Functioning-Capitalists v Corporate Executives
I have made this point many times, and yet, Mike once again, seems not to have understood it, and proceeds in his argument as though it were, in fact, those corporate executives, who are, or who I were describing as being the functioning capitalists! So, he writes,
“The argument that social democracy expresses the common interests of workers and industrial corporate management requires attributing an astonishing degree of ‘false consciousness’ to industrial corporate management. Quite understandably, this social group generally does not back social democratic parties, which are usually associated with trade unions, even where they are not, like the Labour Party, based on them.”
But, the “functioning-capitalists” as I pointed out, are themselves workers, as Marx stated. They are themselves members of trades unions, and frequently of the Labour Party. In fact, one criticism from the sects of the Labour Party, particularly under New Labour, was precisely that it was dominated by such “middle-class” elements, rather than traditional blue-collar workers. Those functioning-capitalists in the coal industry, for example, were members of NACODS, on the railways, they are members of TSSA, and so on.
When I worked in the ceramics industry, my union branch secretary, was a production manager, and my ASTMS branch comprised many such managers. He lived, like many of the others, in a council house, and he, like many of the others, was active in the LP. In fact, he became a Stoke City Councillor. But, I could equally have referred to my various comrades, who were trades union activists in other industries, who were members of AUEW-TASS, led at that time by CP member Ken Gill, which organised such “functioning-capitalists”. I had a quick look on line, recently, at job adverts for production managers, most of which, in this area, were paying wages ranging from as little as £20,000 up to around £35,000 a year, and so hardly of a level where those managers are going to enjoy the lavish lifestyles of a middle class university lecturer, or even a solidly working-class train driver, let alone that of an owner-capitalist!
Structure v Function
Mike makes a fundamental error of thinking in terms of structures, rather than functions. He sees the division between interest-bearing capital and industrial capital, in terms of a division between banks/financial institutions and industrial/commercial companies. But, of course, that is not the division I have referred to, or which Marx describes. A bank can be a socialised industrial capital as much as a car factory. On the basis of Mike's model, he jumps to the false conclusion that I am proposing some kind of cross-class alliance of workers and industrial capitalists, i.e. the corporate executives of industrial companies, against banks and finance houses. If he had actually read carefully what I wrote, he would see that nothing could be further from the truth!
Mike misunderstands the point about social democracy and demonstrates it in his comment about the “alliance of workers and the national bourgeoisie”. Firstly, I have made no proposal for any such alliance. I have only tried to analyse what actually exists. What exists, even on the basis of the conditions that existed in Marx's time, and more so in Engels' last years, is a situation where the functioning capitalists, the day to day managers are themselves skilled workers, drawn from the working-class, living within working-class communities, paid a wage, and often a wage below even that of other skilled workers. In terms of their relation to the means of production, as wage workers, and in terms of their standard of living, their social milieu, they stand within the working-class. Only as the personified representative of the socialised-capital, and by its function to maximise the production of surplus value, do they stand in an antagonistic relation to other wage workers, and in the case of the worker-owned co-operatives, as Marx sets out, even that antagonism disappears.
“The wages of management both for the commercial and industrial manager are completely isolated from the profits of enterprise in the co-operative factories of labourers, as well as in capitalist stock companies. The separation of wages of management from profits of enterprise, purely accidental at other times, is here constant. In a co-operative factory the antagonistic nature of the labour of supervision disappears, because the manager is paid by the labourers instead of representing capital counterposed to them. Stock companies in general — developed with the credit system — have an increasing tendency to separate this work of management as a function from the ownership of capital, be it self-owned or borrowed.”
(Capital III, Chapter 23, p 387-8)
The Conflict of Forms of Property as Sources of Revenue
It is not a conflict of structures that either I or Marx are referring to, but a conflict of different forms of capital, which are the sources of different forms of revenue (interest as against profit) a conflict which exists within those structures. The capital of a bank, particularly in its functions as money-dealing capital, may be a socialised capital, and seeks to produce profit. Shareholders in the bank, lend money-capital to it, and obtain interest in the form of dividends on their shares, and that interest is a deduction from the profits made by the socialised bank capital, and consequently limits the accumulation of the bank's capital.
It is not a conflict in which a car manufacturer is somehow good, whereas a bank is somehow bad. It is a conflict, in which the productive-capital of the car manufacturer or bank seeks to maximise the profit of enterprise, which means not only maximising profit, but also minimising the payment of rent, interest and taxes; where that productive-capital seeks to accumulate so as to produce yet more profit. And, on the other side of that conflict stands the interest of the landlord to extract as much in rent as possible, and more fundamentally stands the interest of interest-bearing capital, to obtain as much in interest, or other capital transfers as possible.
It is not a conflict in which a car manufacturer is somehow good, whereas a bank is somehow bad. It is a conflict, in which the productive-capital of the car manufacturer or bank seeks to maximise the profit of enterprise, which means not only maximising profit, but also minimising the payment of rent, interest and taxes; where that productive-capital seeks to accumulate so as to produce yet more profit. And, on the other side of that conflict stands the interest of the landlord to extract as much in rent as possible, and more fundamentally stands the interest of interest-bearing capital, to obtain as much in interest, or other capital transfers as possible.
That interest is not somehow manifest outside the structures of the industrial companies, in the shape of the banks and finance houses, as Mike seems to imagine, but within those very same structures. It is the interest of money-lending capital, of the shareholders, and their executive representatives on company boards, that stands in opposition to the objective interests of the industrial capital whether that industrial capital is that of a bank or a car company. It is those shareholders that seek to extract as much as they can in the shape of dividends, capital transfers and so on, which thereby reduces what is left as profit of enterprise available for the accumulation of productive-capital, which forms the basis of the contradiction. That situation is merely complicated in the case of the banks, because they also act, via their activities as representatives of money-lending capital, as also recipients of revenues in the form of interest and capital gain.
