Much of the history that we are taught in school, or that we learn about from the media is the history of prominent individuals, or events. More recently, the media and some historians, for the purposes of book sales, have promoted the “What If” school of history i.e. what if Hitler had been assassinated etc. All too easily history can be seen merely as simply a sequence of such events rather than as a process developing according to certain identifiable laws of motion; all too often it can be viewed as the acts of prominent individuals rather than these individuals merely being representatives of social forces; all too readily the real actors on the historical stage – the masses of ordinary people – are ignored and forgotten.
This piece is a much abridged extract of a history I began writing 20 years ago, of the Labour Movement in North Staffordshire, but which I broke off due to political and hten domestic commitments. A considerable amount of the data relating to the Pottery Union is taken from the excellent book by Burchill and Ross, and I apologise for any material taken from there not directly attributed - it has been more than 20 years, and I was working here quickly off notes made at the time. It attempts to reclaim some of that real history for the ordinary working people. Inevitably, it highlights the specific role played by certain individuals, but it also tries to locate that role in the material foundation of social processes, and the movements and influences behind these individuals. It tries to rescue the history of the working people of North Staffordshire in another way too. This history tries to show the immense richness of the political struggles conducted by the working class of North Staffordshire. The history of those struggles has been hidden to the modern working class of the area under a smog created out of the mythological moderacy and apathy of the North Staffs proletariat.
In writing this history I have attempted to utilise the Marxist method. I begin by examining the existence of radical ideas at the time of the Civil War, and to examine how these were to be picked up or rejected by the working class, which was to develop later. In examining the development of this working class, and its Labour Movement I have tried to move from the general to the particular, and have tried to show how particular political ideas developed out of existing doctrines, and the interaction with new material conditions, and how, in turn, these ideas changed as material conditions changed.
The Civil War
The Civil War was a political revolution waged by the nascent bourgeoisie against the power and privilege of the old feudal ruling class. Given the small size of the bourgeoisie against the power of the aristocracy and its retainers it was forced to rely on the support of other classes of society – the peasantry and the small but emerging working class. In order to mobilise the support of these other classes it was forced to bring forth ideas which went way beyond what was required for its own emancipation, and interests. But once let loose these ideas were taken up by representatives of these other classes people such as the Levellers, Diggers, 5th Monarchists, and 7th day Adventists whose ideas went way beyond the limited concerns of the bourgeois.
Staffordshire at the beginning of the Civil War had tried to remain neutral, but as Ronald Hutton points out in his book, “The Royalist War Effort 1642-46” this was impossible. Staffordshire became a military crossroads. As Hutton puts it, “this unfortunate county” became “the centre of a highly complicated and deadly game of chess, with the mastership of England as the prize.” In addition to its strategic position as a route from Oxford to Wales and from Coventry to Manchester the County suffered considerable plunder by Royalist forces. Hutton concludes that it was local communities not Parliament that defeated Charles I, “not from hatred of his cause but from hatred of the war itself.”
A son of a butcher, Richard Harrison, who became Mayor of Newcastle under Lyme, entered into this maelstrom as one of Cromwell’s most trusted soldiers. Major General Thomas Harrison, was one of the regicides, and the first to be tried on the return of Charles II. Harrison was a 5th Monarchist, and was to become in later years an increasing critic of the Protectorate, leading Cromwell to withdraw his Commission.
See: Harrison
”The proletariat goes through various stages of development. With its birth begins its struggle with the bourgeoisie. At first, the contest is carried on by individual labourers, then by the workpeople of a factory, then by the operatives of one trade, in one locality, against the individual bourgeois who directly exploits them. They direct their attacks not against the bourgeois conditions of production, but against the instruments of production themselves; they destroy imported wares that compete with their labour, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the Middle Ages.
At this stage the labourers still form an incoherent mass scattered over the whole country, and broken up by their mutual competition. If anywhere they unite to form more compact bodies, this is not yet the consequence of their own active union, but of the union of the bourgeoisie, which class, in order to attain its own political ends, is compelled to set the whole proletariat in motion, and is moreover yet, for a time, able to do so. At this stage, therefore, the proletarians do not fight their enemies, but the enemies of their enemies, the remnants of absolute monarchy, the landowners, the non-industrial bourgeois, the petty bourgeoisie. Thus the whole historical movement is concentrated in the hands of the bourgeoisie; every victory so obtained is a victory for the bourgeoisie.”
Marx and Engels – “The Communist Manifesto” pp 53-4.
In the middle of the 17th century, life was essentially rural. In 1666 Burslem, centre of the embryo pottery industry had 40 houses, Hanley had a population of about 80. Yeoman farmers made pots on a domestic scale. By the early 18th century some were involved in coal mining. Life was hard and the small relatively isolated communities ensured that a worker toiled for his master on a personal level, and socially the two lives overlapped. By the middle of the 18th century improved transport and production methods heralded a revolution in the pottery and other industries which was to drive a wedge between master and workman.
Harsh realities of bad harvests and wars abroad, and a struggling economy were only keenly felt by the working people. As early Trade Unions were run as underground organisations evidence of their existence in this early period is difficult to uncover. However, in 1757 hungry potters and colliers marched from Trent Hay Farm, between Stoke and Hanley, to Congleton demanding cheaper Corn. It was a clear example of effective organised working class protest.
North Staffordshire was built on three basic industries Pottery, Coal and Iron. All three had in common a paternalistic system, and all three demonstrate some similarities in the way the Trade Unions developed. The dominant industry, and influence on the Labour Movement has, however, quite clearly been the Pottery industry.
The Pottery Industry
Date Number Employed
1710 – 15 500
1785 15,000
1835 20,000
1841 20,000 – 23,000
1850 25,000
1861 30,000
1871 34,651
“….. the National Union of Operative Potters was said in 1833 to have a membership of 8,000, probably a larger percentage of the workers eligible than any subsequent union before 1914.”
(R.H. Tawney. Introduction to Warburton’s “The History of Trade Union Organisation in the North Staffordshire Potteries” 1939.)
The union did not emerge from a vacuum. North Staffordshire had not been unaffected by the political outbursts of the late 18th century or between the passing of the Combination Acts and there repeal. It was said of Newcastle under Lyme in 1792 that Thomas Paine’s “Rights of Man” was in almost every hand, particularly the journeymen potters –
“more than two-thirds of this populous neighbourhood are ripe for a Revolt especially the lower class of inhabitants.”
(J. Massey 22nd November 1792 H.O. 42.22; F. Knight “The Strange Case of Thomas Walker”, as quoted in E.P. Thompson, “The Making of the English Working Class”.
A dispute in fact occurred in 1791 at Spode’s and an exchange of leaflets took place. Some workers had been imprisoned as a result of action by the employers, and the workers sought financial support from other workers in the area. Leaflets were produced, “To Our fellow Workmen, to the Public.” During this early period political events and movements played an important role. The Parliamentary Reform Movement (1816-19), which had substantial working class support, made itself felt in the Potteries. On 7th February 1817, Joseph Johnson, the Manchester leader, gave a lecture at Lane End, and, on the 10th, addressed 5,000 – 6,000 people in Hanley. He was later driven from the stage by what was described as “an organised ejection by the bourgeois”. Leaflets were distributed copies of which are in Hanley Museum.
On 1st November 1819, there was a large meeting in Hanley chaired by William Ridgway, a leading pottery manufacturer, to protest against the use of troops against a peaceful crowd in St. Peter’s Fields, Manchester – The Peterloo Massacre.
What was interesting about the Pottery industry was its typical size. Because of the lack of mechanisation surplus value could only be increased by the extensive use of labour. As a result factories were large and employed child and female labour in appalling conditions. As early as 1769 Wedgwood’s Etruria factory had been built and contained all the disciplines of factory life. (There are numerous websites with useful information on Wedgwood’s factory and also Wedgwood’s politics, he was a Unitarian, supported Universal Male Suffrage and Annual Parliaments, opposed slavery etc.) Wedgwood introduced, what was to become known as, the division of labour at the Etruria factory, and he introduced a Watt steam engine there even before they were introduced into the Lancashire textile mills. Siting the factory where he did was also determined by the fact that he knew it lay on the course of the proposed Trent and Mersey Canal.
Date Number of Firms Number Employed Average
1762 150 (Burslem) 7,000 47
1836 130 20,100 155
1841 130
Source: Burchill and Ross p23.
In 1841 according to Burchill and Ross “A History of the Potters Union” (1977), most potters were employed in factories containing 250-300 workers. Some factories were much bigger.
Davenports 1400
Thomas Mayer 500
Adams 650
Ridgways (Shelton factory) 500
By 1833, Enoch Wood’s factory was recorded as having over 1,000 employees. In the early 1840’s, Copeland and Garrett employed 1,000 in a factory covering nearly 11 acres. By 1871 there were seven potbanks employing each between 500 – 1,000 workers. The national average factory size at the time was 84.
Source: Burchill and Ross.
Age 5 10 15 20 25 30 35 40 45
Males 327 3043 2765 2219 1733 1713 1141 1420 782
Females 161 1879 2358 1683 963 624 444 327 235
Age 50 55 60 65 70 75 80 85
Males 102 305 231 118 67 32 13 3
Females 138 86 42 25 23 8 2 -
Source: Burchill & Ross
Engels in “The Condition of the Working Class in England” gives an account of the atrocious condition of the Potters. Marx also in Capital quotes a Health Inspectors Report on the District.
“Each successive generation of potters is more dwarfed and less robust than the preceding one.”
And another doctor says,
“Since he began to practice amongst the potters 25 years ago he had observed a marked degeneration especially shown in diminution of stature and breadth.”
According to Dr. Arledge, senior physician at the North Staffs Infirmary.
“The potters as a class both men and women represent a degenerated population both physically and morally. They are as a rule stunted in growth, ill shaped, and frequently ill-formed in the chest; they become prematurely old, and are certainly short lived; they are phlegmatic and bloodless, and exhibit their debility of constitution by obstinate attacks of dyspepsia, and disorders of the liver and kidneys and by rheumatism. But of all the diseases they are especially prone to chest disease, to pneumonia, phthisis, bronchitis and asthma. One form would appear peculiar to them and is known as potter’s asthma, or potter’s consumption. Scrofula attacking the glands or bones or other parts of the body, is a disease of two-thirds or more of the potters….That the degenerescence of the population of this district is not even greater than it is, is due to the constant recruiting from the adjacent country, and intermarriages with more healthy races.”
(Children’s Employment Commission First report p24. Quoted in Karl Marx Capital Vol. I p235 Lawrence and Wishart Ed. 1977)
“But with the development of industry, the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more. The various interests and conditions of life within the ranks of the proletariat are more and more equalized, in proportion as machinery obliterates all distinctions of labor, and nearly everywhere reduces wages to the same low level. The growing competition among the bourgeois, and the resulting commercial crises, make the wages of the workers ever more fluctuating. The increasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes. Thereupon, the workers begin to form combinations (trade unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there, the contest breaks out into riots. “
“The Communist Manifesto” pp 54-5
The First Potters Union
The first Potters Union whose existence can be proven was the Journeymen Potters Union founded in 1824. Like most early unions the Potters Union was a craft union. It was amongst the skilled artisans whose education and wages allowed them to read and become acquainted with radical ideas that the Union first took root. The history of radical ideas, previously mentioned, would, therefore, have played an important part in determining the politics of the early potters’ union.
There are a number of reasons why the Potters Union grew rapidly during the first part of the 19th Century. For one thing there was the terrible conditions in the potbanks that have been described. Secondly, there was the history of radical ideas in the area, which were readily taken up by the journeymen potters. But there were also factors concerning the way the factory was organised that encouraged Trade Union organisation. Reference has already been made to the size of the factories. Bringing large numbers of workers together thus ensured that the workers would discuss these radical ideas, be aware of their common condition, and more easily determine their interests as a class against the employers.
Additionally, there was a large amount of scope for clashes between the workers and employers.
”Piecework was the dominant method of payment for the journeyman. As in other industries the relationship between piecework and a wide variety of products helped to focus the attention of the operative on the determination of wages. Wages were high and the pottery journeymen have historically been generally classified as belonging to the ‘aristocracy of labour’”
Burchill & Ross p.4
”.. the system of wage determination in the pottery industry had its own complications. Manufacturers issued price lists for the production of ware covering a phenomenal variety of products of all sizes at a large number of different stages of production. The nature of the production process and the variety of products opened up a whole range of areas of conflict as a focus for discontent.”
”The homogeneity of the area’s populace and industry made it easy for workers to come together when necessary. Potmaking dominated the life of the community and made formal trade union organisation easy when demanded.”
Burchill & Ross p.6
The Journeymen Potters Union began in 1824. In August 1825, a strike started involving “oven-men, slip makers, turners of the wheel, treaders of the lathe, triangle makers and painters”. (Burchill & Ross p.58) The employers responded with a lock-out. With winter and a trade depression, the strike failed and the union disintegrated, bringing unemployment and victimisation in its wake. The rank and file were not very sympathetic to their leaders. President of the union, Joseph Thomas, was “Dismissed by the unionists – and insultingly told to ‘go to work’”.
