Tuesday, 12 April 2016

Tilting At Windmills - Part 3 of 6

Social Democracy

Mike also misunderstands the nature of social-democracy. He says, 

“The second point is that it is an astonishingly artificial broadening of ‘social democracy’ to read it as covering all sorts of state interventionism. Comrade Bough’s analysis would in effect require the labelling as ‘social democratic’ of the British Liberal and Tory parties of the later 19th century, of the US Democratic Party - and the Republican Party of Eisenhower and Nixon. The result is to render the category ‘social democratic’ so broad as to be analytically useless.”

Firstly, it is not to label those parties as being “social-democratic”, but to label the ideas that determined some of their policies, and the policies themselves as social-democratic. It does not turn the Republican Party into a social-democratic party, any more than the conservative ideas that motivated Blair and Brown to pursue the interests of fictitious capital, by blowing up property, stock and bond market bubbles, turned the Labour Party into a conservative party. In reality, all of the major parties, in all of the developed capitalist states, are coalitions of interests, which, in turn, is conditioned by the need to build an electoral coalition, required to gain office.

At different times, these parties will move in the direction of either conservatism or social-democracy, depending upon what ideas are more prevalent, in society, at the given time, and how that affects each party's ability to build a coalition around its core support.   Those ideas will themselves be a reflection of the underlying objective interests of capital, whether industrial or interest-bearing capital has an upper hand. In the same way, although labour is subordinated to capital, that does not mean that, at certain times, when unemployment is low, and the demand for labour-power is high, labour may not obtain temporary advantage, with higher wages better organisation, and so on, which is likewise manifest within the realm of ideas, and its reflection within such political coalitions.

The Bourgeois Social Democratic State

Secondly, the term social-democracy, in the sense in which I use it, is less broad than the term “bourgeois democracy”, and so is no more “analytically useless” than that term. As Marx puts it in The Critique of The Gotha Programme,

“Nevertheless, the different states of the different civilized countries, in spite or their motley diversity of form, all have this in common: that they are based on modern bourgeois society, only one more or less capitalistically developed. They have, therefore, also certain essential characteristics in common. In this sense, it is possible to speak of the "present-day state" in contrast with the future, in which its present root, bourgeois society, will have died off.” 

I use the term “social-democracy”, as a sub-species of the term bourgeois democracy, just as in its earlier period bourgeois democracy exists in the shape of the sub-species of “liberal-democracy”. The two categories are different precisely because the period of liberal bourgeois democracy represents conditions in which private capitalist property predominated, whereas social democracy represents conditions where socialised-capital predominates. How this plays out in relation to the struggle between the ideas of conservatism and social democracy, and their strength within society and political parties I discussed some years ago.

As Marx puts it, in “The Eighteenth Brumaire of Louis Bonaparte”,

“The peculiar character of social-democracy is epitomized in the fact that democratic-republican institutions are demanded as a means, not of doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony. However different the means proposed for the attainment of this end may be, however much it may be trimmed with more or less revolutionary notions, the content remains the same. This content is the transformation of society in a democratic way, but a transformation within the bounds of the petty bourgeoisie. Only one must not get the narrow-minded notion that the petty bourgeoisie, on principle, wishes to enforce an egoistic class interest. Rather, it believes that the special conditions of its emancipation are the general conditions within whose frame alone modern society can be saved and the class struggle avoided. Just as little must one imagine that the democratic representatives are indeed all shopkeepers or enthusiastic champions of shopkeepers. According to their education and their individual position they may be as far apart as heaven and earth. What makes them representatives of the petty bourgeoisie is the fact that in their minds they do not get beyond the limits which the latter do not get beyond in life, that they are consequently driven, theoretically, to the same problems and solutions to which material interest and social position drive the latter practically. This is, in general, the relationship between the political and literary representatives of a class and the class they represent.” 

The Petit-Bourgeois Functionary as Personification of Social Democracy

And what clearer personification of that petit-bourgeoisie, and petit-bourgeois mindset is there than the “functioning-capitalist”, the day to day manager, and their equivalents within assorted bureaucracies?  People who view their own intermediate and mediating position as reflecting the true nature of society as one of shared interest, of society as a machine that simply requires mainetnance and regulation.

The point being here that it is the nature of modern society, as dominated by socialised-capital, which conditions its existence as a bourgeois social-democracy, in which objectively, and ultimately it is the need for this socialised, industrial capital to reproduce itself, which can only be now accomplished via the extraction of relative surplus value, which requires the existence of a social-democratic state, which incorporates the working-class, via the provision of a welfare state, which provides the basis for huge levels of capital accumulation, by creating the conditions of long-term stability, via measures of macro-economic planning and so on.

It is that which is the underlying reality of social reproduction, and which sets the constraints within which elected governments are allowed to operate. It is that which ultimately limited the ability of Thatcher or Reagan to create a smaller state, as much as it was what caused Osbourne to have to reverse his austerity measures, and introduce measures for capital investment. It is what lies behind the current statements that monetary policy by central banks cannot carry all of the weight, and that governments across the globe will have to reverse austerity, and introduce measures of fiscal stimulus, and capital investment.

