Red Tories?

There has recently been discussion of, what has been termed, “Red Toryism”; the idea that, at least some, sections of the Tory Party have adopted ideas more commonly associated with the Left. I have even heard the guru of this “Red Toryism”, Phillip Blond, of the Think Tank Respublica, described as a “Marxist”! Blond, who is an adviser to Cameron, is no doubt the driving force behind the latest example of this, the Tories advocacy of Worker Co-operatives in the Public Sector. But, as the saying goes, there is nothing new under the Sun.


The first thing I want to say is that I think it is important, for a Marxist, to distance themselves from the tendency to disparage the motives of politicians, even bourgeois politicians. There is no reason for us to argue that such people do not believe, sincerely, in the ideas they put forward. Our argument with them is not that they are all a bunch of liars and hypocrites, on the whole, though some clearly are, but that their politics flow from the interests of the class whose representatives they are - the Capitalist Class. It is entirely consistent with Marxist theory, which states that ideas are a function of material conditions, and class consciousness is a function of social position and social relations, to believe that the representatives of the bourgeoisie are entirely, sincere in their belief that the ideas they put forward are not just for the benefit of that class, but for society as a whole, because for them there is no difference between the two sets of interest, “L’etat, c’est moi.” The tendency to argue otherwise, which is very easy during a time like the present, when people’s confidence, in politicians of all sorts, is at an all-time low, due to the expenses scandal, is actually very dangerous. It is to encourage the worst kind of nihilism, and rejection of politics without providing any kind of real alternative. Our job is to encourage greater involvement in political activity not to discourage it. The main beneficiaries of such nihilism will not be the Left, but the fascists, and petit-bourgeois forces such as the Anarchists. We should use the Expenses Scandal, and other such things, to encourage ordinary workers to become involved in politics themselves, to drive forward a democratic struggle that pushes bourgeois democracy to its very limits and beyond, and to encourage workers to become involved in a more direct form of democracy in their communities and workplaces.

From that perspective, I welcome the Tories conversion to the idea of worker-owned Co-operatives, an idea that I have been putting forward for some time, and which was a central part of the economic, social, and political strategy of Marx and Engels. I welcome it, because it means that they have opened a Pandora’s Box that they will not so easily close. I welcome it also, because of what it represents. What, in fact, it represents, at least in part, is that aspect, identified by Lenin, of the necessary conditions that lead up to social revolution; that the rulers find that they cannot simply go on ruling in the old way. Every old Mode of Production, finds itself having to borrow from the methods and forms of the Mode of Production that is to replace it.

Feudalism found itself coming up against barriers to its own expansion. Within it was arising the forces of Mercantilism, which represents a stepping-stone to Capitalism. The Mercantilists, the Merchant “Capitalists”, were not really Capitalists at all. As Marx explains, Capital is a social relationship; it is the relationship between Capital and Wage Labour. Only in this relationship, whereby Labour Power is exchanged, as a commodity, with Capital, is Surplus Value produced - as opposed to all previous Modes of Production where a Surplus Product is produced - and without Surplus Value there can be no Capital, in its physical form of congealed Surplus Value, self-expanding value. But, the Merchants were not owners of Capital. They did not exchange their Money as Capital with Wage Labour. This money certainly acted LIKE Capital, in the exchange, Money - Commodity - Money1, they certainly see the Money they receive back increase from that they laid out, but it is not an increase resulting from the creation of Surplus Value, as occurs under Capitalist production. On the contrary, it is an increase resulting from buying low and selling high, a process, which if driven to its extreme, actually results in a destruction of productive capacity, as happened in the Mediterranean City states, where the usurpation of the merchants drove the peasants into destitution. The class interests of the Mercantilists are quite different from those of the Capitalist class. It is not surprising that under Feudalism the interests of the Mercantilists, and the feudal aristocracy became seriously intertwined. The old Feudal regime was able to utilise the Mercantilists as a means of extending its own life and fortunes. To the extent that these Mercantilists conducted their trading activities on a global scale, and in the process, acting under Royal or Aristocratic patronage, helped extend the feudal realm ever wider, they brought back for their Feudal partners vast riches, as well as the large number of new commodities upon which this wealth could be expended. In the process, the aristocracy itself began to be involved in this Mercantilism, usually in the form of Banking.