In February 1830 a meeting was held in Hanley to discuss the Truck Acts, and one of the main speakers was Joseph Peake, one of the old leaders of the Journeymen Potters Union. At the end of the meeting a speaker from John Doherty’s National Association for the Protection of Labour (NAPL) stood up to advertise a meeting to be held at Wolstanton marsh. On 15th November a large meeting was organised by the NAPL. A potter chaired the meeting, and the main speaker was John Doherty himself. Out of the meeting a Trade Union branch – the China and Earthenware Turners Society was formed. This branch was the forerunner of a more general union of all the pottery trades, and by early 1832 the organisation of the potters was called simply the National Union of Operative Potters.
The union held its second Annual Delegate Meeting. It lasted four days and had delegates from Bristol, Swansea, Newcastle on Tyne, Worcestershire, Derbyshire and Yorkshire. From this point, the Union obtained its national reputation. Its membership stood at about 8,000, of which 6,000 were in North Staffordshire. This represented about a third of the total workforce – a very high rate of unionisation. The Union’s reputation was boosted by the involvement and praise of Robert Owen. He visited the Potteries twice in 1833 to meet the Union leaders and also corresponded with them. At the 1833 Co-operative Congress, Owen publicly praised the Potters Union. “There is no section of the country, where the march of the intellect is making more rapid strides than this, and I will make public this solid proof of the disposition and ability of the people to look after their own interest.”Throughout 1833, selective strikes took place, to force a levelling up of prices by the lower paying bosses. In September of 1833, a Committee of pottery manufacturers put forward a new list of piece rate prices. Their proposals were rejected by the Union, and a new committee of seven masters and six operatives established to draw up a new agreed list. The strikes of 1833 cost the union £6,223, but the union won new rates. However, the bosses soon began to break the new agreement. In July 1834, three employers, in Tunstall, decided to stop paying the agreed rates, on the basis that they had not been universally applied. With the large number of small employers, it was impossible to make the rates universal. The dispute with the employers continued beyond the normal setting on date of Martinmas. In January 1835, the employers established another committee to revise piece rate prices. The union rejected their proposals and put forward a proposal for a committee made up of an equal number of workers and employers. The bosses rejected this proposal and in doing so expressed their dislike for unions. “….this meeting feels bound to declare its persuasion, that the steps which have been taken to adjust matters between the said Manufacturers and their Workmen, would have been successful, and the List of prices been accepted, but for the influence of a System now in operation, which, under the pretence of defending the rights of workmen, destroys their free agency, keeps them in conflict with their masters, and imposes upon them suffering, when the causes thereof have ceased to exist.”
The dispute dragged on, with the employers gradually breaking, until, in early Match, nearly all were back at work. Again the union had won a victory, but the bosses had sounded a warning of their willingness to fight. The big test of strength, between the Union and the employers, was to come in 1836.
The 1836 dispute centred on the two main issues of contention between the Union and employers – Annual Hiring and the practice of “Good from Oven”. Good from Oven was a system of piece work payment whereby only pieces which were alright after they had been through the initial firing were counted for payment. The system did not affect all workers. It mainly affected the hollow ware pressers and flat pressers. That is to say those who produced the cups, teapots etc. (hollow ware) and the plates (flat ware) in the initial unfired state. There were a whole series of reasons as to why the ware might emerge from firing faulty, from faulty mixture, improper firing to carelessness in carrying the moulds to the oven.
The main focus of attention, however, was the question of the Annual Hiring. Every Martinmas workers were hired under a contract of employment. These contracts made the workers into virtual serfs, because the contract tied them to the employer. Workers who left an employer during the term of a contract were fined or imprisoned. The system was extremely useful for the employers to break strikes, and to exploit the workers.
In the Summer of 1836 the Union drew up its own model agreement and set about enforcing it. They used the same tactics they had used in the previous years – select a factory, withdraw key workers and ensure these could not be replaced, then encourage the laid off workers to bring legal actions against the employers. The employers responded by creating the Chamber of Commerce, and to use the lock-out once contracts had run out, and try to insert a clause into contracts allowing them to lay workers off in the event of a strike.
At first the Union was successful. They won at Adams’, and followed this by calling workers out at 14 factories in Burslem and Tunstall – bringing out 3,500 workers. The Chamber of Commerce responded with a lock-out and promise of financial support to the 14 factories. They wanted to last out until 5th September when negotiations for new contracts would begin, and when all the members of the Chamber of Commerce would join the lock-out. The union began to weaken suggesting that some workers go back. The employers refused to allow them back. The union had classified employers in terms of which they thought would crack first. None, they thought, would last more than a month.
In September, the Chamber of Commerce refused to negotiate with the Union. Sixty-four factories closed at Martinmas, throwing 20,000 workers out. No open negotiations took place until December, although there were behind the scenes attempts to resolve the strike. Lord Lieutenant of the County of Staffordshire, Lord Talbot, in a letter to the Home Secretary wrote,
“The Trades Unions have already begun to collect contributions from the shopkeepers and the people who attend the market either by enforcing a system of long credit or by direct cash payments, and they have sent delegates to the several great manufacturing towns and to the General Trades Union for funds…”
Burchill & Ross (p.67)
”Home Office reports show that movements of troops took place between November and December. On 14th November Colonel Thorn reported that a detachment of Fusiliers had been marched from Stafford to Newcastle. On 19th November the ‘Staffordshire Mercury’ reported that 400 men had been sworn in as special constables…..By mid November the locked out workers were confronted by determined employers backed by troops and special constables.”
Burchill & Ross (p. 67)
Feargus O’Connor the Chartist leader spoke all around the country in support of the potters. Workers, hired under new contracts, paid 5 shillings a week to support those on strike and locked out. Strike pay, in December, was 5 shillings for single workers and 6 shillings for married ones. At the end of December, a meeting of non-unionists, financed by the employers, was held at Betley, calling themselves “Independent Workmen”. They produced propaganda aimed at dividing the workers. At the same time, however, a meeting was held at the Saracen’s Head in Hanley comprised of Trade Unionists from all over the country. This meeting called on the Potters to reject the bosses’ offer, and promised continued financial support. But the union was gradually losing the battle. Although, individual agreements were being secured, with various employers, the Chamber of Commerce insisted on maintaining the lock-out, until all employers had secured a return to work on their terms. The lock-out officially ended, on 27th January 1837. The combined strike and lock-out had lasted 20 weeks. Many Potters had suffered terribly, and the Union was irreparably weakened. A trade depression followed with many potters failing to regain employment. Union leaders were victimised and the union collapsed in miserable defeat.
With the union defeated, the way was open for the employers to attack the workers. Conditions, for the workers, became noticeably worse. With the union defeated, the workers hostility turned to political solutions to their condition, in place of merely Trade Union struggle. In one sense, this was positive. It reflected a growing class-consciousness – an awareness that the political system must be changed to improve their condition. In another sense, though, it was a step backward. The workers took up the cause of Chartism, and seemed to believe that obtaining the suffrage would be the answer to all their problems. Experience since the working class has obtained the vote shows this to be false, and that although a fight on the political level, the creation of a workers party etc. is important, this needs to be based on the self-activity of the working class organised in strong Trade Unions.
Politicisation
The early political influences on the North Staffs Labour Movement have already been mentioned, first the radical ideas emerging out of the Civil War, which in turn gave way to the petit-bourgeois radicalism of Tom Paine, and then with the transformation of the population from being yeoman farmers, peasant producers of pottery and mining (North Staffordshire is absolutely peppered with old mine workings most of which are not even recorded because they were dug by individual families. When houses were built on a field behind my house a few years ago six mine shafts were discovered within a fairly short space of each other, and that is true of the entire area.) into an industrial working class, new ideas began to emerge, reflecting the interests of a new working class – Owenism and Chartism. Although Owen made a number of visits to the area, and, as has been said, praised the Potters Union, his influence with the local workers, in the first half of the 19th century, was not that great. the local workers, in the first half of the 19th century, was not that great.The Potters did not. for example. join Owen’s Grand National Consolidated Trade Union. In addition to Owenism and Chartism. there was another influence on the political development of the North Staffs. Labour Movement. That influence was from Methodism, which although not a political influence per se did play an important political role. Its influence was clear in the beginning of the 20th Century in the development of the Labour Party.
But after the defeat of 1837 the most important political influence was unquestionably that of Chartism. Despite the defeat of 1837. it was Chartism which became the outlet for the militant struggles of the North Staffs. workers.
Chartism in North Staffordshire
Chartism
The People’s Charter was first published in May 1838. At about the same time the idea was put forward of a National Convention in support of a Petition for the Charter. The North Staffordshire Mercury of 11th August 1838 reports a meeting at the Sea Lion Inn, Hanley addressed by the Chartist leaders Feargus O’Connor in support of the petition. There were delegates at the meeting from Birmingham, Manchester and Glasgow. The Mercury stated that, “Considering the suddenness and altogether unexpectedness of it, attendance was numerous and respectable.”
A few months later the Chartist paper, the Northern Star, reported a demonstration in Hanley of 20,000 people. “On Wednesday morning last, the town of Hanley presented a heart stirring scene to the lover of liberty. Early in the morning, the drum and fife were heard, announcing the day had arrived, when the voice of the Potters was to join that of their brethren in the demand for freedom.” (Northern Star 17th November 1838). The demonstration was all that more impressive given the defeat of the 1837 strike.
At the rally afterwards the local Chartist leader, John “Daddy” Richards was elected as the delegate to the National Convention. Daddy Richards also moved the first resolution at the rally. He said, “the great general grievance under which they laboured was class legislation. Men who represented boroughs were required to have £300 a year, and men who represented Counties $500. It was not then wonderful that those class legislators should represent themselves at the expense of the people. The power which this system gave them had enabled them to tax all the articles of their produce and the duty went into the pockets of the idlers. By universal suffrage alone could this great and crying evil be checked.” (ibid)
The same report quotes Feargus O’Connor. “A thought strikes me that you are poor and I’ll tell you the reason why, and why poor laws are necessary – because you have about 130 master potters who annually share about one million’s worth of your labour. Now £250,000 would be more than ample for risk and speculation, and the remaining £750,000 would make you independent of the three devil kings of Somerset House.” (A reference to the 3 Poor Law Commissioners.)
The Chartists were split between the “physical force” Chartists, and those who opposed violence. It is clear that most of the North Staffs Chartists were “physical force” men and women from the many documented cases of arms distribution in the area. In March 1839. a local Justice of the Peace, H.H. Williamson wrote to Lord Talbot the Lord lieutenant of the County stating,
”My Lord, sometime since I heard it rumoured that the Chartists in the potteries were arming – yesterday I saw a very respectable person (in whom I can place confidence) and he assured me that some of the Chartists in the Potteries had purchased guns at ten shillings each which he understood came from Sheffield.”
And, a week later, John Richards, in his report to the National Convention, on 22nd March, stated, “If something be not speedily done to give a greater plenty to the working man, something of a very fearful import must follow. Nor will it be possible for me, let me do my utmost, to keep that peace you know I so much long to be kept by the operatives of England. I shall have to visit those place ere I see you. Shall impress on them the motto Peace, Law, Order, but I fear all will be of no avail, this being the language used in those places – better to die by the sword than perish with hunger.”
A month late, at a meeting of about 300 people, in Burslem, Thomas Capper, a Chartist from Tunstall, called on supporters of the petition to adopt the same means of defence as those engaged in rebuilding the walls of the Holy City “a trowel in one hand, and a sword in the other.”
The violence was of course not all one way, and when the Chartists spoke of defence that often was what it was. The dragoons of the militia more than once were sent in on horseback to quell demonstrations. At one meeting in Burslem a mill worker from Leek was decapitated by the lash from a bull-whip. The culprit had to flee the area for fear of his own life.
The establishment of a new Police force began a series of demonstrations. The North Staffordshire Mercury with a headline “Disturbance at Lane End: Military Called Out” reported on 11th May.
”During the week the inhabitants of Lane End have been in a state of fearful apprehension and excitement from the disorderly conduct of a number of persons in the lower ranks of society. We have been at considerable trouble to obtain accurate information as to the causes of the tumult and find that the principal one is the extreme aversion and hatred entertained by the parties towards the new Police force lately established in that neighbourhood.
”Some of the respectable inhabitants of the town ascribe the violent conduct of the mob to the speeches delivered at a Chartist meeting on Monday last, on which occasion the people were encouraged in their hostility to the police; while others are of the opinion that the badly disposed only waited for any sort of pretext to avenge what they feel to be a check upon their lawless ness.”
