecil Rhodes, reminiscing about a meeting of the unemployed he once attended. The discontent he encountered there convinced Rhodes that Britain should expand its empire, thereby improving the economic prospects of British workers, in order to avert a civil war.

Yet, incongruously, Lenin states elsewhere in his book (Ch. 4) that if capitalism could ‘raise the living standards of the masses, who in spite of the amazing technical progress are everywhere still half-starved and poverty-stricken … it would not be capitalism’. This prompts the question – why then would the capitalists go to such lengths to raise the living standards of some workers by ‘bribing’ them?

Lenin’s definitive statement on the subject appears in the 1920 Preface of Imperialism:

 ‘Obviously out of such enormous super-profits (since they are obtained over and above the profits which capitalists squeeze out of the workers of their “own” country) it is possible to bribe the labour aristocracy. And the capitalists of the “advanced” countries are bribing them, they bribe them in a thousand different ways, direct and indirect. This stratum of workers-turned-bourgeois, or the labour aristocracy, who are quite philistine in their mode of life, in the size of their earnings and in their entire outlook, is the principal prop of the Second International, and in our days, the principal social (not military) prop of the bourgeoisie. For they are the real agents of the bourgeoisie in the working-class movement, the labour lieutenants of the capitalist class, real vehicles of reformism and chauvinism’.

Prior to the First World War, as Eric Hobsbawn notes, Lenin did not really make a connection between the ‘labour aristocracy’ and imperialist ‘super-profits’ as an explanation for the reformist outlook of workers. Rather, he seems to have attributed this to the influence of certain ‘petty bourgeois’ tendencies becoming more prominent due to a changing occupational structure and the development of a purely ‘economist trade union movement fragmenting the working class into ‘selfish’ (“petty bourgeois”) segments each pursuing its interest at the expense of others’ (Monthly Review, December 2012).

It was the impact of the First World War and Lenin’s profound sense of shock induced by the various Social Democratic parties (comprising the Second International) abandoning all pretence of international solidarity and aligning themselves with their respective capitalist governments in the cause of an imperialist bloodbath, which jolted him into further developing his idea of the labour aristocracy. That War, he reasoned, was the quintessential expression of the capitalist rivalries inherent in imperialism. By supporting it, the parties of the Second International betrayed their own inadvertent support for the imperialist project.

Imperialism had been condoned on the grounds that, by imposing capitalist development on the newly colonised countries, this would hasten the advent of socialism. However, behind the superficial rationalisations portraying imperialism as some kind of objectively ‘civilising’ and progressive project there lurked ulterior motives.

Lenin argued that by materially benefitting from the imperialist project, by increasing their living standards at the expense of the colonial workforce, the labour aristocracy comprising the ‘principal prop of the Second International’, found their appetite for socialist revolution had been considerably dulled if not altogether extinguished. Thus did they succumb to the politics of ‘opportunism’ – or reformism – and, in their leadership role as representatives of the wider working class, they set about persuading the latter to adopt this course of action as well, in the process abandoning their earlier commitment to socialist revolution. Indeed, reformism itself could likewise be construed as a form of bribery insofar as it held out the prospect of workers improving their circumstances within the framework of capitalism itself, thereby shoring it up.

Earlier theories

The term ‘labour aristocracy’ was originally coined by the anarchist, Mikhail Bakunin, in 1872. Bakunin felt it was not the organised and more skilled workers within the proletariat that were its most radical elements but, rather, those lower down the labour hierarchy: ‘To me the flower of the proletariat is not, as it is to the Marxists, the upper layer, the aristocracy of labor, those who are the most cultured, who earn more and live more comfortably than all the other workers’ (On the International Workingmen’s Association and Karl Marx,1872).

This, in a way, anticipated Lenin’s view that revolution was more likely to break out first in the poorer countries of the world. In both instances, the underlying (and rather mechanistic) assumption seems to have been that the more intense the poverty experienced, the more likely are people to revolt.

However, this raises the question – what are the people supposedly revolting for? A violent uprising, however understandable, does not of itself constitute a social revolution if all it does is to replace one ruling class with another. Social revolution means a fundamental change in the basis of society irrespective of how it is achieved.

Bakunin’s basic argument has been endorsed by others – like Frantz Fanon, whose seminal work The Wretched of the Earth (1961), contended that it was the lumpenproletariat and Third World peasantry who, precisely because of their social distance from the capitalist mainstream and its dominant ideology, embodied the greatest revolutionary potential within modern capitalism. Similar sentiments have been expressed with regard to the newly-identified ‘precariat’ of more recent times.

