Are The Tories and Blue Labour Neoliberals? Part 1 of 10

Are the Tories, and/or Blue Labour neo-liberals? No. That so many label them as such is a sign that the term is used not as a category, and aid to analysis, but simply as abuse, much as the term “fascist” has been used to describe individuals and organisations who quite clearly are no such thing. Its an indication of the degradation of Marxist, or even just socialist politics, to where it resolves, essentially, not into any kind of political science, but just moralistic, and emotional outbursts. Marx referred to a similar degradation in economics and in socialism, in the latter part of the 19th century as vulgar economics, and vulgar socialism.

What characterises neoliberalism (in itself a vague and pretty useless term), which I prefer to call conservative social-democracy, is a recognition of the role of big capital, and policies that serve the interests of the ruling-class, a ruling-class that, today, is comprised of owners of fictitious-capital, and who exercise control over that big capital, not via their private ownership of it, but via their ownership of shares – as well as via the state, which acts in their interests. If the Tories, or Blue Labour were, indeed, neo-liberals, neither of them would have been advocating Brexit, and both of them, now, would be taking advantage of its obvious failure, and unpopularity amongst the vast majority of the electorate to reverse it as quickly as possible! But, they are not doing so, which, in itself, shows that they are not neo-liberals.

The only mainstream parties, currently, that are neo-liberal are the Liberal Democrats, Greens, SNP, and Plaid Cymru. They are the only ones – if you ignore the, so far, irrelevant Rejoin The EU Party – that have an overtly neo-liberal agenda of rejoining the neo-liberal EU on its current basis. If, as a neo-liberal must do, you seek to advance the interests of the ruling class, by advancing the interests of large-scale, socialised, industrial capital, which provides the revenues – interest/dividends – of that ruling class, as well as providing it with the capital gains from the rising asset prices associated with it, you must advocate for the EU, and a reversal of Brexit. The above parties do that, but the Tories and Blue Labour do not. The latter, therefore, are not neo-liberals, they are much worse, a reactionary throw back to a period before even social-democracy emerged in the 19th century.

What the Tories are, is a manifestation of the ideas, not of neo-liberalism, but of 18th century Liberalism, of the ideas of the Libertarians/anarcho-capitalists, of whom Hayek was the frontrunner, chosen by Thatcher, in the 1980's, and to whom the likes of Rees-Mogg look, today. Thatcher was the point of transition from the mildly progressive social-democracy of post-war Buttskellism, which coexisted within a spectrum with conservative social-democracy, that ended in crisis in the 1970's, and broke down under Callaghan, into the period where conservative social-democracy had to contend, in the 1980's, not with a challenge to its Left, but from the Right, and battled it out, inside the Conservative Party, with the Classical Liberal/Libertarian, petty-bourgeois nationalists that represented the increased social weight of the petty-bourgeoisie, which make up its membership, and core vote.

They take seriously all of that nonsense contained in the small business myth, and need to limit and even break up the large monopolies, and so on, to return to some golden era of small business dynamism, and free market competition. They were strengthened by the fact that, since the 1980's, the size of the petty-bourgeoisie grew by 50%, reversing the trend seen over the previous 200 years, of them being squeezed out of existence. There is also a return to some of those ideas in the US, again, today, with proposals for breaking up the large tech monopolies, reminiscent of the reactionary ideas at the end of the 19th century, of “anti-trust” legislation. The reality is that its highpoint, recently, came and went with Truss's government.

Anti-Duhring, Introduction, I – General - Part 5 of 17

In WWI, the old bourgeois ideas of bargaining within the system, of trades unionism, reformism and sectionalism, asserted themselves in the labour movement, however, in the phenomenal form of nationalism, as the workers of each country united, not with the workers of other countries, against capital, but with their own ruling classes, in the hope of securing a bigger share of the global pie, at the expense of their fellow workers in other countries.