The following letters which can be found in “Chartism in North Staffordshire” – a study book produced by Staffordshire Education Department – also demonstrate the readiness to resort to arms both by the local Chartists and the local State Authorities. (See pages 12-15 of the above book.)
The extent of support amongst the pottery workers themselves for Chartism is demonstrated by the nominations to the Chartist General Council from the Potteries. The Northern Star of 10th April 1841 listed them as:
G.B. Mart China Painter
John Clay Enamel Fireman
Joseph Colclough Potter
Charles Hackney China Potter
Henry Sharp China Painter
Joseph Heath China Potter
Moses Simpson Cordwainer
The support for Chartism was the first clear sign of a political class consciousness amongst the North Staffs workers, a recognition that a political solution, as opposed to just a Trade Union solution, was needed for their problems, and that solution would only be forthcoming from their own organisation rather than from support for the two bourgeois parties – the Tories and Whigs.
As time passed, the idea, that the Charter could be granted as a result of petitions, became less and less credible. The demand for industrial action – A General Strike or Workers Holiday, as it was termed, began to win more and more support. The North Staffs. Chartists were quick to take up the demand. Although a formal resolution, to strike until the demands of the Charter were met, was not carried until August 1842, miners in North Staffordshire had been on strike since the beginning of July. The strike was not started in support of the Charter, but in support of miners, employed by a coal owner, named Sparrow, from Longton, who was attempting to cut wages. However, at the meeting, called to organise support for the miners, the main speakers were Chartists, and the ideals of the Charter were clearly expounded, along with a call for a local General Strike in support of the miners. The strike spread and had a serious effect on other industries. Contact was made with other areas and the miners saw their strike in a national context rather than just local. When North Staffordshire was experiencing a severe crisis of depression, strike and political action, news arrived that at Manchester the Trades Conference there had called for a general strike for the Charter and asked other towns to do the same. On Monday 15th August 1842, Chartists and miners combined, declared that "all labour cease until the People's Charter becomes the law of the land." This was followed by turning out those at work in the potteries and pits in and around Hanley and an increasingly inflamed situation.
Organising such an effective General Strike, throughout North Staffordshire, was a tremendous achievement, so soon after the defeat of 1837, but it was more so given the trade depression occurring at the time, and the ferocity of the response from the State.
” Strikes and protest meetings were suppressed in many parts, though the events in the Potteries were "the most destructive riots, resulting in the largest number of prisoners being arrested, imprisoned and transported of all the disturbances in Britain throughout the Chartist period." (R Anderson & R Fyson, The Chartists &, Rioters).
All in all 222 people were put on trial, 49 of these were transported whilst 116 were imprisoned often with hard labour. It was the greatest number ever arrested and tried during the movement’s history.
Utopian Socialism, Owenism, Emigration Societies.
Following the defeat, suffered by the working class in the Chartist riots of 1842, the movement, in North Staffordshire, was set back dramatically. Although Chartism was not completely dead, the political head of the movement, which the Chartist leaders represented, had been cut off. Defeated and demoralised the Labour Movement began to look for alternatives. Inevitably after such a defeat the search for alternatives concentrated on avoiding conflict. It was in these circumstances that Owenite utopianism was taken up. Such a turn was a terribly regressive step.
”The significance of critical-utopian socialism and communism bears an inverse relation to historical development. In proportion as the modern class struggle develops and takes definite shape, this fantastic standing apart from the contest, these fantastic attacks on it, lose all practical value and all theoretical justifications. Therefore, although the originators of these systems were, in many respects, revolutionary, their disciples have, in every case, formed mere reactionary sects. They hold fast by the original views of their masters, in opposition to the progressive historical development of the proletariat. They, therefore, endeavor, and that consistently, to deaden the class struggle and to reconcile the class antagonisms. They still dream of experimental realization of their social utopias, of founding isolated phalansteres, of establishing "Home Colonies", or setting up a "Little Icaria" [8] -- pocket editions of the New Jerusalem -- and to realize all these castles in the air, they are compelled to appeal to the feelings and purses of the bourgeois. By degrees, they sink into the category of the reactionary conservative socialists depicted above, differing from these only by more systematic pedantry, and by their fanatical and superstitious belief in the miraculous effects of their social science.
They, therefore, violently oppose all political action on the part of the working class; such action, according to them, can only result from blind unbelief in the new gospel. The Owenites in England, and the Fourierists in France, respectively, oppose the Chartists and the Reformistes.”
“Communist Manifesto”. Pages 92 and 93
Its important to make a distinction here, though. Marx himnself distinguished between Owen, and his followers. Marx’s objection was not to Owen’s proposal for Co-operatives per se, on the contrary, it was to the idea that Co-operatives, or Little Icara, islands of socialism could be developed on their own as an alternative to the class struggle. The Owenites pursued this latter course, just as was done by the followers of Proudhon in France. In fact, for Marx, and this is a point totally missed by modern Marxists, and Leninists in particular, co-operatives were central to class struggle, they were the emans for Marx by which the transformation from Capitalist economy to socialist economy was to be accomplished, they were the material basis on which the class conscioussness of workers was to be raised.
“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises. into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” (emphasis added)
He goes on,
“The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Pereire with the pleasant character mixture of swindler and prophet.”
(Capital Vol III pp441-2)
And in the Critique of the Gotha Programme criticising the statist policies of the Lassaleans, whose modern equivalent is the demand for nationalisation, Marx comments,
“That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with state aid. But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.”
Part III
He objects to the demand for State aid, saying,
“Instead of arising from the revolutionary process of transformation of society, the "socialist organization of the total labour" "arises" from the "state aid" that the state gives to the producers' co-operative societies and which the state, not the workers, "calls into being". It is worthy of Lassalle's imagination that with state loans one can build a new society just as well as a new railway!”
If the socialists agreed to such a policy,
“shows that its socialist ideas are not even skin-deep; in that, instead of treating existing society (and this holds good for any future one) as the basis of the existing state (or of the future state in the case of future society), it treats the state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases.”
And,
“through these demands that it puts to the state, expresses its full consciousness that it neither rules nor is ripe for ruling! ….”
He echoes the same idea in his Address to the Congress of the First International,
"Hence the Ten Hours’ Bill was not only a great practical success; it was the victory of a principle; it was the first time that in broad daylight the political economy of the middle class succumbed to the political economy of the working class.
But there was in store a still greater victory of the political economy of labor over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of dominion over, and of extortion against, the laboring man himself; and that, like slave labor, like serf labor, hired labor is but a transitory and inferior form, destined to disappear before associated labor plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen’s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.
At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however, excellent in principle and however useful in practice, co-operative labor, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters, and even keep political economists have all at once turned nauseously complimentary to the very co-operative labor system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatizing it as the sacrilege of the socialist. To save the industrious masses, co-operative labor ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defense and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labor. Remember the sneer with which, last session, Lord Palmerston put down the advocated of the Irish Tenants’ Right Bill. The House of Commons, cried he, is a house of landed proprietors. To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party."(As an aside I have calculated that the funds held in workers pension Funds today amount to around £500 billion. This is enough to buy outright more than half the companies in the FTSE 100. Imagine if workers demanded the simple democratic right to have democratic and collective control over these funds that are now controlled by the same financiers that run the bosses systems against the interests of workers, and used that right to transform these companies into workers co-operatives, let alone if this was combined with the power of the Co-op Bank and other Co-operative institutions!)
And so it was in North Staffordshire. The movement was divided between the new Owenite leaders of the pottery workers like William Evans, on the one hand, and the remnants of Chartism, made up of those leaders, like Capper, who had not been deported and had been released from gaol, on the other. The division is instructive from another sense. Evans became the leader of the new pottery union UBOP, and his position was secured not by mass support, but by the support of a tightly knit group of loyal supporters able to dominate the union in the face of demoralisation and lack of political leadership amongst the rank and file. The Chartists, however, appear to have drawn their support from the rank and file of the Labour Movement.
For instance, over 500 workers turned out to cheer Capper on his return to Hanley after he was released from gaol. Shortly after, the Chartists held a meeting in Longton, with the Chartist leader Feargus O’Connor speaking. Only about 50 turned up, but given the scale of the defeat that had been suffered, this was still a sign of the strength Chartism retained amongst the working class. Another sign was the opposition within the UBOP to the policies of Evans.
UBOP had been formed on 6th September 1843. Its emergence was almost certainly due to a resurgence of confidence, amongst the pottery workers, as a result of the improvement in trade, stimulated by growth in the American Market. On 2nd December 1843, the union launched its own newspaper “The Potter’s Examiner and Workman’s Advocate”. William Evans was its editor. Evans politics were easily discernible, from this statement in the first issue.
“This publication is the organ of a Trade Society and as that society is composed of individuals of every grade of political opinion, it would be the height of folly, under these circumstances, to mix up politics with the advocacy of the rights of labour.”
Evans had been influenced by the British Temperance Emigration Society, which was established in 1842. In May 1844, the Hanley Operative Potters Emigration Society and Savings Fund was established, with Evans as its agent. The aim of the society was to buy land in Wisconsin in the USA, and to organise emigration from the Potteries to this territory. For someone with Evans’ politics, such a scheme was very attractive. On the face of it nothing could be more logical than to organise emigration of workers in order to reduce unemployment, and by doing so strengthen the position of the remaining workforce who would thus be able to push up their wages without the need for industrial action. The idea of moving to a land of plenty must also have seemed attractive to many workers as an alternative to industrial struggle, after the defeats of 1837 and 1842. Certainly, the Examiner carried many stories from those who had emigrated about the much higher standard of living to be found in the US, though these stories were to turn out to be not what they seemed.
According to Burchill and Ross, “The Potters Examiner” did not depend on socialist arguments – except rarely and opportunistically. "No attempt was made to analyse an alternative political system as possibly a feature of life in America – unless one infers an anarchic system of free, contiguous, but separate landowners, enjoying the health of the land, each his own boss and free from the oppression of the factory and its Master and presumably self sufficient.”
I think this is debatable. Certainly the Examiner concentrated on the simple economic argument rather than trying to convey lofty ideals, but the basic ideas conveyed did, themselves, represent a distinct political current. That current could be variously described as “Economic Romanticism” as Marx described the ideas of Sismondi, “Utopian Socialism”, as he described the ideas of Owen and Fourier, or Narodism as it was to become in Russia. Probably, Narodism is the closes comparison. The Russian Narodniks believed that the peasant communes of 19th century Russia were the basis of Russian socialism, and that these communes would be the means by which socialism could be established in Russia without the need to pass through a stage of capitalist development. This is very like the “anarchic system of free, contiguous but separate landowners, enjoying the health of the land” that Burchill and Ross describe.
Moreover, it is clear that Evans and the Emigration Society did have definite ideas about the administration of their New Jerusalem. This is demonstrated by the fact that they intended to print their own symbolic money – dollar notes issued on the security of the Townships of the Emigration Society.
The idea of the Emigration Society was to raise subscriptions, so as to buy land in Wisconsin, and, periodically, hold draws to determine who would emigrate to America. In fact, less than 100 people did emigrate, and many of those were not potters. The scheme was opposed by some members of UBOP from the beginning. This opposition demonstrated the continuing support for Chartism. Evans linking of the activities of UBOP to emigration was a source of repeated conflict between him and the Chartists. This conflict could be seen openly in the pages of Evans’ Examiner on the one hand, and the Northern Star on the other. In 1846, the Hollow ware Pressers Lodge (Branch) of UBOP decided to allocate half of each union subscription to the funds of the Emigration Society. This brought matters to a head. A split occurred and a new Market Tavern Lodge of Hollow Ware pressers was formed after its members had pulled out of the old Branch and Central Committee. The influence of Chartism on this development can be seen from the fact that these “seceders” as Evans described them published a letter in the Northern Star headed “The Emigration Humbug of the Potteries”.
The first ballot of the Society was reported in the Staffordshire Advertiser on 29th May 1847. Two more ballots took place shortly afterwards. But the number of people emigrating was small, and on 28th May 1848 the Advertiser announced that the potters had decided the previous Monday to open up the scheme to other trades. By the end of the year, to prevent the scheme from collapse, it had been opened up nationally. Thomas Twigg was hired as estate manager.
In 1847 the potters were forced to accept wage cuts. The union was in disarray, and during 1848 the Examiner collapsed. All of this made the problems of the Emigration Society much worse, but it managed to survive for another three years. Indeed, in 1849 Evans appears to have staged a comeback. The Examiner returned under the title of the ‘Potters Examiner and Emigrants Advocate ‘. A report in the Advertiser in January 1849 told of a tea party at the Free Trade Hall in Manchester addressed by Evans and attended by 2,000 people. The Emigration Society was reported as having branches in several parts of the country, and at the tea party ballots were conducted for six allotments. In the middle of 1849 the Emigration Society was separated from the Union Constitution, but several branches formed their own clubs attached to the Society.
