French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 9 of 9

But, as I set out nearly 20 years ago, in relation to the collapse of Northern Rock in Britain, in the run-up to the global financial crash, what if they did, sell their shares and bonds? The concern with the level of share and bond prices, is itself a reflection of the fact that since the 1980's, the whole politico-economic model has been built around the delusion of fictitious capital. Watch any of the business programmes, and they are obsessed with the movement of financial markets, of the prices of shares and bonds. The valuation of companies is not measured in the physical capital, which is what they require to produce goods and services, not to mention profits, but by the current value of the issued shares.

But, shares are only issued after the company has been already loaned money. They are little more than a receipt for the payment of that money, a debt certificate. The money already handed out to the company, has been used to buy real capital, and it is that real, physical capital that is significant. It is that capital, the buildings, machines, materials and labour-power that comprise its elements that produces new real wealth in the form of goods and services, and along with it produces the new value of those goods and services. So, as I pointed out in relation to Northern Rock, so what if the existing shareholders decide to sell their shares?

The consequence is that the price of those shares falls. But, that does not affect the value of the real capital of the company, or its ability to function as capital. As Marx points out, in the past, crashes in asset/share prices have often gone along with conditions that benefit a rise in real capital accumulation.  If shareholders, faced with increased tax, in the form of a wealth tax, or dividend tax, or capital gains tax, decide to sell their shares and buy shares in some other country, so long as the workers in those companies continue to be able to operate the real capital, for them nothing significant has changed. So, when, at the time of Northern Rock and so on, governments claimed that they needed to bail-out those companies, to buy up their shares and so on, nothing of the kind was necessary, all they needed to do was to rubber stamp the right of the workers in those companies to turn up to work as they did previously. So long as the company is itself profitable, there is no reason not to continue to do so.

But, of course, governments were not going, and are not going to give workers that right, because to do so would mean that workers would demand the same right in every company – a right, incidentally, which they should already have as the collective owners of those companies. The real answer to shareholders threatening to sell their shares, bonds and so on, is to remove the unjustified rights that the shareholders, currently, exercise.

There is no reason why, as shareholders, they should exercise control over companies, and, yet that control enables them to asset strip companies, or to decide to just close them down entirely. Remove that right, and hand it to workers, and the power of those shareholders is undermined immediately. Yes, its true that, when firms, then, seek to borrow money via the issue of shares, they will face resistance from potential shareholders, manifest in much lower share prices, and so higher dividend yields, but for existing companies, the large majority of their needs for additional money-capital can be met from their own realised profits. Moreover, banks insurance companies and so on, are, also, the collective property of workers, and so all of the pools of savings contained in them can be mobilised to meet those additional funding needs.

The real obstacle, here, is not the ability to finance this additional capital accumulation, but the fact that the response of the ruling class to such measures would go way beyond these types of actions, of capital strikes, attacks on the currency and so on. It would assume the form of the kinds of action seen in Chile in 1973. It would go to the measures of economically blockading any country that sought to go down that path, as, for example, has happened with Cuba. To resist all of that, it is necessary to go beyond the measures even of progressive social-democracy, and to move to the establishment of a workers' state, and to establish such a state on an extensive basis, for example, across the EU.

That is the struggle that lies ahead of us.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 8 of 9

The rise of the reactionary, nationalist petty-bourgeoisie, and the inability of conservative social-democracy to produce growth are inextricably linked. The model of conservative social-democracy since the 1980's, has been an illusion based on the idea that wealth can be created out of thin air, simply as paper wealth arising from rising asset prices. Its no wonder it has developed that illusion, given that the global ruling-class is a class of owners of fictitious-capital, i.e. of those paper assets. It also finds its reflection in the idiotic ideas of Modern Monetary Theory, which confuses money with currency, and thinks you can produce more money by simply printing more currency, as though you can produce more cows, by endlessly photocopying pictures of cows.

Conservative social-democracy could not increase growth, because doing so, in current conditions, means a rise in interest rates, and a rise in interest rates causes a crash in asset prices, as seen in 2008. That is because, a rise in growth, i.e. real capital accumulation, means an additional demand for loanable money-capital, whether that demand is met by firms borrowing in the money markets, or by retaining a larger part of their realised profits for such investment. At the same time, having used up large amounts of the relative surplus labour created during the 1980's/90's, a rise in growth/employment, means rising wages. So, a relative increase in demand for loanable capital, at a time when the supply of that capital is constrained, means higher interest rates, and so, falling asset prices. Within the confines of capitalism that is what must happen, short of some new technological revolution, which even AI does not currently offer. Indeed, globalisation, which, year after year, reduced costs and frictions, and raised productivity, has been stopped in its tracks, as the wave of petty-bourgeois nationalism has risen. And, as the growth of large-scale, capital was, thereby, curtailed, so the petty-bourgeoisie grew to fill the gap, both absolutely and relatively.

But, just as for the last 30 years, the ruling class, as owners of those financial assets is not of a mind to save capitalism by accepting a severe drop in its own paper wealth. If conservative social-democracy was forced to give way to progressive social-democracy, even such as that which ruled over the period of post-war growth, it can only succeed on the basis of a much greater development of social-democracy than that which thrived in the post-war period. It requires as Verhofstad et al note, a much larger single market, and political union. And that is true in the Americas, Asia and Africa too. Any attempt to raise taxes, on highly movable wealth, for example, as now being proposed in sections of the Left in Britain and France, will just lead to that movable wealth moving, and that is the reality of the global ruling class owners of fictitious capital, as mentioned earlier.

However, if an EU state were to harmonise its taxes, it becomes difficult for that ruling class to simply sell its shares, bonds and so on, in European companies, or government securities. The same with all of the other politico-economic blocs, and were those blocs to return to the ideas that dominated after WWII, and were to establish, new, global institutions and cooperation, the ability of speculators to simply play one off against another would be severely curtailed. That is what the interests of real industrial capital, as opposed to the interests of the ruling-class/fictitious capital dictate is required.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 7 of 9

The US Republicans, as well as the UK Conservative Party and Labour Party can no longer be considered social-democratic parties, as they have themselves been drawn into the mire of petty-bourgeois, nationalism, competing with the likes of Trump and Farage for the support of that particular section of the electorate. If social-democracy is to have any resurrection, it can only come from a growth of the currently weak forces of progressive social-democracy, as represented by the Corbyn Party in Britain, the Democratic Socialists in the US, and so on. But, for the reasons already set out, that progressive social-democracy, itself, can only be a transitional phase, which will have to move rapidly forward, before being replaced by Socialism.

A recent short article, even by a group of conservative social-democrats highlights this reality, but without recognising the inevitable consequence of their analysis and conclusion. In the article in Social Europe, they write,

“With only 5% of the world’s population and a growing economic backlog, faced with a world dominated by empires from Putin’s Russia to Trump’s United States and Xi Jinping’s China, Europe risks becoming a mere vassal of America...

Domestically, the second Von der Leyen Commission has decided to call into question the Green Deal, although it was the flagship project of her first term, as if climate change were not getting worse. It has also presented a disappointing multi-annual European budget, which does not provide for any real increase in spending and undermines cohesion policy in order to finance new priorities in research and defence. At the same time, the populist, Eurosceptic and Europhobic far right, aligned on Putin and Trump, has never been so powerful within both the Member States and the EU institutions.

It should now be clear that Trump is not, and never will be, an ally. Trump’s America is a major geopolitical, economic and cultural threat for Europe. However, becoming a mere American protectorate is not inevitable. Another path is possible, given the outrage sparked by the series of humiliations we are witnessing. The revival of a pro-European majority within the three institutions, and in particular in the European Parliament, would make it possible to change course, moving from vassalage to self-determination. It is up to the Parliament, which is responsible for overseeing the Commission and has the power to censure it, to demand a new direction in its work. To begin with, the European Parliament could block the reduction of European customs duties on American products, a measure that would certainly be approved by European voters. It should use this power, showing that Europe is capable of resisting blackmail.

As Mario Draghi has said, we will not become a geopolitical power by relying solely on improving our competitiveness and our internal market. We must become a true federal union, finally freed from the constraints of unanimity and endowed with competences in foreign and security policy.”

