Socialism and Social Democracy
In short, socialists should support remaining in Europe, and indeed measures to further develop Europe, whilst clearly demarcating themselves in that campaign not only from pro-EU Tories and Liberals, but also from the social-democrats. Where the social-democrats, phrase their argument in terms of what is good for British workers, in staying in Europe, socialists reject such an approach, and start from what is in the interests of all workers. We reject the ideas about EU workers being denied in-work benefits, as migrants, even for a limited time, because it is nationalistic. It divides workers on the basis of their nationality, and thereby creates a two-tier workforce in each country. In so doing, just as such arrangements for public sector pensions created a two-tier workforce in the civil service some years ago, it divides workers, weakens them, and opens up the door to a wider attack on workers benefits, and rights.
The next stage for the Tories will be to extend the proposals so that all British workers are denied benefits, unless they have contributed to the tax and national insurance scheme for some minimum length of time. The devastating effect that would have on those who suffer some form of disability, and who can never obtain employment, in the first place, so as to make such contributions, and on those communities where permanent structural employment means that large numbers never obtain work, or at best only obtain sporadic work, can easily be seen.
The socialist objections to in-work benefits, and indeed to welfare benefits in general, are quite different to these nationalistic arguments. Marxists oppose in-work benefits, because they represent a subsidy to inefficient, low paying capitalists. Not only are they objectionable on that basis, but they also result in a misallocation of capital, away from where it could accumulate more rapidly, and thereby provide greater employment. The Marxist objection to the welfare state, in general, is that it is a construct of the wider capitalist state, under its control, and designed to meet the needs of capital, not workers. In fact, this is one obstacle to developing European wide solutions, because such welfare states, are currently established within the framework of the nation state, and thereby counterpoised to those of every other nation state, including within the EU.
Marx and Engels opposed the introduction of National Insurance, and welfare states for precisely these reasons, and argued instead for the workers to defend and extend their own forms of social insurance, through their trades unions, and Co-operative and Friendly Societies. Such independent workers provision, can always then be geared to meet the workers' interests rather than those of capital, it is directly under workers control, and is not bound by national borders.
To the extent that such welfare states exist, however, Marxists support social-democrats in attempting to democratise them, whilst pointing out the limitations of achieving that outside workers ownership of the scheme. In response to the arguments of the nationalists, who object to migrant workers obtaining these benefits, we argue that such a welfare state can now only rationally exist on the basis of common benefits and entitlements for all workers across Europe. Such a European welfare state, and system of common benefits, can only exist on the basis of those benefits being paid from a central European budget, which requires the establishment of a single European state, with a single Federal Budget, and fiscal arrangements. Rather than less Europe, and division, the arguments of the nationalists, in these examples, point to the need instead for more Europe, for a single European state.
That same argument applies in relation to the Minimum Wage. The consequence of the conservative arguments for exceptionalism and division inevitably lead to increased competition, and a race to the bottom. In Capital III, Chapter 11, Marx sets out why higher wages are in the interests of the larger capitals with a higher organic composition. But, its also obvious that any such large capital that thinks it can sell into a market where prices of production are influenced by these higher wages, whilst itself benefiting from lower wages on its own production, will seek to do so, so as to make surplus profits. Similarly, they will seek to locate into those areas where they think they can obtain other similar benefits, which is why they have been attracted in the past to Enterprise Zones and so on. The limitation on this, is whether these other factors lead to a lower overall level of social productivity. For example, low wages often go along with low levels of skill for workers, low levels of tax go along with decrepit infrastructure and so on. These do not matter for the more backward forms of capital, but they do for the more advanced forms. Competition by nation states, or regions on this kind of basis, thereby tend to lead to a development of these backward forms of capital, and a fetter on the development of the more advanced forms.
Minimum wages are only palliatives and insurance required within capitalism. They are social-democratic measures, rather than socialist solutions, based upon the transformation of the productive and social relations. But, socialists can support such social-democratic measures, not only on the basis of providing protection for workers, for so long as capitalism continues, but also because they encourage the development of the more progressive forms of capital, required for the development of socialism. The introduction of a common Minimum Wage, across Europe, could act as a powerful incentive for capital, across Europe, to invest in means of raising productivity, particularly if that is combined with measures introduced by a centralised European state to renovate the infrastructure in less developed areas of the EU. Instead of loans to indebted countries like Greece, which merely ensure that repayments are made to global banks, and do nothing to resolve the problem of lack of capital, in those economies, even a social-democratic programme for Europe, would be framed in terms of something akin to the Marshall Plan after World War II, and would aim to create the basis for the accumulation of the kind of productive-capital, in those economies, which could be globally competitive, and thereby allow those economies to pay their own way without such loans. The EU, in fact, has more than sufficient resources as a whole, to facilitate such a programme of fiscal expansion, which would also quickly end the levels of unemployment currently existing within the periphery.
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