Marx’s opinion of the ‘lumpenproletariat’ contrasted starkly with Bakunin’s. Living largely outside of the constraints of formal wage labour and subject to the vagaries of desperate poverty, the lumpenproletariat, by virtue of its very life situation, was more likely to become a ‘bribed tool of reactionary intrigue’ rather than a force for revolution. This was a reference to elements of the lumpenproletariat being employed by the French state within its armed forces for the purposes of maintaining order during the social upheavals of the mid-nineteenth century – the bribe in question being a soldier’s wage rather than something received in addition to this wage (The Class Struggles in France 1848-1850).

Marx’s reference to the lumpenproletariat being ‘bribed’ is ironic, given Lenin’s insistence that it was labour aristocracy, instead, that was the beneficiary of capitalist bribery.

However, this may be a case of over-theorising on both sides. One’s own circumstances – be one a lumpenproletarian or labour aristocrat – need not be particularly decisive as far as one’s receptivity to socialist ideas are concerned. Indeed, Marx and Engels themselves in the Communist Manifesto speculated on the possibility of even some capitalists (Engels himself, being a prime example), cutting themselves adrift from their class and seeking common cause with the workers.

Nevertheless, the weight of historical evidence suggests that the more militant elements within the working class (particularly those who have embraced revolutionary socialism) have, indeed, tended to be drawn from the ranks of semi-skilled and skilled workers.

There is a further irony in Lenin’s depiction of the labour aristocracy as a force for conservatism since it was precisely this segment of the Russian working class that formed the social base from which the Bolsheviks primarily drew their support – skilled machinists in the large factories whereas ‘Lower paid workers, such as the predominantly female textile workers, were generally either unorganized or apolitical (until the beginnings of the revolution) or supported the reformist Mensheviks’ (C Post, Solidarity Sept-Oct 2006).

Engels, before Lenin, had suggested a link between capitalist monopoly and the labour aristocracy, in a letter to Kautsky, concerning the political situation in England: ‘There is no workers party here, there are only Conservatives and Liberal-Radicals and the workers gaily share the feast of England’s Monopoly of the world market and the colonies’ (12 September 1882).

However, unlike Lenin, Engels held that the tendency for capital to penetrate everywhere would eventually break down England’s global monopoly (and, by extension, undermine the super-profits it derived from such a monopoly), thereby reversing the ‘embourgeoisement’ of the English proletariat.

Bribery but how?

For all Lenin’s talk of how the capitalists bribe the labour aristocracy in ‘a thousand different ways, direct and indirect’, it is difficult to envisage even a single way in which this might happen – not if we are to remain faithful to the meaning of the term ‘bribe’ as a premeditated act to materially induce the other party to the transaction to do your bidding. For Lenin’s concept of a bribe to make any sense, and to work on its own terms, it would need to imply something given in addition to the wages received – meaning one would need to transparently disaggregate the income of the labour aristocracy into a ‘legitimate’ wage and ‘illegitimate’ bribe component. This obviously did not happen; all workers received was a wage so any alleged bribe would be hidden within this wage.

This raises multiple problems. If the capitalists of the imperialist countries were so amenable to surreptitiously sharing the proceeds of their investments abroad with (some of) their workforce at home, one might surmise that they would be less resistant to pressure from the latter for better wages than was the case. As Tony Cliff noted: ‘No capitalist says to the workers: “I have made high profits this year, so I am ready to give you higher wages”’ Socialist Review, June 1957). Workers always have to struggle for higher wages. Indeed, Lenin rather contradicted himself by suggesting that super-profits are obtained over and above ‘the profits which capitalists squeeze out of the workers of their “own” country’ – implying a systemic need, arising out of market competition, for these capitalists to exert a constant downward pressure on wage levels.

If Lenin’s thesis was correct we would expect income differentials between the labour aristocracy and other workers to vary in proportion to a country’s level of colonial investment. However, the evidence suggests otherwise. According to Cliff, wage differentials between skilled and unskilled workers were higher in a country like Rumania which had very little foreign investment compared to, say, Britain – in Lenin’s time by far the world largest source of foreign capital.

Moreover, though wage differentials in Britain did widen significantly between, roughly, 1850 and 1890 because of the growth of craft unions (e.g. the Amalgamated Society of Engineers) dominated by ‘labour aristocrats’, these differentials narrowed towards the end of the nineteenth century with the appearance of the ‘new unionism’ which sought to reach out and organise unskilled and semi-skilled workers. The point is that it was precisely then when the age of imperialism commenced (as Lenin saw it) that these differentials started narrowing, thus contradicting what his theory predicts.