In September, another meeting of about 2,000 people took place this time in Hanley. According to Evans, the Society now had 1,600 acres in Pottersville, and another 50,000 acres in Fox River. The Society was reported as having 105 branches. However, the fact that only one ballot took place at this meeting shows that things were not going as well for the Society as Evans made out. The crunch for the Society came the following year. First a letter appeared in the Advertiser from an emigrant, Philip Pointon, which was extremely critical. Then the Northern Star printed the full text of a memorial published in the United States press, which attacked the Society, and demanded an inquiry into its operations. Over the following months Evans was accused of withholding critical letters, and of bribing settlers to write glowing reports of life in the USA. IN the United States, land was seized by the Authorities in payment of debt, whilst Twigg was accused of misappropriation of funds. On 1st March 1850 the Advertiser announced the demise of the Society.
This wasn’t quite the end of Evans and Emigration. On 11th January 1851 a new paper the Potters Press and Miners Advocate had appeared with Evans as editor. The paper contained an advertisement under the heading “Evans Emigration Office, 104 Dale Street, Liverpool” which advertised passages to all parts of the world at reasonable cost. As Burchill and Ross point out, “An indication of the final outcome of the rivalry was the involvement of the miners in the 1851 newspapers. Chartism was discussed in this paper with some respect and approval – something which never happened in the Examiner.” (p97)
Evans advocacy of Emigration took the potters and miners of North Staffordshire in totally the wrong direction, after the defeats of 1837 and 1842. Instead of starting to rebuild the union organisation, the union’s resources were drained into Emigration. Instead of learning the lessons of defeat, in order to secure victory in the next battle, Evans advocacy of Emigration channelled the Potters into avoiding struggle; it led them away from drawing political conclusions and into looking for an easy way out. As Burchill and Ross put it “…it must be concluded that Evans’ leadership was a disaster and contributed to the ultimately insular and isolated posture of the pottery workers in the second half of the 19th Century."
See Also: 1905 Reform and Revolution
Friday, 6 June 2008
Thursday, 5 June 2008
Pits, Pongs and Politics
The story starts back in 1981. I’d been involved in politics for about 7 years starting as a shop steward when I was about 19, and quickly getting involved in the local Trades Council, and the Labour Party. Most of my activity centred around Trade Union work. Even though I was involved in Chile Solidairity, and the setting up of a local Anti-fascist organisation, this too basically centred round Trade Union work because virtually all the comrades involved came to it from a Trade Union background, mostly the Trades Council, because the Labour Party was so moribund.
I remember going to my first Labour Party meeting. My wife and I had both applied to join just after we got married in 1974. It was a year later when we actually got invited to a meeting, and then only because my mother had harangued one of the local Councillors that week at the village Community Centre, as the Councillor supervised that week’s bingo. We turned up to the meeting at the Labour HQ. The flat we were living in, at the time, was pretty damp and mould ridden, but the Labour HQ was even worse; at least the walls of the flat didn’t look like they were about to fall down. Inside the massed ranks of the advanced section of the local Labour Movement were assembled. They comprised two brothers who, at the time, seemed old enough to have been founding members of the Labour Party, but as one, at least, of them is still alive, obviously must have seemed older to me as a 21 year old than they actually were. They had inherited the local cinema, so weren’t short of a bob or two. Both were City Councillors, and one was also a County Councillor. In addition to them was a younger man who was an USDAW full timer who was also a City Councillor. Another middle-aged man who I knew, from my Trade Union activity, as being a member of the local Pottery Union National Executive, having represented my union, ASTMS, in spheres of influence negotiations with them. He was also a City Councillor though for a neighbouring ward. The only other people at the meeting were the wives of the aforementioned, and the woman Councillor my mother had harangued.
The meeting began, and as it was just before local elections (literally about a week before) they decided that perhaps they should put out a leaflet or two. That decided, within about ten or fifteen minutes, they got on to the more important issue of how much money had been raised at bingo. The date of the next meeting was set to be held in six months. That was typical of the state of the Labour Party throughout North Staffordshire at the time.
When a few months later, having recruited half a dozen young people from my workplace, who I discussed Trade Union issues with every lunchtime, to form an LPYS branch, I was looked on with deep suspicion. When we met with the MP, who was also the CLP Secretary, he more or less accused all of us of being Trotskyist infiltrators – the fact that, in my case, this was true, I still felt was somewhat besides the point. In the end, we were turned down on the basis that the last time they encouraged young people to join a table tennis table had been broken! The MP, though, did know something about Trotskyists. He had been the Secretary of the local Communist Party before joining the LP, after Hungary in 1956. He not only brought some of the other CP’ers with him, but all the old Stalinist organisational practices.
You can understand why I gave most of my attention to Trade Union activity, and, even when I went to University, in 1977, I kept my old union membership, and continued to be a delegate to the Trades Council.
Anyway back to the future, or in this case 1981. A re-organisation of boundaries had brought a couple of new militants into the local LP, one an AUEW TASS Branch Secretary and his wife an ASTMS shop steward. Shortly afterwards, another trade union activist from what was then the POEU also joined with his wife, who I had known from school. But, no matter how many other individuals we managed to recruit, whenever it came to a vote, the old guard always seemed to produce just enough people to come and vote us down – mostly they seemed to be pensioners they’d signed up at the bingo the previous Friday.
Anyway, one night my mate from the POEU came round with a copy of a document he’d read from the last meeting. It was a copy of a Planning Application to tip hazardous waste in a marl hole (a marl hole is a big clay pit) that was right behind the houses on the estate where I lived. At first, I didn’t know how to respond. I wasn’t geared up for community politics, all my activity was based on what I thought at the time was “real” politics. But, at his prompting, I typed up a petition and we churned out some information and copies of the petition on the duplicator which was essential equipment for revolutionaries at the time, and which sat in my back bedroom surrounded by pictures of Trotsky, and assorted papers and journals.
To my surprise the response was amazing. My neighbours had said, “Oh you won’t get anybody to do anything.” And I thought they were probably right. But before long the petition was full, and people were asking us what we were going to do next. Like any good revolutionary we decided the first thing was – to call a meeting.
My mate had rang one of our local Councillors, the brother who was the County Councillor, and told him what we were doing. That was when the shit began to hit the fan. We were told we couldn’t do this because we were going against a decision of the Labour controlled County Council to permit this planning application. My mate, even though the campaign had been his idea was told he was being led astray by me. I know because I listened in to the conversation on his phone extension.
I think it was the next day that the Chairman of the County Council’s Waste Disposal Committee paid me a visit. I’d not long got home from work, and my wife was about 8 months pregnant. He came in and began by shouting and bawling threatening to have me expelled from the LP, and threatening to sue me for defamation, which was not particularly what my wife wanted to hear in her condition.
We found out that they were going to try to undercut us by calling a meeting of their own, and bringing in their full-time officers to calm everyone’s fears. But by this time, I had spoken to Les Hearn, who was writing the science column for Socialist Organiser, and Les had given me details about the chemicals proposed to be tipped, and pointed me in the direction of some relevant articles in the New Scientist.
I went back to University and prepared our arguments. Meanwhile my mate had obtained the phone numbers of various news organisations, and begun contacting TV stations.
When the public meeting took place, around 400 people overflowed the school hall. The council officers couldn’t answer the scientific data we put forward. The Councillors sat quietly. Despite all the opposition the County Council refused to reverse their decision, and the go ahead was given for the private company to begin tipping its toxic chemicals.
Shortly, after we called another meeting of our own, and the same large turnout came along. The meeting elected a steering group, and people divided up – some doing publicity, others taking it in turns to stand outside the gates of the tip checking the contents of the lorries going in – a concession we had won from the Council.
This went on for a few months. Linda Berry came up from Central News and interviewed us, and an amazing level of support was maintained, when it would have been easy for people to have been demoralised once the tipping began. I think the reason it didn’t was because we had a strategy, and ensured that the campaign was all about the people involved, not about those of us leading it. In fact we went out of our way to get other people to take on responsibility, and because we had a strategy – basically we looked for every breach of the planning permission, and reported it to the Planning Committee, and kept up a political campaign for the decision to be reversed – everyone had something to do. We also didn’t burden people with meetings, but let each work group organise itself, and produced a regular newsletter. We also made our own cine film, which looked at what had happened with other similar tips, and the problems that had been caused with leachate.
But the campaign had some far wider effects. A couple of miles away a plastics factory exploded again near to houses. We were asked to go and speak, to relate our experience and activity. Faced with the size of support we had, no longer were we being threatened with expulsion from the LP, but the local Councillors were claiming they had been in support all along. Of course, the local people knew differently. Around 25 of them joined the branch Labour Party, and that year the Left swept the board of all the branch positions. The next year we began replacing the Councillors. Instead of the Branch meeting being around 8 people as it was when I first joined, every month we were having branch meetings of 50 people, and over 100 at the AGM. But, rather like the story about for the want of a nail a shoe was lost etc., the same thing began to happen.
Within the CLP there had been one branch that was not controlled by the old right. Now there were two, and the effects began to snowball. Within a couple of years, we threw out the MP.
But before that let me finish off the story about the tip. One day during the Summer I’d been out for the day. When I got back my mate came round, and told me the BBC and Central News were on their way. Their had been a big explosion at the tip. Apparently, the bulldozer had crushed some large drums, the chemicals inside had reacted with other chemicals in the tip, and it had gone up. Anne Diamond arrived and we got a prominent spot on the Central and BBC News. Within a week the County Council had decided to buy the tip, and fill it with building rubble, though there were still some who tried to claim that somehow I had caused the explosion!!!
Over the next few months, the campaign over the tip became a template for a lot of our activity. People in an area of old terraced houses were threatened with demolition, and next to no compensation. We got them to organise themselves into a Residents Association, which pressured the local council. They brought in Prince Charles’ architect, who drew up alternative plans, which have saved most of the houses, created living space, and green areas etc. Based on that the local LP made it a policy to set up Residents and Tenants Associations throughout the ward, giving whatever assistance we could, showing them how to produce their own newsletters etc.
Often the people involved in these activities were not class conscious workers – far from it. I remember on one occasion having to take my mate to one side. A young couple from the tip campaign were thinking of joining the LP. We were sitting in the pub talking to them, and they came out with a load of racist crap. My mate thought I would react strongly, but, in fact, nothing they said was any different than you would hear on many shop floors amongst your own union members. I had to explain to my mate that its necessary to make distinctions between this kind of racism, which you have to deal with by educating those coming out with it, and the kind of hardened racism of what was then the NF. It put me in an awkward spot. In the end I simply explained to the young couple that we could not accept racist sentiments in the LP, both because they are wrong and divisive, but also because we wanted to encourage people of all races to join.
What these kinds of activities do allow, however, is to challenge these kinds of ideas within an environment, where you are beginning from a position of agreement on something. If you can win people’s confidence and respect for doing something which immediately affects their lives you are a good way to being able to get them, at least, to listen to what you have to say, and that is the first step in educating people, and building class consciousness. A very slow process, but one I don’t believe can be short circuited if you really want to transform society.
Just as a couple of postscripts. The next year the Manifesto for the City Council elections contained a commitment to oppose all toxic waste tipping within the City, and the final one I am especially proud of. One of the young people who joined the campaign was a geologist. He worked for an oil company, and his expertise was invaluable. At first, he didn’t really want to get involved, because he was worried how it might affect his job. A few months ago I was in the car listening to Radio 4. I’d missed the first part of the interview, but learned that it was about someone who had gone to live in Colombia and had become involved in their local community to the extent that the people in the village had asked them to stand for local mayor. As I listened to the interview a few more things came into place. The person involved had been working in the North Sea, and offered a job, by their oil company. It turned out that this man who had become involved in community politics in Colombia, and had been the local mayor for the last few years, was the same geologist who had reluctantly joined our campaign over the tip.
Tuesday, 3 June 2008
A Reply To Damon Hoppe
This is a reply to Damon Hoppe in respect of a discussion within the North Staffs Campaign Against Racism and Fascism that arose after recent reporting in the Guardian of the rise of the BNP in Stoke, and the decline of the Labour Party.
“I mean greens a capitalist party???!!! Thats a bit like calling the Labour Party a workers Party...Oh they just did.”
“1) The Greens are definetly not capitalist it is an ecological movement and therefore by its very definition anti-capitalist. Its philosopohy is grounded in ethics and ecology. As being 'Green' involves a change in world view it has not yet gained popular appeal, but greens are optomistic about a paradigm shift. Though there is an air of desperate panic amognst some members - myself a case in point- as they know it may soon be to late!”
This makes no sense. The Greens ARE a capitalist party. There is nothing in the programme which challenges Capitalism per se. On the contrary being Green is very profitable for Capitalism. Just look at all the stratified marketing that capitalist firms do selling things at higher prices, be they environmentally friendly this or that, or organic water or such like. Or look at the big business now being developed around alternative energy. Nor does the Greens social base come from the working class.
