Workers don’t control political power (2026)

From the August 2026 issue of the Socialist Standard 

The state presents itself as a neutral arbiter, a set of institutions that balances competing interests, responds to democratic pressure, and governs in the common good. This is an illusion.

 The state is not neutral. It is the organised power of the ruling class. Its courts, police, military, and legal apparatus exist primarily to protect property relations, to guarantee that those who own the means of production continue to own them, and that those who don’t must continue to sell their labour-power to survive.

The wage system: concentrating wealth and power simultaneously

This is the mechanism at the heart of everything. Workers are paid less than the value they produce, the difference is appropriated by those who own the means of production. This isn’t occasional exploitation or the result of individual greed. It’s how the system functions by design.

And here’s the critical point: wealth and power are not separate things. Money is power, directly and immediately. Accumulated capital buys political influence, funds media outlets, finances lobbying operations, endows universities, and shapes the terms of public debate. Every pound extracted from the wage relationship doesn’t just enrich an owner, it widens the power gap between owner and worker. Wealth concentrates, and with it the ability to shape society in the interests of the wealthy.

The wage system therefore performs a double function simultaneously: it extracts wealth upward and concentrates political power upward at exactly the same rate. These are not two separate processes. They are one process with two consequences.

The anger this produces

Most working-class people don’t articulate this in political terms. But they feel it, viscerally, daily, in ways that produce real rage.

The nurse who works twelve-hour shifts and can’t afford to heat her home properly while energy company executives collect eight-figure bonuses. The warehouse worker tracked by an algorithm, disciplined for toilet breaks, earning just enough to survive while the company posts record profits. The young person who does everything right, works hard, studies, plays by the rules and still cannot afford to rent a decent flat, let alone buy one. The family that chooses between food and bills at the end of the month while being told the economy is performing well.

This is not bad luck. It is the system working exactly as intended.

The frustration deepens when people turn to politics for relief and find the same story. A new government arrives promising change. Within months it is managing the same constraints, making the same concessions to capital, explaining why things cannot move as fast as promised. The cycle repeats. The sense that the game is rigged, that no matter how you vote, nothing fundamental shifts, is not cynicism. It is an accurate reading of how power actually works.

When anger is misdirected

That anger is real and legitimate. But without a clear analysis of where it comes from, it gets captured and redirected. At migrants. At benefit claimants. At a remote cultural elite. At any target that doesn’t threaten the underlying system.

The worker who resents his neighbour for claiming housing benefit while a landlord extracts half his wage in rent has had his anger pointed in exactly the wrong direction. The voter who turns to a nationalist strongman because mainstream politics has failed them is expressing genuine grievance through a vehicle that will deepen their exploitation while appearing to challenge it.

This misdirection isn’t accidental. Concentrated wealth funds the media, the think tanks, and the political movements that perform this redirection. It is one of the functions that money-as-power performs most effectively.

The vote and its limits

Workers can vote. In many countries they won that right through bitter struggle. But voting periodically for competing sets of managers of the capitalist system is not political power. Governments change; the underlying economic structure does not. Whichever party takes office inherits the same constraints, bond markets, capital flight, corporate lobbying, and the basic requirement that the economy remains profitable for investors. Policy operates within those limits or faces immediate economic punishment.

The wealthy don’t need to buy every politician or rig every election. They don’t have to. When economic power is sufficiently concentrated, the range of politically possible options narrows automatically. The system polices itself.

The structural problem

Economic power can precede and shape political power. Those who control investment, production, and employment set the terms within which governments operate. A government that seriously threatens property rights finds capital withdrawn, currency attacked, and media turned hostile almost immediately. This isn’t conspiracy, it’s the structural logic of a system where production is privately controlled.

Reform and its ceiling

Reforms, like better healthcare and labour protections, can sometimes be won. These matter. But they are concessions extracted under pressure, not transfers of power. And they are reversible, as decades of austerity have demonstrated. The ceiling on reform is the point at which it begins to threaten profitability. Beyond that point, the state’s coercive functions become more visible.

The conclusion

The anger felt by working people is not irrational. It is the rational response to a system that extracts their labour, concentrates the proceeds as wealth and power in a minority’s hands, offers them a vote every few years as a substitute for genuine agency, and then blames them when they lose faith in the process.

Real political power for workers would mean controlling the conditions of their own lives, the economy, production, distribution. That requires not managing capitalism better but replacing it with common ownership and democratic control. As long as the wage system stands, wealth will continue to flow upward and power with it. Everything short of abolishing that relationship leaves economic power, and therefore real political power, in the hands of a minority.

Jake Ambrose (Australia)

Socialism & the State. (1910)

From the December 1910 issue of the Socialist Standard

The Socialist propagandist is often confronted with the assertion that the establishment of a system of Socialism would involve the subjection of the individual to a hide-bound State, that would eventually result in the enslavement of the people. 

The Socialist, on the contrary, asserts that the working class are enslaved to-day, and that only the establishment of Socialism can effect their emancipation.

The individualist attacks Socialism from the standpoint that the proposed change simply means the continuation of the present wage-system of production, in which the whole of the wealth of society shall be owned by a number of persons incorporated into a State or bureaucracy, instead of being, as at present, owned by private individuals. He maintains that the right of the individual is supreme, and condemns any action on the part of a State or collection of individuals, that interferes with his desires.

Since correct understanding implies correct interpretation of terms used, and the point revolves upon the meaning of the term “slave”, I will preface my remarks with such a definition. 

A slave is one who is owned by or controlled by another; one who is compelled to labour to satisfy the wants of another. 

The chattel-slave originally was a prisoner of war, whose life was at the disposal of his owner. He was allowed to live in order that he might produce more wealth, or greater satisfaction, for his owner, than could be obtained from his death, his owner, of course, providing him with the food, clothing and shelter necessary to keep him in a fit condition.

Later on in the development of society we find the serf, who was compelled to labour for a certain period for his lord, the remainder of his time being at his own disposal for the purpose of providing himself and his family with the necessaries of life.

To-day the worker, in order to live, is compelled to labour for a certain period. He receives, however, but a portion of the wealth created. Out of the wealth he has produced he receives (according to Mr. Chiozza Money [who estimates the wealth produced at £4. 5s. per week per family of five, while the average amount received by a working class family of five is shown to be 25s . per week] and other capitalist statisticians) about one-third. That is to say that if he produces goods to the value of £3, he receives as a wage £1, his master taking the remainder.

While there may be a difference in degree in those different forms of exploitation, the principle still remains. The under-dog is compelled to labour for the purpose of producing something to satisfy the wants of others who, holding the things necessary for his life, thereby control him. He is, therefore, still a slave.

The principle would remain if the working class was compelled to work for a State instead of for individual employers. If the whole of the wealth and the means of production are owned by a State and the worker receives a wage, then slavery is not abolished, but is intensified.

The worker to-day, while compelled to work for a master, still has some sort of a choice among those masters, but with the State as the only employer he is compelled to work for that employer and under that employer’s conditions, or take the only alternative and starve. State Capitalism would intensify slavery, but State Capitalism is not Socialism.

Our individualist opponent, if a toiler, is subject to others. Others have the power to say when he shall work and when he shall starve, how he shall work and under what conditions. His life and action are determined largely by his spending capacity; by the extent of his wage. He cannot do as he would wish because he is bound to the bench or to the counter. The greater part of his life is occupied by laborious toil or petty business – toil and worry and anxiety in the interest of others. He is robbed by the capitalist employer and oppressed by the capitalist State.

And what is this State? Merely representative of the dominant class; the class in power, whose interest lies in an opposite direction to the interest of the workers. 

The State is merely the force that enables the working class to subject the working class.

Large  bodies of drilled and armed men are only necessary where the greater number of the people are subject to the few, and those civil and military forces necessary to control the oppressed and exploited class are the “State”.

The State grew up at a certain stage of economic development with the growth of classes, and when the classes are abolished the State will go too. Socialism means no State.

The propertyless have no “rights” under capitalism — not even the right to live. Far from being in any way free they are the property, to all intents and purposes, of the propertied class. Our opponents have been misled by the so-called friends of the worker — the municipal-cum-nationaliser — by the pet theory of the Fabian, who holds that the “government of the future must be by experts”, with the Fabians, of course, as the experts.

Those who read of the conditions of the people of Peru, prior to its conquest by the Spaniards, will find therein many points of resemblance to the proposed bureaucracy of the Fabians.

The Peruvian State was not capitalism: goods being produced, not for sale, but for consumption by the people. Take the following from Prescott (p. 56):

“The Peruvian Government watched with unwearied solicitude over its subjects, provided for their physical necessities, was mindful of their morals, and showed throughout the affectionate concern of a parent for his children, who were never to act or think for themselves, but whose whole duty was comprehended in the obligation of implicit obedience”.

And on page 26 we are told “Industry was publicly commended and stimulated by rewards”.

Compare this with the following from Fabian Essays (1908 edition) under the heading of “Socialism and the State” (p. 163).

“Out of the value of the communal produce must come, rent of land payable to the local authority, rent of plant needed for working the industries, wages advanced and fixed in the usual way, taxes, reserve fund, accumulation fund, and the other charges necessary for the carrying on of the communal business. All these deducted, the remaining value should be divided among the communal workers as a bonus . . . 

"If there is one vice more than another that will be unpopular under Socialism it is laziness.”

In Peru, we are told (Prescott, p. 26) “Occupation was found for all, from the child of five to the aged matron not too infirm to hold a distaff, no one was allowed to eat the bread of idleness in Peru”.

Well may working-men who have studied the conditions of present-day capitalism resent the proposals of the “State Socialist” with his grandmotherly legislative enactments. Such a change as is proposed by him would indeed mean slavery, and would throw the propertyless class still deeper in the mire of social degradation.

The Government of the Incas was in spirit truly patriarchal since “the task imposed upon him was always proportioned to his strength, he had seasons of rest and refreshment and was well protected against the inclemency of the weather”, and “every care was shown for his personal safety”. Yet the greater number of people in Peru were slaves, and slaves of such a type that the conditions of to-day are preferable to those who, recognising the evils of wage-slavery under which they exist, are trying to find a way out. True the people were kept in subjection by the superstition that the Inca was a supreme being, a descendant of the sun, and they blindly worshipped him as omnipotent. They were prepared to toil for his benefit and for the benefit of his nobles.

But is the superstition of the Fabian worshipper in any way preferable? To blindly worship the State and toil to support the supposed experts in control (for we are told [Fabian Essays, p. 164] that it is probable that the “captains of Industry will be more highly paid than the rank and file of the industrial army”) is as great an error, as foolish a superstition, as to worship the sun and its supposed descendants.

The worker must be forced to realise that to effect his emancipation he must discard  all superstition and must refuse to be led and bossed by self-styled “superior persons”. He must understand that in order to obtain the best of things necessary for life, with the least expenditure of energy he must organise with his fellows.

Individual production is played out. Without doubt the best results are to be obtained by social production. All the evil is caused by that co-operation ending with production, and the wealth, socially produced, being owned by a small section of the community. We cannot go back to individual production, nor is it desirable. What must ultimately come is a system wherein wealth shall be socially produced and collectively owned by the producers, who shall say in what way and in what quantity it shall be produced.

In brief, the means and instruments for producing and distributing wealth must be owned and controlled by the whole working community.

Twel.

Yes in My Back Yard (2025)

Book Review from the November 2025 issue of the Socialist Standard

Abundance: How We Build A Better World. By Ezra Klein and Derek Thompson. ISBN 9781805226055

This book has caused quite a stir. It has even made Chancellor Reeves’ summer reading list, and been cited – in passing – by Robert Peston. It is part of the YIMBY (Yes In My Back Yard) trend. Its central theme is that government regulation is choking the capacity for effective action to generate wealth, and that instead the liberal left has been concentrating on the parcelling out of scarcity, rather than trying to improve the overall material wealth of society.

The authors mention the expensive failure to build a high-speed railway in California, citing environmental laws and litigation as the reason: alongside the excessive bureaucracy to plan the route. They also note California has higher rates of homelessness than comparable cities in Texas, and attribute the blame to zoning and to authorities loading environmental, building and labour standards into permissions, making building uneconomic for developers.

In their narrative, they do discuss the nature of landholding and the fact that residents’ houses are also financial assets, only to skip blithely over them to discuss bureaucratic complexity again. In so doing, and returning to their theme that it was the failure of efforts to restrict the power of public authorities that is to blame, they ignore the role of private property.

The state is restricted in order to secure the power of private property. The litigation is there to protect property rights. It’s there to protect economic interests (and some firms do benefit from regulation). The complex funding arrangements and financial regulations are there precisely to keep the interests of wealth superior to state power. This is a political choice, and one that those who fund the political parties will continue to demand.

At points, the authors seem to indicate that it would be better to allow constructors to build slum housing than to continue allowing homelessness. They also suggest reducing quality controls and demands on construction: in essence, they are allowing that the working class cannot afford decent housing. Although their ‘lens’, as they say, is increasing supply, they ignore the lack of effective demand for the majority.

They find time in their conclusion to reference Marx and Engels in The Communist Manifesto talking about unfettering productive forces to produce abundance. But they ignore what those fetters of capitalist society are: the law of no profit – no production, and the law of no profit – no employment. The growth of income streams alongside the capacity to produce so much that profit margins would be reduced to zero.

Absent an understanding of the role of private property and the class struggle from their narrative, they are reduced to a simple call for de-regulation coupled with bold state action. They do not see that the litigiousness they decry is meant to exclude a thorough-going democratic control that includes all voices. The abundance they seek can only come from the common ownership and democratic control of productive wealth.

Pik Smeet

50 Years Ago: The State and Socialism (1966)

The 50 Years Ago column from the March 1966 issue of the Socialist Standard

It is an underlying principle of State activity that human life and liberty are minor considerations compared with the rights and safety of property. This is no new discovery. Today the fact is so glaring that it seems idle to dwell upon it. Yet it is no mere wartime principle; it arises from the very nature of the capitalist State. That State mainly exists in order to provide the force to guarantee the rights and emoluments of property to the possessors. The origin of the State was in the necessities of the institution of property. Today its predominate function is that of the armed forces of repression. In essence it has always been an armed policeman. The State and its chief function is necessitated by the antagonism of interests, the division of the people into oppressors and oppressed, propertied and propertyless, brought about by the institution of private property. It cannot live longer than the system that is based on properly. With the reabsorbtion of property into social ownership the repressive State will disappear. As a State it will die out. In its stead will arise the administration of things in common for the common weal. These are truisms to every Socialist, but how completely are most workers deluded into believing that the State exists to protect their lives, liberties and happiness. Yet the lessons have been both numerous and conclusive. Despite the veil of hypocrisy that has been thrown over the facts, they are, and always have, been plainly visible to all who have eyes to see.

[From the Socialist Standard, March 1916.]