There are other grounds on which one might question the theory. For instance, it overlooks that what might theoretically be in the interests of the capitalist class as a whole to collude in bribing workers to achieve some nebulous political objective, may not be a sufficiently persuasive reason for individual capitalists (in competition with other capitalists) to become involved in this stratagem. Meaning it may never take off as a stratagem.

Likewise, workers succumbing to such bribery and seeing themselves as indebted to their employers would probably be less likely to militantly struggle for better wages and conditions. This would probably more than wipe out the value of any hypothetical bribe they might have received.

There are other problems with Lenin’s theory which we will consider later in the context of a ‘post-colonial’ world. While Lenin fondly imagined ‘national liberation struggles’ would serve to undermine imperialism and thereby strike a blow against ‘monopoly capitalism’ the outcome of such struggles, as we shall see, has been quite the opposite of what he hoped for.

Robin Cox

(To be continued)

Imperialism and the ‘Labour Aristocracy’ (2020)

From the August 2020 issue of the Socialist Standard

  Given that many believe that those living in the ‘Global North’ are living off the backs of the people in the ‘Global South’, we begin a multi-part series of articles correcting this, starting with the origin of this mistaken view.

Marx and Engels’ Communist Manifesto was not just a scathing indictment of capitalism; it was also a paean to its material achievements which were seen as preparing the ground for communism.

Remarkably anticipating today’s globally interconnected world, it spoke of capitalism’s expansionist dynamic, propelling it to spread out across the world from its heartland in Western Europe:

  ‘The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production’.

These days the shoe is on the other foot: the footprint of Chinese capitalism is everywhere visible in the guise of its mass-produced commodities and those ‘Chinese walls’ have long since become just a tourist attraction. As Marx said:

  ‘The country that is more developed industrially only shows, to the less developed, the image of its own future’ (Capital, Vol 1).

However, this ‘diffusionist’ perspective has not gone unchallenged among those claiming allegiance to Marxism. In the early 1900s Trotsky developed his concept of ‘combined and uneven development’ which he coupled with another – ‘permanent revolution’ – in opposition to the ‘stageist’ model of the Mensheviks. That model maintained that a relatively backward country like Russia needed to pass sequentially through two distinct stages – a ‘bourgeois democratic’ revolution (which socialists were urged to support) followed by a socialist revolution once capitalism had become sufficiently developed.

Trotsky argued that Russia exhibited a dualistic character -– a modern urban-based capitalist sector and a vast pre-capitalist peasantry – which necessitated a quite different model. The Russian bourgeoisie were too weak to implement a ‘bourgeois democratic’ revolution themselves. Consequently, it fell to the workers’ party to do this. Concurrently, the new ‘workers’ state’ should move towards implementing a socialist revolution. Hence the idea of a continuous ‘permanent revolution’ – two revolutions rolled into one.

However, Trotsky acknowledged that Russia alone lacked the productive capacity socialism required and so opposed the concept of ‘socialism in one country’ promoted by Stalin and Bukharin. For a socialist revolution to succeed this depended on developments elsewhere – notably, the advanced countries:

  ‘We rest all our hope on the possibility that our revolution will unleash the European revolution. If the revolting peoples of Europe do not crush imperialism, then we will be crushed – that is indubitable. Either the Russian revolution will raise the whirlwind of struggle in the west, or the capitalists of all countries will crush our revolution’ (1930, History of the Russian Revolution).

The ‘European revolution’ did not occur. Nor was there any good reason to expect it might. After all, most workers there had been patriotically supporting one capitalist bloc against another in World War One. But in Russia, too, the vast majority were not socialists either (as Lenin repeatedly acknowledged) and without a conscious socialist majority you can’t have a ‘socialist revolution’. Thus, having seized power in 1917, the Bolsheviks had little option but to develop capitalism.

The unpalatable implications of this for a self-proclaimed ‘Marxist’ like Lenin helps to explain his subsequent subterfuge in trying rationalise away developments there. Though he generally did not anticipate the coming upheaval in 1917 would be socialist, it later became commonplace among Bolshevik cadres to refer to it as a ‘socialist revolution’. That was only credible if you completely redefine what socialism meant which is precisely what Lenin did – identifying it with a form of ‘state-capitalist monopoly’ made to ‘serve the interests of the whole people’ (1917, The Impending Catastrophe and How to Combat It).