Marx and Engels note the beginning of that process. In Capital III, Marx notes the division and antagonistic interests of interest-bearing capitalists (fictitious-capital, share and bond holders) with real industrial capital, and, thereby, the functioning capitalists, who develop into a sizeable, professional middle-class, but also with the workers who are, objectively, the collective owners of the socialised capital. As Marx sets out, interest-bearing capital does not stand in an antagonistic relation to workers as workers.

“The lending capitalist as such faces the capitalist performing his actual function in the process of reproduction, not the wage-worker, who, precisely under capitalist production, is expropriated of the means of production. Interest-bearing capital is capital as property as distinct from capital as a function. But so long as capital does not perform its function, it does not exploit labourers and does not come into opposition to labour.

On the other hand, profit of enterprise is not related as an opposite to wage-labour, but only to interest.” 

(Capital III, Ch.23)

Fictitious-capital (interest-bearing capital/shares/bonds, i.e., the property of the ruling class) stands in an antagonistic relation to workers, not as workers, but as the collective owners of socialised capital.

The interests of this socialised capital must determine the interests of the state, but also of the ruling-class, in the end, despite the short-term antagonistic interests. Without an expansion of the real industrial capital, there is no expansion of profits, and so, ultimately, no expansion of interest-dividends, rents or taxes. The consequence of trying to deny that reality simply exacerbates the contradiction.

“It would be still more absurd to presume that capital would yield interest on the basis of capitalist production without performing any productive function, i.e., without creating surplus-value, of which interest is just a part; that the capitalist mode of production would run its course without capitalist production. If an untowardly large section of capitalists were to convert their capital into money-capital, the result would be a frightful depreciation of money-capital and a frightful fall in the rate of interest; many would at once face the impossibility of living on their interest, and would hence be compelled to reconvert into industrial capitalists.”

(ibid)

The owners of fictitious-capital may use their control, as shareholders, in law, to continually increase the proportion of profit taken in interest/dividends, or capital transfers (asset stripping), as Haldane notes they have done since the 1970's, but the result is to continually reduce the proportion available as profit of enterprise, available for real capital accumulation. The result is inevitably to raise price-earnings ratios to ever higher levels, and to reduce yields on financial and property assets, leading to financial bubbles and financial crashes, as with 2008.

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Anti-Duhring, Introduction, I – General - Part 4 of 17

In fact, because the working-class has failed, in the intervening period, to establish control over its socialised capital – itself a function of its political leadership being dominated by the ideology of petty-bourgeois and bourgeois nationalism, and social-democratic statism and liberal welfarism – other than for its cooperatives, a further development, and complication has arisen. The ruling-class has become a global class of speculators. It owns its wealth, not in the form of real industrial capital, but in the form of fictitious capital (shares, bonds, and their derivatives) The link to the industrial capital of any one nation state, no longer exists. It is only the dwarfish capital of the petty-bourgeoisie, the relics of private capital, that remains tied to the nation state, and looks to it for protection, hence the drive for Brexit and other similar petty-bourgeois, nationalist equivalents, elsewhere.

An American money-lending capitalist/speculator can own the shares of a Japanese, German, British or Chinese company, or the bonds of such companies or governments, with equal facility. A Russian money-lending capitalist/speculator, likewise, may own the shares or bonds of Microsoft, Fujitsu or Siemens, as well as the bonds issued by the US, British or Japanese states. In fact, they will always tend to do so, buying those share and bonds they gamble will provide the greatest total return (change in asset price together with interest/dividends).

The global ruling class is a footloose class of money-lenders/speculators, with homes across the globe, able to move to wherever best suits their immediate needs, just as the Internet and electronic financial markets enables them, at the press of a key, to sell shares and bonds in Tokyo and buy them in Toronto. The private industrial capitalists of the 19th century, today, are a relic, existing only in the form of the petty-bourgeoisie, and small private capitalists. They are still large in number, about 5 million small capitals, or about 15 million people, in Britain, for example, giving rise to the small business myth, but they are weak and subordinate in economic and social power.