The same is true today. History moves on regardless of the actions of individuals. In the last century, Marxists have been singularly unsuccessful in pushing forward their agenda. Nevertheless, significant changes in the Mode of Production have continued to occur without them. The hallmark of Capitalism, the thing that makes it progressive, vis a vis all previous Modes of Production, and which drives ever faster development and innovation, is competition. But, in the 19th Century competition gave way to Monopoly, as the small firms became swallowed up by ever larger, ever more efficient firms. But, ever-larger firms meant ever-larger amounts of Capital that had to be laid out, with consequently ever larger risks. One of the features of Capitalism over the last 100 years has been the drive to reduce, and where possible remove that risk. One of the first steps in that direction was the introduction of legislation to establish the principle of limited liability. That meant that the owners of Capital could combine their resources in single ventures, over which they did not necessarily exercise day-to-day control - which was increasingly the role of professional managers - without risking the whole of their fortunes, as opposed to that portion invested in the Company. But, even very large companies were susceptible to large-scale market changes. As Monopoly gave way to Monopolistic competition, and Oligopoly, what these firms were keen to avoid was any reduction in overall price levels. As Sweezy shows, if one Oligopolist raises prices, their competitors will not necessarily follow, but if one cuts prices, the others WILL follow suit, introducing a price war, and a consequent fall in profits for them all. The creation of the Federal Reserve in 1913 was part of an overall introduction of macro-economic management within Capitalist economies designed to protect these large firms, by acting to prevent such falls in the general price level, by means of printing paper money.

In place of outright competition, therefore, Capitalism was forced to borrow from the ideas about economic planning and Management of the future socialist society. Moreover, at an individual enterprise level, the changes in productive relations forced similar approaches on Capital. Huge investments of Capital cannot be made simply on a whim, risking losing all. Capital was forced to adopt, again, the principles of Socialist Society, of producing the Use Values that consumers required, and to identify these not by retrospective responses to price movements, but by pro-active means such as Market Research, demographic analysis and so on, indeed many of the methods pioneered in the USSR were taken up by Capitalist firms in the West. Not only does Capitalism create those basic conditions of Co-operation, identified by Marx, that comprise the Division of Labour, but, it increasingly adopts many of the forms of socialist society, such as the large integrated enterprise, the use of economic planning at an enterprise and macro-economic level.

Indeed, in Europe, many other aspects of that socialist society have been adopted in the form of socialised healthcare, education, and so on. The European Capitalists did so, because of the conditions that confronted them, and because these socialised systems offered them a more efficient means of providing such necessary services than could private Capitalist provision. The US, faced with different conditions followed a different path, though it should not be forgotten that the US too has socialised healthcare in the form of Medicare and Medicaid, as well as socialised education. Capital in the US, has now been forced to consider extending socialised healthcare, as the cost of private healthcare has risen inexorably. But, in Britain, in particular, the fact that healthcare and other aspects of the Welfare State have grown way beyond what Capital originally envisaged has led to its own problems and contradictions. As the experience in Eastern Europe demonstrated, State provision without any kind of real democratic control on a day to day basis leads to the inevitable rise of a State bureaucracy whose interests become a large determinant in the way these organisations function. Though everyone looks back to the economic barbarism of the Thatcher era with a view of its programme of Public Spending cuts, and privatisation, the reality is that, even under Thatcher, the Sir Humphrey’s still got their way, and the size of the State continued to rise. Vast sums are being poured into these Public Services without the consequent improvement in outputs. And every day we see examples of failure in the NHS in even providing a basically decent service. The Tories are right that, in large part, the reason for this is a lack of ownership and control over those services by the workers who work in them, resulting in what Marx called “The Alienation of Labour” .The facts are clear, worker-owned enterprises outperformed privately owned FTSE companies by 10 % last year.

Capital introduced the Welfare State and socialised services because it was the most cost effective means of it reproducing Labour Power that was fit for the purposes of 20th Century economies. But, everything changes, and what was most effective then is not today. Capital is looking for new ways to reduce that cost. The Tories are no doubt sincere in believing that Worker Co-operatives might be one way of providing those services more effectively, and more efficiently - I believe they are right in that - but the motivating factor here is the need to resolve this problem in a way that reduces the overhead costs for Capital. That should not be a reason for socialists to oppose it. What is in the interests of Capital is not necessarily against the interests of workers. However, what is clear is that where any such new development occurs Capital will seek to maximise its own benefit from it. The job of Marxists is not then to oppose such development, but to push forward workers interests within it.

That is clear from what can be seen from the Tories proposals on such Co-operatives. The Tories speak of the State setting a budget for these services, which the Co-operatives would have to adhere to. The benefit for workers within the Co-operative would be that if they deliver the service to the required standard within this budget, they can keep the surplus either to invest in their Co-operative or to share out amongst themselves. Such an approach is consistent with the Tories overall ideology. Co-operatives on this basis are reduced to nothing more than Capitalist enterprises that just happen to be owned by workers. For the Tories and the bourgeoisie in general Capitalism represents the “End of History”. Simply turning workers into Capitalists is an aspect of that. For the Tories and bourgeois, Co-operatives, which simply turn workers into Capitalists are the end of the story; for Marxists they are just the start of the story – a means to an end. As Marx put it,

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. ... The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.”

