Understanding The US Political Crisis - Part 5

The Bourgeois Social Democratic State (1)

Marx described in the Manifesto the way “the aristocracy took their revenge by singing lampoons on their new masters and whispering in his ears sinister prophesies of coming catastrophe. 

In this way arose feudal Socialism: half lamentation, half lampoon; half an echo of the past, half menace of the future; at times, by its bitter, witty and incisive criticism, striking the bourgeoisie to the very heart’s core; but always ludicrous in its effect, through total incapacity to comprehend the march of modern history.”

Conservatives continue to fulfil this function, but in changed conditions. That is most pronounced in Britain, because its political system, and its parties continue to bear all of the scars of their historical development. The British Conservatives continue to reflect the interests of the aristocracy and landed property, and the aristocracy of finance that developed out of that same class. But, they also reflect the interests of their main membership and electoral base within the ranks of the small capitalists, and their associated layers. Both of these sections of society are backward looking to a period in history when they were ascendant, but a time which has now past never to return. With the demise of the Liberal Party, upon the birth of the Labour Party, the big industrial capitalists were also forced to make common cause with these reactionary sections of the exploiting classes within the Tory Party, even though ideologically their interests remained tied to the ideas of social-democracy, which now formed the basis of the state.

A similar division can be seen in the US despite the different historical development. There it was the Republicans that represented the interests of the northern, industrial capitalists. Southern Democrats, by contrast were based upon the slave owners. That history still leaves the impression that it is the Republicans that are the Party of Big Business, whereas the Democrats, who have traditionally obtained their support more from industrial workers are viewed as less business friendly. But, a look at the support the Democrats get from Big Business, a look at the number of multi-millionaires that make up the core of their elected politicians, a look at the actual policies pursued by the Democrats indicates that the only difference between these two parties is the electoral strategy each has to pursue to get elected, and the section of Capital that each represents.

Within the ranks of the Conservatives in the UK, US and elsewhere, those representatives of the small business class preponderate, for the simple reason that although modern Capitalism is dominated by big industrial capital, and its interests ultimately determine the dynamic of development, often behind the backs of the capitalists themselves, small businesses themselves form the overwhelming majority of capitalist enterprises. It is no wonder that the interests of these small businesses, therefore, have to form the bedrock of what Conservative politicians have to say, even where that conflicts with what those of them who reflect the interests of big, industrial capital actually believe. Nor does that extend solely to the party political representatives. It extends to the functionaries of companies, of business organisations, and those sections of the press reliant on selling newspapers to that section of society.

Farage The Klown, and the jokers of UKIP may be
ridiculous throwbacks, but they are holding Cameron
and the Tories to ransom, just as the Tea Party is
holding the Republicans in the US to ransom, and
thereby threatening to bring down the entire global
financial system.

In a sense, that is a repetition of the situation that Marx described in relation to the aristocracy who in order to win elections were forced to “lose sight, apparently, of its own interests, and to formulate their indictment against the bourgeoisie in the interest of the exploited working class alone.” Except here, sections of the big bourgeoisie, lose sight of their own interests, in order to win elections by pandering to the reactionary interests of the small capitalists, whose time has past. In so doing, they make themselves hostage to fortune, and the obvious manifestation of that is the rise of the Euro-sceptic Right in the Tory Party, of UKIP, of similar fractions across Europe, and of the Tea Party in the US. Barack Obama, is quite right when he pointed out on TV a couple of days ago, that the entire US economy is being held to ransom, by a fraction of one party, in one part of Congress, in one branch of government. But, the truth is that could be said about the situation in Britain, and across Europe in relation to the policies of austerity that are being implemented to meet the interests not of capital in general, but of that reactionary section of small capital. It is happening, because the big, industrial capitalists are allowing themselves to be held hostage by failing to come out openly and fight for their interests against them.

The main focus of the Tea Party objection to Obama, rests not just with the fact that the US Budget has grown massively, as has the level of debt to pay for it. It rests with the introduction of Obamacare, the introduction of a more comprehensive system of healthcare for US citizens, which brings it more into line with the situation in Europe. It reinforces the view described in the quote from Hayek in Part 4, that it is a combination of organised labour and organised capital that is driving towards a socialist state. The view that such a state is socialist, is of course, nonsense. But, it is correct that such developments are an indication that the basic social-democratic idea that dominates modern capitalism, continues to create the dynamic that determines the way the state itself develops, as a welfarist state.

For years, big industrial capital in the US, mostly in the shape of the car companies, complained bitterly about the fact that they were made uncompetitive compared with their European counterparts, because they had agreements with their unions for the provision of what was very good, but increasingly expensive private healthcare. Very large companies such as Wal-Mart, which not only shunned unions, but also refused to provide such health insurance for their workers, forcing them to use the state healthcare system medicaid, were attacked by their unionised competitors, for effectively acting as parasites. The introduction of some form of European style socialised healthcare system was clearly in the interests of big US Capital, to take the burden of health insurance off its backs, and as in Europe, place it on the backs of the workers and the middle class, and small capitalists.

The point is illustrated in this piece by an ideologue of US big capital, Matt Miller in Fortune Magazine, back in 2005.

“But seen in this context, the prescription-drug bill last year was the first step in the Republican-led socialization of health spending. Companies have been clobbered funding retiree health plans. The GOP felt their pain, and presto, $750 billion over ten years moved from private to public budgets...

The bigger hurdle may be stereotypes. Business's sensible drive to get Uncle Sam to take on more of the health burden will run into the nihilistic (but potent) "big government" rhetoric of the GOP--plus the party's delusion that we can keep federal taxes at 17% to 18% of GDP as the boomers retire.

If Republican pols want to help Republican CEOs solve their biggest problems, this caricature of a political philosophy will have to give way to something more grown-up. Just as the Nixon-to-China theory of history says it will ultimately take a Democratic President to fix Social Security, it may take a Republican President to bless the socialization of health spending we need. ..Ask yourself: When we're on the cusp of decades of wrenching challenges from places like China and India, doesn't American business have enough to do without managing health care too?”

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