An ‘anarcho-capitalist’ explains (2024)

From the March 2024 issue of the Socialist Standard

Last November voters in Argentina elected as President, Javier Milei, who must have styled himself at one time an ‘anarcho-capitalist’ since that’s what the media keep calling him. In January he was invited to the gathering of global elites in Davos in Switzerland and gave a speech in which he expounded his views. He had some harsh things to say about the state, seeing it, as individualist anarchists do, as the negation of ‘freedom’:

‘The state is financed through tax and taxes are collected coercively. . . This means that the state is financed through coercion and that the higher the tax burden, the higher the coercion and the lower the freedom’ (tinyurl.com/29vuvjwr).

Strict anarcho-capitalists want to abolish the state completely and transfer all its functions, including the judiciary and the armed forces, to profit-seeking private enterprises. Milei doesn’t go that far as he sees a very limited role for the state (to protect and enforce private property rights and commercial contracts) and so is technically what has been called a ‘minarchist’.

Defining his ‘libertarianism’ he said:

‘Its fundamental institutions are private property, markets free from state intervention, free competition, and the division of labour and social cooperation, in which success is achieved only by serving others with goods of better quality or at a better price. In other words, capitalist successful business people are social benefactors who, far from appropriating the wealth of others, contribute to the general well-being. Ultimately, a successful entrepreneur is a hero.’

Adding ‘and this is the model that we are advocating for the Argentina of the future’. So, it looks as if he is going to try to introduce ‘minarchy’ there. The result could well be some sort of ‘anarchy’.

Capitalist heroes?

It is a measure of the desperation of workers in Argentina that they were prepared to vote into the top office a person who calls capitalists heroes.

Are successful capitalists really heroes? To have a chance to be successful you first have to obtain money to invest in producing some good or providing some service. You can get this in various ways — inherit it, borrow it, even acquire it illegally — but you have to get it. Having identified what you think might be a profitable market you use the money to rent premises, buy machinery and materials, and hire workers. You put the workers to work at producing your product which you hope to sell at a price that covers these expenses plus a mark-up for profit. If your hope is realised you end up with more money than you started with. You have made a profit.

But what is the source of this profit? Since the only way that wealth can be produced is by applying human labour to materials that originally came from nature (usually after having been fashioned and refashioned many times) the source can only be the work of those who produced what capitalists sell. It’s the difference between the value of what workers add to the materials and what they are paid as wages. The source of profits is the unpaid labour of workers. Contrary to Milei’s assertion, capitalists do appropriate wealth produced by others. That’s not very heroic.

It is true that while some capitalists succeed others fail, and that how well you know your market or can identify a new market can affect how much profit you make and whether you succeed or fail. But this doesn’t increase the amount of wealth that has been produced. It is competition between capitalists to get a share of that part of new wealth produced by the working class over and above what it costs to maintain them. ‘Capitalist successful business people’ are those who do best in this competition at the expense of their capitalist rivals.

All on their own?

Milei argued that it is ‘free trade’, ‘free enterprise’ capitalism that has been responsible for the immense increase in both productive capacity and the amount produced since 1800.

It is a bold claim to say that this was achieved by private enterprises acting all on their own in pursuit of profits without any state intervention; in fact in spite of such intervention. We hold no brief for those pro-capitalists who favour state intervention, but we must point out that the state provides a range of key services that help private enterprises to operate and succeed. For instance, by arranging for a supply of literate and educated workers, or a health service to patch up workers so they can go back to work as quickly as possible, or payments to workers who are temporarily unemployed during a slump so that their ability to work doesn’t deteriorate for when they are needed in the next boom.

Milei denounced this state provision of services for capitalist enterprises as a whole as ‘collectivism’ (and also, as might be expected, as ‘socialism’):

‘The problem is that social justice is not just, and it doesn’t contribute to general well-being. Quite on the contrary, it’s an intrinsically unfair idea because it’s violent. It’s unjust because the state is financed through tax and taxes are collected coercively.’

In his view, taxing capitalist enterprises to pay for such collective services amounts to stealing some of their profits by force:

‘[T]he market is a discovery process in which the capitalists will find the right path as they move forward. But if the state punishes capitalists when they’re successful and gets in the way of the discovery process, they will destroy their incentives, and the consequence is that they will produce less.’

There is an element of truth in this in that, if the state goes too far in this direction — as reformist politicians want as a way of trying to improve conditions for workers under capitalism — this will have the consequence both of undermining the quest for profit that drives the capitalist economy and of rendering capitalist enterprises uncompetitive compared with their rivals from other states. It’s why all reformist governments fail and are doomed to fail. But if a state which did not provide these services for its capitalists and left their provision to profit-seeking private enterprises — as ‘anarcho-capitalists’ and ‘minarchists’ want — then this too would undermine the competitiveness of its capitalists.

It’s the job of governments, as the executive committee of their capitalist class, to get the balance right. In any event, no state has ever not provided such services, so it cannot be claimed that capitalist development since 1800 has been due to private capitalist enterprises alone. In fact, capitalism has never existed without the state. The state helped it to come into being and has helped maintain it ever since.

Can the market fail?

Milei also took a pot shot at neo-classical economic theory which, he said, ‘designs a set of instruments that, unwillingly or without meaning to, end up serving intervention by the state, socialism and social degradation’. He had in mind in particular its theory that the state should intervene to correct ‘market failures’.

According to him, market failures are impossible:

‘The market is a mechanism for social cooperation, where you voluntarily exchange ownership rights. Therefore based on this definition, talking about a market failure is an oxymoron. There are no market failures. If transactions are voluntary, the only context in which there can be market failure is if there is coercion and the only one that is able to coerce generally is the state, which holds a monopoly on violence.’

Notable ‘market failures’ that he rejected as such were the emission of too much CO2 into the atmosphere and the emergence of monopolies. He says they are not examples of the market failing. Okay, let’s accept this and see them as the result of ‘free market capitalism’ working normally. That rather weakens his case for ‘free market’ capitalism. These are indeed results of how the capitalist market economy does work and why its operation prevents states from dealing effectively with problems such as climate change. In any event, state intervention to try to correct what are perceived as market failures has nothing to do with socialism.

Milei began his address by saying that he was there to tell his audience, made up of the world’s leading capitalists and political rulers, that ‘the Western world is in danger’. This danger, he told them, came from continuing to practise ‘collectivism’. At the end he remarked: ‘I know, to many it may sound ridiculous to suggest that the West has turned to socialism’. He was right. It does sound ridiculous but that’s because it is ridiculous.

Adam Buick

Globalisation: the left on the coat-tails of liberalism (2003)

Book Review from the January 2003 issue of the Socialist Standard

Two recent books, Globalization: Neoliberal Challenge, Radical Responses by Robert Went and The Twilight of Globalization: Property, State and Capitalism by Boris Kagarlitsky highlight the long-standing history of globalisation of trade, changing imperial relations and the failure of the modern left to come to any effective strategy to combat its renewed assertive neo-liberal ideology. In the late-nineteenth and early-twentieth century the left was able to delineate a clear position between its own anti-imperialist stance and the pro-imperialist and apologist liberal positions. By the second half of the twentieth-century, however, after the experience of running capitalism (with its consequent disillusioning impact on principles) and the disorientating policies of supporting “progressive” struggles over “reactionary” ones, the left is in a muddle. For example, a significant section of the British left backed the NATO bombing of Serbia and the support of the Labour Party for the hegemonic ambitions of the US shows how much politics has seemingly changed in the course of a century.

