Thursday, 16 December 2010

Cuts, Inflation And Interest Rates - Part 2

In the 19th Century, Karl Marx and Frederick Engels developed the idea of Permanent Revolution. It is a direct application of the dialectical logic, the concept that all though we experience phenomena as a series of discrete events or categories, in fact, these are just moments within a process, and each of these moments is itself contradictory, containing within itself an element of the past, and an element of the future. So, within Feudal society, the elements of Capitalist Society were already present, and the struggle of those elements against the feudal elements, is what was progressive and revolutionary. Feudal society did not remain one static phenomena, but changed as the Capitalist elements became more dominant, until eventually they predominated and the society became something qualitatively different – it became Capitalist Society. They learned the political implications of that in 1848 in Germany. At that time, Germany was still ruled politically by the old feudal ruling class, even though, the Capitalist Class had become very powerful economically and socially. They expected that the German ruling class would seek to gain political power for themselves in the same way that the British Capitalists had done in a series of battles that started with the Civil War, proceeded through the Glorious Revolution, and culminated in the 19th Century with a series of victories beginning with the Reform Act of 1832, the repeal of the Corn Laws, and culminating at the end of the century with the extension of the franchise to most adult males.

But, in fact, although the German Capitalists did engage in such a confrontation along with the Capitalists of other European states at the time, ultimately, they pulled back from that fight. The reason was that as Capitalism had developed this dialectical process also brought into existence the elements of the next stage of human development – the modern working class, and socialised production based on co-operative labour. When the British Capitalists had set out to carry through their Political Revolution, the working-class was still a weak new class. The Capitalists were able to mobilise it as its foot soldiers against the Feudalists, just as it had previously mobilised sections of the peasantry. But, by the time of the Revolutions of 1848, the working-class across Europe had become much bigger, much stronger, and now was beginning to recognise its own distinct interests, and to develop its own political programme and parties, such as the Chartists in Britain. The Capitalists were torn between the need to fight against the representatives of the past, and the representatives of the future. They chose to make a compromise with the representatives of the past, who were fellow exploiters.

The lesson they learned, and which was taken up by Trotsky, in his Theory Of Permanent Revolution, in which he sets out the reasons by which, in countries where the bourgeois political revolution has not been completed – which applies both to countries with their own feudal political regime, and to countries which have a Colonial political regime – a developed, organised working-class cannot simply resolve to undertake a limited struggle for the carrying through of the bourgeois revolution – the so called “Stages Theory” advanced by the Mensheviks and other Social-Democrats, and by the Stalinists – because as Marx and Engels learned in 1848, the Capitalists at a certain point, fearing that such a process will continue, and provide the workers with the opportunity to impose themselves on it, will turn on the workers, and make a deal with either the Landlords, or the Colonial power, or both. At a point in history where the existence of large working classes, of large-scale socialised production and co-operative labour makes, the fight for Socialism possible, workers cannot limit themselves to simply fighting for the lesser-evil, of Capitalism, or even a more progressive form of Capitalism over a less progressive form, but can only achieve even these limited aims, by combining it with a struggle for its own independent interests i.e. for Socialism.

Trotsky, applied this theory, with devastating effect, to the struggle of the Chinese workers and peasants against Japanese Imperialism in the 1920's and 30's. The Stalinists argued for the Chinese workers to subordinate themselves to Chiang Kai Shek, and invited him into the Comintern. Trotsky was vilified and hounded by the Stalinists for opposing this policy, but as he predicted, the result was that Chiang and the Kuo Min Tang, turned on the workers and Chinese Communists, murdering them in their thousands. Trotsky applied the same theory in Spain during the Spanish Civil War, arguing for the need to dismantle the Officer Corps, and for the workers to keep their independence, and fight for their own independence. See: Lessons Of The Spanish Civil War. Similarly, in his A Program Of Action For France, where he was advising the French workers on how to oppose the attacks on bourgeois democracy by the French fascists, he argued that although, the French workers should obviously defend all of those aspects of bourgeois democracy – free speech, right of assembly, right to organise in Trades Unions, Universal Suffrage etc. - which facilitated the workers organisation and struggle, they should do so not by simply limiting themselves to that struggle, not by simply seeing it as a lesser-evil against fascism, but by using its own proletarian methods to defend them against the fascists, by establishing Factory Committees, by establishing Peasant Committees, by setting up Workers Defence Squads, and Militia, by demanding Workers Control and other measures that enhanced the workers position, and provided workers with a real reason to become involved and mobilised than just to defend a Capitalist System that they already recognised was not meeting their needs. In other words, the fact that the workers were on the back foot, was not a reason to adopt a purely defensive posture, but to defend by attacking, to defend the present against a return to the past, by combining it with a struggle for the future.

