Thursday, 21 January 2016

Overcoming The Power of Capital - Part 5 of 8

From what has been said above, it then becomes clear that the policies of social-democracy, in so far as they encourage the further development and accumulation of capital, are measures, which are simultaneously in the interests of capital, particularly, in the first instance, of real productive-capital as well as workers. For example, the introduction of the Factory Acts, and of limitations on the working-day, whilst opposed, initially, by individual capitalists, driven by competition, was objectively in the interests of capital in general, because it acted to husband its most vital resource – labour-power, which was becoming exhausted.

The same is true of other measures such as the public health measures, and introduction of public parks and so on, at the end of the 19th century. It was the basis for Bismark's introduction of national insurance, and a welfare state, of Churchill's introduction, in 1909, of a national minimum wage, and Neville Chamberlain's proposals in the 1929 Local Government Act, as Chancellor, in the 1920's, for the introduction of a welfare state, which were further developed by Beveridge, and then introduced by Atlee, after WWII. As Marx points out, in Capital I, discussing such measures, all that capital requires is that a level playing field is established. Of course, as he and Engels point out, what this level playing field also achieves is the advantage of the bigger, more efficient capitals that can afford these measures, as against their smaller rivals, who are then swallowed up.

As Engels put it,

“Thus the development of production on the basis of the capitalistic system has of itself sufficed — at least in the leading industries, for in the more unimportant branches this is far from being the case — to do away with all those minor grievances which aggravated the workman’s fate during its earlier stages.” 

It is a point that even liberals recognised. As Frederick Hayek put it, all such regulations over the length of working day, working conditions and so on, are compatible with liberal principles and competition,

“... so long as these restrictions affect all potential producers equally”.

(The Road To Serfdom, Chapter 3, p 28)

These principles also lie behind Marx's concept of The Civilising Mission of Capital.  As capital expands, it is forced to extend the size of the market, and to develop whole new ranges of products, which must be sold to workers, thereby raising their standard of living, extending their intellectual and cultural horizons. In doing so, it increasingly prepares them to become the new ruling class. That is even more the case as the development of socialised capital sees the social function of the capitalist taken over by professional managers, increasingly drawn from the ranks of the working-class itself, and whose most obvious expression is the worker-owned co-operative.

Mike is wrong then when he says,

“Most of the time the subordinated non-owners tolerate and even accept their subordination - the phenomenon Max Weber misleadingly called ‘legitimacy’. They do so because the overall social order delivers a more or less acceptable living; because it delivers an improvement on previous social orders; in countries like this one, because it delivers a place high in the global social hierarchy, so that even badly-off Brits are a lot better off than (for example) Somalis.”

That gives the impression that British workers higher living standards are somehow achieved at the expense of Somalis, who are super-exploited, as a result of an international social order, and unequal exchange. In reality, in Marx’s definition of exploitation, as the rate of surplus value, it is the British workers who will tend to be more highly exploited, despite their much higher living standards. As Marx sets out, in Capital I, the reason that British workers living standards are higher is not any such unequal exchange, or super exploitation of Somalis or others, but the higher level of productivity of British workers, resulting from the use of more and better fixed capital.

What stands behind Mike's comments here is an only grudging acceptance of the idea that capitalism actually does produce real improvements of workers' living standards, that those improvements are only achieved as a result of workers forcing capital to make concessions to it, or of capital feeling it must make those concessions because of external fears such as those presented by the existence of the USSR. Even then, according to this view, these concessions are only possible for specific privileged countries, because they are able to super exploit other countries. So, we have the rather odd view that,

“The Arab east, sub-Saharan Africa, south Asia and Latin America remain fundamentally colonised economies.”

In other words, what Mike presents is not Marx's view presented in the concept of the Civilising Mission, but the Lassallean concept of the Iron Law of Wages. The best response to that view was given by Marx himself.

“It is as if, among slaves who have at last got behind the secret of slavery and broken out in rebellion, a slave still in thrall to obsolete notions were to inscribe on the program of the rebellion: Slavery must be abolished because the feeding of slaves in the system of slavery cannot exceed a certain low maximum!”

At a time when productive-capital, in Europe and the US, was more obviously dominant, this nature of bourgeois democracy as social democracy, and of the state as a social-democratic state, was more apparent. The United States, for example, was one of the first places, in the 19th century to develop free public education, and the model in Massachusetts was referred to by Marx, in the discussions of the First International.  The reason being that its industrialisation, from the start was based upon a higher technological basis, and requirement for better educated workers. This dominance of productive-capital, in the period of long wave boom after World War II, was also the material basis for the creation in most developed economies of a welfare state, even in the US with Johnson's “Great Society”, the use of Keynesian interventionist policies, and so on.

