Reactionary Nationalism v Progressive Internationalist Social-Democracy
What Paul sees as evidence of a broken economic model is actually evidence of the growing contradiction between the productive relations of socialised capital, and distribution still dominated by private capital. That is, for the last thirty years, Neo-liberalism/conservative social-democracy has held sway. It has defended the interests of the owners fictitious capital, the owners of bonds, shares and property, who derive their wealth and revenues from these assets. In order to keep the prices of these assets inflated – which has become required, as with yields near zero, they depend upon the extraction of capital gains – central banks have printed money, and promoted speculation, whilst governments have bought up distressed financial assets, promoted property speculation, whilst simultaneously depressing the real economy, and real capital accumulation with policies of austerity.
The financial crisis of 2008 was not an indication of the failure of the underlying economic model. If anything, it was the opposite. It was an indication of the incredible dynamism of the global economy that rapidly came into conflict with the relations of distribution, and continued power and influence of the owners of fictitious capital. But, as Marx describes in Capital III, fictitious capital is subordinate to productive-capital. It is productive-capital which produces profit, and without profit there is no rent or interest, and without rent or interest there is no capitalised value of land, shares, bonds or other such assets.
In the last thirty years the state and central banks have tried to defy that economic reality, so as to keep asset prices inflated. They can do so no longer. But, in the process the measures they undertook to keep asset prices inflated had other social and political consequences. By hyperinflating property prices, they put property ownership out of reach of an entire generation, and made the prospect of moving up to a better house out of range of the generation before it. It had the other effect of inflating rents to unsustainable levels that necessitated vast sums of government funds to be handed to landlords in Housing Benefit subsidies.
That, together with the increased cost of pension provision, due to hyperinflated share and bond prices, resulted in a massive transfer of wealth from real capital – particularly socialised capital – to fictitious capital.
The other measure required to inflate asset prices was the imposition of austerity, at a time when rapid economic expansion, after 2000, should have seen general living standards rising and public service provision improving. This came on top of the decimation of industrial and urban areas in the 1980's.
It was this backdrop, and the weakness and atomisation of the working class it engendered, which opened the door, as it has in the past, to the spread of reactionary, divisive, sectionalist and nationalist ideas, be it the BNP and UKIP in Britain, the FN in France, or any of the other nationalist parties across Europe, and their equivalents in other parts of the globe.
Paul says of the Scottish independence referendum,
“Contrary to media myths, this was not a nationalist surge but a left-inclined plebeian movement. Handed the opportunity to break away from a neoliberal state committed to austerity for the next decade, the Scottish people came very close to doing so and breaking up the world's oldest capitalist economy in the process.” (p 260)
But, that is not the case. The SNP arose as a conservative nationalist party. Its initial success came almost exclusively from winning over Scottish Tories, and earned themselves the label “Tartan Tories”. The real basis of Scottish nationalism, and the point when it began to get wider support, was when North Sea oil revenues increased, and the idea could appear possible that Scotland might keep all that oil money to itself. Something similar lies behind Catalan nationalism, as Spain's most affluent region.
There was nothing progressive in the demands for Scottish independence in 2014, any more than in the demands for Brexit in 2016. In 2014, a few misguided leftists were able to hop on the reactionary bandwagon of the SNP, just as the same elements in previous times, lined up with Enoch Powell and the National Front to oppose the Common Market, or lined up with UKIP and the BNP to oppose the EU under the banner of No2EU, and then attached themselves to the same reactionary nationalist elements in 2016 with the ridiculous concept of Lexit.
Had the Scottish referendum resulted in a vote for independence, its consequences would have been as disastrous as the vote for Brexit. Paul speaks only of it breaking up the British capitalist economy – a retrograde and reactionary step in itself – but says nothing about the fact that its immediate effect would be to break up the British labour movement, isolating Scottish workers from their comrades in England, Wales and Northern Ireland, and setting in train the inevitable competition to drive down conditions to the lowest denominator.
The real nature of Scottish nationalism has been indicated in the period after 2014. It has seen not a growth of a radical left alternative to the SNP, but a flowing back of SNP support to the Scottish Tories! In fact, outside the growth of Corbynite forces, inside the Scottish Labour Party, mirroring their growth in the rest of Britain, what existed of the Far Left, in Scotland, has all but vanished from sight.
The solution for Scottish workers, for Catalan workers, or German workers, as for all workers, resides not in raising the reactionary, divisive and diversionary national question, but, as Marx and Engels wrote, in The Communist Manifesto, the raising of the property question. The form in which that property question should be immediately raised is obvious.
- Why is that current laws allow shareholders to exercise control over property they do not own, i.e. over the socialised capital of companies, and why is it that we, as workers and managers, within those companies are denied any control over the capital of our companies?
- Why is it that those shareholders and their representatives, the top executives, and Boards of Directors, are allowed to use that control so as to sacrifice the future of the company and to prevent the use of profits we create for investment, solely in order to hyperinflate their share prices?
- Why is it the capitalist state, and its central bank, is prepared to destroy the potential for real capital accumulation and economic growth that provides for the well-being of the vast majority of society, on the altar of simply keeping the asset prices of the top 0.01% inflated?
- Why do those same laws deny us, as workers, the democratic right to control the funds we have contributed to our pension schemes?
These questions are not revolutionary in content. They rest entirely within the bounds of bourgeois property laws. As such, they are questions that a progressive social-democracy should have raised long ago. They address the real problem that workers currently face. That is not a problem that the existing productive forces and productive relations are incapable of further development, but that that development is being held back by the distribution relations of the era of the monopoly of private capital persisting into the era of socialised capital.
So, I fundamentally disagree with Paul's conclusion that,
“If you used the method engineers use – root cause analysis – to ask why three systemic disruptions are happening at once (financial, climatic and demographic), you would quickly trace them to their cause: an economic system in disequilibrium with its environment and insufficient to satisfy the needs of a rapidly changing humanity.” (p 262)
That is just another way of phrasing the prognostication of Malthus from 200 year ago, or the Iron Law of Wages of the Lassalleans from 150 years ago, or of the Stalinists of 50 years ago. Capitalism is not going to collapse, and if it did the consequences for workers would be dire. Capitalism not only remains, but if anything is an increasingly powerful and dynamic economic system. Our task is not to continually look for ways in which we might identify some potential catastrophe that might undermine it, including man made catastrophes, such as support for reactionary and divisive nationalistic solutions that seek to revert to some more primitive level of development, but is to build upon the advances that capitalism itself provides, and to develop our own social forms, able to transcend it on that basis. As Marx puts it in Value, Price and Profit,
“They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society.”
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