Just to complete the historical analogies; he took the same attitude to the Stalinist States, and the attacks upon them by Imperialism. More than anyone, Trotsky had a right to vilify the political regime of Stalinism, and did so in the most devastating manner. Yet, Trotsky argued that whether you defined these states as some form of Workers State, as some form of State Capitalism, or even as some new unknown form of society such as Bureaucratic Collectivism, Marxists should still defend them against a return to private Capitalism, which would represent a step away from the establishment of Socialism. It would be just another form of the Stages Theory, but this time suggesting that a return to private Capitalism was a stage that had to be gone through BEFORE workers could once more argue for Socialism. Instead, he argued that they should defend those States, not by keeping quiet about what was so terribly wrong, bureaucratic and oppressive about them, but precisely by highlighting precisely why those things were ultimately the reasons why they would FAIL, and result in a restoration of private Capitalism. What existed could only be defended on the basis of vigorously advocating advance from them, of counterposing the need to democratise and transform them, to push forward workers control and ownership, and alongside it, workers democracy.

The reason I have introduced this lengthy digression, is that in this method of dialectics developed by Marxists like Marx and Engels themselves, and developed by others such as Lenin and Trotsky, we see the basic method of struggle that we should advocate today on a whole range of issues whether it is advocating the completion of the bourgeois democratic revolution, of defending bourgeois democracy against fascists and other reactionary ideologies such as Political Islam, or of defending jobs or opposing cuts and privatisation. We should not oppose the Cuts and Privatisation of our own bureaucratic, inefficient and oppressive State Capitalist institutions such as the NHS, or other Public Services by presenting them as some lesser-evil to private Capitalism, we should not be shy to highlight the fact that these State Capitalist organisations ARE bureaucratic, inefficient, and oppressive – a fact that most workers who have to rely on them, and work in them already know – but should oppose the Cuts on the basis that it is by pushing forward towards workers ownership and control of these organisations that the solution can be found, and that by going back to private Capitalism we are moving in the wrong direction, creating the conditions under which a whole period of historical development will only need to be repeated.

Its rather like the response Lenin gave to Kautsky in relation to the question of Monopolies and the free market, in “Imperialism The Highest Stage of Capitalism”. Lenin quotes Hilferding approvingly,

“It is not the business of the proletariat,” writes Hilferding “to contrast the more progressive capitalist policy with that of the now bygone era of free trade and of hostility towards the state. The reply of the proletariat to the economic policy of finance capital, to imperialism, cannot be free trade, but socialism. The aim of proletarian policy cannot today be the ideal of restoring free competition—which has now become a reactionary ideal—but the complete elimination of competition by the abolition of capitalism.”

And in response to Kautsky's call for a policy of breaking up the Monopolies Lenin writes,

“Kautsky broke with Marxism by advocating in the epoch of finance capital a “reactionary ideal”, “peaceful democracy”, “the mere operation of economic factors”, for objectively this ideal drags us back from monopoly to non-monopoly capitalism, and is a reformist swindle...

Let us assume that free competition, without any sort of monopoly, would have developed capitalism and trade more rapidly. But the more rapidly trade and capitalism develop, the greater is the concentration of production and capital which gives rise to monopoly. And monopolies have already arisen—precisely out of free competition! Even if monopolies have now begun to retard progress, it is not an argument in favour of free competition, which has become impossible after it has given rise to monopoly.

Whichever way one turns Kautsky’s argument, one will find nothing in it except reaction and bourgeois reformism.”

Lenin – Imperialism

But, as both Engels in Anti-Duhring and Lenin in Imperialism set out, State Capitalism is merely the logical conclusion of this process of concentration. At its most logical conclusion it results in an economy where industry is totally statified, but where commodity production continues, and competition exists between huge state owned Trusts, and where Capital is allocated by the State to where the highest rate of profit can be made at any one time. It means the logical conclusion of the development of the Capitalist Class away from its former direct role into production, through to part-time Managers as opposed to worker-owners, to providers of private Capital whilst professional managers administer it, to ultimately becoming mere owners of Money Capital, which they lend through the Bond Markets to the State, for it to allocate, and from which they draw interest – having no other role other than that of “coupon clipping”.In fact, we see that increasingly today. Just look at the crisis in the Bond Markets we are experiencing today. But, within the context of a “mixed” economy", it operates in other ways too. In reality the Public Sector has always been used as a means of massively subsidising the private sector. Public Sector energy producers charged much lower prices to industry than they did to private consumers. The NHS has always been an easy target for private firms to treat as a milch cow. The latest example of that was shown in the Channel 4 News/British Medical Journal investigation into the way the NHS is paying around a quarter of a billion pounds more over 5 years, for insulin than it need to. NHS Spending On Insulin

Such State Capitalism like any other form of Monopoly is not in any way Socialist, it is just a more mature form of Capitalism. We do not advocate it any more than we would advocate any other form of Monopoly, but as Lenin points out, nor do we advocate or support a return to more primitive forms of Capital. Our answer to both is to advocate Socialism. And, if that is not to be just another meaningless phrase here and now, asking workers to simply wait for the revolution, it can only mean one thing, and that is what Trotsky set out. It is to fight to push things forward. It is to argue the need for Workers Control, which in reality can only be achieved either under conditions of dual power, or else by workers taking ownership of their particular means of production. A first step in that process is the Occupation, and the work-in. But, the logical conclusion of that in the short term, is the demand that those particular means of production be handed over to the workers within them, and the establishment of a Workers Co-operative, operating as one unit within a developing Co-operative Federation of Workers property.

Back To Part 1

Forward To Part 3

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