This new definition grew out of Lenin’s belief that state capitalism was a ‘step forward’ for Russia. Though he distinguished between ‘socialism’ and other forms of state capitalism – such as in wartime Germany – he nevertheless endorsed the latter too, arguing that ‘our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it’ (1918, ‘Left Wing’ Childishness).

Lenin’s semantic gymnastics help us to better understand other aspects of his worldview – most notably how he envisaged a ‘proletarian revolution’ unfolding. According to him, this was likely to first occur, not where capitalism was most advanced (as Marxists contended), but rather ‘at the weakest link in the imperialist chain’. Russia, though itself an imperialist power, was a paradigmatic example, being heavily dependent on foreign capital. By breaking that chain here this would induce a domino effect, starting in Europe and culminating in capitalism’s overthrow worldwide. When this did not happen Lenin increasingly shifted his focus from Europe to national liberation struggles against imperialism in the ‘backward’ countries as the way forward.

For Lenin, imperialism was the ‘highest stage of capitalism’, commencing in the late nineteenth century. He was not referring to imperialism in general but rather a new and virulent kind of imperialism originating in certain structural changes within capitalism itself – notably, the emergence of ‘monopoly capital’.

In his book, Imperialism: A Study (1902) which influenced Lenin, the liberal, J.A. Hobson, wrote of a shift from ‘competitive capitalism’ to ‘monopoly capitalism’, after the late nineteenth century Great Depression. Monopoly capitalism was the ‘tap-root’ of the new imperialist era exemplified by the ‘Scramble for Africa’. Hobson opposed the then establishment view that ‘trade followed the flag’, arguing instead that trade could flourish without the need for colonial conquest.

According to him, what fueled imperialism was the accumulation of surpluses of capital beyond what the advanced countries could profitably invest domestically. These surpluses arose out of extreme inequality. Given the capitalists’ ‘higher propensity to save’, redistributing wealth in their favour, not only increased their savings (‘capital’) to the point of excess; it also reduced the workers’ income and thus exerted a restraining influence on their capacity to consume.

Consequently, there was diminished scope for the capitalisation of profits, because of insufficient market demand. This depressed prices and solidified a movement toward monopoly by making it increasingly difficult for small businesses to survive.

Lenin concurred with Hobson’s ‘capital surplus’ theory but disagreed with his ‘underconsumptionism’. As Charles Barone notes, Lenin seemingly argued that capital would be exported, ‘not because it was absolutely impossible to invest in the home market but because it could obtain a higher rate of profit abroad. The variance of profits existed ostensibly because of the uneven development of capitalism where capitalism had become “overripe” in some countries’ (Marxist Thought on Imperialism: Survey and Critique, 2016).

According to the labour theory of value, a higher rate of profit initially occurs where production is more labour-intensive (typically the case in the economically backward colonies) since ‘living labour’ is the sole source of profit. This rate tends to decline with mechanisation and industrialisation (as was happening in the developed countries) though that would be compensated for by an increase in the absolute mass of profits.

Normally, under competitive capitalism, this situation would be mitigated by the tendency for profit rates to equalise through the flow of capital towards industries temporarily experiencing above average profits, thereby increasing supply and thus eventually reducing prices (and profit rates).

However, in the context of the new imperialism, Lenin held that Marx’s 19th century model of competitive capitalism no longer applied. It was being progressively replaced by monopoly capitalism which interrupted this tendency for profit rates to equalise. As Paul Sweezy contended in The Theory of Capitalist Development (1968), under monopoly capitalism, the ‘equal profit rates of competitive capitalism are turned into a hierarchy of profit rates, highest in the most completely monopolized industries and lowest in the most competitive’.

If so, we would expect investment to incrementally flow into the monopoly sector at the expense of the competitive sector. Rudolf Hilferding in Finance Capital (1910) suggested this is precisely what was happening. Bank capital and industrial capital were merging into finance capital, the ultimate form of capital most closely associated with imperialism. Centralisation of capital would eventuate in the formation of a general cartel which would fuse with the state, replacing market competition with planned production. This probably influenced Lenin’s own thinking on the allegedly progressive role of state capitalism.

For Marx, super-profits could indeed arise from monopolies (and developments like technological innovations). However, he did not go as far as Hilferding in thinking this would kill off competition: Monopoly produces competition, competition produces monopoly. Monopolists compete among themselves; competitors become monopolists (1847, The Poverty of Philosophy).