Or does it? The tradition of leftism in Britain, rather than being an alternative to capitalism has, when negotiating for political power been liberal rather than anything approaching socialist. The 1945 “settlement” was not based on the ideas of the Labour movement but on a programme of social-security and nationalisation that had long been part of the liberal agenda, being synthesised in the 1942 Beveridge Report (which was also incidentally supported by the Communist Party). During the twenty years following the second world war the “social-compromise” of the welfare-state and Keynesianism become the accepted centre ground of British politics.

However, following the long-term decline in economic growth liberal opinion swung away from the Keynesian orthodoxy to a new one based in classical economic theory. The left, increasingly isolated from mainstream economics, first led a failed counter-attack in the early 1980s and then slowly surrendered on all fronts under Neil Kinnock and finally the right-wing bully Tony Blair. There is and always has been, it is true, a radical left aiming at arriving at state-capitalism through the Labour Party but the “socialising” impact of the post-war nationalisations was virtually non-existent. Such measures were not accepted by the political centre as necessary on the grounds of radical social and economic ambition but because it could be defended – to an extent – in terms of the overall efficiency of capitalism.

Privatisations, pursued ideologically against perceived excess government economic activity, have generally failed and sometimes cost business more than the old nationalised equivalents. The state remains, despite globalisation, a strong social, economic and political force, which is no doubt why transnational corporations spend billions of pounds globally in influencing their decisions. This despite the continuing ideological attack on the state even to the point of damaging the stability of the capitalist state itself. Privatisation has seen the domination of ideology over pragmatism for capitalist government. A European Commission report of 1992 (quoted by Kagarlitsky) failed to find any advantage and in fact an additional cost to be borne for capitalism. The reason given, to reduce the economic role of the state and thus to reduce state expenditure has singularly failed to occur; in Russia, for example, it was said that a reduction in the state economic sector of one-tenth required an increase of the state apparatus by one-third. States are not reducing in size or reducing their role but are merely changing with an increase of unaccountable quangos and so on. Similarly the increasing role of international organisations have not been met by a reduction in the role of national governments. The situation may be summed up with the phrase “freer markets and more rules”. Thus the use of the state is open to a different approach and is open to the left, which is currently unwilling to use it.

Further, the social inequalities engendered by neo-liberal capitalism can threaten to undermine the basis of capitalist government itself. A strong state involvement in the economy has historically been a boon for, rather than the bain of, capitalism. It is essential for the creation of a social consensus for capitalist relations:

“Because the capitalist market cannot get by without non-market institutions, the state as a non-commercial entity plays a key role, not only financing public bodies but also overseeing the interaction between the development of the economy and that of the various structures of the social sphere… Without a certain consent by the governed, the state could hardly perform its class function. But this means that the state system, as an instrument of the ruling class, cannot fail to take account of the interests of other social layers as well. When the institutions of power prove incapable of this, the state system enters into crisis” (Kagarlitsky, The Twilight, p.8).

Increasing inequalities are likely to lead, if not to outright conflict, then to tensions and an increasing political demand and therefore political will, where representative democracies exist, to a likely challenge to the unapologetic inegalitarian capitalism of recent decades. Robert Went reveals that the ratio of income between the top 20 per cent and the bottom 20 per cent of the world population was 60:1 in the early 1990s and predicted to decline to 50:1 by 2010 if all went well with the world economy; given the crises of the 1990s the ratio is far likely to increase rather than decrease. Went argues that the prospects for workers globally of the continuation of current trends is bleak indeed:

“there will be a greater and more dominant dictatorship of the markets, particularly over countries that wish to attract capital; greater social inequality as a result of a dual process of polarisation, within countries and on a world scale, among countries; progressive levelling down of wages, working conditions and social security; ecological destruction and deterioration; a greater role for unaccountable international institutions and blocs; and a further undermining of democracy” (Went, p.108).

The state has also tended to be a great source of innovation in the field of technology, which is not, as widely reported, the cause of globalisation but merely facilitates it. Not least of these developments was the internet, which originated in the 1960s in the US Defence Department but also includes space technology, infrastructure and education.

The confidence of global finance capital was somewhat shaken by the capital-flow and currency crises in Mexico in 1994 and Asia in 1997, which produced several calls for international regulation of global capital flows. Further crises are likely to induce regulation if severe enough. Current actions to solve financial crises are tied to austerity packages, which avoid the global impact of such incidences but create problems of development for those countries which are subject to them. While the share of world trade of developing countries has increased from 20 per cent to 30 per cent in the post-war period, economic growth has in the main been restricted to the EU, US and Japan. The imposition of export-led growth on the resource rich developing countries means that to develop a break with neo-liberalism is needed. A degree of protectionism is needed for national capitalist economies to prioritise industrial development. Such a growth, of course, could well be a stimulus for the global economy were it not geared to the interests of finance capital in the developed world.

Successful development has generally taken place in countries or regions where the interventionist state is the norm and not under conditions of anything approaching free-trade. Selective intervention in the world economy has been the basis of most industrial growth, from the British cotton-trade to South Korea and Taiwan in the 1960s who, without government protection of the domestic market tied to export performances of amongst others the clothing industry, would still be exporting rice as its export mainstay. Protectionism then most probably must play a prominent part in any meaningful economic growth in the non-western world – the west of course being still well acquainted with it, despite its rhetoric.

In the light of the utter failure of the Kyoto agreement to result in meaningful regulation it is also clear that for any serious recognition of environmental sustainability there must be a proliferation of regulation and state-led implementation of clean-technologies and the innovation of new ones. If humans are to survive on the earth then this must be done. If ecological disaster is not to be averted by socialism then capitalism must clearly adopt such an approach.

What then is to be done? Went is clear that capitalist relations are flawed:

“It is not possible within the existing economic logic, in which profit maximization comes first, to solve the most important problems that humanity faces. Under capitalism, the individual interests of speculators, employers or investors determine what they do. The partial rationality of their actions clashes with the general social interest of present and future generations.

In fact, capitalism is becoming more and more irrational. The discrepancy between what is economically and socially possible and what is actually happening has never been greater than it is today” (Robert Went, Globalization, p.121).

Kagarlitsky is also clear that the old state driven approaches to the problems of capitalism are also little hope for the future:

“The old Big Brother is dead, meet the New Big Brother. Now Big Brother is global or multinational, but even more faceless and even less accountable than before. It is no surprise that after experiencing what globalization has in store, so many people world-wide are becoming nostalgic for the old Big Brother” (Boris Kagarlitsky, The Twilight, p.2).

It seems strange then that despite the attention that both Went and Kagarlitsky pay to the need for an adequate response to capitalism and its current ideology that both see the answer in progressive reforms, or what Kagarlitsky calls “revolutionary reforms”. Following the massive defeat of leftism across the world, it is clear that socialist revolution can well do without the pursuit of reforms. Such an attitude also ignores the extent to which any challenge to neo-liberalism will most likely be led by an ideological shift back to liberal social-pragmatism – in other words, a shift motivated not in the interests of labour but of capital.

Colin Skelly

Cooking the Books: An anarcho-capitalist president? (2023)

The Cooking the Books column from the October 2023 issue of the Socialist Standard

In August the media reported the success in Argentina’s presidential primary elections of Javier Milei, ‘a self-described ‘anarcho-capitalist’’ (Financial Times, 31 August), ‘the ultra-right libertarian and ‘anarcho-capitalist’ who represents angry Argentina’ (El País, 14 August).

If they now have a chance of one of theirs being elected as president, the anarcho-capitalists have come a long way since we debated them in the 1980s and 1990s, challenging their argument that socialism (as a society based on common ownership without production for sale) was impossible and refuting their spurious ‘economic calculation argument’.