In other words, the EU must press forward to political union, and creation of an EU state. Progressive social democracy, can, and should support that goal, and, if its immediate plans are to be achieved, it will have to do so, but it is not enough. Even were Britain, for example, to see the reactionary, petty-bourgeois nationalist regime of Blue Labour thrown out, as the Blair-right, conservative social-democrats regroup along with the Liberals, and pro-Europe Conservatives, that would only replicate the situation existing, now, in France. A Britain back in the EU would certainly be a positive development, dealing, to an extent, with the need for growth, and, also, putting an additional £40 billion of tax revenues into the coffers, but it does not deal with all of those issues that existed prior to Brexit, and which, indeed, continue to plague the rest of the EU, as well as the global economy.  It is why Marxists have always argued that we are not advocates of the existing EU per se, as a "lesser-evil", but recognise its progressive nature, on the path to international socialism.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 6 of 9

In the 30 years after 1980, real capital was accumulated, output did increase, and the global working-class did increase, indeed, the working-class globally, doubled in size between 1980 and 2000, and increased by 30% after 2000 to 2010, making it the largest class on the planet for the first time. But, that increase was not even. There was again a combined and uneven development. The biggest increase was of the working-class in those newly industrialising economies. It was there, also, that this was reflected in a bigger proportional rise in real wages. 

In the old developed economies, a 200 year process of the gradual disappearance of the petty-bourgeoisie, as it sank into the ranks of the working-class, was reversed. Since the 1980's, the size of the petty-bourgeoisie, in those countries, has risen by 50% bringing with it a rise in its social weight, and most notably where that petty-bourgeoisie always has most effect, in its electoral significance.

This was not a fortuitous reversal of workers being able to escape wage-labour, but a further deterioration of their condition, as growing unemployment threw them out of the labour market, forcing them into the misery and precarity of self-employment, as I have described before, culturally symbolised, at the time by a series of comedy dramas such as Only Fools and Horses, Minder, Auf Wiedersehen Pet, and Boys From The Blackstuff.

It was that which was reflected in the ructions in the UK Conservative Party, and its equivalent, the US Republican Party. Both had been conservative social-democratic parties, representing the interests of the ruling-class owners of fictitious-capital, but whose voter base and membership was dependent upon large numbers of the petty-bourgeoisie. In the late 80's, both saw a rise in the influence of that petty-bourgeoisie on their votes, and in their membership, as it asserted its power.

This immiserated petty-bourgeois was also closely tied to the other precarious social layers in the decayed urban areas in which it subsisted. The old social-democratic consensus was broken by it, in the form of Reagan and Thatcher. But, both set in motion a process that was out of their control. In the US, the Republicans began to be rent asunder, and saw the rise of the interests of the petty-bourgeoisie, as manifest in the growing support for the Libertarians, and, in the early 2000's, the Tea Party, and finally Trump.

In Britain, Thatcher became increasingly a vehicle for those same kinds of petty-bourgeois ideas, which in the 1990's, also saw the development of its outriders in UKIP, and its subsequent brand names, as well as in the takeover of the party itself by the Eurosceptics. Its ultimate demise has come in the form of the split of its social-democratic voters and members to the Liberals, and its petty-bourgeois/Tory voters and members to the Farage Company.

Similar developments occurred in Europe. But, its in the US and UK where this process has been most pronounced. It was not just that the progressive social-democracy of the period 1950-74, which hit the buffers in the 1970's, as the long-wave turned to its crisis phase, gave way to the conservative social-democracy of the late 70's and 1980's, but that, as this conservative social-democracy presided over the effective asset striping of large-scale capital, as it promoted the illusion of paper wealth, in the form of inflating asset prices, it also, set the course for its own demise at the hands of the petty-bourgeoisie.

By the time of the 2008 global financial crisis, as the buffers were, thereby, hit, in relation to its own illusory ideas, the petty-bourgeoisie already had the momentum behind it. In the US and UK, social-democracy has already vacated the field, in terms of the political regime. Its only defence resides in the imperialist state itself, as representative of the ruling class, and in the hands of a relatively small number of progressive social-democratic forces.

Cameron was its last hurrah, as he tried to continue the model of Blair, just as Obama/Biden were its last hurrah in the US. In France, Hollande performed a similar role, to Blair, but his failure amid a continued opposition to a collapse into petty-bourgeois reaction, simply delayed the inevitable confrontation, as Macron, representing no real social forces, became its last encore, in France.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 5 of 9

The real reason that conservative social-democracy has sought to raise retirement ages, to reduce holidays, to cut welfare spending and so on, is not because workers are living longer, need more health care and so on, because the rise in labour productivity of actual use-values, more than covers that. It is that the parasitic ruling-class, which has no useful function, has drawn more and more for itself out of social production. What is more, the fact that the bourgeois measure of productivity has slowed significantly since the global financial crisis of 2008 is, also, no coincidence.

After 2008, a growing proportion of GDP went to cover revenues to the ruling-class and its state not for actual consumption, but simply to finance the purchase of existing financial assets, as they sought to remedy the damage done to their paper wealth as the asset price bubble burst. Compare that with the period after WWII, when a progressive social-democracy built welfare states, and pumped huge amounts into real capital investment in plant and equipment in nationalised industries, into state infrastructure, which itself raised productivity, and during which time, even the parasitic ruling-class looked to increased real capital investment as the basis of their revenues from expanding masses of profits, funding their payments of dividends and interest. What is more, they did that despite national debt forming a much larger percentage of GDP than it does today.

In contrast, as testament to the fact that the system has become thoroughly decadent and based on gambling and speculation, today, we have huge dams built in Ethiopia, producing vast amounts of hydro-electric power, which is then used not to produce goods and services for the Ethiopian people, but to power huge computer banks used for Bitcoin mining! The current cost of mining those Bitcoins is $20,000 each, but the Bitcoin is itself a pure speculative asset, even more so than were Tulip bulbs during the mania. At least tulips are real commodities. But Bitcoin has no use-value other than purely for the purpose of speculation. You can't eat it, wear it, or produce anything else from it. It is a pure waste of labour-time, and only sustainable as long as speculators gamble that its market price will be higher tomorrow than it is today.

If you borrow to finance real capital accumulation, as happened after WWII, the increased mass of capital and profits provides the basis of paying back the debt, as well as raising productivity and profitability. If you borrow to finance consumption, or to finance simply the inflating of already inflated asset prices it spells inevitable catastrophe.

What changed in the 1980's, was that, in order to resolve the crisis of overproduction of capital relative to the labour supply, a technological revolution was introduced, in which machines using the latest microchip technology replaced huge quantities of labour. Productivity, real productivity, i.e. physical output per labour hour, rose massively, meaning that the unit value of output fell significantly. That fall in unit values of commodities meant that there was a huge fall in the value of constant capital, and moral depreciation of the vast quantities of existing fixed capital. So, the rate of profit rose massively, and a further huge release of capital was created. In addition, not only did wages fall, as the former relative shortage of labour turned into widespread mass unemployment, but the value of labour-power itself was reduced. The rate of surplus value, and, thereby, rate of profit was raised.

In these conditions as in all previous long-wave cycles, total output rose more slowly than net output, because with rising unemployment and falling wages, aggregate demand grows more slowly. Profits rose, but with the new technologies, and release of capital, a smaller proportion of those profits were needed to fund capital accumulation. Interest rates, thereby, fell, and that started a secular rise in asset prices. The ruling-class, a global class, now with no social function, and which rested upon its ownership of fictitious capital, increasingly saw its wealth and power deriving from those fictitious assets, as though they had some magical power to provide them with wealth and revenues independent from the need to accumulate additional real industrial capital, and, thereby, the production of growing masses of profits.

That impression was further enhanced by the growing deindustrialisation of the developed western economies, and the growing industrialisation of economies in Asia, and Latin America, and more latterly Africa. A global ruling-class of owners of fictitious-capital has no particular objective reason to favour capital in one part of the world as against another, particularly in conditions of US hegemony, and para state global institutions whose role is to establish an international rules based order, seeking to provide a level playing field for capital everywhere. The ruling-class can as easily own shares or bonds of companies or governments in Asia, as it can those in Europe or North America, and the new communications technologies enabled them to buy and sell these paper assets at the press of a computer key, creating a further problem for nation states and governments, as I will discuss later.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 4 of 9

In France, currently, the conservative social-democratic government of Macron is seeking to cut welfare benefits, and to increase the age of retirement for workers. The French conservative social-democrats, and other bourgeois political pundits, have, of course, used, as part of their justification for this, the example of Britain, where over the last 20 years, successive governments have got away with cutting the size of the welfare state, and raising the age of retirement and so on. Where the likes of Owen looked to best practice in terms of raising productivity by enhancing the conditions of workers, in the last 30 years the opposite has been the case. When the UK government sought to undermine the final salary pensions of state workers, for example, it used the disgraceful fact that non-state workers had already been deprived of theirs during the Thatcher years. Compare that, even to the welfarist notions of Winston Churchill at the start of the 20th century.

The, then, Liberal Winston Churchill was able to introduce the first Minimum Wage in 1909, saying,

“It is a national evil that any class of Her Majesty’s subjects should receive less than a living wage in return for their utmost exertions… where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes up the trade as a second string… where these conditions prevail you have not a condition of progress, but a condition of progressive degeneration.”

(Trade Boards Act 1909)

An important point to note, here, is that, when Blair's government did introduce a Minimum Wage, not only did the Tories oppose it, despite it being set at a pitifully low level, but, because it was established and has continued as an hourly minimum rate, not a weekly, let alone monthly minimum amount, not only was it meaningless, but it actively encouraged employers to use zero hours contracts and other forms of precarity.  It, thereby, created the very conditions in which, full-time, permanent labour was undercut "by the worker who only takes up the trade as a second string".  Today, that second string is one that supplements various other kinds of precarious existence. 

One of the central planks of their argument is that workers are living longer, and so, the proportion of the population that is receiving pensions, and that also requires more healthcare and so on, is rising. As I have set out long ago, and as Robert Owen describes, here, that argument is completely bogus.

In 2000, UK life expectancy was 78, and in 2025 is 82. For workers, particularly those in the more hazardous and arduous jobs, who also tend to live in the worst conditions and locations, it is much lower than that (up to 19 years lower). In percentage terms that is a rise of around 5%. But, taking Owen's point above, productivity in Britain, rises by around 2%, every year! So, in just 3 years out of that 25 year period, each worker in Britain, would have raised their output, on average, by more than enough to cover the increased number of pensioners and their consumption of social output. In fact, to emphasise the point, taking the period since 1950, when the welfare state was established on a larger scale, the average life expectancy was, in 1950, nearly 69. It was after that that life expectancy rose most notably, itself, in part due to the welfare state, better healthcare, living conditions and diets. Yet, far from raising the retirement age during the following decades, they were reduced, as well as pensions improved, and for those still working, they had shorter working days, and more holidays.

By 1990, the average life expectancy had risen from 69, to 76, a rise of 10%. Even using the false measure of productivity employed by bourgeois economics, the point is clear. Bourgeois economics measures productivity on the basis of GDP per hour worked. That is a false measure for many reasons. Firstly, GDP measures only the new value created, and not the total value of output. Secondly, what we are concerned with is not the value of the output, but its physical quantity. Pensioners, after all, do not eat, or wear the value of output, but the physical use-values themselves. As Marx demonstrated, as actual productivity – the number of use-values produced per labour hour – rises, the unit value of those use-values declines. But, even using the false bourgeois method of calculating productivity, it has risen far more than the proportional rise in life expectancy. Between 2000 and 2008, it rose by around 15%.

As I have set out before, if you want a more accurate measure of just how much productivity has risen, mostly as a result of the microchip revolution of the 1980's, it is signified by the fact that 25% of all the goods and services produced by mankind in its entire history on the planet, were produced in just the first ten years of this century!!! Yet, according to the likes of Macron, the fact that workers are living a couple more years longer than they used to, has so upset things that they must now work longer, have shorter holidays, longer working-days and so on. Come back Robert Owen!

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 3 of 9

At his New Lanark Mills, Owen who was the precursor to the type of “functioning capitalists” described by Marx in Capital III, noted that, no matter how much he and other professional managers, benefited the workers by providing them with better wages and conditions, which, also, improved productivity and profits – and the New Lanark Mills did do all that to an unprecedented degree – the main beneficiaries remained the capitalists who took no part in production, but who simply loaned money to it.

“From 1800 to 1829, he directed the great cotton-mill at New Lanark, in Scotland, as managing partner, along the same lines, but with greater freedom of action and with a success that made him a European reputation. A population, originally consisting of the most diverse and, for the most part, very demoralised elements, a population that gradually grew to 2,500, he turned into a model colony, in which drunkenness, police, magistrates, lawsuits, poor laws, charity, were unknown. And all this simply by placing the people in conditions worthy of human beings, and especially by carefully bringing up the rising generation. He was the founder of infant schools, and introduced them first at New Lanark. At the age of two the children came to school, where they enjoyed themselves so much that they could scarcely be got home again. Whilst his competitors worked their people thirteen or fourteen hours a day, in New Lanark the working-day was only ten and a half hours. When a crisis in cotton stopped work for four months, his workers received their full wages all the time. And with all this the business more than doubled in value, and to the last yielded large profits to its proprietors.”

(Engels, Anti-Duhring)

Owen noted,

“And yet the working part of this population of 2,500 persons was producing as much real wealth for society, as, less than half a century before, it would have required the working part of a population of 600,000 to create. I asked myself what became of the difference between the wealth consumed by 2,500 persons and that which would have been consumed by 600,000.”

The answer was that the huge difference had been syphoned off by the capitalists who no longer had any functional role in production, but who merely loaned money to those engaged in that production, i.e. the associated producers. Like the landlords before them, they now had no useful role to play, and yet, as ruling-class, via their control of the state, continued, and continue, to drain the vast majority of social production into their hands. Engels noted,

“The answer was clear. It had been used to pay the proprietors of the establishment 5 per cent on the capital they had laid out, in addition to over £300,000 (6,000,000 marks) clear profit. And that which held for New Lanark held to a still greater extent for all the factories in England.

“If this new wealth had not been created by machinery, the wars in opposition to Napoleon, and to support the aristocratic principles of society, could not have been maintained. And yet this new power was the creation of the working class.”

To them, therefore, the fruits of this new power belonged. The newly-created gigantic productive forces hitherto used only to enrich individuals and to enslave the masses, offered to Owen the foundations for a reconstruction of society; they were destined, as the common property of all, to be worked for the common good of all.

Owen’s communism was based upon this purely business foundation, the outcome, so to say, of commercial calculation. Throughout, it maintained this practical character.”

(ibid)

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 2 of 9

This was not a crisis-free capitalism. As Mandel describes, for example, in “The Second Slump”, there were, in fact, five cyclical recessions in the period after WWII, even before the “Second Slump” that began in 1974. But, unlike the previous cyclical recessions, or the slump of the 1920's and 30's, social-democracy even seemed to have got the measure of that, as a result of its increasing planning and regulation of the economy, utilising Keynesian demand management techniques, and combining fiscal and monetary policy. As Mandel notes, it did not prevent recessions, such as that of 1957, but it did significantly curtail the severity and duration of them.

Social-democracy, via these same methods, and under the auspices of the hegemony of US imperialism, sought not only to plan and regulate the national economy, but also the global economy. It established international, para state institutions for that purpose, such as The World Bank, IMF, GATT/WTO and so on, not to mention the UN and its various funds and organisations that performed like a global welfare state. All of those institutions were fundamental elements to the creation of a global economy, and single global market. Within that process, also, reflecting a combined and uneven development, Western Europe achieved the goal of economic union, by voluntary agreement, in the form of the EU, to compete with the US, which had formed into a large federal state via its Civil War. Similar politico-economic blocs were established in Asia, Latin America, and Africa.