The Labour party, however, whilst it has always been a Party which remains ideologically tied to capitalism is at the same time organically tied to the working class, both through those that vote for it, through its individual membership, and through the affiliation of the Trade Unions. That is what makes it a Workers Party, and what provides the basis for being able to change society in a way the Liberals or Greens never can.
“2) Socialist Party. Extreme left? Dont be silly. Most of its policies were the bread and butter of post-war Labour and indeed Conservative governments. Just good old 'Social Democracy'...A bit hung up on old rhetoric maybe....”
I didn’t actually specify the Socialist Party as “extreme left”, I was actually thinking of other actually more left groups. But the same logic applies to the Socialist Party. The fact remains they do not have the same resonance within the working class that the LP has – or unfortunately even the BNP amongst workers – so their attempt to substitute their own commitment for the actual support of workers is in practice divisive, and counter-productive.
“3) Liberalism attempts to accomedate Capitalism by restraining it and harnessing its forces for good.(Adam Smith, etc) Gave us the welfare state (Bevridge report) etc. Many liberal ideas have been dismissed as socialist which gives you an idea of how right-wing the government is. Not exactly a 'workers party' (what is a worker anyway?) but certinely a friend of the people. Alas the use of the term neo-liberal which is in fact anti-liberal may leave many confused as to what liberalism is.”
Actually, if you read some political history and philosophy you will find that Liberalism is based on the policy of Laissez-Faire, and the unrestricted Free market. It is what is alluded to by anarcho-capitalists such as Mises and Hayek. Neo-Liberalism derives its name from the fact that it recognises under monopoly capitalism the fundamental role of the capitalists state, a role denied by the original Liberals, and by people like Mises. It was under the Liberals that the worst excesses of the Industrial revolution occurred. As for policies such as the Welfare State and so on these are capitalist policies, in part brought in because of the desperate condition of workers who had not even been fit enough to fight in World war I and II, and because short of Labour in the post-war period, capitalism needed a healthy workforce. Along with the rest of these state capitalist welfarist measures they buy off sections of the working class, pacify it, and create a dependency culture rather than a spirit of working class self-reliance, and collectivism.
“The liberal democrats are probably the most sympathetic to workers of the mainstream parties.”
When it suits them to win votes. IN practice in Councils around the country they have been far more harsh in their treatment of workers than have most Labour councils.
“The suggestion that 'iron fist of capitalism' BNP is a Workers Party is really quiet insulting.”
No its not, it’s a statement of fact, and socialists like myself believe in starting by telling the truth. Only then can you begin to deal with it. The BNP like all fascist parties exists ultimately to come to the rescue of capitalism, but in order to do that it has to win power, and it has to gain support on the streets. The majority of people are workers, and they can only do that by appealing to workers and the middle class. Usually, they appeal to the most backward, least organised workers, and you can see that happening now. But, in Italy and Germany for instance the more dominant the fascists became the more they were able to win over wider groups of workers, including some that switched straight across from the Communist Party.
If you don’t recognise that, and from that realise why it is necessary not just to oppose the BNP, but why it is also necessary to provide workers with a credible alternative then you are doomed to failure.
“As for infiltrating the Labour Party to transform it into a 'workers party' , apart from being dishonest, makes about as much sense as infiltraring the BNP with the same intention. Most infiltraters go native insteed.”
As for infilreating the Labour party, who said anything about infiltrating it. I am a Marxist, and believe as Marx did that the priority is to build the Workers Party. In the Communist manifesto Marx and Engels wrote,
“The Communists do not set up their own parties separate from the Workers parties.”
There is no question of infiltrating anything, or of being dishonest. It is the responsibility of socialists to build the Labour party as the Workers party. The way to do that is by beginning at the grass roots turning each LP Branch out into its community to deal with the problems of people through collective action. We should where possible attempt to build co-operative forms as alternatives to the solutions offered by Capitalism and by the capitalist state at national and local level, thereby building the strength and conscioussnes, and social and economic power of the working class.
Ultimately, that is a far more practical and realistic solution than relying on bourgeois politicians whether they be from the Labour Party, the Greens or the Liberals.
“We have to face poltical reality.”
Yet you advocate voting for the Greens!
“There are decent people in both of these parties who probably detest the leadership of them and there 'new right' ideas as much as the general population who we can all be working with.”
And the best way of doing that is by being a member of the Labour Party.
“But anyone claiming that 'New Labour' is a friend of ordinary working people is frankly only going to upset lots of people and make them very very angry indeed “
I agree, but who is saying that New labour is a friend of ordinary working people. I’m certainly not.
“Now please can we get back to stopping the BNP and deal with resistsing or supportiung 'New Labour' some where else!”
Yes, but the way to stop the BNP is by providing a credible political alternative, and that can only be built through the labour party alongside all those “decent people” in there you refered to.
See Also:
The LP is Dead, Long Live the LP
Vote labour in the mayoral Election
Marxists and the Workers Party
“I mean greens a capitalist party???!!! Thats a bit like calling the Labour Party a workers Party...Oh they just did.”
“1) The Greens are definetly not capitalist it is an ecological movement and therefore by its very definition anti-capitalist. Its philosopohy is grounded in ethics and ecology. As being 'Green' involves a change in world view it has not yet gained popular appeal, but greens are optomistic about a paradigm shift. Though there is an air of desperate panic amognst some members - myself a case in point- as they know it may soon be to late!”
This makes no sense. The Greens ARE a capitalist party. There is nothing in the programme which challenges Capitalism per se. On the contrary being Green is very profitable for Capitalism. Just look at all the stratified marketing that capitalist firms do selling things at higher prices, be they environmentally friendly this or that, or organic water or such like. Or look at the big business now being developed around alternative energy. Nor does the Greens social base come from the working class.
The Labour party, however, whilst it has always been a Party which remains ideologically tied to capitalism is at the same time organically tied to the working class, both through those that vote for it, through its individual membership, and through the affiliation of the Trade Unions. That is what makes it a Workers Party, and what provides the basis for being able to change society in a way the Liberals or Greens never can.
“2) Socialist Party. Extreme left? Dont be silly. Most of its policies were the bread and butter of post-war Labour and indeed Conservative governments. Just good old 'Social Democracy'...A bit hung up on old rhetoric maybe....”
I didn’t actually specify the Socialist Party as “extreme left”, I was actually thinking of other actually more left groups. But the same logic applies to the Socialist Party. The fact remains they do not have the same resonance within the working class that the LP has – or unfortunately even the BNP amongst workers – so their attempt to substitute their own commitment for the actual support of workers is in practice divisive, and counter-productive.
“3) Liberalism attempts to accomedate Capitalism by restraining it and harnessing its forces for good.(Adam Smith, etc) Gave us the welfare state (Bevridge report) etc. Many liberal ideas have been dismissed as socialist which gives you an idea of how right-wing the government is. Not exactly a 'workers party' (what is a worker anyway?) but certinely a friend of the people. Alas the use of the term neo-liberal which is in fact anti-liberal may leave many confused as to what liberalism is.”
Actually, if you read some political history and philosophy you will find that Liberalism is based on the policy of Laissez-Faire, and the unrestricted Free market. It is what is alluded to by anarcho-capitalists such as Mises and Hayek. Neo-Liberalism derives its name from the fact that it recognises under monopoly capitalism the fundamental role of the capitalists state, a role denied by the original Liberals, and by people like Mises. It was under the Liberals that the worst excesses of the Industrial revolution occurred. As for policies such as the Welfare State and so on these are capitalist policies, in part brought in because of the desperate condition of workers who had not even been fit enough to fight in World war I and II, and because short of Labour in the post-war period, capitalism needed a healthy workforce. Along with the rest of these state capitalist welfarist measures they buy off sections of the working class, pacify it, and create a dependency culture rather than a spirit of working class self-reliance, and collectivism.
“The liberal democrats are probably the most sympathetic to workers of the mainstream parties.”
When it suits them to win votes. IN practice in Councils around the country they have been far more harsh in their treatment of workers than have most Labour councils.
“The suggestion that 'iron fist of capitalism' BNP is a Workers Party is really quiet insulting.”
No its not, it’s a statement of fact, and socialists like myself believe in starting by telling the truth. Only then can you begin to deal with it. The BNP like all fascist parties exists ultimately to come to the rescue of capitalism, but in order to do that it has to win power, and it has to gain support on the streets. The majority of people are workers, and they can only do that by appealing to workers and the middle class. Usually, they appeal to the most backward, least organised workers, and you can see that happening now. But, in Italy and Germany for instance the more dominant the fascists became the more they were able to win over wider groups of workers, including some that switched straight across from the Communist Party.
If you don’t recognise that, and from that realise why it is necessary not just to oppose the BNP, but why it is also necessary to provide workers with a credible alternative then you are doomed to failure.
“As for infiltrating the Labour Party to transform it into a 'workers party' , apart from being dishonest, makes about as much sense as infiltraring the BNP with the same intention. Most infiltraters go native insteed.”
As for infilreating the Labour party, who said anything about infiltrating it. I am a Marxist, and believe as Marx did that the priority is to build the Workers Party. In the Communist manifesto Marx and Engels wrote,
“The Communists do not set up their own parties separate from the Workers parties.”
There is no question of infiltrating anything, or of being dishonest. It is the responsibility of socialists to build the Labour party as the Workers party. The way to do that is by beginning at the grass roots turning each LP Branch out into its community to deal with the problems of people through collective action. We should where possible attempt to build co-operative forms as alternatives to the solutions offered by Capitalism and by the capitalist state at national and local level, thereby building the strength and conscioussnes, and social and economic power of the working class.
Ultimately, that is a far more practical and realistic solution than relying on bourgeois politicians whether they be from the Labour Party, the Greens or the Liberals.
“We have to face poltical reality.”
Yet you advocate voting for the Greens!
“There are decent people in both of these parties who probably detest the leadership of them and there 'new right' ideas as much as the general population who we can all be working with.”
And the best way of doing that is by being a member of the Labour Party.
“But anyone claiming that 'New Labour' is a friend of ordinary working people is frankly only going to upset lots of people and make them very very angry indeed “
I agree, but who is saying that New labour is a friend of ordinary working people. I’m certainly not.
“Now please can we get back to stopping the BNP and deal with resistsing or supportiung 'New Labour' some where else!”
Yes, but the way to stop the BNP is by providing a credible political alternative, and that can only be built through the labour party alongside all those “decent people” in there you refered to.
See Also:
The LP is Dead, Long Live the LP
Vote labour in the mayoral Election
Marxists and the Workers Party
Kondratiev's Long Waves
Nikolai Kondratieff was a Russian statistician and economist (1892-1938). He developed a theory that capitalism moves in long waves of rise and fall. These long waves are themselves related to the other cycles operating within the capitalist economy such as the business cycle, as well as other cycles affecting, for example, commodity prices, interest rates, the gold price and gold production etc. all of which are interrelated. A very good background on the life of Kondratieff, and his work including the debates he had with Trotsky, Preobrazhensky, Schumpeter and others in the 1920’s in respect of his theory is given here.
Kondratieff by Louca
I intend here to look at Kondratieff’s thesis in relation to the criticism of it by economists of different schools, and the work of others such as Schumpeter who used it as part of their analysis of the Business Cycle, of those that try to explain the Long Wave through innovation or other exogenous factors such as the opening up of new markets or territories, and finally to look at whether a Kondratieff cycle can be identified in current trends, and if so what consequences flow from that. A link to Kondratieff’s essay is given in the above link, but English versions are also available in the Review of Economic Statistics 1935, in a collection of his works published in 1998 by Pickering and Chatto, and in a slightly abridged version in the July 1978 Lloyds Bank Review (Issue 129). Kondratieff’s theory was first published in a volume entitled “Problems of Economic Fluctuations” by the Institute for Business Cycle Research which was actually established by economists of the Austrian School.. At the time of its publication this association was not so strange as at that time there was considerable overlap between economists of the Austrian School of Bohm-Bawerk and Marxist economists. Although, Bohm-Bawerk was in his time one of Marx’s harshest critics, his criticism of Marx’s theory, as Hilferding demonstrated, was based not just on a misunderstanding of Marx’s theory, but on a criticism of that aspect of Marx’s work set out in Vol. I of Capital. Most of Bohm-Bawerk’s criticisms were in fact dealt with by Marx himself in Vol. III of Capital. Moreover, despite that criticism Bohm-Bawerk was moved to comment,
“Marx has become the apostle of a wide circle of readers, including many who are not as a rule given to the reading of difficult books.” (Karl Marx and the Close of his System”)
And it was one of the members of Bohm-Bawerk’s private seminar, von Bortkiewicz who provided the first mathematical solution to Marx’s Transformation Problem outlined in Vol. III of Capital. These seminars were attended by both Austrian and prominent Marxist economists such as Rudolph Hiferding. Hilferding was to provide a thorough refutation of Bohm-Bawerk’s critique of Marx – “Karl Marx and the Close of His System”, which also takes apart much of the basis of Austrian and Neo-classical economic theory.