The theory, the Financial Times noted, was the brain-child of Murray Rothbard (1926-1995) who ‘developed a radical version of libertarianism that he called ‘anarcho-capitalism’. In this worldview, states are ‘organised banditry’ and taxation is nothing but ‘theft on a gigantic, and unchecked, scale’. As Quinn Slobodian points out in his recent book Crack-up Capitalism, in Rothbard’s ideal polity, ‘contracts would replace constitutions’ and people would not be citizens but ‘clients of a range of service providers’’ (tinyurl.com/484hr8b8).

We can confirm this from the many debates we had with them. They did argue that capitalism can, and should, exist without the state; in fact that as long as the state existed there was not real capitalism but ‘statism’ or ‘corporatism’. Capitalism, they said, had never been tried. In their view, the functions of the state, including the courts, the police and the armed forces, should be exercised by competing private enterprises whose services individuals could buy according to choice. In fact, everything should be dealt with by buying and selling contracts between individuals and groups of individuals.

This includes the sale of body parts. They are divided over whether parents can sell their children. Milei, who is evidently a loud-mouth who speaks before he thinks, confirms both. According to El País,

‘In June of last year, he referred to the sale of organs as ‘just another market’ during a radio debate. ‘Who are you to determine what [a person] does with his life?’ Milei questioned. (…) Days later, a journalist asked him if he subscribed to another theory that suggested ‘the sale of children.’ Milei replied, ‘It depends,’ and further got himself tangled up. ‘Shouldn’t the answer be no?’ the journalist pressed. ‘If I had a child, I would not sell it,’ Milei said. ‘The answer depends on the terms in which you are thinking; maybe 200 years from now it could be debated’ (tinyurl.com/ykvn5baj).

Capitalism in Argentina must have reduced workers there to the depths of desperation if so many are prepared to vote, even as a protest, for a person with such crazy ideas.

Anarcho-capitalism is a dystopian nightmare that, if it could be implemented, would make capitalism even worse than it is now by subjecting everything, literally everything, to being bought and sold. It would reduce us all to isolated atoms only interacting in the market place.

Capitalism has never existed without the state and never could have. It was helped into being by the exercise of coercive state power both to accumulate the first money invested as industrial capital (colonial plunder, slave trade) and to create a propertyless proletariat by driving peasants off the land (enclosures, clearances). As Marx put it, capitalism came into the world ‘dripping from head to foot, from every pore, with blood and dirt’ (Capital, vol 1, ch. 31). Once established, capitalism still needed a social organ of coercion to maintain the monopoly over the means of production by a few and to exclude the working class from them except to work for wages and produce profits.

In any event, if Milei is elected president, there is no chance that he will abolish the state in Argentina. ‘Anarcho-capitalism’— capitalism without a coercive state — is a contradiction in terms.

The Roots of Politics (1951)

From the August 1951 issue of the Socialist Standard

As the Labour Party have failed to deliver the goods they promised there is a tendency to turn away from politics by many who previously supported the Labour Party. Some are turning to the trade union movement to seek the solution to their troubles, others are giving up the struggle in despair. A lack of understanding of the basis of their troubles led them to support the Labour Party in the first place. Had they realised that the policy of the Labour Party would not, and could not, lead to a fundamental change in the basis of society they would not have been disappointed with the fruits of Labour policy.

Wherever any class or individual throughout history has reached a dominating position it has been accomplished by participation in politics. Even the so-called dictators, like Alexander, Caesar, Cromwell, Napoleon, Mussolini, Hitler and Stalin, have all gained a dominating position in this way. When firmly entrenched they have sought for means to keep up the illusion that their power is based upon the interests of the majority, and have even been compelled to make certain concessions to popular dissatisfaction. They have continued in power by promising a return to older procedure when the external and internal enemies of the State have been finally crushed. Hence their power has been prolonged by their capacity to continue to foster the illusion that the external and internal enemy is hindering the people from entering into the prosperity that the policy of the dictators aimed at securing.

It is sometimes argued that we are living in the present and that a study of past history is a waste of time. That we should concern ourselves exclusively with the practical questions of to-day. Practical questions of two thousand years ago are still practical questions of to-day, although some of them may come up in a somewhat different form. This is so because a fundamental social condition of to-day, the existence of class ownership of the means of production, was also present then.

In the opening paragraph of one of Marx’s essays he wrote, "The tradition of all past generations weighs like an alp on the brain of the living." Since the outgrowth of private property, thousands of years ago, traditions associated with it have troubled the brain of man across the ages and still muddle his outlook upon even the simplest problems of to-day, distorting bis views upon politics.

Politics has to do with the State. The State came into existence along with property and the division of society into classes that struggled against each other for power and domination. All class struggles are political struggles; struggles for control of the State for the purpose of using it or removing it The basis of politics is the production and distribution of wealth: the form political struggles assume is determined by the economic organisation of society at any given time. Political parties represent, or claim to represent economic interests. They are organised for the purpose of getting control of the State power to serve these economic interests.

Many of the institutions and the procedures bound up with government to-day are thousands of years old, and so are the arguments put forward in defence of these institutions and procedures. Elections, the secret ballot, short terms of office, rotation in office, majority rule, the whip, filibustering, the magistracy, representative government, leagues of nations—all these were present in societies, based upon property, that flourished over two thousand years ago. Every new class that economic development threw up sought, in its turn, to get control of the State machinery in order to put social relations into a mould that suited it.

Running through history like a thread are the constant disputations about how a well-organised State should be controlled, and property is the constant factor in which these disputations are rooted.

In ancient Greece class rule was philosophised into "the question as to whether the one ablest individual, or the most capable and virtuous minority, or the general body of citizens should, or does, rule"— and the same questions are debated to-day on the same basis, class rule.

An old Greek writer, Xenophon, put the idea in a general form when he wrote: “ 1 am always of opinion that of whatever character governments are. of a similar character also are the governments which they conduct.” It is interesting, in passing, to notice that Xenophon, in an essay “ On the means of Improving the Revenues of the State of Athens," put forward a strong plea in favour of nationalising such enterprises as the silver mines, shipping, market buildings, shops, lodging houses and places of entertainment. He argued that State investment was "the safest and most durable of human things."

Aristotle, the most influential of ancient writers, in his “Politics" proclaimed that “the State is a creation of nature, and that man is by nature a political animal." Farther on he writes :

“ 'And so, in one point of view, the art of war is a natural art of acquisition, for it includes hunting, an art which ought to practise against wild beasts, and against men who, though intended by nature to be governed, will not submit; for war of such a kind is naturally just."

In the Middle Ages Machiavelli (whom a humorist pointed out bears “ the domestic name for the devil") warns the Prince to take account of classes in governing, and balance one against the other for his own benefit.

In the early years of Capitalism, John Locke, in his essay on civil government, gave the following definition of political power:

“Political power, then, I take to be a right of making laws with penalties of death, and consequently all less penalties, for the regulating and preserving of property, and of employing the force of the community in the executing of such laws, and in the defence of the commonwealth from foreign injury, and all this only for the public good."

Harrington, in his "Oceana," argued that power naturally and necessarily followed property, and Cromwell opposed universal suffrage on the ground that: "The consequences of this rule tend to anarchy. For where is there any bound or limit set if men that have but the interest of breathing shall have voices in elections.”

lu America, Madison, one of those responsible for the Declaration of Independence, wrote: “From the influence of different degrees and kinds of property on the sentiments and views of the respective proprietors ensues a diffusion of society into different interests and parties." How sentiments can vary from practice was shown by the Declaration of Independence in 1776 and the Constitution of the United States, 1787-1789. The Declaration contained the following paragraph:

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life. Liberty and the pursuit of Happiness."