So long as US hegemony remained, this was all fine, because all of these institutions and all of the global planning and regulation, designed to create order, and a rules based system, were, of course, mostly to the benefit of the dominant economies, particularly the US economy, and its multinational companies. Even within these large multinational blocs, the old tensions remained. Germany and France dominate the EU, and gradually came closer, as symbolised by the alliance between Chirac and Kohl, but as Marx and Engels describe in relation to business trusts and cartels, they tend to fracture in periods of crisis, requiring the establishment of a single centralised power, which in the case of blocs like the EU, means the establishment of a single centralised state. It is why British imperialism, tied to US imperialism, has always been at odds with the EU.

Marx and Engels noted that, in the 19th century, when the state intervened to establish laws such as the Factory Acts and so on, the main beneficiaries of that, were not just the workers, but also the large-scale capitals, because they could afford to operate on that basis, and, indeed, as Robert Owen and others had shown, these ways of operating, actually raised productivity and with it profitability. It acted to further spur capital concentration and centralisation, and hasten the demise not just of the petty-bourgeois producers, but of the smaller private capitals themselves. The further development of that large-scale, socialised capital, now organised by armies of professional middle class managers, administrators, bookkeepers, technocrats and so on, on the basis of scientific management, standardisation, regulation and planning, all borrowing from the methods of the encroaching new socialist society, however, was all still conducted on the basis of meeting the needs of capital not labour, and, when it came to the global order, it was still done for the benefit of US capital.

But, the contradictory nature of capitalism, in its imperialist stage, is also, characterised by the development identified by Robert Owen, even before it was more scientifically analysed by Marx and Engels.

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French Government Falls As Social-Democracy Falters Amid New Global Debt Crisis - Part 1 of 9

Social-democracy is inherently contradictory. It is the last form of bourgeois-democracy, prior to its replacement by socialism. It represents the political and ideological reflection of the contradictory and transitional form of capital in its imperialist phase, dominated by large-scale, socialised capital. It is based on the lie that the interests of capital and labour are ultimately the same, and only need to be negotiated, in the short-term. It has been the dominant form of bourgeois-democracy since the latter part of the 19th century, when large-scale, socialised capital expropriated private capital (the expropriation of the expropriators), and became tied to the capitalist state, which it required to increasingly plan and regulate the economy, on an ever widening and deepening scale.

Because it is based on that contradiction, and ultimately the lie, whenever the contradiction sharpens, during a crisis, social-democracy always, itself, faces a crisis, because it must always prioritise the interests of capital over those of labour, whilst social-democracy itself can only continue so long as it has the support of the millions of workers that retain their illusions in it. It must either move forward, further strengthening the social position of the workers, as the personification and collective owners of the socialised capital, (which it only ever does up to the point where the long-term interests of capital are challenged), or it must leave the field. In essence, this is the conclusion drawn by Marx, as early as 1850, and contained within the theory of permanent revolution.

In practice, as I have set out elsewhere, the USSR/Stalinism, and Nazi Germany/fascist Italy etc., also reflected this fundamental contradiction social-democracy sans democracy. All of these phenomenal forms attempted to deal with that contradiction by implementing measures designed to accumulate real industrial capital within the context of the dominance of large-scale socialised capital, and so did so via all of those methods borrowed from the oncoming socialist future, i.e. the planning and regulation of production, on an expanded scale. In the age of imperialism, that expanded scale, also, means on an expanded geographic scale. The choice becomes socialism or barbarism, which, in the age of thermonuclear weapons, means socialism or the end of humanity.

As I wrote at the start of the Ukraine War, which itself is a manifestation of the current global crisis, and need to create even larger single markets, leading to intensifying competition between global imperialist blocs, which is leading to WWIII, unless checked by the global working-class, via socialist revolution, it would undoubtedly call into question whether western social-democracy could survive it. The answer appears to be clearly no.

In the post-war period, social-democracy seemed unassailable. Economies expanded rapidly as did living standards, not just in terms of more necessities, but an ever-expanding range of goods and services, including welfare states providing “free” education and health and social care, and social security in relation to ill-health, unemployment and retirement. This was a “progressive” social-democracy, which was not only based on this expansion of large-scale, socialised industrial capital, but, in turn, sought to facilitate its further expansion, by continually expanding the realm of planning and regulation of the economy. The welfare state, whose outlines were established in Prussia in the early 19th century, enhanced by Bismark in Germany in the late 19th century, and formalised by Chamberlain, Beveridge,  and others, in Britain, in the early 20th century, is part of that apparatus of planning and regulation, in relation to the planned supply of labour-power.

Forward To Part 2

Macron Wins With a Minority of Votes

Macron won the French Presidential election, but with a minority of votes, making it a pyrrhic victory, and indicative of things to come. Macron won 58.2% of the valid votes cast, but, firstly, 28.01% of voters did not turn up to vote, and of those that did only 91.4% cast a valid vote, with 6.35% casting a blank vote, and another 2.25% casting an invalid ballot in protest.

On that basis Macron's 58.2% vote, represents only 53.19% of votes cast, and only 38.29% of the total electorate. Still, of course, proportionally more than that of Le Pen, but hardly a mandate either, with a bigger proportion of the population deciding to either abstain, or to actively cast a protest vote than voted either for Macron or Le Pen.

Macron's supporters have, of course, highlighted the fact that he is the first candidate since Chirac to win re-election, but that simply illustrates the dire condition of French politics. With 13 million voters abstaining, it was the lowest turnout since 1969, indicating the fact that French voters disdained of the choice between either the right-wing nationalist politics of Le Pen or the right-wing Thatcherite policies of Macron. Its again an indication of the dire condition of politics that the Thatcherite politics of Macron were repeatedly described by the media as centrist, and also that large sections of the Left, and of social-democracy, seeking opportunistically to rally support around the “lesser-evil”, on the basis of “my enemy's enemy is my friend”, went along with such a description.

With Macron unable to seek another term as President, he now has five years in which to wreak further havoc with those same Thatcherite, anti-working class policies. The French Social-Democrats suffered the same fate as Pasok, as a result of repeated adherence themselves to Thatcherite/Blairite policies, with Hollande's left talking, and rapidly rightward actions, being the last straw. The French Socialist candidate, Anne Hidalgo obtained just 1.74% of the vote in the first round. The social-democrats of the French Communist Party did little better with just 2.28%.

The so called Left candidate, Melonchon, secured 21.95%, showing the extent to which French workers actually do want a credible workers' candidate to vote for offering at least some nod in the direction of their interests, much as happened with the historic rise in Labour's vote in 2017, when Corbyn became Leader, similar to the rise in support for Labour when Michael Foot became Leader in 1980. However, Foot, Corbyn and Melonchon all suffer the same defect, which is that their radical social-democratic politics remain constrained within that social-democratic framework, and what is worse, it is made impossible, and reactionary by the economic-nationalist ideology that dominates it.

Melonchon's economic nationalism was little different, in content, to the policies espoused by Le Pen, which is why around a third of his voters said they would vote for Le Pen in the second round, despite him calling on them not to do so. It is the same petty-bourgeois economic nationalism, and statism that led people like Nye Bevan to support the Moseley Memorandum, put forward as such an economic program by Oswald Moseley in the 1930's, first when he was a Labour Minister, and which became the foundation of his economic policies for the British Union of Fascists.

And, that same convergence of the petty-bourgeois, statist, reformist Left with the statist Right, was seen again in the 1970's with those like Tony Benn and Michael Foot, who lined up to oppose the EEC, with the National Front. Petty-bourgeois nationalism and statism is the cancer that continually eats away at the heart of the labour movement, in all countries. It was the foundation of it lining workers up behind their respective ruling classes for the slaughter of WWI and II, and is being seen again, now, in relation to those elements lining workers up behind NATO imperialism against Russia and China, as the world heads inexorably towards WWIII, which truly will be the war to end all wars, as humanity itself is destroyed.

Attention now turns to the French parliamentary elections, and with Le Pen's NR party having only 7 seats, the factors that led to the support for Macron, as the least shitty option, in this election, will not apply. The French workers need to rebuild and renew their political organisations, both for those elections, and for the class struggle that lies ahead.