Since the ending of that long-wave boom in the mid 1970's, productive-capital was put on the defensive in these developed economies, especially as, the more mature sections of it increasingly moved to China and other parts of the globe, where higher rates of profit started to become possible. Its a process I wrote about, back in 1983. In fact, its notable, that China itself has been increasingly developing its own welfare state provision, not out of any altruistic concern for its workers, but out of concern for the needs of the accumulation of productive-capital, and extraction of relative surplus value.

I do not accept Mike's concept of a “ratchet to the right”, therefore, because what it ignores is the material conditions that exist at particular periods. So, Mike says that Wilson's government was to the right of Atlee's, for example. This begs the question of the definition of right and left, in respect of social-democracy, of course. But, we could also ask, was Atlee's government, or Wilson's to the right of Ramsay McDonald, in 1931? Mike seems to associate “Left” and “Right” here not just in economic terms, but also in rather statist terms, considering the arguments he seeks to make later, in relation to “Overcoming The Power of Capital”.

In fact, this idea of a ratchet to the right, other than at a superficial level, is at odds with the historical view presented by Marx and Engels, and reflected in Kautsky's presentation in “The Road To Power”, of the objective reality of a steady march of the material conditions in the direction of Socialism. If despite that underlying trend of the objective conditions in the direction of Socialism, there has been no corresponding political advance towards that goal, the fault lies entirely with the political leadership given to the working-class, and most notably with those that call themselves Marxists, but who for the last one hundred years have presented a reformist, statist ideology to the working-class, based upon a transformation of society from above, either by gradual reformist means, via Parliament, or else by revolutionary means via the seizure of state power, by an elite vanguard party. Both end up being necessarily both bureaucratic and authoritarian, with Socialism being something that is to be done for, or to the working-class, rather than created by it.

In the terms that Mike uses, we might then ask, were workers conditions better under Blair than Wilson, under Wilson than Atlee, and under Atlee rather than McDonald? We might point to the fact that it was Blair that introduced a national minimum wage, rather than either Wilson or Atlee; that Blair introduced a trebling of the NHS budget, and significant new hospital and school building programme, alongside significant expansion of public sector financing, after 2001. Its true that, Blair did not reverse Thatcher's anti-union laws, but that is to forget that Wilson wanted to introduce similar laws and controls with “In Place of Strife”, that Atlee sent out the troops to strike break and so on. Moreover, if the purpose of a “left” social democracy is to try to overcome the anarchy of market relations, isn't a central requirement of that kind of planning and regulation, to plan and control labour relations, by keeping control in the hands of the union bureaucracy, alongside their corporatist partners, and out of the hands of the rank and file?

Moreover, we might point out that Atlee's government removed some of the only existing examples of workers' ownership and control of industry, when he nationalised the worker owned co-operative coal mines, alongside the privately owned mines. By contrast, the 1964-70 Wilson governments, began to introduce more of the kind of corporatist policies that one would expect from a social-democratic government, which tried to regulate the economy in the interests of capital accumulation. That involved not just beer and sandwiches with the TUC leaders, but also alongside it, “In Place of Strife”. It extended the operation of the National Economic Development Council, as a social democratic attempt at macro-economic planning.  The 1974-79 Wilson/Callaghan governments introduced the National Enterprise Board, and a series of Local Enterprise Boards such as GLEB, the idea of workers democracy via planning agreements and worker directors, at the same time as other measures intended to plan and regulate capital, in the interests of capital accumulation, i.e. the introduction of the Social Contract.

If we are considering the question of overcoming the power of capital, then in terms of a social-democratic government, do not these measures of control and regulation, and workers involvement in that process, put Wilson's government to the left of Atlee's? In fact, if we look back on that period, these measures only sought to raise the level of social democracy, in Britain, to that which had already been established, after WWII, in the reconstruction of Germany. The first Works Councils in Germany date back to proposals by the Frankfurt Parliament of 1848. In Britain, the proposals of the Bullock Report, commissioned by the Wilson Government, in 1975, went further than the German system. Where the workers in Germany elect 50% of the supervisory boards, and the shareholders appointed the chair, giving them a majority, Bullock had as its terms of reference.

“Accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors, and accepting the essential role of trade union organisations in this process to consider how such an extension can best be achieved...” 

It proposed that in all companies over 2000 employees that all of the employees be balloted to decide whether they wanted to have representation on the Board, but that only the trades union members be allowed to actually nominate, be nominated, and vote for those representatives. There would be an equal number of trades union and shareholder directors, with the chair being appointed by the government. The motivation for the report itself came from the EU's Draft Fifth Company Law Directive, which sought to harmonise the measures of workers democracy across the EU.

No comments: