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Review of Predictions For 2025 - Prediction 3 – Social-Democracy Continues To Disintegrate

Prediction 3 – Social-Democracy Continues To Disintegrate

Its hard to think of how events could any more have validated this prediction, over the last year. In the US, the same collapse of social-democracy, seen across the globe, manifest in the failure of the Biden regime, which created the conditions for a return of the petty-bourgeois nationalist Trump, is the same failure seen, across Europe, and the developed economies in Asia and Latin America, in which popular frontism, designed solely to form electoral blocs against the election of petty-bourgeois nationalists, inevitably offers nothing to workers, and delivers even less. They simply prepare the ground for the future victory of the reactionaries.

By emphasising electoralism and the formation of purely passive, electoral pacts, this popular frontism inevitably subordinates the interests of workers to the lowest common denominator of the politics of those they seek to include in the alliance. Across the globe, therefore, we saw failed conservative, social-democratic parties and politicians seeking to mobilise the votes of workers behind them, solely on the basis of a moralistic politics of “the lesser-evil”, and pleas to vote for them, or be damned by the election of an even worse alternative.

As I set out during the year, we saw sections of the supposed “Left” including those that ludicrously continue to label themselves “Trotskyists”, even as they have openly become mouthpieces for western imperialism, adopt this same approach, demanding that socialists advocate a passive vote for conservative, social-democrats such as Harris, and who, inevitably, therefore, not only demobilise the working-class from the real struggle against the threat from the forces of authoritarianism and Bonapartism, a struggle that requires not passive voting, but active fighting unity of the class – i.e. a workers united front in action, not a passive popular front in the ballot – but, they also, inevitably dirty their own hands, and must accept the responsibility for the subsequent disappointment of all those workers they misled into such a doomed venture. No amount of hand-wringing or attempts to claim that the alternative would have been worse, or dishonest claims about electing such governments so that they could be put on the spot, can rinse their hands clean.

When the reactionary, petty-bourgeois nationalist Trump, regime returned, therefore, the ground had not only been prepared for it by the failure of the conservative, social-democratic regime of Biden-Harris, but, as elsewhere, the more it had failed, the more it sought to keep itself in office, simply by borrowing the clothes of Trump, simply to try to steal some of his less reactionary voters. The same happened in France, in Britain, in Germany and elsewhere, setting in place an inexorable ratcheting to the Right. And, when Trump won, despite that – or more correctly because of it, as a stupid strategy, in even bourgeois electoral terms – the conservative social-democrats in the US, and their associates, elsewhere, have been left with no response to it, even an electoral or parliamentary response.

Of course, they never could have provided any more of a credible response, precisely because the material conditions upon which conservative social-democracy has rested for the last 40 years – or more correctly rested up to the crash of 2008 – no longer exist. They certainly were not going to provide any alternative, and effective response to the likes of Trump – or similarly to Farage/Musk/Yaxley-Lennon in Britain, or Le Pen in France etc. - by mobilising workers in action, as Trotsky advised in the 1930's, because that would have posed the danger for them that those workers would take matters into their own hands, as the dynamic of that unfolded, and they began to assert their own independent class interest, as Marx and Engels and later Trotsky and Lenin noted, i.e. a process of permanent revolution.

But, when they have lost even on their own bourgeois electoralist terms, they have no response either, not even a bourgeois-democratic, parliamentarist response, for the same reasons that they failed in the first place, when in government. Trump has continued to dismantle the basic tenets and institutions of US bourgeois democracy, such as it was. He has had no real need to resort to the tactics and strategy of fascism, simply because the forces of bourgeois-democracy themselves, in the US, had already been so weakened by the bourgeois-democrats themselves. The necessary connections between the parliamentary representatives of bourgeois-democracy, and the social forces that they rest upon has been continuously eroded over the last 50 years, creating the conditions for a mass society, of the type in which Bonapartists and authoritarians thrive.

The bourgeois-democratic politicians, swallowed their own illusions, about politics and democracy being all about election to office, by whatever means, selling your wares like a Mars Bar salesman. The delusion was that presented in various political dramas such as Borgen. The picture is presented most classically in Europe that class based politics has come to an end, but the reality is quite different. It is not that even in the realm of voting that the role of class has ended. It is not the working-class that has abandoned the traditional social-democratic ideas and parties, for example, but that the traditional social-democratic parties, having increasingly cut their ties to the social forces upon which they rest, have then, also, abandoned the social-democratic ideas themselves. Workers have not broken from the ideology of social-democracy, but have found it impossible to vote for parties whose only connection to it, has been a legacy, an empty label of what they once represented. The increasing votes for Greens, etc., is not an indication that class based voting has ended, but simply that it is asserting itself, demanding that appearance and reality be aligned.