Neither The “Fascist” Nor The Thatcherite

In the French Presidential elections, on Sunday, socialists are presented with two unacceptable choices. On the one hand the “fascist” Le Pen, or on the other the Thatcherite Macron, whose anti-working class, anti-immigrant policies, over the last five years, have created the conditions in which Le Pen could, once again, be in the final run-off, and whose policies continued into the next five years will only further strengthen the support for the far right. Socialists should advise workers to choose neither. Both are their immediate enemies. Instead, efforts should be put into building an effective opposition both to Le Pen, and to Macron in the weeks, months and years to come.

If the choice were between Macron and Valérie Pécresse, the Republican/Gaullist candidate, few would have difficulty in arguing for an abstention, just as, in Britain, in an election faced with only a Tory and a Liberal candidate, socialists would oppose both. But, because Le Pen is seen as a fascist, some on the Left argue, on the basis of lesser-evilism, and the principle of “my enemy's enemy is my friend” that its necessary to hold our nose, and vote for Macron. That is nonsense.

In his 1938 article, Learn To Think,Trotsky sets out why we do not adopt the position of lesser-evilism, or “my enemy's enemy is my friend”. It amounts to boycotting our own politics, and reduces us to simply placing a plus wherever our enemy places a minus sign. It allows them to dictate our politics. In that article, Trotsky argues that, in a war between fascist Italy and bourgeois-democratic France, if the Italian fascists proposed sending arms to revolutionaries in Algeria, conducting a struggle for liberation from France, Italian socialists would argue for allowing Italy to do so, even lifting any strike action, to facilitate it if necessary. Such action would undoubtedly weaken bourgeois-democratic France, and so strengthen fascist Italy. So, why would socialists argue such a course?

Firstly, we do not rely on the bourgeoisie, or its state, to resolve historical problems on our behalf. The task of defeating fascism in Italy could not be subcontracted to French democratic-imperialism, and was the responsibility of the Italian workers to bring about. Trotsky argued that, even as the Italian workers enabled the supply of weapons to Algerian revolutionaries, they would continue their own struggle against the main enemy at home, the Italian bourgeoisie, and its state. Secondly, Trotsky says, the labels "fascist" and "democratic", when it came to analysing imperialism, were irrelevant. They are simply masks that imperialism picks up and abandons depending upon which best suits its requirements at the time.

The workers have no interest in putting themselves in the camp of democratic imperialism, as against that of fascist imperialism, because rather than choosing either of these evils, the workers should choose their own independent alternative, the camp of the international proletariat and its struggle against imperialism in either of these two ephemeral guises.

And the same is true in relation to the French Presidential election. The idea that its necessary to advocate a vote for Macron as against Le Pen, is based on this same mindless lesser-evilism, and the idea that “my enemy's enemy is my friend”. Just how idiotic it is can be seen from simply asking the question of how far it goes? Its widely accepted that the candidacy of Éric Zemmour's was to the Right of Le Pen. So, had the run-off been between those two, would that mean voting for Le Pen as the lesser-evil to Zemmour? Or, put it in the other direction. Consider a vote in Britain, where there are two candidates, one from the BNP, the other from UKIP, would socialists advocate a vote for the UKIP candidate? What if the UKIP candidate was an ex BNP'er, who simply felt they had a better chance under a UKIP label. Perhaps a vote between a BNP candidate and a Tory would be an easier choice, but what, again, if the Tory was Enoch Powell, or someone with similar views, or, again, an ex BNP'er standing under a Tory flag? After all, there have been many ex members of the NF, and BNP that stood as Tory candidates.

The idea that its necessary to vote for Macron, because Le Pen is a fascist, is based on several fallacies. In the 1930's, the Stalinists adopted the Third Period sectarian madness, in which anyone who was not a member of the Communist Party was some kind of fascist. They argued that there was no real difference between a bourgeois-democratic political regime and fascism, and so it was irrelevant whether fascists triumphed, over other candidates. It meant that the Stalinists failed to form united fronts with the reformist socialists, social-democrats, and Trotskyists to fight the fascists, which facilitated the victory of the latter. Trotsky bitterly criticised the Stalinists for that sectarian madness, but that criticism has nothing to do with forming Popular Fronts, which are electoral pacts against the fascists, which is the policy that the Stalinists adopted in France and Spain after Hitler's victory, and which resulted in equal disaster to the Third Period madness!

Marxists do not at all fail to recognise the difference between a political regime of bourgeois-democracy, as against a political regime of fascism, but the question is how to fight the latter, and, as Trotsky described in his writings on fascism in the 1930's, it is not by turning ourselves into defenders of bourgeois-democracy, of bourgeois liberals, or by limiting ourselves to the methods of bourgeois-democracy, and so becoming mere parliamentary cretins. He sets it out most clearly in his Program of Action for France, written in opposition to the Stalinist advocacy of the Popular Front, as a response to the threat of fascism.

In it, the whole emphasis is on the self-activity, and self-government of workers via extra-parliamentary activity. Trotsky argues,

“We are thus firm partisans of a Workers’ and Peasants’ State, which will take the power from the exploiters. To win the majority of our working-class allies to this program is our primary aim.

Meanwhile, as long as the majority of the working class continues on the basis of bourgeois democracy, we are ready to defend it with all our forces against violent attacks from the Bonapartist and fascist bourgeoisie.

However, we demand from our class brothers who adhere to ‘democratic’ socialism that they be faithful to their ideas, that they draw inspiration from the ideas and methods not of the Third Republic but of the Convention of 1793.”

Bourgeois-democracy was not what he sought, and its defence was to be achieved not by electoral means, and shabby electoral pacts with liberals, but by the direct action of the proletariat itself, organised in factory committees, armed workers militia and so on. That is what Marxists mean when we say that we recognise the difference between fascism and bourgeois-democracy, because we also recognise, as Trotsky sets out, that the latter, as the preferred method of bourgeois rule, in so far as it necessarily fails to meet the needs of workers, and so leads to the rebellion of the workers, leads to the former, as it seeks to batter down their rebellion.

And, again, this relates to the Presidential election, because the argument that its necessary to vote for Macron as against the “fascist” Le Pen, is also based upon a fallacy, in relation to what fascism is. Fascism is a movement of the petty-bourgeoisie, of the small business class. But, for a fascist political regime to be established, the ruling class must itself ally with the petty-bourgeoisie, against the revolutionary proletariat, and do so with the full backing of the capitalist state. That is what happened in Germany, and in Italy, and in Spain etc. The fascists are mobilised as paramilitary forces to break up the organisations of the working-class. This is the real essence of fascism, and not the superficialities of whether some of its supporters run around in Nazi regalia, and have extreme nationalist and racist views.

In fact, describing Le Pen as fascist, on that basis is incorrect. Simply being racist and ultra-nationalist is not the same as being a fascist. In fact, it would be more accurate to describe Zelensky, in Ukraine, as a fascist than it is Le Pen, and yet, many of those calling for a vote for Macron to oppose Le Pen, are also “standing with” Zelensky and his regime, again illustrating the absurdities that can arise from adopting a policy of lesser-evilism, and “my enemy's enemy is my friend”. But, let's accept the common description of Le Pen as a fascist, rather than just a nasty racist and ultra-nationalist. Would an electoral victory for Le Pen, be the same thing as France then being a fascist state? To believe so is to completely fail to understand the nature both of fascism, and of the state. It is again to fall into parliamentary cretinism, and to confuse superficial appearances with underlying realities.

When, Salvador Allende's Popular Front of Stalinists and Social-Democrats won the elections in Chile, did that turn Chile into a socialist state, or workers' state? Of course not. The state is the permanent machinery of the ruling class, and acts to defend and promote the interests of that ruling class, irrespective of the vagaries of parliamentary elections, which merely provide a superficial, democratic gloss to the reality of the class dictatorship of the bourgeoisie, exercised via that state. That state has many ways of frustrating the actions of elected governments, wherever they contradict the interests of the ruling-class, as Trump discovered, and as Boris Johnson discovered as he has tried to implement Brexit. Ultimately, as Allende discovered, if the elected government's actions threaten the interests of the ruling class enough, then that state will simply overthrow the government, either acting alone, or in concert with others.