- Section 9 of the Constitution runs as follows:

"The Migration or Importation of such persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress ... but a tax or duty may be imposed on such importation, not exceeding ten dollars for each person."

This section was put in to serve the property interests of the importers and users of black slaves. “ All men are created equal "—well, not all men!

These are a few illustrations of the fact that since property came into existence it has produced the classes that contend for control of the State, and determined the attitude of a ruling to a ruled class. Further that as long as a class controls State power it seeks to mould society to suit its interests. To-day the capitalist class rules and rules in their own interest, though under the guise of "labour." In order to bring about a fundamental social change, a change from Capitalism to Socialism, it is necessary to take control of the State out of the hands of the capitalists. This can only be done by political action. But something more than this is required. This political action must be taken by a majority who understand and want Socialism, otherwise it will only have the appearance of the removal of power while in fact power will still remain where it is. This is what happened when the Labour Party became the Government.

Gilmac.

The Socialist Forum: Some questions about Government. (1931)

Letter to the Editors from the July 1931 issue of the Socialist Standard

A correspondent put the following questions :—

1. Do you believe in the coercion of the minority by the majority?
2. Do you agree that the best governed are those governed with the least amount of laws?
3. Do you favour voluntary or compulsory co-operation ?
4. As man is unable to govern himself, how can you claim that he is capable of governing others ?
5. As all human laws must be backed by force (otherwise ceasing to be operative), how can you claim the attainment of freedom under majority rule ?

Yours, etc.,

H. Anderton.

Reply.

(1) In a conflict the stronger party prevails, irrespective of anybody’s “beliefs.” If, as is usually the case, it is the majority which is stronger, then the majority will prevail over the minority in the event of a clash.

(2) We are seeking to establish Socialism, not seeking to alter or improve the method by which one class governs or coerces another class. From the workers’ standpoint it matters little whether the ruling class apply the coercion through many laws or few. The essential thing is that the capitalists—having been voted into power by the workers—have the means to enforce their laws. When the means of production and distribution become socially owned, it will not be necessary to maintain a coercive State for the subjugation of one class by another. There will be no classes. Society will find it convenient and necessary to formulate rules for the guidance of the individual in social affairs, and will naturally aim at simplicity and brevity in the formulation of these rules.

(3) The meaning of the question is not clear, but where the choice exists of achieving an object either with compulsion or without compulsion, it is obvious that the latter method is to be preferred because it avoids provoking resistance.

(4) We have not said that: man is “unable to govern himself,” and we are not sure what our correspondent means by the phrase. As for the question of his ability to govern others, it is only necessary to consider the ability shown by the capitalist class to govern the working class. How, in face of that fact, can anyone deny so obvious a truth?

(5) All human laws do not have to be backed by force or cease to be operative. Custom is an important and, in some cases at least, as efficient a factor as force to secure observance. For thousands of years custom was the social rule without a coercive State behind it. When we talk about attaining freedom, we make it quite clear what we mean, viz., the abolition of private ownership and control of the means of life. Majority rule will obtain when society is based on social ownership, and is not in any way incompatible with social ownership. If by freedom our correspondent means the “freedom” of the individual or the minority to disregard the commonly agreed practices necessary to the existence and well-being of society, we do not claim that such an absurdity is possible under any form of society.

Editorial Committee.

What is the State? (1928)

From the October 1928 issue of the Socialist Standard

“We are the State !” exclaimed an enthusiastic young supporter of the Labour Candidate at a recent by-election. Presumably he included in the “we,” the working class, to which he obviously belonged; and as the notion to which he gave utterance lies at the root of much that is mis-called “Socialism,” it demands some consideration.

The State is the political organisation of society under the control of one class for the ruling of other classes. It arose and developed along with the division of society into classes and the struggle between those classes of which written history is the record.

Lewis Henry Morgan, in “Ancient Society,” showed how the State took its departure from the old kinship form of society as a result of the development of private property and chattel slavery. Up till that time the military force of the social group had been directed outward against hostile groups also based upon kinship, or common descent.

The essential feature of the State, however, is that its forces are directed not only against hostile States but inwards, against a subject class.

Thus the ancient city-states of Greece, Rome, etc., existed to procure and subjugate a slave population for the economic benefit of the patricians and rich plebians who were slave-owners. The kingdoms of the Middle Ages preserved the social supremacy of the feudal lords over the serfs, etc., while the modern State, no matter whether it be nominally monarchial or republican, exists to protect the accumulated wealth of the capitalist class against the wage-slaves who produce it.

Here, however, the bourgeois “democrat” (whether Conservative, Liberal or Labour) protests that these wage-slaves, as we call them, have the vote.

“They elect their own rulers; therefore, in effect, they govern themselves.”

It is necessary here to keep our eyes on history. The wage-earning section of the population have only been enfranchised for the last half-century, and up to the present have not developed the political knowledge and organisation necessary for the control of the State power in their own interests. They have, on the contrary, placed this power repeatedly in the hands of their class enemies by voting for parties which uphold the legal rights of those enemies. Hence we find that even under so-called “Labour” Governments the armed forces are held in readiness to repress any attempt by dissatisfied sections of the workers to challenge those property rights.

These facts lead superficial folk to the conclusion that the workers cannot acquire political control; that there is some obstacle inherent in the very nature of the political machinery which prevents the wage-slaves doing what all previous insurgent classes have done. We are frequently told, for instance, that the vote is “only a piece of paper” and has no real power. We have only to push this sort of “logic” a little further to see its utter absurdity.

A £5 note is “only a piece of paper,” but even an anarchist would not throw one away. The so-called “economic power” of the property-owning class is also represented by pieces of paper, i.e., title deeds, bonds, share certificates, I.O.U.s, bank books, receipts, bills of exchange, agreements, etc., legal documents, in fact, of every description. The validity of these pieces of paper is recognised and upheld by the State, which at present is but the executive of the entire capitalist class, the specially appointed guardian of its collective interests.

The enfranchisement of the workers was the outcome of industrial development. So long as they were scattered in small towns and villages under handicraft and early manufacturing conditions it was easy enough for the property-owning class to rule by virtue of their own organisation; but the advance of machinery brought the wage-slaves together in masses of formidable size, animated, moreover, by an increasing discontent with the existing social order. The political expression of this discontent, the Chartist movement, was for the time being crushed; but it opened the eyes of the ruling class to the danger of ignoring the force behind it. How to utilise this force and divert it into channels consistent with the safety of capitalist society became the most pressing problem for this class. It was solved by degrees through the partial granting of the Chartists’ demands.

Henceforward the various sections of the master-class—Conservative, Liberal and Radical—made bids for working-class support, professing sympathy with their aspirations towards improved conditions, promising measures of reform and thus effectively dividing the workers into corresponding factions which cancelled one another out and nullified any attempt at independent organisation.

The enfranchisement of the workers has thus served as a safety-valve in delaying the inevitable social explosion and has more recently enabled the masters to utilise on a wide scale the knowledge and experience of members of the working class itself in leading that class up political blind alleys and in gaining its support for the more efficient and economical working of the machinery of government.

Is it therefore useless to the workers ? By no means ! Any machine, tool or instrument may be used for a variety of purposes or to no purpose at all in accordance with the knowledge of the operator.