Capital Vol III

But, Marx, Engels and their supporters in the First International, like Ernest Jones, recognised that what this signified was the continuing role of class struggle. They viewed the social revolution, by which these basic property relations were transformed, not as some single event as Leninists view the 1917 Revolution, but was a process that lasted for many decades. It was a struggle that had to be conducted on many fronts, and hence for them becomes central the question of the Workers Party, and of Marxists within it. Where Capitalism can take an existing individualist ideology existing within class society, and whereby the desire to increase individual wealth can easily be translated into a desire to accumulate Capital – every peasant is a potential Capitalist – the same is not true of Co-operative society. It is not immediately apparent that advancing collective interests best furthers the interests of each worker. On the contrary the very working of Capitalism conveys the opposite message. That is why it is very difficult even to persuade workers to put aside their individual interests just to join a Trade Union. And, where they do combine to form Co-operatives, there will be a strong tendency to see themselves purely as owners of Capital. Only if the lessons of Co-operation can be extended to the idea of Co-operating outside the single enterprise to the need to Co-operate between Co-operatives, and with other workers generally, can their interests be furthered in the longer term, and that requires a degree of consciousness higher than that simple desire to own your own firm – especially where that desire often arises in response to a threat of that firms closure.

As Ernest Jones put it in his letter to the Co-operative Movement,

“Then what is the only salutary basis for co-operative industry? A NATIONAL one. All co-operation should be founded, not on isolated efforts, absorbing, if successful, vast riches to themselves, but on a national union which should distribute the national wealth. To make these associations secure and beneficial, you must make it their interest to assist each other, instead of competing with each other—you must give them UNITY OF ACTION, AND IDENTITY OF INTEREST.

To effect this, every local association should be the branch of a national one, and all profits, beyond a certain amount, should be paid into a national fund, for the purpose of opening fresh branches, and enabling the poorest to obtain land, establish stores, and otherwise apply their labour power, not only to their own advantage, but to that of the general body.

This is the vital point: are the profits to accumulate in the hands of isolated clubs, or are they to be devoted to the elevation of the entire people? Is the wealth to gather around local centres, or is it to be diffused by a distributive agency?”

And, as Marx pointed out. The Co-operatives would not be allowed to simply go their own way. They would face all kinds of opposition from the bourgeoisie, and its State,

“At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however, excellent in principle and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters, and even kept political economists have all at once turned nauseously complimentary to the very co-operative labour system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatising it as the sacrilege of the socialist. To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defence and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour. Remember the sneer with which, last session, Lord Palmerston put down the advocated of the Irish Tenants’ Right Bill. The House of Commons, cried he, is a house of landed proprietors. To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party.”

Address to The First International

As we see here, there is nothing new in the Tories advocacy of Co-operatives by the bourgeoisie, provided, of course, those Co-ops are kept within certain limits. We see that in what the Tories have to say about them. They want these Public Sector Co-ops to be simply providers of services contracted out by the Capitalist State, and the budget for which will be tightly controlled by that State. But, if they had truly been converted to the idea of workers having such control over their own lives, why impose such limits? Why should not workers, at a local or other level, establish their own purchasing Co-ops for these services, and allow these workers to define for themselves how much they wish to spend to acquire them? In the same proportion they should demand a reduction in the taxes taken from them by the Capitalist State. In this way, the two sets of Workers Co-ops, the Consumer Co-op, procuring the service, and the producer Co-ops supplying it, would have every incentive to co-operate, and to ensure that what was provided was both of high quality, and was provided in the most efficient means. The Tories will not adopt such a strategy, precisely because its logic is to remove control from Capitalist hands, and transfer it to the hands of the working class. Even if the Tories did adopt some form of such a strategy it would be constrained in such a way as to make it neutered, and the Capitalist State, would, whatever the Tories or any other Government proposed, frustrate it by all means possible. As Marx said in his Critique of the Gotha Programme, the Co-operative society cannot be created from the State downwards, but only by the conscious actions of the workers upwards.

I believe that this solution of two sets of Co-ops – Consumer co-ops procuring services, and producer Co-ops supplying them, is better than the proposals made by the Co-op Party in response to the Tories announcements, of mixed Co-ops, or Consumer Co-ops pure and simple. I have set out the reason elsewhere. In a Consumer Co-op there is no immediate dynamic, which leads its members to participate in decision making about how production should be organised. On the contrary, the tendency can tend to be to look to cut prices or costs, by imposing on the conditions of the workers in the Co-op. But, workers in a Producer Co-op, are led to participate in decision making at all levels within the enterprise on a day to day basis. This dual structure acts both to provide protection for workers interests in production, whilst creating the conditions for engendering direct co-operation of workers as consumers and producers.