But, currently, its not revolutionary workers that threaten the interests of the ruling class, but various fascistic and ultranationalist and reactionary forces that represent the interests of the petty-bourgeoisie that has become strengthened over a long period, in which its numbers have grown. Brexit, and the growth of that petty-bourgeois element in the Conservative Party, as well as the Gilets Jaunes in France, along with similar trends in the US, are an indication of it. Unlike 1920's Italy, or Germany and Spain in the 1930's, when the ruling class promoted an alliance of the state with fascist paramilitary forces to beat down the workers, the capitalist state has every reason to seek ways of frustrating the fascists, and even the ultranationalists, and reactionaries such as Trump, or Le Pen.

In the last week, as opinion polls have shown the gap between Macron and Le Pen widening, financial markets have picked up. They would not do that if they saw Le Pen as their candidate. In the 1920's and 1930's, the bourgeois media fell over itself to make clear its welcome for the rise of Mussolini and Hitler, by contrast. But, what if they are wrong, and Le Pen wins, is that the catastrophe that those who promote lesser-evilism suggest? Well, it would definitely create different conditions, but look at the response in Britain, over the last week, from sections of the ruling class, and its state to Pritti Patel's suggestion that asylum seekers could be shipped off to Rwanda. In the 1920's Mussolini was able to shut down democracy, as was Hitler following the Reichstag fire, but that was in conditions where the ruling class had turned to fascism as its saviour, and where the state was allied with the fascists. Today, the opposite condition applies.

In the US, last year, the state soon slapped down the coup attempt of Trump's supporters, and has continued to chase them down since. The problem in the US is not the state, but the limp, ineffective nature of Biden and the Democrats.  Neither French nor wider ruling class interests have any reason to see Le Pen undermine the EU, for example, as a result of ultranationalist agendas, and the French state would undoubtedly act to frustrate and prevent any such action by a Le Pen Presidency. After all, France has a history of elected governments being thrown out by coups, organised by the state, as with that led by DeGaulle in 1958, which created the current Fifth Republic itself. Any chance that Le Pen would be able to subvert bourgeois-democracy in France, which is what is actually required for it to become a fascist regime, as opposed to simply having fascists elected to office, is virtually impossible, let alone the resistance that would be organised to it by the French proletariat.

French workers should reject both evils. Neither Le Pen nor Macron, but a working-class struggle against both, as the starting point for rebuilding the French labour movement itself, and as a part of the development of a Europe wide movement for international socialism, and a Workers Europe.

In The Coming Elections Vote Against Nationalists and Support International Socialism

As nationalism and social-patriotism is again on the rise, as it was before WWI, the task of international socialists is to stand even more militantly against it.  That means, in the forthcoming elections, in Britain and France, socialists should oppose all nationalists, and where possible give their active support to international socialist candidates.  In many cases, that will, unfortunately, mean active abstention.

As Trotsky wrote,

"Fascism is a form of despair in the petit-bourgeois masses, who carry away with them over the precipice a part of the proletariat as well. Despair as is known, takes hold when all roads of salvation are cut off. The triple bankruptcy of democracy, Social Democracy and the Comintern was the prerequisite for fascism. All three have tied their fate to the fate of imperialism. All three bring nothing to the masses but despair and by this assure the triumph of fascism."

(Phrases & Reality, in Writings 1938-9, p19)

The idea of their being some "progressive nationalism", in the age of imperialism, is itself a petty-bourgeois fantasy.  The struggle against imperialism, as Trotsky points out, is not a struggle for "nationalism", or "national self-determination", but is a struggle of the proletariat for Socialism!

"The independence of the Belgians, Serbians, Poles, Armenians and others is regarded by us not as part of the Allied war programme (as treated by Guesde, Plekhanov, Vandervelde, Henderson and others), but belongs to the programme of the international proletarian struggle against imperialism."

(The Programme of Peace)

The idea that even a country of the size of Britain can be actually independent in the age of imperialism, is a reactionary petty-bourgeois fantasy, of the kind that lies behind the small business myth, or the Stalinist theory of building Socialism In One Country.  Its why Brexit is such a reactionary, utopian dead-end that is bound to lead to disaster, and ultimately Britain re-joining the EU on worse terms than it had when it left.  So, the idea that smaller and weaker countries can be independent, and exercise any meaningful "national self-determination", is an even bigger, reactionary, petty-bourgeois fantasy.

"Capitalism has transferred into the field of international relations the same methods applied by it in “regulating” the internal economic life of the nations. The path of competition is the path of systematically annihilating the small and medium-sized enterprises and of achieving the supremacy of big capital. World competition of the capitalist forces means the systematic subjection of the small, medium-sized and backward nations by the great and greatest capitalist powers. The more developed the technique of capitalism, the greater the role played by finance capital and the higher the demands of militarism, all the more grows the dependency of the small states on the great powers. This process, forming as it does an integral element of imperialist mechanics, flourishes undisturbed also in times of peace by means of state loans, railway and other concessions, military-diplomatic agreements, etc. The war uncovered and accelerated this process by introducing the factor of open violence. The war destroys the last shreds of the “independence” of small states, quite apart from the military outcome, of the conflict between the two basic enemy camps."

(The Programme of Peace)

That, indeed, is why capital needed to create the EU, just as it has created NAFTA, Mercosur, ACFTA, and so on.  Those advocating a return to the nation state, and in favour of "national self-determination" are unreconstructed reactionaries.  As Lenin and the Bolsheviks argued, for many of them, the demand for "national self-determination", is nothing more than a cover for the demand for "defence of the fatherland", for the workers to abandon their own class interests, and to line up behind their own reactionary bourgeoisie and petty-bourgeoisie, and, in some cases, even worse, behind the interests of the old landlord class, and clergy, as for example, is the case in Tibet.

But, it is also the case when it comes to petty-bourgeois nationalists at home.  The fact that the SNP, Plaid Cymru and Sinn Fein clothe their petty-bourgeois nationalism in the garb of a more radical social-democracy doesn't change the underlying reactionary nature of their nationalist agenda.  Even more is that the case with the fantasists of the Northern Independence Party, or the "Lexiters" in their various garb as TUSC and so on.  Socialists can have no truck with any of these petty-bourgeois reactionaries, no matter how much they dress themselves up as some kind of radical alternative.  Its worth remembering Lenin's polemics against the nationalistic and separatist arguments of Luxemburg and Pilsudski.  The consequences of those arguments came 20 years later, when Pilsudski's nationalism swept aside any remnants of his Socialism, and his nationalist authoritarian regime in Poland took on features similar to that of the Nazis.

The nature of English nationalism presented by the reactionary wing of the Tory Party, particularly in respect of Brexit, gave the nationalists of the SNP, and Plaid an opportunity to appear as progressive, solely because they could present their nationalism as also internationalism, as they oriented to the EU, whilst the Tories pushed ahead with Brexit, and an English nationalist agenda.  But, even within the SNP their are also opponents of the EU, and the reality is that for any nationalist party, support for the EU will only ever go as far as it is compatible with pursuing purely national interests, which ultimately means the interests of the national bourgeoisie.  Again, in the age of imperialism, and large scale multinational capital, that national bourgeoisie, amounts almost exclusively to the petty-bourgeoisie.

The agenda of those nationalist parties, in so far as it is social-democratic, is only so in the way that social-democracy itself is contradictory, and so whilst representing the interests of large-scale socialised capital, does so whilst presenting itself as the defender of the small producer as well as the worker.  There is no reason for socialists to offer any support for such nationalist parties, however much they present themselves as more radical social-democrats.

But, that does indeed present socialists with a problem.  Although the Labour Party itself, in terms of its half million or so members, remains a largely progressive social-democratic, and internationalist party, committed to re-joining the EU, and opposing Brexit, the PLP has effectively split from it to form a separate and independent party.  The PLP is now under the control of the reactionary nationalism of Blue Labour.  It has freed itself from any real control by the party, whilst it has used its control over the party machinery to impose itself on the party in the country.  That condition cannot continue, and a formal split, or the effective destruction of the party outside parliament must follow.