The significance, however, of this petty-bourgeois relic is precisely in its numbers, and the consequence of that in bourgeois elections. From the 1980's onwards, it was able to capture conservative, social-democratic parties such as the Conservatives in Britain, or Republicans in the US. It pursued a petty-bourgeois, nationalist agenda, quite at odds with the interests of imperialism (large scale, socialised industrial capital), for example, manifest in Brexit, and the protectionist policies of Trump et al.

The global ruling class had an indirect interest in a further development of globalisation, the abolition of nation states, and their outmoded borders, because that reduced costs, speeded the turnover of capital, and so on, which boosted realised profits, out of which their interest/dividends were paid. But, they are tiny in number, and so their electoral power is non-existent. They rely, instead, on their control of property, and of the state, so that the continued development of globalisation, of the further integration, for example, of the EU, as a political entity, i.e. state, is accompanied by bureaucratic methods, over the heads of voters, which further antagonises the petty-bourgeoisie, and those social layers influenced by, and associated with it that sought a reactionary solution in the utopia of the nation state, of national self-determination, national independence, “taking back control”, and other such delusions.

What is worse is that the political leadership of the working-class became the conduit of these reactionary, petty-bourgeois nationalist ideas into the labour movement, also. Marx and Engels had propounded the principle that the workers have no country. Lenin, and the Marxists of the early 20th century continued that concept of international socialism, stating that they fought not for national self-determination, but for the self-determination of the workers of all nations, breaking down all national borders, and forging the greatest possible unity of workers across the globe, against their common enemy, the global ruling class.

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Anti-Duhring, Introduction, I – General - Part 3 of 17

The solution, as Owen et al realised, was that the large-scale production, in each enterprise, which necessitated high levels of regulation and planning to standardise and coordinate each phase and element of production, had to be extended to the whole of society. In fact, as Marx and Engels note, in Capital III, Chapter 27, the large-scale, socialised capitals, be they cooperatives or joint stock companies, by the end of the 19th century, were themselves driven down that path. They formed monopolies, cartels and trusts, and the capitalist state, itself, was led to nationalise some of these industries. Increasingly, the capitalist state had to operate on behalf of capital in general, to standardise production – as for example railway gauges – to regulate, coordinate and plan the national economy, in the same way that production was organised in each enterprise. As Engels put it in his Critique of The Erfurt Programme,

“I am familiar with capitalist production as a social form, or an economic phase; capitalist private production being a phenomenon which in one form or another is encountered in that phase. What is capitalist private production? Production by separate entrepreneurs, which is increasingly becoming an exception. Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.”

The problem with the Utopian ideas of Saint Simon and Fourier, in particular, for developing such cooperative commonwealths was that they relied on the existing owners of capital – the bourgeoisie – simply being converted to this view on the basis of its superior rationality and morality. Whilst some individual capitalists did so, whether on the basis of foresight, or often religious/moral conviction, there was no reason why the vast majority would do so. On the contrary, everything drove them in the opposite direction.

They, increasingly, saw the need for regulation and planning of production, for standardisation and so on, not for the benefit of society, and certainly not for the benefit of workers, but for the benefit of expanding the market, for ensuring that they could reduce their costs, ensure that they could sell all their output, and maximise their profits.

The development of monopolies, trusts and cartels was the bourgeois form of that rationality. And, as this large-scale socialised capital, intimately tied to the state (imperialism) grows ever larger, it bursts out of the fetter of the nation state, which had, previously, been its product. Just as the monopoly of private capital had become a fetter on the further development of capital, by the middle of the 19th century, a fetter burst asunder by the development of socialised capital, and the expropriation of the expropriators, so too, by the start of the 20th century, the nation state had become a reactionary fetter on the rational development of capital that had to be removed, and replaced by, ever larger, multinational states, and, even, global para-state bodies and institutions.