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Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 11

Duhring makes the following comment, in relation to Law, a version of which can also be found, today, in the argument of proponent of MMT.

“Law too was obviously never able completely to eradicate the above-named basis” (namely, “the basis of the precious metals”), “but he pushed the note issue to its extreme limit, that is to say, to the collapse of the system”. (p 300)

Engels comments,

“In reality, however, these paper butterflies, mere money tokens, were intended to flutter about among the public, not in order to “eradicate” the basis of the precious metals, but to entice them from the pockets of the public into the depleted treasuries of the state.” (p 300)

That, of course, has been the goal of all states that sought to pay their bills by corrupting the currency, and passing off such devalued tokens at their face value. Marx discussed it in "A Contribution To The Critique Of Political Economy", in relation to the predecessors of Keynes, and the proponents of MMT, the Birmingham Little Shilling Men.

Engels returns to Petty and the further elaboration of these points.

“To return to Petty and the inconspicuous role in the history of economics assigned to him by Herr Dühring. Let us first listen to what we are told about Petty’s immediate successors, Locke and North. Locke’s Considerations on Lowering of Interest and Raising of Money, and North’s Discourses upon Trade, appeared in the same year, 1691.” (p 300)

Engels quotes Duhring's assessment.

“What he” (Locke) “wrote on interest and money does not go beyond the framework of the reflections which were current under the dominion of mercantilism in connection with the events of political life”. (p 300)

Marx deals with North, Locke, Hume, as well as Massie, in Theories of Surplus Value. Locke, in particular, represented the interests of the rising industrial bourgeoisie, as also, for example, set out in his Second Treatise on Government. As Marx sets out, in Capital, so long as restrictions existed on the lending and borrowing of money, it meant that it amounted to usury. Once those restrictions are lifted, it is not only those desperate for money that can borrow, but those who seek to borrow in order to invest in real industrial capital accumulation. When it is only the desperate who borrow, there is no limit to the usurious rates they will pay, especially given the limited number of lenders. But, when restrictions are lifted, whilst the additional demand for money-capital acts to raise interest rates, the fact that industrial capitalists will only borrow if the rate of interest is lower than their anticipated rate of profit, acts to put a cap on it.

Moreover, it is not the supply of currency/money tokens that is relevant, for the reasons set out earlier, in determining the rate of interest, but the supply of money-capital. The main source of new money-capital is realised profits. Other sources are money reserves (savings). So, when industrial capital expands, it produces greater masses of realised profit, and so increases the supply of money-capital, thereby, putting downward pressure on interest rates, as happened, for example, from the 1980's onwards.

Back To Part 10

Review Of Predictions For 2025 - Prediction 2 – Europe Draws Away From US Imperialism

Prediction 2 – Europe Draws Away From US Imperialism

The arrival of Trump, and his cabal of petty-bourgeois nationalists in the White House, as with other processes, made this prediction an inevitability. The moralists and idealists, who cling to the idea of a world divided into “good” and “bad”, “white hats” and “black hats”, “democracies” and “authoritarians”, not only were thrown into disarray, by the arrival of the “authoritarian” Trump, as leader of the “democracies” global alliance, upon which they had relied for so long, but, in order to deal with that reality, as with so much else, they have been led into simply denying it, as though it is not real, a temporary divergence from the true path, to which they will return. In order to sustain that delusion, they have been led to prostitute themselves even more at the feet of Trump, and his reactionary regime, most glaringly seen in the gut-wrenching sycophancy of the likes of Starmer, and of Rutte.

But, the more they deluded themselves into the idea that they could simply win over the moronic, narcissistic Trump by their increasing prostration and arse-licking, the more Trump simply treated them with the contempt they deserved. In that, Trump's petty-bourgeois nationalism also, coincides with the longer-term interests of US imperialism, and those interests do not coincide with those of EU imperialism. The liberals, idealists and moralists have continued to frame their narrative as one in which the world is at risk from the evil “black hats”, of the “authoritarian” regimes in Russia, China and so on. As Marxists, of course, we recognise the threat those regimes represent. But, our solution to that threat, just as with the threat represented by authoritarians within our our own states, is not to subordinate the working-class to the liberal bourgeoisie, and its class interests. Every time workers have done that, in the past, it has resulted in disaster, betrayal, and the victory of the forces of reaction. There is no reason to believe it would be different this time.