The same railway engine which draws hundreds off passengers to their desired destination may stretch them lifeless on the track. A razor may be used for getting a shave or cutting one’s throat, while spades may be used indifferently either for digging potatoes or burying the dead. Socialists regard the State as an instrument of oppression so long as it is controlled by the political organisations which support capitalism, no matter what facile yarn these organisations may use to ensnare the workers. The same economic development, however, which has raised the master-class to wealth has also converted the majority of society into wage-slaves. This majority can assume the ascendancy in the State so soon as it understands its revolutionary mission as dictated, by its interests. The franchise is not a mere bribe to be offered or withdrawn by some imaginary free-will of the master-class. It has been wrung from them by the necessity of having working-class support just as wages are wrung from them by the necessity of feeding and clothing their slaves.

“But,” it is objected, “the masters do not rely exclusively upon the workers’ support. They finance the armed forces and can thus defy a Socialist majority.” The people, who raise this objection talk as though financing the armed forces was quite a simple matter. They ignore wholesale the complex conditions under which that financing is carried on.

Charles I. in this country and Louis XVI. in France came to untimely ends through making similar mistakes and imagining that it could be done quite easily without the assistance of Parliament.

The capitalist class in both countries went to a considerable amount of trouble in gaining and developing parliamentary control of the Army, simply because painful experience convinced them that this control could not be entrusted to irresponsible individuals without danger to the interests of the tax-paying class itself.

Financiers do not lend money either to governments, military adventurers, or any other concerns just for the fun of the thing; or from patriotic motives, a relish for excitement or sheer philanthropy. Hence one finds at the top of most financial columns in the newspapers quotations of numerous gilt-edged securites such as Consols, 2½ per cent. and 4 per cent. ; War Loan 5 per cent. ; Victory Bonds, 4 per cent. On these securities interest has to be paid, and as the gigantic investments in the machine for the maintenance of capitalism are secured upon the entire property of the capitalist class, its taxable capacity has to provide the interest.

Parliament, among other things, regulates taxation according to the varying interests of the exploiting class. Its seizure by a class-conscious majority of workers or its voluntary abandonment by its capitalist upholders spells death for capitalism.

Finance is a power only so long as there is no greater power to take its place. So long as the workers accept the wages system they will of necessity allow those who hold the money-bags to hold also the reins of government. Only an organisation of the workers based on the recognition of the need for common ownership and democratic control of the means of life will be able to dispense with money and consequently snap their fingers at those who hug it like some weird talisman whose charm is broken.

In the proletariat’s hour of triumph the financiers will endeavour in vain to feed and clothe their erstwhile defenders with coins and pieces of paper. The producers of wealth will consciously assume control of its distribution.

Their fellows in the armed forces will have no conceivable incentive to attempt to say them nay.

The Labourites who claim now that “we are the State” have to explain how it is that the State enslaves us and withholds from us the means of producing and distributing wealth. On the other hand, the so-called Communists, Anarchists, industrialists and the like who claim that we have not the means to obtain control of the State machinery, have to explain how we can be prevented from doing so, or, alternatively, what other way there is of achieving our emancipation.

Eric Boden

More and More (2022)

Book Review from the August 2022 issue of the Socialist Standard

More: the 10,000 Year Rise of the World Economy. By Philip Coggan. The Economist Books £10.99.

This book contains a great deal of useful factual and statistical material on the development of human society, from hunter–gatherers to the present day, from the origins of agriculture via big increases in productivity to the 2007–08 financial crash. Chapters dealing with chronological periods alternate with those covering specific topics, such as energy and transport. Here we will focus on some of the themes and the main points made.

Coggan is quite open about the role of the state in defending and assisting capitalism. Some level of law and order is needed for businesses to operate, and also the government provides education and various kinds of infrastructure required by capitalism. Britain has never been completely laissez-faire, and more generally the Great Depression of the 1930s led to much greater state involvement in the economy. Many industries have been protected from competition from abroad, and long-term research without short-term payoffs is unlikely to be funded by private companies.

Another theme is the global interconnectedness of production. Cross-border trade involves over half of what the world produces; around ninety percent of this is carried by ship, as can be seen at massive container ports such as Felixstowe and Singapore. Everyday products such as toothpaste contain sizeable numbers of ingredients, which need to be combined in a factory, put in a tube and package and transported to a wholesale warehouse and then to a shop. ‘No man is an economic island.’

Coggan makes no bones about the impact of the slave trade, describing it as ‘the industrialisation of brutality’. He quotes another writer: ‘The African countries that are the poorest today are the ones from which the most slaves were taken.’ More generally, the European conquest of the Americas ‘had a catastrophic impact on the indigenous population’, with perhaps ninety percent of the inhabitants of Mexico being killed, whether by imported diseases or warfare.

In answer to why Karl Marx’s predictions of revolution did not come true by the late nineteenth century, Coggan refers to the benefits of industrialisation being ‘sufficiently apparent’ by then. Marx was indeed over-optimistic, but surveys of workers’ lives in London and York around that time, by Booth and Rowntree, showed that about forty percent could barely keep their heads above water.

The author sometimes puts the word capitalism in quotation marks, on the grounds that it tends to be used in a slippery way, though he does not exemplify this. Yet it does not stop him using communism (without quotation marks) to describe the former system in Russia, which is not slippery, just wrong. And when he writes that ‘If anyone needed a post-Soviet illustration of the failings of Socialist economics, Venezuela was it’, he just shows that he knows nothing about Socialism. He does, however, describe the current system in China as ‘authoritarian capitalism’.

Sadly, the William Morris listed in the index is the owner of a car factory and supporter of Oswald Mosley, not the revolutionary author and designer.

Paul Bennett

Capitalism and the State (1957)

From the July 1957 issue of the Socialist Standard

A Fabian myth shared by Mr. Strachey is that increasing state activity, especially on its economic side, is an important factor in changing capitalism into something which is not really capitalism. Like Communists, although for other reasons many Labourites have proclaimed that the system is on its last legs. Unfortunately for such a view, capitalism seems to be a centipede.

State Economic Activity and Capitalism

It may be pointed out that state economic intervention has been a feature of modern capitalism right from the start in the form of state funds for capital projects, subsidies, technical research, tariffs, etc. So far from state intervention being a symptom of the system’s old age. it has. on the contrary, been a means whereby the various capitalist nationals have attained a more vigorous economic life.

That there has been a great increase in state activity in the history of modern capitalism is undeniable. This is due to the fact that the state is bound up with and inseparable from the general activities of capitalism. With the vast expansion of capitalism there has gone a corresponding increase in the activities and functions of the state. Just as the development of capitalism, nationally and internationally, has led to an increase in the antagonisms and tensions not only within the national economies, but between them, this in turn has greatly added to the growth of the weight and complexity of their problems. The state thus comes increasingly to the fore as the one social institution able to cope with these problems at any adequate level.

Origin of the State

Marxists do not regard the state as part of some eternal dispensation. It can be shown that the state is an historical product and, like all other social institutions, it has an origin and growth. Marxists point out that there have been societies without states, hence society is both logically and historically prior to the state institution. The state as an organised coercive agency does not in fact emerge until the break up of early tribalism, with its primitive egalitarianism, which was brought about by the development of private property relations and its concomitant privileged and unprivileged social classes.

With the division of the community into owners and non-owners of the sources of wealth production, the state as a social power becomes the means of ensuring the continuance of this division against disruption from within, as the result of social conflicts engendered by antagonistic class relations of production and enemies from without. The state thus serves to guarantee the legal titles of those who own the means of production and gives them the right to appropriate the labour of others, be they slaves, serfs or wage workers. In the ultimate instance these legal relations can receive a physical sanction by the control of the state over the armed forces. Thus any class which is the dominant class in a given set of private property relations of production must have direct or indirect access to the state apparatus.