Imperialist war and annexations were the inevitable bourgeois form of that progressive development. As Trotsky put it,

“Capitalism has transferred into the field of international relations the same methods applied by it in “regulating” the internal economic life of the nations. The path of competition is the path of systematically annihilating the small and medium-sized enterprises and of achieving the supremacy of big capital. World competition of the capitalist forces means the systematic subjection of the small, medium-sized and backward nations by the great and greatest capitalist powers...

The right of national self-determination cannot he excluded from the proletarian peace programme; but it cannot claim absolute importance. On the contrary, it is delimited for us by the converging, profoundly progressive tendencies of historical development. If this “right” must be – through revolutionary force – counter-posed to the imperialist methods of centralization which enslave weak and backward peoples and mush the hearths of national culture, then on the other hand the proletariat cannot allow the “national principle” to get in the way of the irresistible and deeply progressive tendency of modern economic life towards a planned organization throughout our continent, and further, all over the globe. Imperialism is the capitalist-thievish expression of this tendency of modern economy to tear itself completely away from the idiocy of national narrowness, as it did previously with regard to local and provincial confinement. While fighting against the imperialist form of economic centralization, socialism does not at all take a stand against the particular tendency as such but, on the contrary, makes the tendency its own guiding principle.”

(The Programme of Peace)

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Anti-Duhring, Introduction, I – General - Part 2 of 17

The reformist ideas about workers receiving the full fruits of their labour leads to merely bourgeois, trades union consciousness, of bargaining within the system, for workers' fair share, as Marx also sets out in Value, Price and Profit. It is based on a false theoretical analysis that confuses labour with labour-power. Upon it develops the bourgeois ideological movements of reformism, social-democracy and syndicalism.

The Sismondist, anti-capitalist ideas are simply a reflection, in the labour movement, of the morals and interests of the petty-bourgeoisie, which daily sees its descent into the ranks of the proletariat. It is a thoroughly reactionary ideology, and trend within the labour movement. As Lenin sets out in his polemics against the Narodniks, who represented such a trend in Russia, it is reactionary, even compared to the liberal bourgeoisie that seeks the most free and rapid development of capitalist production, and the destruction of all the old parochial, regional and national boundaries that restrict such development. In the age of imperialism, that is even more the case.

The alternative to these two trends was that developed by the likes of Saint Simon, Fourier and Owen. Rather than the reactionary and utopian anti-capitalism of Sismondi, it welcomed the advance of that capitalist production. Rather than wanting to go back to some supposed golden age of small scale, independent production, it wanted large-scale cooperative production, and the increased planning of that production that goes with it. As Marx notes, Owen's New Lanark Mills, with the productivity benefits of their large-scale production, utilising high levels of fixed capital, were able to provide higher wages and better conditions for its workers. Indeed, as he sets out in Capital I, Britain's large scale capitalist production, in general, was able to outcompete its European rivals, even though European wages were 50% lower.

Lenin makes a similar point against the Narodniks, in his The Development of Capitalism In Russia. The worst conditions were for those small-scale, independent commodity producers, followed by the labourers in the handicraft workshops, and small manufactories. The best conditions were for the workers in the large-scale, highly capitalised, often foreign owned, plants.

But, contrary to the views presented by Carey, for example, wages do not rise in line with this increased productivity. The large rises in productivity follow on from crises of overproduction of capital, as labour shortages push up relative wages, and squeeze profits. That provokes capital to undertake a new technological revolution to replace labour. The consequence is not only a clearing out of labour, creating a relative surplus population, and immediate fall in wages, but is also to bring about a fall in relative wages, even as nominal wages and real wages once more rise! The interest of capital, in raising productivity is not to raise wages, but to raise profits, and so long as capitalism continues, that applies not only to private capitals but also to socialised capitals, including cooperatives.