Socialised Capital
It is not an alliance of the working-class with any form of bourgeoisie (national, international, large or small) that I have anywhere proposed, but a recognition of the fact that it is, in fact, workers themselves, “associated producers”, “from manager down to the last day-labourer” who are now objectively the representatives of socialised capital. In fact, as Marx states, in relation to the worker owned co-operatives, that is manifest.
“...the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”
(Capital III, Chapter 27)
And standing against them, are not only the representatives of the remnants of private productive-capital, but also the representatives of interest-bearing capital (shareholders, bondholders etc.), which as Mike himself correctly stated, in his first article, is the form in which private capitalist wealth today predominates, and finally of landed property.
The Workers' Party
It is precisely upon this basis that the political conflict rests. And here we come to another instance of where Mike blatantly engages in a tilting at windmills. He writes,
“The second illusion is about the road to socialism: that the working class can build massive worker-managed cooperatives, which can foreshadow socialism, without at the same time building an anti-constitutional workers’ party working to discredit the media, judiciary, corrupt MPs, and so on.”
How on Earth Mike can make such a comment, I truly do not understand. Set aside the fact of me spending fifteen years of my life as part of a revolutionary organisation, or all of my adult life as a member of the Labour Party, focussed on trying to turn it outwards to workers struggles, whilst simultaneously trying to turn actual workers struggles into a means of transforming the Labour Party itself, and building such a Workers Party, there is not only a section on my blog entitled “The Workers Party Index”, but there are numerous posts on my blog, written about the need for such a party, and discussing how to go about it!
The whole point here is not the ridiculous idea that Mike wants to attribute to me, and which I have nowhere even come close to suggesting, that socialism could somehow simply gradually evolve as a result of an organic growth of these massive co-operatives, but how these two things – the development of worker-owned property, and workers self-government and the development of a Workers Party – go hand in hand! As Marx put it, and as I have cited many times,
“But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart...
To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defence and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour... To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party.”
Historical Materialism v Petit-Bourgeois Idealism
The whole point is upon what basis this Workers Party is then enabled to develop. Does it, as Mike seems to believe, arise by being simply sucked out of the thumb of people like Mike and others, who have seen the light, and proselytise for it in the papers of tiny revolutionary organisations, in the hope that the scales will eventually fall from the eyes of millions of workers, who will then join them in creating such a mass revolutionary party. That was the kind of petit-bourgeois idealist conception that was put forward by sects like the League of the Just, and even the Communist League. But, Marx and Engels on the basis of a recognition of the role of actual workers own activities in mass movement like the Chartists, broke from that conception, as they developed the theory of Historical Materialism.
"... that policy and its history are to be explained from the economic relations and their development, and not vice versa. … Communism among the French and Germans, Chartism among the English, now no longer appeared as something accidental, which could just as well not have occurred. These movements now presented themselves as a movement of the modern oppressed class, the proletariat, as the more or less developed forms of its historically necessary struggle against the ruling class, the bourgeoisie; as forms of the class struggle, but distinguished from all earlier class struggles by this one thing, that the present-day oppressed class the proletariat, cannot achieve its emancipation without at the same time emancipating society as a whole from division into classes and, therefore, from class struggles. And Communism now no longer meant the concoction, by means of the imagination, of an ideal society as perfect as possible, but insight into the nature, the conditions and the consequent general aims of the struggle waged by the proletariat.”
(Engels – History of the Communist League)
"... that policy and its history are to be explained from the economic relations and their development, and not vice versa. … Communism among the French and Germans, Chartism among the English, now no longer appeared as something accidental, which could just as well not have occurred. These movements now presented themselves as a movement of the modern oppressed class, the proletariat, as the more or less developed forms of its historically necessary struggle against the ruling class, the bourgeoisie; as forms of the class struggle, but distinguished from all earlier class struggles by this one thing, that the present-day oppressed class the proletariat, cannot achieve its emancipation without at the same time emancipating society as a whole from division into classes and, therefore, from class struggles. And Communism now no longer meant the concoction, by means of the imagination, of an ideal society as perfect as possible, but insight into the nature, the conditions and the consequent general aims of the struggle waged by the proletariat.”
(Engels – History of the Communist League)
On that basis, the Workers Party arises, as Marx suggests, from increasing numbers of workers seeing, in practice, the potential for developing existing forms of socialised capital, and of the need to exercise control over them, in opposition to the control currently exercised by the representatives of interest-bearing capital, and the need to engage in a political struggle around the very question of that control? Does it arise from the need to engage in a struggle to defend and extend this socialised capital, particularly in the form of the worker-owned co-operatives, and the forms of workers self-government that develop out of it, against the attacks of the representatives of small private capital, landed property, and interest-bearing capital, or does it somehow simply develop out of an act of pure will? It is the question that Materialists have always put to Idealists, it was the central issue of Marx's polemics with Proudhon, for example, in “The Poverty of Philosophy”.
So, from past discussions he should know that I have spent considerable time discussing how such a mass revolutionary party is not just necessary, but how it arises. Secondly, throughout my article I discuss the process of the resolution of the contradiction between the underlying objective reality of socialised capital, and the continuing power of fictitious capital, and the measures required to address that contradiction. How exactly, does Mike think that I propose addressing those political issues other than precisely by the need to develop such a mass revolutionary party, which engages in the political struggle? That is precisely the point that Marx makes in his Inaugural Address to the First International.
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