For Lenin, the primary source of super-profits originated not within the domestic economies of advanced capitalism, however, but rather from the export of capital to the colonised countries. These super-profits were enormous, being obtained over and above the profits which capitalists squeeze out of the workers in their own country (Imperialism, the Highest Stage of Capitalism).

One would expect this to be reflected in the pattern of investment given that capital tends to flow to wherever the rate of return is highest. However, the evidence suggests, firstly, that the great bulk of capital then, as now, raised in the advanced countries was invested domestically rather than abroad (as foreign direct investment – FDI). Secondly, most FDI was itself invested (as Lenin acknowledged), not in the colonies but in other advanced countries – particularly America. Thirdly, at this time there were few controls on the movement of capital internationally so it is unlikely that the equalisation of profits rates would have been significantly impeded. Finally, fluctuations in FDI flows tended to follow the same pattern as domestic investment, implying a roughly similar rate of return – a conclusion empirically supported by historians like D K Fieldhouse and others.

Bukharin, in Imperialism and World Economy (1915), wrote of two contradictory trends shaping modern imperialism. While monopoly capital made for the decline of competition domestically, internationally competition was intensifying in the guise of economic nationalism (mainly in the form of tariffs rather than capital controls).

Lenin called this state of affairs monopolistic competition – the imperialist conquest of foreign territories opened up additional markets to soak up the expanded output of domestic manufactured goods whilst affording opportunities to invest surplus capital in the primary sector of these colonies, employing a super-exploited workforce to produce cheap raw materials for export to imperialist countries themselves.

Thus, in contrast to Marxian diffusionist thinking, Lenin (following Trotsky) argued that imperialism shored up and perpetuated the ‘uneven development of capitalism’ and, with that, spatial variations in the rate of profit. Repressive colonial policies that pushed down wages, the establishment of native reserves to subsidise labour costs out of the proceeds of peasant farming and the persistence of labour-intensive production techniques constituted the material basis of these ‘imperialist super-profits’.

Before modern imperialism some countries (notably Germany) had been able to rapidly develop their economies, exploiting what Trotsky called the ‘privilege of historical backwardness’ and join the select club of imperialist powers. However, by the early twentieth century this was no longer possible. Those powers having carved up the rest of the world amongst themselves, one could only expand its sphere of influence at the expense of another. This is what led up to the First World War.

It was then, wrote Lenin, that the ‘world proletarian revolution’ was in the process of ‘clearly maturing’. The events in Russia, he suggested, could ‘only be understood as a link in a chain of socialist proletarian revolutions being caused by the imperialist war’ (The State and Revolution, 1917).

But Lenin’s reading of the situation was hopelessly misguided. A ‘socialist proletarian revolution’ would surely have entailed an emphatic widespread rejection of nationalism and, as noted, there was little evidence of that happening then. Indeed, ironically, Lenin himself was a fervent advocate of the ‘national liberation’ of ‘oppressed states’ from the ‘oppressor states’, convinced that political independence would strike a blow against imperialism and, by extension, monopoly capitalism.

Nothing could be further from the truth as the subsequent history of post-independence states in the Global South bears out.

Robin Cox

(To be continued)

Link to Part 2

Capitalism Since the War (1968)

Book Reviews from the October 1968 issue of the Socialist Standard

Western Capitalism Since the War by Michael Kidron – Weidenfeld & Nicolson, 36s.

Theories of Imperialism by Tom Kemp – Dobson, 42s.

Both these writers are left-wing lecturers at Hull University. Michael Kidron is a prominent member of the ‘International Socialism’ group, while Tom Kemp is editor of Fourth International—the ‘Socialist’ Labour League’s theoretical journal. Kidron’s little book (which he rightly calls an essay) concerns itself with the economic trends which he can see, or thinks he can see, developing in Western Europe and North America. Kemp, on the other hand, has produced a commentary on the theories of imperialism elaborated by a number of writers—Lenin, Luxemburg, Hobson, Schumpeter; but the reader catches glimpses of what the SLL thinks is happening to capitalism today.

Slumps and crises are a permanent feature of the capitalist system. So, for relatively long periods, it often displays a marked tendency to stability. When this happened in the 1890’s one of its effects was to lend weight to the arguments of the revisionists, led by Eduard Bernstein. Bernstein claimed that capitalism was becoming more adaptable and was able to stabilize itself by means of the credit system, employers’ organisations and other devices. In the same way, since the Second World War, other theories have been put forward to explain the fact that no generalised slump has developed and one of the most .fashionable has been the so-called permanent arms economy.