The underlying driver of that is competition, which must occur so long as production is based on the production of commodities. In other words, so long as production takes place speculatively, in advance of demand, for the purpose of selling those commodities for money, every producer of those commodities will seek to ensure they can sell all of their production, by competing to undercut their rivals. In fact, one way of doing that is to produce on the largest scale their capital allows, so as to obtain economies of scale, and reduce unit costs. Production, thereby, gallops ahead much faster than the market, leading to gluts and crises in which prices fall catastrophically, production stops until the glut is cleared, workers are thrown on to the streets, and, with no wages, demand for commodities falls even further.

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Anti-Duhring, Introduction, I – General - Part 1 of 17

Introduction

I – General

“Modern socialism is, in its content, primarily the product of the recognition, on the one hand, of the class antagonisms prevailing in modern society between proprietors and non-proprietors, between capitalists and wage-workers, and on the other hand, of the anarchy ruling in production. In its theoretical form, however, it originally appears as a more developed and allegedly more consistent extension of the principles laid down by the great French philosophers of the Enlightenment in the eighteenth century.” (p 18)

In his, The Three Sources and Three Components Parts of Marxism, Lenin gives an extended version of this idea.

“The history of philosophy and the history of social science show with perfect clarity that there is nothing resembling “sectarianism” in Marxism, in the sense of its being a hidebound, petrified doctrine, a doctrine which arose away from the high road of the development of world civilisation. On the contrary, the genius of Marx consists precisely in his having furnished answers to questions already raised by the foremost minds of mankind. His doctrine emerged as the direct and immediate continuation of the teachings of the greatest representatives of philosophy, political economy and socialism.

The Marxist doctrine is omnipotent because it is true. It is comprehensive and harmonious, and provides men with an integral world outlook irreconcilable with any form of superstition, reaction, or defence of bourgeois oppression. It is the legitimate successor to the best that man produced in the nineteenth century, as represented by German philosophy, English political economy and French socialism.”

Day to day material reality provided the basis of socialist ideas, and of a socialist movement. In other words, the newly developed industrial proletariat found itself thrown against the newly arisen industrial bourgeoisie, in struggles over wages and conditions. Moreover, from around 1825, when the first generalised crisis of overproduction occurred, the anarchy of this form of production, where vast quantities of commodities are produced, speculatively, without knowing whether they can be sold, leads to a recognition of its irrationality.

But, recognising these material conditions does not mean a correct, theoretical understanding of their causes, or the solution to them. Natural scientists, after all, observe many natural phenomena, but, without having a correct theoretical understanding of them. Only scientific analysis, delving beneath the superficial appearance provides an ever more developing understanding of reality. Every generation must, necessarily, begin with the scientific data and theories it inherits as the starting point of its own scientific analysis. It is not only in terms of material conditions that Man creates his own history, but in conditions not of his own choosing. The socialist movement, necessarily, began on the basis of the bourgeois moral philosophy of Kant, as a response to the evils of capitalism, and with the bourgeois economic theories of Ferguson, Smith and Ricardo.

As Marx sets out in Theories of Surplus Value, it produces the first working class theorists such as Hodgskin et al, who use the tenets of Ricardo's theories against the bourgeoisie. For example, if the value of commodities is produced only by labour, then, why is it that wages are not equal to this value, why is it that the labourer lives in poverty, whilst the non-labourers, the capitalists, live in luxury. It leads to utopian concepts such as the demand that workers receive “the full fruits of their labour”, which continue down to today in the programmes of reformists and social-democrats.

But, also, the anarchy of production, which leads to overproduction of commodities, and crises, denied by Mill, Ricardo and Say, but, undeniable after 1825, leads Sismondi to conclude that such crises can only be avoided by slowing down, or ending altogether, the development of the capitalist production whose gigantic productive power gives rise to them. Again, as Marx sets out in Theories of Surplus Value, such anti-capitalist theories are also utopian, and, thereby, in seeking to retain, or return, to some less developed stage, also reactionary.

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