There is no more reason for socialists to vote for, let alone give active support for Blue Labour nationalism than there is any other form of nationalism.  Yet, absent an alternative Workers Party, socialists are obliged to support the only Workers Party that does exist, which is the Labour Party.  We have faced this dilemma before, when socialists needed to back Labour, but could not do so uncritically, when it meant voting for Callaghan.  At that time, it was resolved by creating an alternative socialist campaign for labour victory, with its own programme and candidates for the elections around which it organised.

Even that, today, looks hard to achieve, signifying just how far backwards the labour movement has gone.  But, there are international socialists standing as candidates in the elections, who will be standing under a Labour banner.  It is necessary to mobilise support for those candidates, by Labour Party members from anywhere in the country directing themselves to those candidates, rather than campaigning in their own areas.

International socialists cannot vote for candidates that stand on a nationalistic and chauvinist platform of the type that Starmer and Blue Labour have been promoting, in which they have wrapped themselves in the flag and promoted the worst forms of jingoism.  We have to actively support all those in the party that are offering an alternative to that nationalistic agenda.  But, in many areas that will not be possible.  In those cases, international socialists as well as going to other areas to support internationalist candidates, can come together in an internationalist united front, or utilise existing internationalist campaigns such as Another Europe Is Possible, organising public meetings, rallies, leaflets and so on, to promote an internationalist agenda.  Given the witch hunting campaign organised by Starmer, however, caution will be required in doing so, so as not to give grounds for the Right to expel members engaged in such action.

In France, voters will be likely to face the choice of voting for the Thatcherite/Blairite Macron, or the fascist Le Pen.  In reality, this is no choice at all.  The reactionary policies pursued by Macron have simply opened the door for Le Pen, just as the policies of Biden opened the door again for Trump, and the policies of Starmer have not only allowed Johnson to prosper, but for any likely replacement to him to be something even worse.  Marxists certainly do not make the sectarian error of the Stalinists in their Third period madness, in which they failed to distinguish between fascism and bourgeois-democracy, but our response to that is never to simply choose the lesser-evil, when it comes to parliamentary elections.  Marxists are the most militant opponents of fascism, but our opposition comes in the form of actual organisation of the working-class to fight fascism on the streets, in the factories and communities, and to oppose them by putting forward our own independent programme, not subordinating ourselves to the bourgeoisie and its liberal representatives as a lesser-evil.  Down that road lies ruin, as the elections in Hungary have again just illustrated.

Unfortunately, the programme of the Left candidate, Melonchon, is as disastrously nationalistic as that of Le Pen, and can also offer no way forward for French workers, rather like that put forward by Corbyn, or now by TUSC, and the other reactionary Left nationalists in Britain.   The run off will undoubtedly be between Macron and Le Pen, which itself should be a disgrace for the French socialists, spurring them to action, but in such a run-off, socialists will be left to call for an active abstention, as part of the start of building a progressive, international socialist alternative for the years to come.

In Britain, in many areas, it will also be the case that socialists will be left with no progressive choice other than an active abstention, having done all they can to organise a progressive international socialist voice in the election campaign.

After Macron, The Deluge

In 2017, I argued that, despite what the Blair-rights, and other centre-ground liberals might have hoped, Macron's win in the Presidential Elections was a pyrrhic victory. Macron won because of a unique combination of factors. Both main parties had seen their centre-ground candidates heavily defeated in the party nomination procedures. The Republican party was rocked by scandal, whilst the Socialist Party, having suffered, as a result of Hollande's posing Left and sharply turning Right, swung behind Hamon, but too late for him to build the same kind of coalition that Corbyn had built in Britain. Besides which, unlike Britain, a credible fake left alternative to the Socialist Party existed in the shape of Melonchon, which split the Left vote, and allowed Macron to get through to the second round run off against Le Pen. But, large numbers of French workers saw no real choice between Macron and Le Pen, and simply abstained in the second round vote, a position I had also advocated. 

Macron's election win was in no sense, a sign that there was a chance for the political centre to re-establish itself. It can't, the long-wave cycle has created material conditions where that, and the economic model on which that centre-ground was constructed, from the 1980's onward, no longer exists. The period ahead will be characterised pretty much by a reversal of the economic conditions, and model that were created in the 1980's, and after. In other words, the fantasy world in which wealth can be created, simply on the back of ever inflating asset prices, fuelled by larger and larger amounts of debt, itself collateralised on those ever inflating asset prices, has run its course. Economic reality is reasserting itself that capital fundamentally depends upon the creation of surplus value, and creating surplus value in ever greater quantities. To produce that increasing mass of surplus value, capital – real capital, comprising means of production and labour-power – must accumulate, and it must produce this increasing mass of surplus value, in order to accumulate, and it must accumulate, because for each individual capital, competition drives it to need to capture an ever larger share of the market, or, at least, not to see its share of the market decline. 

In fact, this very reality, of the need for capital to accumulate, which causes the demand for money-capital to rise, and push up the rate of interest, itself is the cause of asset price bubbles bursting. This dynamic, of the dominance of real productive-capital, and the bursting of asset price bubbles, which have been the basis of the wealth of the ruling-class, the global top 0.01%, is what undermines the political ideology that underpinned the coalition that formed the political basis of the centre-ground over the last thirty years. That economic model, that saw the paper wealth of that top 0.01% grow at a grotesque rate over the last thirty years, whilst, in order to maintain those asset prices real economic growth, and capital accumulation was relatively held back, is what created the divisions in society that have erupted over the last ten years, and spelled the end of that centre-ground politics. 

The period ahead will be marked by an increased accumulation of capital. The underlying dynamics of the long wave cycle has pushed that forward, despite the attempts of the state and central banks to hold it back. Across the globe, capital accumulation has continued to take place, and alongside it has come an increase in the global working-class, including in the old heartlands of industrial capitalism. The working-class is now the largest class on the planet. The process of capital accumulation has proceeded on the basis of the usual combined and uneven development. The old capitalist heartlands have been in relative decline, whilst the new, more dynamic centres in Asia, Latin America, Africa and the old Stalinist States of Eastern Europe, have grown more rapidly, with income per head in these areas rising much more rapidly than in the old developed economies. One reason that growth has been more rapid in these developing economies, is the fact that they have large potential supplies of exploitable labour-power, so that absolute surplus value could be increased, simply by expanding the social working-day. 

As these increasing amounts of labour have been employed, even with wage rates remaining stagnant, the total amount of wages in the economy rises rapidly, but in the more rapidly developing economies, such as China, etc. wage rates themselves were also rising, causing living standards to rise significantly. As I have pointed out in the past, in relation to China, for example, this rising standard of living is easily seen in relation to food consumption. As the wage fund rises, so it is mirrored by an expansion of total output that goes to provide wage goods, and that means that capital is driven to invest in this production of wage goods. Each individual capital is driven to do that, because if it does not, its competitors will, and so it would lose market share, and thereby competitiveness. 

At a macro-economic level, there are basically two regimes under which this capital accumulation can take place. Either, it takes place in an international environment in which global trade restrictions are being reduced, so that trade, and with it, economic growth increase, or else it can be undertaken in a regime in which additional trade restrictions are put in place, so that economies seek to engage in import substitution, protecting their own domestic capitals from competition, which results in higher prices, for domestic consumers, and lower living standards, as the basis of pushing up the rate of profit. These two contrasting regimes are what lies behind the contending forces currently of progressive international, social-democracy, as against reactionary economic nationalism. 