Nor were the founders of the Austrian School such wholehearted supporters of the free market as their current disciples. Bohm-Bawerk, for example, argued that he feared that unbridled free competition would lead to "anarchism in production and consumption." Nor were the ideas of the Austrians solely the basis for a defence of capitalism. Engels in his preface to Capital Vol III writes,
“One need not strain his thinking powers to see that this explanation for the profits of capital (the idea that profits are merely an additional sum on top of their value put forward by Prof. Lexis – AB), as advanced by “vulgar economy”, amounts in practice to the same thing as the Marxian theory of surplus-value: that the workers are in just the same ‘unfavourable condiiton’ according to lexis as according to Marx; that they are just as much the victims of swindle because every non-worker can sell commodities above price, while the worker cannot do so; and that it is just as easy to build up an at least equally plausible vulgar socialism on the basis of this theory, as that built in England on the foundation of Jevons’s and Menger’s theory of use-value and marginal utility. I even suspect that, if Mr. George Bernard Shaw had been familiar with this theory of profit, he would have likely fallen to with both hands, discarding Jevons and Karl Menger, to build anew the Fabian church of the future upon this rock.” (Capital Vol III p10.)
This reference to Shaw relates to the fact that the Fabian socialists, of whom Shaw was a leading member, based their socialist principles on the Neo-classical/Austrian theory of marginal utility. The theory has as one of its requirements the idea of diminishing marginal utility – in other words the more of something that I have the less utility I will derive from each additional unit. On this basis the Fabians argued, quite rightly, that in this case the more wealth someone has, or the more income they have then the less utility they will derive from incremental units. If therefore, you want to increase the welfare of society this can be achieved quite simply. By taxing the wealth of the rich they will suffer only a small loss of utility because they have a lot of wealth to begin with, transferring this wealth to the poor will, however, cause them to experience a large increase in utility because they have little wealth, and any marginal increase will therefore be that much greater. The same is true of an income tax, which reduces the utility of high pay only slightly. Such an approach fitted completely with a Benthamite, utilitarian philosophy, which argued that the basis of morals was that which maximised the greatest good for the greatest number. But as Engels remarks this kind of vulgar socialism based on redistribution had nothing in common with scientific Marxist socialism.
Another economist who participated in these gatherings was Joseph Schumpeter who used much of Marx’s work in developing his own analysis, and who also took up Kondratieff’s Long Wave theory as part of his own analysis of capitalist cycles. Schumpeter said of Marx, in his monumental ‘History of Economic Analysis’,
“the totality of his vision, as a totality, asserts its right in every detail and is precisely the source of intellectual fascination experienced by everyone, friend as well as foe, who makes a study of him’; and elsewhere “at the time when his first volume appeared there was nobody in Germany who could have measured himself against him either in vigour of thought or in theoretical knowledge.”
Schumpeter, himself, was to be a member of the first Austrian Social Democratic government. He occupied the post of Finance Minister, and it was upon his shoulders that blame for the later hyperinflation was to be placed. Mises was invited to also join it, but he declined. Indeed, Mises, was to go on to support (though not actually join) the Austrian clerical-fascists who opened the door to Hitler. Most of the Austrian School economists had been high-ranking functionaries in the regime of the absolutist Hapsburg dynasty, and so were extremely hostile to the introduction of democracy. But by-passed by history they largely sank into obscurity contenting themselves to private life and carping criticism based on a vision of some past golden age of Capitalism and Liberty that had never existed.
“With the exception of the unlucky Schumpeter, the rival Austrian School economists, most of whom had played important roles in the pre-1918 Hapsburg public life, withdrew into the harbor of private businesses and chambers of commerce and observed the procession of events. They were particularly incensed at the Social Democrats plans for nationalization of certain industries and social insurance schemes. It was during this time that the "Socialist Calculation" Debate with Ludwig von Mises and Friedrich von Hayek erupted. The Austro-Marxian planners had, on their side, the exceptional abilities of several sympathetic Paretian economists -- notably, Oskar Lange and Abba Lerner. Other economists closer to the Marxian tradition, notably Fred M. Taylor, Emil Lederer, Jacob Marschak and Henry Dickinson, participated in this debate on the Marxian side. “Source:
Austrians
“In spite of the deep hostilities between Social Democrats and Conservatives in post-First World War Austria, their basic ideas on the business cycle and on macroeconomic policy were not substantially different. Both considered inflation as potentially dangerous, and neither advocated demand expansion as an approach to the very high level of unemployment. The explanation lies in part in the intellectual tradition of the Austrian School of economics in the years before 1914, when such leading socialist figures as Otto Bauer, Karl Renner, Rudolf Hilferding, and Otto Neurath were active participants in the Bohm-Bawerk Seminar, as was Joseph Schumpeter (Marz, 1986) and Ludwig von Mises. The traumatic experience of the inflations of 1919-22--and most particularly the hyperinflation of October 1921 to May 1922--certainly contributed to a reluctance to rely on monetary expansion and has influenced Austrian (and German) social democratic policy to this day. We return to the consequences of the post-First World War inflations later in this paper.
To understand Hayek's place as a fourth generation star of the Austrian School of economics, it is important to appreciate that neither its founder Carl Menger, nor Menger's two (rival) successors--Eugen von Bohm-Bawerk (1851-1914) and Friedrich von Wieser (1851-1926) were radical antisocialists. Bohm-Bawerk was a true liberal and his Privatseminar in the decade before 1914 was enriched by important controversy with Marxist thought.(*) The leading Marxist participants already referred to were unquestionably influenced by the methodology and approaches of that school in various ways which would take us too far afield were we to treat them in this essay. Austro-Marxist approaches to macroeconomic policies were conditioned by the intellectual formation of those of its leading lights who were trained in economics in the best years of the Austrian school before 1914.
Wieser has been described as the central figure of the Austrian school: central in time, central in the ideas he propounded, and central in his influence insofar as he was the holder of the central chair during nearly two decisive decades. His socioeconomic credo was summarized as follows: "Building on a strong Catholic and conservative foundation he was an interventionist liberal ... with quite an admixture of racist sentiment who still found it possible to admire Marx. Above all, he was an admirer of the state as guided by the supreme wisdom of his own bureaucratic class." (Streissler, 1986) The anti-interventionist, antisocialist current in the Austrian School, which so appealed to Lionel Robbins in the 1920s, was the singular contribution of Ludwig von Mises (1881-1973), and was ultimately carried into the Anglo-American world by his favorite protege, Hayek. Here it must be noted that Mises' extreme anti-interventionism was not shared by all the members of his seminar.”
Source Polanyi:
Polyani
The above link gives an excellent background to Austrian economics and its degeneration into the current apologist sect that should more correctly be described as Misean than Austrian.
An example, of how far, the Austrian economic theory has degenerated from its originators such as Bohm-Bawerk into a purely ideological apologia for capitalism is given in this article critiquing Kondratieff by the rather wretched Murray N. Rothbard (this is a man who believes that there should be a free market in babies!!!) who is one of the leading spokesman for the Austrian School and US Libertarianism.
Rothbard on Kondratieff
Rothbard as I said above is a pretty wretched economist who seems incapable of even reading other economists work honestly let alone presenting a honest criticism of it. In one work I have reviewed elsewhere he claimed that Marx argued that inflation was caused by wage increases, despite the fact that Marx specifically in a number of places including some pamphlets, produced specifically for the purpose, argues exactly the opposite case. In the above work Rothbard says,
“What was wrong about the 1780s, for example? No particular depression there.”
No that is true, but then as Kondratieff says in his work,
“The rise lasted from the end of the 1780’s or beginning of the 1790’s until 1810-17”there is no real contradiction there. But what Rothbard is doing here is he has taken 54 years as being the period of the long wave, and then mechanically looked at individual years, to make his case. However, Kondratieff never said that the period of the long wave was 54 years. On the contrary, he said the period he had analysed showed the period ranging between 40 and 60 years.
Rothbard goes on,
“Fifty-four years from 1789 brings us to the "expected" trough year of 1843, a year in which everything was smooth sailing.”
But according to Kondratieff,
“The decline lasted from 1801-17 until 1844-51”
slap in the middle of which was the crisis of 1847, and was indeed part of a long period in which there had been repeated crises. It was a time when Britain, as the workshop of the world, was repeatedly flooding the world markets to an extent that it took on some occasions more than three years for the world market to absorb the glut of English textile exports, where thousands of workers died from starvation in the textile manufacturing centres, where troops had to be stationed in the main cities to quell the violence that resulted from it, and from the rising tide of working class opposition represented by the Chartists.
Rothbard then continues,
“The third alleged Kondratieff horror point, or trough year, was 1896.”
But Kondratieff writes,
“The rise lasted from 1890-96 until 1914-20.”
In other words yet again Rothbard picks on a particular year whereas Kondratieff says quite openly that such precision is not possible any more than it is possible to be specific about say the business cycle, which at the time varied between 7 and 11 years, and in addition infers years as cycle troughs which do not even tally with the troughs set out by Kondratieff. In short, it is the typical falsification of views used to make a point by a charlatan.
Rothbard adds to this falsification when he says,
“Really, on one and only one ground: each of these years was a trough point for the index of wholesale prices. All the other alleged confirmations of the Kondratieff troughs were simply of prices, or else of monetary phenomena reflected in prices.”
But had he taken the trouble to actually read Kondratieff, or was minded to tell the truth, then he could not make this comment. Kondratieff actually makes the point himself that his data would not mean much unless he could show cycles in physical production. So alongside his series on wholesale prices and bond prices (British Consols, and French Rentes) he also gives series detailing the production and consumption of coal, pig iron, and lead. In another table for France, England, United States, Germany and the Whole World he also gives data for Oat acreage in France, and Cotton acreage in the US as well as other data on Foreign Trade, wages, Savings Bank Deposits etc. In order to ensure that the data is not subject to variations due to fluctuations in prices, he also reduces all prices to a gold price.
Nor is Rothbard’s argument that, even during the downward phases of Kondratieff’s long wave, production and living standards rose, convincing. It is quite possible that, in a constantly upward moving trend line, that phases of decline can be masked by the overall upward trend. Analysis for example of Stock Markets shows that during a secular Bull Market there will be downward movements, but the low point of these downward movements may still be higher than the previous low. In fact, Rothbard later acknowledges that Kondratieff’s actual analysis takes this secular trend on board and, using established statistical techniques, removes it from the data, alongside any effects from the 7-11 year business cycle, which are removed by using a 9 year moving average. But, Rothbard only refers to this in order to criticise Kondratieff for its use, implying that to take out the secular trend is a falsification of the data. Were Kondratieff arguing that no such secular trend exists, that the downward leg of the long wave takes prices and production back down to the same level as the trough of the previous down leg, then Rothbard’s objection would be valid, but Kondratieff makes no such claim, and what’s more it would be a ridiculous argument to make. The whole history of mankind, with or without capitalism, has been one of steadily rising productive capacity, not in some linear fashion, but nevertheless on a secular upward curve. Kondratieff spells it out,
“Even granting the existence of long waves, one is, of course, not justified in believing that economic dynamic consists only in fluctuations around a certain level. The course of economic activity represents beyond doubt a process of development, but this development obviously proceeds not only through intermediate waves but also through long ones."
In other words, just as say, in the Stock Market, a secular Bull Market is characterised by a larger number of rallies than sell-offs, and by higher highs, and higher lows, so an upswing in the long wave is characterised by a greater number of up years than down years, and vice versa. During a down leg of the long wave some down periods such as during the Depression might be very down indeed, but this does not mean that taken as a whole even the down leg of the cycle will not show overall growth, for the very reason Kondratieff sets out, that the long waves themselves are set within the context of a secular upward trend of human productive capacity. In order to see the wood from the trees it is necessary to remove that background trend.
Kondratieff not only removes this secular trend from the output figures, but from the price data too. So, Rothbard demonstrates again, clearly that either he hadn’t actually read Kondratieff or that he really doesn’t understanding economics or statistics very well when he says,
“And second, the cause of the booms and of the subsequent contractions is all too clear. Namely, monetary inflation brought about by war finance. The so-called "Kondratieff" is merely a description of war and peace.”
Despite the fact that Kondratieff makes clear that he has both taken account of secular price movements, and has taken account of monetary inflation by reducing prices to a gold price!!!!
Rothbard persists with this nonsense,
“The severe 1973–75 recession filled the hearts of the Kondratieffites with joy: the peak had arrived on schedule! But inflation still continued. The next big recession came swiftly, but still there seemed to be always recovery, and inflation continued throughout.”
This is all the more ridiculous coming from an Austrian whose theory defines inflation not as an actual rise in prices, but a rise in money supply!!! If during that period the consequences of the huge monetary expansion were removed as Kondratieff did then this inflation would disappear too.