Engels and The Material Basis For Social Democracy

Moreover, it is not just me that frames it in this way. Engels makes exactly the same point.

“The Reform Bill of 1831 had been the victory of the whole capitalist class over the landed aristocracy. The repeal of the Corn Laws was the victory of the manufacturing capitalist not only over the landed aristocracy, but over those sections of capitalists, too, whose interests were more or less bound up with the landed interest - bankers, stockjobbers, fundholders, etc. Free Trade meant the readjustment of the whole home and foreign, commercial and financial policy of England in accordance with the interests of the manufacturing capitalist...

Both these circumstances had turned the English working class, politically, into the tail of the ‘great Liberal Party’, the party led by the manufacturers. This advantage, once gained, had to be perpetuated. And the manufacturing capitalists, from the Chartist opposition, not to Free Trade, but to the transformation of Free Trade into the one vital national question, had learnt, and were learning more and more, that the middle class can never obtain full social and political power over the nation except by the help of the working class. Thus a gradual change came over the relations between both classes. The Factory Acts, once the bugbear of all manufacturers, were not only willingly submitted to, but their expansion into acts regulating almost all trades was tolerated. Trades Unions, hitherto considered inventions of the devil himself, were now petted and patronised as perfectly legitimate institutions, and as useful means of spreading sound economical doctrines amongst the workers. Even strikes, than which nothing had been more nefarious up to 1848, were now gradually found out to be occasionally very useful, especially when provoked by the masters themselves, at their own time. Of the legal enactments, placing the workman at a lower level or at a disadvantage with regard to the master, at least the most revolting were repealed. And, practically, that horrid People’s Charter actually became the political programme of the very manufacturers who had opposed it to the last. The Abolition of the Property Qualification and Vote by Ballot are now the law of the land. The Reform Acts of 1867 and 1884 make a near approach to universal suffrage, at least such as it now exists in Germany; the Redistribution Bill now before Parliament creates equal electoral districts-on the whole not more unequal than those of France or Germany; payment of members, and shorter, if not actually annual Parliaments, are visibly looming in the distance and yet there are people who say that Chartism is dead.”

Preface To The Second German Edition of “The Condition Of The Working Class”

Social Reproduction

It was to explain that it is the objective constraints of this process of social reproduction, which means that Mike's thesis about the domination of interest-bearing capital is wrong, which led me to begin my previous response to Mike by setting out that process of social reproduction, which Marx describes in relation to the Tableau Economique. The reason for setting out the actual process of social reproduction, as analysed and described by Marx, on the basis of the Tableau Economique, was that a certain Mercantilist conception of that process has been introduced into Marxist economic theory, and underlies Mike's main contention of the dominance of money-capital over productive-capital.

That Mercantilist conception is reflected in the concept of calculating the rate of profit on the basis of historic prices, rather than as Marx did, on the basis of current reproduction costs. Where for Marx the purpose of capitalist reproduction is the replacement “in kind” of the elements of the productive-capital, as the basis for then establishing reproduction on an expanded basis, that Mercantilist conception turns it into being simply the expansion of exchange value, of money values, and in the process also confuses the expansion of those money values, due to capital gains, with the generation of surplus value, and self-expansion of capital, via the production process, and conversely confuses capital losses due to the moral depreciation of capital, with reductions in surplus value, and the rate of profit. 

Social Democracy v Conservatism

Mike admits that if I demonstrate that the bedrock of his thesis, that financial capital predominates, is wrong, then there is no need for me to disprove the conclusions he derives from that thesis. True, but his claim that I do not deal at all with his conclusions, is also false. So, for example, I challenged his claim of a ratchet to the right, by discussing the fact that the Wilson/Callaghan governments saw the introduction of measures of workers democracy, and of greater social democratic planning and strategy than did the Attlee government, which undermined such measures. 

If the basis of social-democracy is the need for the extension of such planning and regulation, then I would argue that, in the extension of the power of the state to intervene, at a national, regional and global level, in terms of the growth of transnational organisations such as the EU, and similar economic blocs, of the power to intervene and regulate by the IMF, World Bank, WTO and other ad hoc bodies such as the G20, then, despite the existence of conservative governments, for much of the intervening period, the objective reality is of a more social-democratic, as opposed to conservative global framework today than existed in the 1970's. 

Moreover, the success of the most dynamic and rapidly growing economic power, and capital during that period, China, has certainly been based upon those elements of social-democracy that require high levels of state intervention, macro-economic planning and regulation, and increasingly that too involves the development of a Chinese welfare state, just as it has relied upon the extraction of relative surplus value, alongside rapidly growing real living standards. But, similar comments could be made in relation to the economic development model used in South Korea, Singapore, Malaysia and elsewhere, as well as, over the last couple of decades, in relation to countries in Latin America.

Indeed, its partly that fact, which has been the basis of conservatives objections to the EU, for example. Yet, even Cameron was forced to limit his “reforms” to a request for the most minor tinkering with the EU's regulations.

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