The Struggle for State Power

If since the passing of primitive society history has been the history of class struggles, then these struggles have centred around the attempt to preserve or win state power. Thus an established ruling class will seek to maintain its control over the state machinery in order to perpetuate a social arrangement favourable to themselves. On the other hand, a rising class which aspires to become a new ruling class, will seek to obtain control of the state in order to mould it along the lines of their own interests. This was the position in which the bourgeoisie found itself in its struggle against the old feudal order, although economic development, by placing them in the key positions of the productive process, had given them an advantage over the old class, they found the old social organisation based on an older mode of production, inadequate for a new expanding form of production of which they would be the prime beneficiaries. The need for the control of state power became essential to bring about a social arrangement more accommodating for the extension and widening of the divergent economic powers.

It can be seen then that a particular form of state organisation is the product of a social class or classes which benefit from a particular set of property relations which it is the state's obligation to enforce.

The Meaning of Private Property Relations

When Marxists say that the state is the protector of private property, they mean that it guarantees the class interests of a given set of property relations. But the significance of these property relations do not consist in the mere ownership of things like the possession of a pair of trousers or the tools of an independent craftsman. Capitalist private property relations means a social relation between men, a relation between owners of the means of production and non-owners.

The social relations of production of capitalism are linked then with a definite class interest which confers upon those who own the wealth resources the right over the disposal of the labour of others. And it is to maintain and enforce these social relations of production that constitutes the primary function of the state.

Reformist View of the State

Marxists point out that class social systems, with their corresponding state structure, are the outcome of social development. They have come and gone, and there are good historical reasons for stating that capitalism, which is the latest of such systems, will also be the last and in turn will give way to a classless and hence stateless social organisation.

While Labour and Fabian theorists accept the fact of the class structure of capitalist society, they do so on different grounds to Marxists. For them social classes and state organisation have always existed and always will. That is why Labour propaganda, although it at times makes veiled references to the injustices of a class society, never advocate the abolition of classes. For them capitalism is part of an eternal dispensation. Their theory is then unhistorical and uncritical.

If, according to such a view, there must always be a class differentation in the social structure, what purpose does the state serve? Their answer is that the function of the state is to minimise the conflict between the classes to the greatest possible extent, in order to maximise social harmony. On such an assumption the state is not a class organ but a classless agency which exists to reconcile divergent economic interests for the greatest common good. Translated into actual political practice, it is the class collaboration theory of the old political parties, whereby the state serves as a means of seeking to blunt class antagonisms.

Such a view of the state provided an opportunistic springboard for the initial high dive of the Labour Party into politics. Its case against the Tories and Liberate was that it had subverted the true function of the state to act in the interests of the whole of society by taking sides in the use of state power. The side of the rich against the poor; thus using the state for a class purpose. It did not say the rich should not be rich, but that they should not be too rich. It did not say that the poor should not be poor, but that they should not be too poor. Social reforms and taxation were to be the instruments for redressing the abuses of Tory and Liberal rule and so bring about a greater equalisation of what they considered as part of the natural order of things to be a socially unequal situation. Nevertheless, their claim that by redressing social abuses they would restore the proper social balance between the classes, compelled them to pose as champions of the under-dog, and even gave the illusion if not the reality of their being a class party, which in spite of their most strenuous denials to the contrary, they have only recently lived down.

Accepting as they did the contest between Capital and Labour as a social norm, they claimed that they would see it was fought under the Marquis of Queensbury rules. As a genuine third man in the ring, they would see the bigger opponent did not use his weight unfairly or maul in the clinches. They would on occasions even compel him to pull his punches. Nevertheless, they were only too anxious to point out that should the workers attempt to take advantage of the situation, unduly, by pressing their claims too far, it would be necessary in the general interest of society for the state to seek to restrain them. That various Labour Governments have used this pretext to employ the repressive machinery of the state to curb the demands of various sections of the working class is too well known to need recording here. In the real world of capitalism the state remains the guarantor of capitalist property relations.

The old apologists for capitalism used to explain away its class division as a division between brain and hand. Labourites refer to it as the division between intellectual and manual work. Like the old apologists, they also accept as a corollary of this that great differences in income are part of the natural order of things. Mr. Strachey in his book, Contemporary Capitalism, in spite of his pseudo Marxist language, endorses the Labour' Party’s views on all these matters.

One cannot help being struck by the identity of Labour and Tories social outlook. The Tories also accept class society as part of the eternal dispensation and the state as being the true representative of society as a whole. Thus Burke, Hegel, Comte, John Stuart Mill, and Uncle Tom Cobley and all, find their synthesis in modern political theory.

Labour Party and Social Planning

When the Labour Party speak of social planning they do not imply the controlling and harmonising of the economic resources in the interest of the whole of society. What they mean is the adoption of certain state policies for the better regulation of the forces of capitalism. Indeed, in a system where profit is the ruling motive and anarchy of production an inevitable consequence, social planning in any real sense is impossible.

In the distant past Labourites saw the hope of a socially planned capitalism in the growth of monopolies. So far, however, from monopolies eliminating the anarchy of capitalist production, as was fondly imagined, they on the contrary tend to intensify it, because monopolies seek the pursuit of certain ends, regardless of the requirements of the economy as a whole.

Labour’s Changed Views on State Capitalism

Early Fabian and Labour theorists, often ex-civil servants, dreamt bureaucratic dreams of a state directed capitalism. Present day Labourites now see it as a nightmare. They have long learned that private appropriation, the interplay of the market and individual economic calculation are the indispensable norms of world capitalism and hence British capitalism. It knows that a Whitehall capitalism so far from solving present day problems, would only complicate and intensify them. In fact, the present anarchy of production would be the essence of economic rationalism compared with the organised chaos of a vast state controlled capitalism.

Now the Labour Party and, of course, Mr. Strachey along with them, have no “plans” for taking over capital accumulation. With proper safeguards Mr. Strachey blandly assures us capital investment and the profit motive must still be the unmutated mainspring of his “mutated economy.” As Mr. Morrison once observed, the Labour criticism of capitalism was not that the capitalist makes profit, but his inefficiency in failing to make continual profit sufficient enough to justify his existence. This also, it seems, is Mr. Strachey’s views.

State Investment

For many years it was fashionable for Labour “experts” to laud state capital investment as an alternative to private investment, and that a planned economy could be achieved by a major intervention in the economic affairs of capitalism via state investment. Such an assumption was utterly unrealistic. Not only would state investment have to compete with private investment, but capital accumulation and profit making would still constitute the mainspring of the system, and the problems of capitalism would remain essentially unaltered. In point of fact, any analysis of modern capitalist countries will show that the state has never assumed any obligation to direct and control capital accumulation, and Labour Governments have been no exception to the rule. What governments have done is to devise policies which seek to aid and maintain capital accumulation. Even social reform legislation, in so for as it succeeds in blunting class antagonisms, has for this reason a bearing on facilitating the smoother path for accumulation.

If capital accumulation, as it can be incontestably shown, is the norm of capitalist society, then it follows that state economic legislation must follow the pattern of that norm. Unless we assume that state policies are designed to undermine and finally destroy this most fundamental feature of capitalist behaviour—the self-expansion of capital. There is not the remotest evidence that the reformist parties contemplate such a project The state exists then to act on behalf of the aims and objectives of capitalist society. While state policies may modify capitalism, the state can never transform capitalist society, whose creature it is. And it is only transformation that can be equated with significant change.

Whatever changes the Labour Party envisages in capitalism, it always unchangingly assumes capital in eternal control. Something for which the capitalist class no doubt feel eternally grateful.

Ted Wilmott