The theory of the permanent arms economy, patented by the I.S. group, is a variety of Keynesism rather than Marxism. Keynes argued that government spending generally could iron out the ups and downs of capitalism. Kidron suggests that a particular type of government spending has achieved this:

  The impact of arms expenditure on stability and investment is no less direct. It is heavily concentrated on the capital goods industries which are responsible for the big swings in the traditional business cycle. It provides a floor to the downswings and has, in the US, been deliberately used in this way.

But the recent build-up in unemployment (which has now remained above the half a million mark in Britain for more than eighteen months) has obviously given quite a knock to the I. S. leaders. Kidron says in his preface that he completed his manuscript in March 1967. At that time he could still write that any “elements of instability are just a smudge on the horizon. So far, the weight of the arms economy has been on the side of stability, charging and recharging the more immediate causes of high employment and well-being.” A year later it is a different story; John Palmer, another of their prominent spokesmen, told a meeting in Hampstead on 13 May last that the permanent arms economy was coming to an end:

  The arms economy is no longer the provider of the capitalist system. Capitalists are now economising on arms spending. The boom years in Europe and America are a thing of the past.

The coming period, he said, would be one of crisis and instability.

The point is that capitalism docs not need a great deal of stabilising anyway— since it is not as unstable as I.S. claims. They subscribe to the underconsumption myth, that left to itself capitalism would collapse as it would not be able to sell what it produced. But, if you hold this view, you must explain why capitalism has not collapsed long ago. The answer Michael Kidron came up with was that capitalism would have collapsed had it not been for arms spending. It is true that consistency is not one of the I.S. group’s strongest points but their statement that the so-called permanent arms economy is coming to an end ought to mean that they think capitalism is about to collapse. For some reason, John Palmer did not give a date.

In fact, what is collapsing is not capitalism but the myth of the permanent arms economy. It has been discredited along with Keynes generally. It is a measure of I.S.’s theoretical bankruptcy that, faced with this, they fall back on the “crisis of capitalism” to create the conditions for social revolution, rather than the growing understanding and organisation of the working class.

The ‘Socialist’ Labour League, of course, never tires of telling us that the capitalist system is in a state of “crisis”. According to them, capitalism has been in this condition for years but recently it did look as though the unbearable tension (and the semi-hysteria it gives rise to in the League) might get some relief when the SLL central committee solemnly announced that the socialist revolution had started, (see Newsletter 25/5/1968). Tom Kemp, however, is relatively restrained in his book and, since he is a Trotskyist, the most interesting sections are those concentrating on Imperialism: the Highest Stage of Capitalism. Lenin came up with the idea that it was imperialism which had given rise to the opportunist trends in the social-democratic movement.

 The receipt of high monopoly profits by the capitalists in one of the numerous branches of industry, in one of the numerous countries, etc., makes it economically possible for them to bribe certain sections of the workers, and for a time a fairly considerable minority of them, and win them to the side of the bourgeoisie of a given industry or given nation against all the others.

Kemp writes that although “there seems no need to accept in a literal way what Lenin wrote about the relationship of the aristocracy of labour to the working class as a whole as valid for the present day”, nonetheless “Marxists have generally followed Lenin in accepting that the ‘aristocracy of labour’ in the metropolitan countries owed its privileged position to the existence of imperialism.”

As with Kidron’s theory, the Socialist Party is in fundamental disagreement with this view. In fact, we reject the Leninist concept of “bribery” as being as crudely mistaken as is the supposedly stabilising influence of the permanent arms economy. For a start, the capitalists have nothing to bribe the socialist movement with. But objections such as this are incidental in any case. The most important error Lenin and his followers made was to imagine that there was any need to bribe the working class into supporting the war effort in their various countries. The workers then, as now, were committed to capitalism. Come war or peace, crisis or slump, their support of the capitalist system has never wavered.

By refusing to face up to this, Lenin contributed to the mystical belief in the revolutionary aspirations of the workers which remains a characteristic of all shades of neo-bolshevism. It is this which accounts for the obsession with leadership which is displayed by groups like I.S. and the SLL. The revolutionary potential of the working class is being diverted by right-wing labour leaders, they argue. Hence the need for alternative “revolutionary leadership”.

The Socialist Party rejects this idea as well. What is needed is not leadership (the labour movement is rotten with “revolutionary leaders” as it is) but a working class equipped with an understanding of Socialism. The left wing are a valuable asset to the capitalist system, thanks to the confusion and disillusionment they produce. As a force for maintaining capitalism they are far more potent than any “bribery” or economic strategy which the ruling class, could resort to.

B. C.