Rothbard’s article was written in 1984, he went on,
“Well, here we are, ten years after the "primary peak," so surely the time for the Big Bang is Now. And yet, instead of that, the economy seems to be bubbling along, recovering nicely. Inflation is still continuing, despite all the propaganda about the problem being over.
Time is inevitably running out on the Kondratieffites. For there will be no Big Bang, no repeat of 1929.”
OOOooops. What do you know, almost right on cue, three years after Rothbard predicted everything was hunky dory and there would be no repeat of 1929 along came the crash of 1987, which was even bigger than 1929, and 58 years after it, right in the comfort zone for Kondratieff’s theory.
He went on,
“The point is that there is no permanent depression, and there is not, and will not be, any deflation. The idea that we are right now in the midst of a Kondratieff depression, but that the deflation is being masked by inflationary bank credit, cannot be the way out.”
Of course, the Austrians sing a rather different tune now. Now the Austrians proclaim doom and gloom in abundance, depression and deflation that is only being hidden by monetary excess.
In fact, in recent years, Kondratieff has in fact found favour amongst some of the Austrian brethren. The last English version of his work published in 1998 by Pickering and Chatto, was promoted by the English Fleet Street Letter, a part of the Agora Publishing network, and edited by Lord Rees Mogg, which regularly quotes from and provides hyperlinks to the Mises Institute and other Misean websites. They also publish other newsletters and quote the work of financial analysts who use the Elliot Wave which is a relative of Kondratieff’s wave analysis, but then Agora’s strategy appears to be publish as many newsletters as you can each saying something different so that having covered all the angles you can at some point in the future claim you predicted such and such an event.
So why then was Rothbard at pains to make this attack on Kondratieff whose work was first published by an Austrian Institute, and whose work was certainly taken seriously by one of the foremost orthodox economists of the 20th century – Joseph Schumpeter. The answer is given in Rothbard’s answer to why business cycles occur.
“We have already seen a hint of the solution: that inflation and the inflationary boom are caused by bank credit expansion generated by governments. In fact, government's central banking system provides the key causal element for all business cycles, a cause exogenous to the market economy. Continuing government intervention sets in motion business cycles by generating inflationary booms. Because these booms distort the signals of the market place in interest rates and in relative prices they bring about grave distortions of production and prices, which must be corrected by recessions and depressions.
In short, government intervention cripples the market economy, and recession or depression is the painful but necessary adjustment by which the market reasserts itself, and liquidates the distortions committed by the government's inflationary boom.”
In short, it is a repetition of the idiotic Say’s Law – the idea that left to its own devices the market economy would not suffer any crises, and markets would always clear. But, of course, the problem with this idea is that the data does not support it. The first downturn in the trade cycle was in 1825, before credit was a major part of economic activity. Throughout the early part of the 19th century, when crises occurred at regular 5 yearly intervals, the Bank of England issued gold currency only in quantities required for circulation, and the use of gold, silver and copper ensured that any surplus currency was thrown out of circulation, yet serious crises occurred during this period.
See the following.
Gold as Money
Its true that capitalism did develop commercial credit to resolve some of its problems in speeding up circulation and trade, but this was certainly not exogenous to the system as Rothbard tries to portray, but was developed by capitalists themselves though Bills of Exchange and Discount houses. Its also true, as Marx demonstrates in Vol. III of Capital, that once this credit becomes established it develops its own dynamic, and in turn affects the business cycle, being one of the reasons why the cycle is extended to a 10 year cycle from a five year cycle, and that in allowing the business cycle to be extended it increases the ferocity of the downturn, but all of this is endogenous to the system not exogenous. Even during the 1920’s, monetary expansion in the US was actually lower than the increase in output, so that rather than being inflationary it was deflationary. But Rothbard cannot admit to these facts, which contradict his case, because that would be to admit that crises are endogenous to capitalism, and, unlike the original Austrians, today’s Miseans are mere apologists for capitalism. They cannot admit of it having any faults, and so must place the blame elsewhere, and if that blame can be put on government interference so much the better.
In this he is right,
“The cause of the boom-bust cycle is not some mystical periodic Force to which man must bend his will; the fault, dear Brutus, is not in our stars but in ourselves, that we are underlings.”
But not for the reason he intends. There is no reason why such cycles should control us. The only reason they do is because we allow our economic destinies to be determined by a mystical force – the market – rather than take control of our economic activity in the same way that we took control of agricultural production rather than believe in the benevolence of the invisible hand of God.
What then of the more substantive criticisms of Kondratieff. Trotsky and others argued that there were exogenous factors, which intervened that were the explanations of certain periods of heightened activity such as wars and revolutions. Kondratieff responds to this criticism by saying that what appear as exogenous forces are themselves the result of endogenous aspects of the cycle.
“Wars and revolutions also influence the course of economic development very strongly. But wars and revolutions do not come out of a clear sky, and they are not caused by arbitrary acts of individual personalities. They originate from real, especially economic circumstances. The assumption that wars and revolutions acting from the outside cause long waves evokes the question as to why they themselves follow each other with regularity and solely during the upswing of long waves. Much more probable is the assumption that wars originate in the acceleration of the pace and the increased tension of economic life, in the heightened economic struggle for markets and raw materials, and that social shocks happen most easily under the pressure of new economic forces.
“Wars and revolutions, therefore, can also be fitted into the rhythm of the long waves and do not prove to be the forces from which these movements originate, but rather to be one of their symptoms. But once they have occurred, they naturally exercise a potent influence on the pace and direction of economic dynamics.” (Kondratieff)
I think this might well be open to question. It is rather mechanical, and determinist. It is certainly true that the drive for imperialist war such as the First World War could largely be placed in the context of a drive to get hold of sources of raw materials, and to get control of markets, and that came at the end of a Kondratieff upswing. A similar case could be made for the Anglo-French Wars at the beginning of the 19th century, which also came at the end of a Kondratieff upswing. But the same could be said about the Second World War, which came during a Kondratieff downswing. Similarly, during the post-war Kondratieff upswing there were plenty of wars and revolutions too, but it is hard to place these within Kondratieff’s explanation. Most of them appear to come within Trotsky’s definition in terms of the revolutions, most of which occurred as part of a national liberation struggle. It is possible to argue that such struggles originated in a weakness of the former colonial power, but this seems to be stretching the explanation somewhat. Nor do the main wars occurring during the period fit the description either – Korea, Vietnam. Again these had more the character of purely politically driven events than a scrabble for markets and raw materials.
Its possible to see in some of these events, for example Suez, or even the CIA overthrow of Mossadegh in Iran, a neo-colonialist/imperialist drive for markets and raw materials – the most important being oil, and it may be argued that the emergence of the US even by the 1950’s as the main western superpower, and development of a kind of ultra-imperialism as described by Kautsky might explain the fact that such expansion was done almost exclusively under the tutelage of the US. It is also possible to see during this time the role of the US in opening up new territories in Asia, and Latin America as new markets, and sources of raw materials but without the kind of inter-imperialist scramble of previous cycles due to the dominant position of US imperialism. But Kondratieff also addresses the extent to which this is cause or effect.
“As regards the opening up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century. Likewise, the Argentine and Canada, Australia and New Zealand, were discovered long before he end of the nineteenth century, although they begin to be entwined in the world economy to a significant extent only with the coming of the 1890’s. It is perfectly clear historically that, in the capitalistic economic system, new regions are opened for commerce during those periods in which the desire of old countries for new markets and new sources of raw materials becomes more urgent than theretofore. It is equally apparent that the limits of this expansion of the world economy are determined by the degree of this urgency. If this be true, then the opening of new countries does not provoke the upswing of a long wave. On the contrary, a new upswing makes the exploitation of new countries, new markets, and new sources of raw materials necessary and possible, in that it accelerates the pace of capitalistic economic development.”
In trying to explain the basis of rather than challenge the existence of the long wave Schumpeter put forward the idea that its determination was the introduction of new techniques. In other words the long wave was nothing more than an innovation cycle. This idea is taken up in an interesting essay by George Ray in the January 1980 Lloyds Bank Review (Number 135) “Innovation in the Long Cycle”. As Ray comments,
“Innovation is indeed a cornerstone of Schumpeterian business cycle theory, according to which its economic impact is immense. Schumpeter’s thesis, in its most simplified form, stated that the upturn in the first Kondratiev cycle (1790-1813) was largely due to the dissemination of steam power, the second (1844-74) to the railway boom, and the third (1895-1914/6) to the joint effects of the motor car and electricity. These all fitted Kuznets’ requirement of an all-pervasive influence on all, or many sectors of the economy.”
Ray goes on to refer to the work of Mensch (G. Mensch “Das technologische Patt” Franfurt 1975 and also in “Stalemate in technology”, Ballinger, Cambridge, Mass. 1979) who in suggesting the need for a “new push of basic innovations” to lift the world out of its depressed state of the time also identified clusters of such basic innovations during the last 200 years, which correlated with Kondratieff’s cycle. These were in or around 1770, 1825, 1885, and 1935 with not much since – remember this was written in 1975. Ray compares these two sets of data and concludes,
“Long cycles do seem to appear, albeit with no great regularity and not simultaneously in both areas….The lags between Mensch’s innovation peaks and Kondrtiev’s are approximately 40 years (more precisely:44,49,41, and 32 years respectively).
Kondratiev’s three troughs followed the innovation-poor periods with an even more uniform lag of about 50 years. Given the difficulties of measurement, this apparent regularity provides food for thought since, if the high ‘technological content’ of each of the long wave theories – most explicitly Schumpeter’s – is considered, this surely must be the most important macro-economic aspect of innovation.”
Kondratieff looks at this Schumpeterian approach. He comments.
“Changes in technique have without doubt a very potent influence on the course of capitalistic development. But nobody has proved them to have an accidental and external origin.
“Changes in the technique of production presume 1) that the relevant scientific-technical discoveries and inventions have been made, and 2) that it is economically possible to use them. It would be an obvious mistake to deny the creative element in scientific-technical discoveries and inventions. But from an objective viewpoint, a still greater error would occur if one believed that the direction and intensity of those discoveries and inventions were entirely accidental; it is much more probable that such direction and intensity are a function of the necessities of real life and of the preceding development of science and technique.
“Scientific-technical inventions in themselves, however, are insufficient to bring about a real change in the technique of production. They can remain ineffective so long as economic conditions favourable to their application are absent. This is shown by the example of the scientific-technical inventions of the seventeenth and eighteenth centuries which were used on a large scale only during the industrial revolution at the close of the eighteenth century. If this be true, then the assumption that changes in technique are of a random character and do not in fact spring from economic necessities loses much of its weight. We have seen before that the development of technique itself is part of the rhythm of the long waves.”
Ray picks this up in relation to Schumpeter and Mensch. He looks at the various innovations identified by Schumpeter in relation to the Kondratieff waves. First, the steam engine.
“But what was the ‘basic’ advance, invention or innovation that eventually sparked off the first (steam-power induced) Kondratiev upswing around 1790? Many would attribute it to Watt – but then Watt did not invent the steam engine, it had been introduced long before by Newcomen (1712), or indeed in a simpler form by Savery (1698); Watt’s further developments (separate condenser in 1769 and the rotative engine in 1781) were undoubtedly very significant improvements. In fact, none of these great men invented the steam engine; their merit as innovators is beyond question – but whose was the ‘basic’ innovation? The first scientist who understood the power of steam and the uses of cylinder and piston was Hero of Alexandria, in the first century AD!”
In similar vein.
“We can now ask the same question as before: What – and whose – was the basic invention? Kondratiev’s second upswing started in 1844 – Stephenson’s first locomotive came into operation in 1814; the Stockton-Darlington railway, the first to be built for public transport and not for coal haulage alone, opened in 1825. But Trevithick had built a locomotive to haul coal in Wales as early as 1804. Who was the ‘basic innovator’ – or does the laurel go back to the steam engine?”
And finally for the third upswing.
“Turning again to the originators of the upswing in the third long cuycle, Lanchester and Austin designed their first cars in 1895 but they had been preceded by Daimler (1887) as well as by others in Europe (France produced 500 cars in 1893). The idea of the internal combustion engine, however, originated much farther back in time, in the late 17th century. With electricity we are in similar trouble: the ‘basic’ invention may have been that of Faraday in 1831, but he could not, of course, have presented his theories in that year without the outstanding achievements of scientists like Benjamin Franklin (1749), Galvani (1791), Volta (1800), Ampere (1822) and others.
…
“Neither Kondratiev nor Schumpeter lived long enough to see the peak of the recent upswing in the 1960’s; it was probably attributable to a combination of major innovations in the chemical industries (catalytic cracking, synthetic materials and fibres, anti-biotics), in aircraft (jet engine, helicopters), in the electrical/electronic industry (TV, computers), and perhaps even in the peaceful application of nuclear power.”