As I set out in the review of Prediction 1, for more than 30 years, globalisation represented the interests of an unconstrained US imperialism, as it invested real industrial capital, across the globe, exploiting vast reserves of labour, creating new masses of surplus-value. This huge mass of surplus-value, produced by labour in newly industrialising economies, was often, realised as profits, by US commercial capital, as this deluge of consumer goods, flooded into the US market. Wal-Mart still sources around 60% of its stock from China. As I set out in my book, this was the other side of the deindustrialisation of the 1980's, and the ability to realise the surplus value produced in China and elsewhere, was also the basis for employing a growing army of workers in the West, in retail, and a growing service sector.

But, China, India, South Korea, Malaysia and so on, just as with Japan before, and indeed the US, as it went from being a British colony, to an industrialised economy, changed the material conditions in which US imperialism found itself. The end of globalisation is not simply the result of a temporary rise to power of petty-bourgeois nationalists. It represents a recognition, by US imperialism, in particular, that its hegemony in the world economy has ended. It acts as a fetter on the further development of capital itself. US imperialism is not confronting Chinese imperialism because of the authoritarian nature of the Chinese regime, but because Chinese imperialism has now grown to an extent that it undermines US hegemony.

For all the propaganda about the expansionist intentions of Russia, as I set out earlier in the year, its not Russia that is talking about occupying Greenland, in order to secure control over the vast mineral reserves, and Arctic waters, it is the US. It is not Russia, nor China, that is talking about seizing the Panama Canal, but the US, just as it is the US that is seeking to provoke Venezuela into responding to the acts of piracy by the US, so as to give a pretext for another US forever war, as it seeks to consolidate its neo-colonial power in Central America. In Central and South America, just as in the Middle East, Africa and Asia, China has extended its influence, not by colonialism, not by the use of military might, but by the power of its capital. The US has no means of competing on that basis, and so seeks to revert to the methods of colonialism, as does the UK, as it acts as Trump's lap dog, and the proposals for the colonisation of Gaza.

The growing separation of EU imperialism from US imperialism is manifest in the talk of the need for the EU to increase its military spending. The rationale, as I set out during the year, is for the establishment of an EU army, and that would mean an inevitable separation from NATO. The discussion of that by the likes of Macron, and of Draghi, may be presented as a response to Trump's own distancing of the US from NATO and Europe, as well as the ridiculous talk about military attacks on Europe by Russia, but the reality is that the creation of an EU army is the necessary corollary of the growing political union, as the EU moves to the formal creation of a multinational state, as it faces the contradictions seen over the last 20 years of a single market, single currency and central bank, but a continuation of nation states within it. The greatest power the EU has in terms of its relations with Russia, is not an extension of its military power, but the development of the EU economy, and the raising of living standards within it. Subordination to US imperialism acts as a fetter to that development.

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Forward To Review of Prediction 3

Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 10

The main reason that the liquidity injections by central banks, in the late 1980's and after, did not result in higher commodity prices, and higher nominal interest rates, is because the liquidity was directed, by central banks and financial institutions into the purchase of existing financial and property assets, causing serial asset price bubbles, which also resulted in falling yields on those assets (because this kind of speculation is not investment/capital accumulation, and so does not result in increased production of surplus value, of which interest and rent are simply components along with profit of enterprise and taxes). The other reason is that rising productivity from the microchip revolution, reduced the unit value of commodities, so that without inflation of the currency, prices would have fallen.

Engels quotes Duhring's comment,

““All that was necessary was to assign to the ‘simple pieces of paper’ the same role that the precious metals should have played, and a metamorphosis of mercantilism was thus immediately accomplished”.” (p 299)

And notes,

“The metamorphosis of my uncle into my aunt can be immediately accomplished in the same way. True Herr Dühring adds appeasingly:“Of course Boisguillebert had no such intention.”

But how, in the devil’s name, could he intend to replace his own rationalist conception of the money function of the precious metals by the superstitious conception of the mercantilists merely because, he held that the precious metals can be replaced in this role by paper money?”. (p 299)

The mercantilists believed that there was something special about the amount of precious metal hoarded in state treasuries, as a measure of the wealth of nations. As Marx described in Theories of Surplus Value, its understandable that such ideas arise in economies that dominated maritime trade such as Britain and the Netherlands, just as its natural that they should identify surplus value/profit as arising from the process of trade/exchange, rather than production. In fact, as Marx also wrote, the mercantilists were not as stupid, in that regard, as some of their later detractors suggested.

Unlike Law, or the proponents of QE/MMT, they understood that this accumulation of precious metal arose from the ability to export more than was imported. It was not possible to increase the wealth of the nation by simply replacing precious metal currency with paper notes, so as to print more of them, any more than by reducing the amount of gold contained in a gold coin, and issuing more such coins.

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