In a period like the 1930's, the latter strategy leads to a deepening of an existing economic stagnation. But, today is not the 1930's. In periods of long wave upswing, such as now, the reactionary policy of economic nationalism, and protection of the domestic market, can go along with continued economic expansion, and, for some economies, may initially even accelerate it. Britain undertook the Industrial Revolution behind a barrage of monopolies and protective barriers, including its restrictions on access to its colonies, and the US similarly industrialised behind high tariff barriers in the 19th century. As Engels put it, citing a conversation he had with a Scottish industrialist on a train journey to London, about US industrialisation, 

“"Well," I replied, "I think there is another side to the question. You know that in coal, waterpower, iron, and other ores, cheap food, homegrown cotton, and other raw materials, America has resources and advantages unequalled by any European country; and that these resources cannot be fully developed except by America becoming a manufacturing country. You will admit, too, that nowadays a, great nation like the Americans' cannot exist on agriculture alone; that would be tantamount to a condemnation to permanent barbarism and inferiority; no great nation can live, in our age, without manufactures of her own. Well, then, if America must become a manufacturing country, and if she has every chance of not only succeeding but even outstripping her rivals, there are two ways open to her: either to carry on for, let us say, 50 years under Free Trade an extremely expensive competitive war against English manufactures that have got nearly a hundred years start; or else to shut out, by protective duties, English manufactures for, say, 25 years, with the almost absolute certainty that at the end of the 25 years she will be able to hold her own in the open market of the world. Which of the two will be the cheapest and the shortest? That is the question. If you want to go from Glasgow to London, you take the parliamentary train at a penny a mile and travel at the rate of 12 miles an hour. But you do not; your time is too valuable, you take the express, pay twopence a mile and do 40 miles an hour. Very well, the Americans prefer to pay express fare and to go express speed."” 

But, Engels also continues, 

“Protection is at best an endless screw, and you never know when you have done with it. By protecting one industry, you directly or indirectly hurt all others, and have therefore to protect them too. By so doing you again damage the industry that you first protected, and have to compensate it; but this compensation reacts, as before, on all other trades, and entitles them to redress, and so on ad infinitum. America, in this respect, offers us a striking example of the best way to kill an important industry by protectionism... 

Protection to shipbuilding has killed both shipping and shipbuilding... 

But the worst of protection is that when you once have got it, you cannot easily get rid of it. Difficult as is the process of adjustment of an equitable tariff, the return to Free Trade is immensely more difficult. The circumstances that permitted England to accomplish the change in a few years will not occur again.” 

(Engels Introduction to Marx Speech on Free Trade) 

For developed economies, protection always means higher costs of production, and so lower rates of growth and capital accumulation. The effect of that depends upon the long wave conjuncture, and the relative strength of the particular economy within the global economy. Donald Trump is implementing a policy of global trade war. That policy, for example, the tariffs on steel and aluminium, raises the costs for US users of steel and aluminium. It thereby reduces their rate of profit, and reduces potential capital accumulation. It raises the costs of wage goods for US workers, reducing their standard of living, and in the longer term pushing up the value of labour-power, reducing the rate of surplus value, and capital accumulation. But, in a period of long wave expansion, it also means that an incentive is given to producers to establish businesses in the US, to avoid the tariffs, so, in that way, it increases capital accumulation. 

The same applies to the effects of those tariffs on China, and other exporters. They respond by introducing retaliatory tariffs. That means they increase the cost of their own imports, with a similar set of effects, as described above. The overall effect is to raise costs, and reduce productivity, which means that less additional wealth is produced, a lower rate of profit is produced, which reduces capital accumulation, and also reduces the pace at which living standards can rise. But, in a period of long wave expansion, this is manifest relatively, not absolutely. In other words, such a trade war has an initial impact, before adjustments in terms of trade take effect, and changes in global trade patterns result. Capital accumulation proceeds, but at a reduced pace, but dependent upon the underlying dynamic of the long wave expansion, that reduced pace, can still be substantial. 

What is certain, is that such trade wars, and the imposition of protective measures can only ever be beneficial to large economies, and then only relative to their impact on smaller economies. The US is damaging its economy via Trump's global trade war, but it can get away with it, because of the size of its economy, compared to the size of the economies of some of those on which it is imposing tariffs. China does damage to its economy, and so does the EU by introducing retaliatory tariffs against the US, but not as much as if these huge economies were only a fraction of the size. As Engels also put it in the above article, 

“Such was protection at its origin in the 17th century, such it remained well into the 19th century. It was then held to be the normal policy of every civilized state in western Europe. The only exceptions were the smaller states of Germany and Switzerland -- not from dislike of the system, but from the impossibility of applying it to such small territories.” 

The idea put forward by the economic nationalists, be they those such as Le Pen, or the BNP, or equally Melonchon, or those Stalinist ideologues advising Corbyn, that any kind of salvation can be found in today's world dominated by huge economies, and economic blocs, by retreating behind protective walls of a nation state, are, therefore, not only thoroughly reactionary, but also doomed to failure. 

That sections of the population, in those capitalist heartlands that have been in relative decline for the last thirty years, and who have seen their living standard stagnate during that time, whilst they see, a tiny section of the population has had its paper wealth expand astronomically, should turn to radical solutions of right and left, is then not surprising. But, the easy solutions presented by the economic nationalists of right and fake left, is an illusion, for the reason described above. 

Last weekend, Fareed Zakharia again interviewed David Miliband on CNN, and discussed the events in France, and Brexit in Britain. Once again, he implored Miliband, the next time he appeared on his programme, to be announcing that he was establishing a new centre party in Britain. That shows just how little these middle-class liberals understand of the world they live in, and the conditions that have created Brexit in Britain, the rise of right-wing populism in Europe, and of the protests of the gilets jaunes in France. To believe that all of these phenomenon could be addressed be creating some new centre party, is like believing that you could put out a fire by throwing petrol on to it! Zakharia could not seem to connect the fact that the current French protests are against Macron, against the failed politics of that centre-ground, of whom he is the poster child in which the liberal middle class placed their faith! 

At the time of the French Presidential election I argued that workers should abstain, because the Blair-right, conservative social-democratic politics of Macron not only offered no way forward, but would open the door to Le Pen. That is what we are seeing now, in France. The solution to the problems of French workers cannot come from the economic nationalism of Le Pen, or of Melonchon. It requires French workers to develop their own progressive, internationalist, social-democratic and socialist alternatives. In the US, the Democrats undermined Sanders in the hope of getting Clinton. They got Trump instead. But, Trump's election, simply fuelled that grass roots movement behind Sanders, and all of those young people that have mobilised around the DSA. In Britain, Brexit has fuelled an ironic development, whereby tens of thousands of new young activists have been drawn into political activity, as part of the Corbynite movement, overwhelmingly committed to internationalism, and opposition to Brexit, as well as to a radical social-democratic economic agenda, even though the Corbynite leadership of the party has itself been captured by that reactionary economic nationalist agenda of the Stalinism, that characterises Melonchon. 

In France, the different electoral system, and the consequent existence of a number of parties has meant that we have not yet seen the kinds of rank and file upsurge inside the Socialist Party that we have seen in the Labour Party, or the US Democrats. But, for the current protests to be lead in a progressive direction, such a development needs to occur. The Greek workers were wise enough to realise that leaving the Eurozone, let alone leaving the EU, would be catastrophic for their interests. The economic nationalism of Melonchon and of those advising Corbyn, is a reactionary dead-end. 

If Brexit occurs, it will result in a more rapid decline of Britain's economic fortunes, with a consequent diminution in workers living standards, and that will occur whether Britain, as a relatively small economy, in terms of global economic formations, attempts to go forward on the basis of some right-wing fantasy of a thoroughly free market free for all, or on the basis of a policy of economic nationalism, and protection. It is unlikely that France will go in that direction. Even in Italy, the right-wing populists of Five Star, and The League, have pulled back from their earlier suggestions of leaving the Eurozone. 

The reality, however, for the EU, as a whole, as it comes to respond to Brexit, and to right-wing populism and nationalism in general, at the same time as it is driven by the material conditions of the long wave uptrend, and the need for capital accumulation, is that it will be led inexorably to the introduction of further progressive social-democratic measures. It will be forced to accelerate the integration of the EU into an EU state, the moves towards the creation of an EU army being just one manifestation of that; it will be forced to speed up the integration of its banking systems, and fiscal regime; and it will be forced to increase the degree of regulation and planning across the block, so as to accelerate capital accumulation, and drive up productivity. The continued accumulation of capital, and the growing power of labour as the demand for labour-power increases, will intensify the need to increase measures of industrial democracy, as part of that process. 

But, as the French protests currently show that forward movement will proceed through a variety of channels, with a number of eddies that move in contradictory directions, as part of the overall forward movement of the current.