A Tale Of Contradictions - Part 2

Imperialism 2

In other words, even by the end of the 19th Century, the big industrial bourgeoisie had recognised that the very ideology of social-democracy that arose on the back of the Trade Union consciousness of bargaining within the system, could also be used to further its own interests against its small-scale competitors, and to create the kinds of conditions of stability, and social peace it required for effective Capital accumulation, under conditions where the now massive scale of investment required some degree of certainty, and where risk had to be minimised. The political implications of that in Britain are again described by Engels.

“The Reform Bill of 1831 had been the victory of the whole capitalist class over the landed aristocracy. The repeal of the Corn Laws was the victory of the manufacturing capitalist not only over the landed aristocracy, but over those sections of capitalists, too, whose interests were more or less bound up with the landed interest-bankers, stockjobbers, fundholders, etc. Free Trade meant the readjustment of the whole home and foreign, commercial and financial policy of England in accordance with the interests of the manufacturing capitalists — the class which now [These words belong apparently not to Bright but to his adherents. See The Quarterly Review, Vol. 71, No. 141, p. 273.-Ed.] represented the nation. And they set about this task with a will. Every obstacle to industrial production was mercilessly removed. ...

“The manufacturing capitalists set about the realisation of this their great object with that strong common sense and that contempt for traditional principles which has ever distinguished them from their more narrow-minded compeers on the Continent. Chartism was dying out. The revival of commercial prosperity, natural after the revulsion of 1847 had spent itself, was put down altogether to the credit of Free Trade. Both these circumstances had turned the English working class, politically, into the tail of the ‘great Liberal Party’, the party led by the manufacturers. This advantage, once gained, had to be perpetuated. And the manufacturing capitalists, from the Chartist opposition, not to Free Trade, but to the transformation of Free Trade into the one vital national question, had learnt, and were learning more and more, that the middle class can never obtain full social and political power over the nation except by the help of the working class. Thus a gradual change came over the relations between both classes. The Factory Acts, once the bugbear of all manufacturers, were not only willingly submitted to, but their expansion into acts regulating almost all trades was tolerated. Trades Unions, hitherto considered inventions of the devil himself, were now petted and patronised as perfectly legitimate institutions, and as useful means of spreading sound economical doctrines amongst the workers. Even strikes, than which nothing had been more nefarious up to 1848, were now gradually found out to be occasionally very useful, especially when provoked by the masters themselves, at their own time. Of the legal enactments, placing the workman at a lower level or at a disadvantage with regard to the master, at least the most revolting were repealed. And, practically, that horrid People’s Charter actually became the political programme of the very manufacturers who had opposed it to the last. The Abolition of the Property Qualification and Vote by Ballot are now the law of the land. The Reform Acts of 1867 and 1884 make a near approach to universal suffrage, at least such as it now exists in Germany; the Redistribution Bill now before Parliament creates equal electoral districts-on the whole not more unequal than those of France or Germany; payment of members, and shorter, if not actually annual Parliaments, are visibly looming in the distance and yet there are people who say that Chartism is dead.”

Preface To The Second German Edition of “The Condition Of The Working Class"

The lessons for this Big, industrial Capitalist class was clear. The most effective means of Capital Accumulation was via the creation of Relative not Absolute Surplus Value. Under such conditions, a portion of the additional Surplus Value created could be shared with the workers, who bargained within the system, and were thereby persuaded that it could continue to meet their needs. The rising living standards of workers, who increasingly formed by far the largest group of consumers, also meant that Capitalists producing consumer goods had a domestic market for their products – a similar process is occurring in China, and other parts of South-Asia today. Where were similar conditions to these to be found? Not in the Colonies, but in Europe and North America. The initial fundamental requirement for this Big industrial Capital to invest was the existence of a bourgeois democratic state like the one it had at home, and which guaranteed the same kinds of social peace, and stability it had become used to. And, as a further incorporation of that Social-Democratic ideology, from the beginning of the twentieth century that Big Capital had seen the importance of the role of a large State in providing that level of security. Rather than risk workers developing their own independent organisations for the provision of Education, Health, and other forms of Social Security, the Big Bourgeoisie saw the advantage of providing those things itself through its State. If it wanted economic security for itself, then in part that economic security, and social stability also required that the workers had a feeling of security too. Having scrapped the small-scale Truck systems of the individual small Capitalists, they instituted their own massive Truck System in the form of National Insurance, and the deductions from Income Tax to cover State Education.

Of all people, the right-wing Libertarian, Frederick Hayek, whose ideas guided Maggie Thatcher and Keith Joseph sums up this approach in his book, “The Road To Serfdom” where he writes,

“... but there can be no doubt that some minimum of food, shelter and clothing, sufficient to preserve health and the capacity for work, can be assured to everybody. Indeed, for a considerable part of the population of this country this sort of security has long been achieved.

Nor is there any reason why the State should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where in short, we deal with genuinely insurable risks, the case for the State helping to organise a comprehensive system of social insurance is very strong.” (p90)

He goes on to talk about the risks arising from the economic cycle, and the role that could be played in dealing with such risks via Monetary policy, which he says would not contradict Liberal values. In fact, in the US that was already the case in 1940 when Hayek wrote his book. The Federal Reserve had been established in 1913, and its clear purpose was to provide price and economic stability by the use of Monetary Policy.

The driving force of Capitalism is the accumulation of Capital, via the production of profit, primarily from Relative Surplus Value. It has found that the most effective conditions for achieving that are those described above. That is a kind of Social-Democratic Welfare State, which acts to provide the optimum level of economic and social stability in which long-term investment, and planning can take place. Bourgeois democracy, is itself fundamental to such an arrangement, because it is only through it that the frustrations and concerns of the majority of society, and in particular, of workers can be safely channelled, thereby avoiding the kinds of uncertainty in which investment cannot effectively take place, or where if it does, much larger returns are required to cover its risk premium. It is not surprising then, that the US never showed any great interest in that old decaying form of imperialism, of Colonialism, because by the beginning of the twentieth century, it was that new dynamic, Big industrial Capital that most clearly dominated the US, and before long it had found the form of organisation in the multi-national corporation of best exporting Capital around the globe. In fact, far from wanting to adopt that Colonial model the US set itself early on as its opponent, seeing in it the remnants of all those old, bureaucratic and monopolistic practices that typified feudalism, and against which the bourgeois revolution had been waged. If US Capital was to spread itself around the globe that had to go. Its reported that towards the end of WWII, Roosevelt had even proposed to Stalin an Alliance for that reason against Churchill, who he despised as a “drunken imperialist”. In the end, that was not necessary, because Europe had been so shattered by the War, and was so dependent on the US, that there was no way they could hold on to their Colonies, and had to accept the terms dictated to them by the US, including the dismantling of their old Empires.

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