And this is the revolutionary role of Co-ops as identified by Marx in the quote above from Capital. It is the means by which Competitive Capitalist Production is replaced by Co-operative socialist production. As stated above, the historically revolutionary role played by Competition lies precisely in the fact that it was a negation of all of that static, bureaucratic, statised, rigid and monopoly production that characterised feudal society. Not only does it continue to play that role, but as Marx says in his Critique of the Gotha Programme, for as long as human society is limited in its production potential so as to have to make choices about how to allocate resources, it must continue to play that role. As Marx puts it bourgeois Right will continue. The fact that open market competition might be replaced by some other means of deciding on what allocation should take place does not mean that competition has ceased, only that its form has changed. In the USSR, it took the form of competition between the various Ministries, the bureaucracy of each putting forward their own demands for resources. Look today in Local Government, and you will see the same thing. Each Chief Officer, looks to defend and where possible increase the size of their Department at the expense of others. The same is true of Civil Service Departments.

In the Critique of the Gotha Programme, Marx sets this out. Competition necessarily leads to inequality. He gives a simple example. In the first stage of socialism the rule would be that each worker is entitled to receive out of the general store of society’s production, goods whose production require the same amount of labour time, as that put in by that worker, less that deducted to cover the overall running of society etc. But, this apparent equality MUST lead to inequality. If two workers work for 10 hours each at the same level of intensity, in actual fact one worker will have expended more effort than the other, precisely because the two workers are themselves not equal. They have different levels of skill, strength etc. Put another way as Marx sets it out, if 10 hours labour is set equal to 100 units of a particular product then in order to be able to withdraw 10 hours worth of products from the store, each worker would have to produce 100 units. But, for the reasons set out above this might take one worker 12 hours, and the other only 8. This inequality is a direct result of the necessity of competition in the allocation of society’s production. Only, if society raised its productive capacity to such a level that there was a general abundance could this situation end. Then it would no longe rbe a question of competing demands for resources – guns or butter – because both guns and butter could be produced in sufficient quantity to meet all needs. Then the principle “From each according to their ability, to each according to their need”, could be established, and with it true equality. But, as Marx pointed out it is not at all clear that such a state of affairs could ever actually exist, and given the increase in production required even to achieve that in the developed world, let alone that required to raise the billions of people in the rest of the world to that level, it seems doubtful that without some huge leap in technology that sufficient resources exist to bring about such a condition.

Yet, Marx was not phased by such a prospect. He saw the advance that even the first stage of Socialism could bring as being historically progressive, in the transformation of production and social relations it would bring. And, after all, though this competition implies continuing inequality, it is qualitatively different from that which exists under Capitalism, or other class societies. The reason for that is simple, it is not competition per se, under Capitalism, which creates such inequality. The cause of the inequality stems not from competition i.e. distribution, but from disparities in the ownership of the means of production. It is precisely for that reason that Marx places such a high importance on establishing Co-operatives, and very little time on fetishising planning or replacing competition. He says,

“If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?”

It is inevitable, then, that Producer Co-ops will have to compete in order that such benefits of competition are acquired by the Co-operative sector. But, such competition can also incorporate Co-operation, and this Co-operative aspect should on the basis of class struggle increase. In short, whilst competition was the negation of feudal monopoly, co-operation becomes itself the negation of that negation.

Of course, the Tories proposals will be welcomed by those on the Left who are hostile to the idea of Co-operatives in general. Again there is nothing new under the sun. The fact that sections of bourgeois argued for them did not stop Marx and the First International from continuing to place them centrally within their strategy. It is unfortunately, the case that large sections of the Left, rather than thinking for themselves, and developing their own programme, allow their political agenda to be determined for them by the bourgeoisie, on the basis that, “My enemy’s enemy is my friend”, or else by simply placing a plus sign, wherever their opponents place a minus.

By raising the idea of Co-operatives, the Tories have opened a whole ideological door for the working class, the idea that they can and should have control over aspects of their lives, rather than simply having to work for the greater glory of some private or State Capitalist boss, or that their democratic role extends no further than placing a cross on a piece of paper every few years, for what greater democratic right is there than the democratic right to own and control your work place. Of, course, the Tories want to limit that to the Public Sector, and to limit that further by keeping control of the purse strings. But, having opened that door how can they deny the right of workers to establish such Co-operatives in other areas of their lives – to control their communities, and their workplaces. How can they deny workers the right to control the vast sums that exist in their Pension Funds – enough to buy up more than half the companies in the FTSE 100 – and to use those funds to further their own interests rather than the interests of Capital.

Red Toryism is a nonsense, but it would be a tragedy if Marxists did not utilise the opening that the Tories proposals on Co-operatives provide, to popularise in the consciousness of workers the idea that they can have real change here and now, that they can and should demand to own their own means of production, and those basic services on which they all depend.