In other words, Ray gives support to Kondratieff’s idea that these innovations are not exogenous to the system. The ‘basic’ innovation may actually be made some considerable time before its application affects economic development. What is important is not the innovation but its application, and its application depends upon a certain level of economic development having occurred, a certain level of technical development having taken place such that the innovation can be implemented. For example, had Leonardo actually produced his flying machine, it is unlikely that it would have been a viable commodity to produce, or even if it had it is unlikely to have been a product which had great economic effects. Only at the point where the economy has developed, trade has reached a certain level, and the potential for producing aeroplanes on a scale for use in passenger and freight transport, warfare etc. exists could such an innovation have any significant consequences for the economy in general. As Kondratieff says, the innovations are introduced to meet requirements of the time, they are endogenous effects not exogenous causes of the upswing. But having been introduced the cause and effect nexus reverses, once introduced the invention does play a crucial role in stimulating economic development.
As Ray puts it,
“Only the widely-based rapid diffusion of some major innovations can be assumed to play any part in triggering off the Kondratiev – or any other - long-term upswing.”
Bearing in mind that Ray was writing in 1980, the year Micrososft started, and probably five years before PC’s even began to be widely used in business let alone in the home, he sets out the possibilities for the innovations that might become widely diffused in the next Kondratieff upswing.
“There are many who believe that the next great innovation, following in significance the motors of earlier Kondratiev cycles and comparable to them in width and depth of impact on the economy, will be the microprocessor. The importance of micro-electronics can be seen already in many areas and it is not surprising that the ‘microprocessor revolution’ has begun to merit serious discussion. It has been emphasized that the microprocessor is a chameleon and that it takes on the character of whatever program has been fed into it; it can detect a guided missile, operate a coffee dispenser, regulate the use of petrol in a car or control an industrial process. If properly programmed it can be used almost anywhere, in communications, in metal machining, and in widely varying applications, from libraries’ bibliographies to medical diagnosis. It is conceivable that it could be a candidate to lead a technological upheaval, giving the necessary push for a swing up out of Mensch’s ‘technological stalemate’.”
Ray looks at this in terms of past cycles.
“Mensch’s innovation peaks followed each other with a lag of 50-60 years; the most recent one was in 1935 – the next on that basis, should follow some time after 1985. Kondratiev’s cycles required about 25 years from trough to peak; if we consider 1975 as the trough, the peak will only be reached by 2000, but in the meantime should come the upswing. On past experience, if the indications in Table 1 are accepted, this is too soon after the innovation peak in 1985, since earlier there used to be 40 years between the peaks of the two series – but then the time lag between the innovation peak (1935 and the economic trough (1975) was also shorter than the 50 years observed earlier.”
But I would take issue with Ray here. Looking back from the tech wreck of 2000 it seems attractive to place a Kondratiev trough in that year as 25 years on from 1975. Moreover, looking at the growth of microprocessor based innovations from the mid 1980’s onwards, and particularly during the 1990’s with the development of mobile phones, laptop computers, and a myriad other devices would seem to confirm the 25-year upswing from the trough of 1975.
This is argued by Ian Gordon.
The Long Wave Analyst
However, I think Gordon's dates are wrong. I would argue that the Kondratiev upswing began after the war around 1949 – Gordon himself talks about this upswing reaching a peak in the 1960’s, so the trough could not conceivably arrive in 1975 less than ten years later.
The chart here looks more relevant to me.
Angelfire Kondratieff Charts
I would argue that the upswing ended in the early 70’s and was marked by the blow-off inflation, followed by the crash of 1974. This position is also that adopted by Ernest Mandel – Long Waves of Capitalist Development (1980). On that basis from around 1974 until around 2000 we were in a downswing. How can that be reconciled with the introduction of new technologies, and birth of new industries during that period? On the basis that Kondratieff sets out that it is set within the long term trend of upward human productive development. Moreover, in reality the period from 1974, whilst being a period of innovation has also been a period of relative economic underperformance in historical terms. Innovations resulted in lower real prices as would be expected in a Kondratiev downward leg. This movement has been masked by the printing of paper money by western governments. The slump of 1974-5 despite expansionary monetary policies dragged on into the recession of the early 80’s, which itself dragged on into the recession of the early 90’s. The upturn in the 90’s witnessed in the West was based actually on the cut in real wages of US workers, and the attacks on wages and conditions by Thatcher in Britain. Moreover, the upturn in those countries has during the 90’s been based largely not on real economic growth founded on increasing wealth and rising real incomes, but has been founded on the very shaky (and ultimately wealth destroying foundation) of massive amounts of debt.
Another factor, however, that needs to be taken into account is Kondratieff’s statements about the US, whose development was slightly out of step with Europe. Moreover, Kondratieff looks at the development of the wave in terms of those economies, which are the dominant and emerging economies of the time. It is possible to argue that the application of the wave to the world economy might show the US experiencing a slightly different pattern than elsewhere, for some of the reasons mentioned above, and others I will come to. Kondratieff’s cycle is broken down into four not 2 phases. The Spring Phase is marked by growth, falling unemployment, rising productivity and stable prices. The Summer Phase is where the cycle reaches its peak and is marked by changes in the psychology of people who have become accustomed to a more affluent lifestyle. Prices rise as capacity utilisation begins to hit a maximum and constraints force up prices. The Autumn phase is often described as a plateau. The limitations of the previous phase begin to exert their influence, but in an attempt to maintain lifestyles, and sustain the boom increasing debt is accumulated.
“Excesses of the plateau period effect a collapse of the price structure. This exhaustion of accumulated wealth forces the economy into a period of sharp retrenchment. Generally, the secondary depression entails a three year collapse, followed by a 15 year deflationary work out period. The deflation can best be seen in interest rates and wages that have shown a historic alignment with the timing of the Long Wave - peaking with and bottoming at the extremes.
Kondratieff viewed depressions as cleansing periods that allowed the economy to readjust from the previous excesses and begin a base for future growth. The characteristic of fulfilling the expectations of the previous period of growth is realized within the Secondary Depression or Down Grade. This is a period of incremental innovation where technologies of the past period of growth are refined, made cheaper and more widely distributed. Incremental innovation consolidates industries.
As increment innovation narrows profits and increases
The Down Grade sees one final period of recession before transitioning to a new period of growth. The final recession is mild with very low inflation and appears far more severe than it will be remembered for later in the Growth Cycle.
Within the Down Grade is a consolidation of social values or goals. Ideas and concepts introduced in the preceding period of growth while radical sounding at the time become integrated into the fabric of society. Often these social changes are supported by shifts in technology. The period of incremental innovation provides the framework for social integration.”
Source:
K-Waves
As is argued here the Kondratieff Winter is associated with the clearance of debt. It is quite possible that for the US the huge amounts of debt that have been accumulated during the 90’s, together with the massive supply of liquidity and the ability of the US to use its position as the holder of the world’s reserve currency, have extended the Autumn phase of the cycle for it, whilst others primarily China, India and other Asian countries have already begun the Spring phase. The application of the cycle in the above link predicted the bottoming of US stock prices fairly accurately as coming at the end of 2002 with an upswing from 2003 leading to another fall in 2005-6, which also looks potentially likely.
Kondratieff looked at one other supposed explanation of his long wave.
“There remains the question whether the discovery of new gold mines, the increase in gold production, and a consequent increase in the gold stock can be regarded as a casual, outside factor causing the long waves…..
“These fluctuations are by no means simply a function of inventors and of the discoveries of new gold mines. On the contrary, the intensity of inventors’ and explorers’ activity and the application of technical improvement in the sphere of gold production, as well as the resulting increase of the latter, depend on other, more general causes. The dependence of gold production upon technical inventions and discoveries of new gold mines is only secondary and derived.
“Although gold is a generally recognised embodiment of value and, therefore, is generally desired, it is only a commodity. And like every commodity it has a cost of production. But if this be true, then gold production –even in newly discovered mines – can increase significantly only if it becomes more profitable, i.e. if the relation of the value of the gold itself to its cost of production (and this is ultimately the prices of other commodities) becomes more favourable. If this relation is unfavourable, even gold mines the richness of which is by no means yet exhausted may be shut down; if it is favourable, on the other hand, even relatively poor mines will be exploited.
“What is the relation of the value of gold to that of other commodities most favourable for gold production? We know that commodity prices reach their lowest level toward the end of a long wave. This means that at this time gold has its highest purchasing power, and gold production becomes most favourable.
“We, therefore, can suppose theoretically that gold production must in general increase most markedly when the wave falls most sharply, and vice versa.”
However, he points out that the reality is not this simple. Changes in technique, and new discoveries will affect the cost of production so that it may become more profitable to produce. This, of course will only be in the short run because these lower productions costs will affect all producers reducing the value of gold, such that profitability is unaffected. And of course these discoveries and changes in technique are more likely when the price of gold is high. Moreover, the actual relation of gold prices and production to the wave will be affected by a time-lag.
“In reality, therefore, gold discoveries and technical improvements in gold mining will reach their peak only when the long wave has already passed its peak, i.e. perhaps in the middle of the downswing. The available facts confirm this supposition.”
He goes on to give details of gold discoveries during the 19th century. If we take 1974, as the peak of the last upswing Kondratieff’s thesis is again confirmed. Gold prices continued to rise considerably past this point throughout the 1970’s reaching their peak in the early 80’s.
If Kondratieff’s thesis is right then the last upswing began in 1949 according to most observers. That upswing ended, most would argue in 1974, and sure enough 1974-5 witnessed the worst slump since the 1930’s. Moreover, despite the kind of lower real interest rates that Kondratieff predicted growth remained sluggish well into the 1980’s. It only picked up as a result of the attacks on workers pay and conditions pushed through by Thatcher and Reagan. But further slowdown occurred through the 90’s with the world’s second largest economy Japan going into a recession in 1990 that has lasted more than 15 years and has been accompanied by the kind of low interest rates, and price deflation predicted by Kondratieff. The US has seen real wages fall for 20 years, and despite blips real interest rates have been falling in the US for 20 years too.
But if Kondratieff is right then the downswing that began around 1974 should now be ending and the world should be on the verge of a new upswing. Are there any grounds for believing that might be true? As far as the major economies are concerned, and the US in particular, the answer at first glance appears to be no. Europe is experiencing low growth and high unemployment, the UK has higher growth, lower unemployment but at the expense of huge levels of debt and has been achieved by a steady erosion of workers pay and conditions over the last 20 years. The US is a similar picture to the UK but writ large. Sooner or later the huge borrowing of the UK and US will cause a massive crisis. But it is that crisis which might, together with other factors, be the very basis of the new upswing. Every upswing of the cycle has seen new economies enter the fray. Britain led the way up at the beginning of the 19th century, and held the dominant position in its latter half, but the latter half saw the emergence of France, Germany and the US. The beginning of the 20th century saw Germany emerge as a dominant economic force alongside the US. The post-war period saw Japan develop rapidly as well as Germany. But in line with Kondratieff’s observations the basis for this emergence was set in the preceding period. We now see the emergence of China and India as increasingly important economic powerhouses, and the basis of that emergence is fully in keeping with Kondratieff’s observations. Having reached a peak of the cycle, dominant economies begin to decline, but the nature of the decline is not uniform. Real wages decline, but do not necessarily decline enough, prices decline but again not necessarily enough. But during this intervening period other economies in this case China and India, where wages, prices and interest rates are already low can begin to develop using the latest techniques, and thereby with their lower wages, prices, and interest rates begin to capture market share. It is they that have in place the more dynamic economies to take advantage of the upswing of the long wave when it begins.
But at the end of the down leg, there is likely to be a considerable blow-off. According to Kondratieff the upswing at the beginning of the 20th century ended around 1914-20, with the downswing beginning in the same period. If 1914 is taken as the start date, then the Depression of the 1930’s begins towards the end of the subsequent down-leg, and it is possible that this down-leg would have been more pronounced had the Second World War not intervened. Even allowing for the War it is not until a few years after the end of the war that we can detect a real upswing in economic activity overall. The accumulation of contradictions in the capitalist system that have been stored up during the last downswing from 1974 are likely to cause a similar blow-off before the commencement of the new upswing, at least as far as the now dominant western economies are concerned, and even allowing for the new economies entering a Spring Phase of the cycle, this Depression in the West will have serious effects for them too. It is this blow-off which will see real wages and conditions in the West decimated, the liquidation and appropriation by capital of large amounts of wealth, accumulated by workers during the upswing from 1949 to 1974, in the form of residential property, but now at risk because of high levels of personal debt, which will by increasing the stock of capital, and at the same time sharply raising the rate of exploitation and rate of surplus value, provide the basis for the new upswing.
That upswing will be marked by an even greater development of China, India and other Asian economies whose workers will fight for and get increasing real wages, which will provide the basis for the kind of consumer driven economy that developed in the West after WWII, it will see a scramble for commodities around the world which has already begun, with a 20 year increase in those commodity prices, and consequent effect on the economies of the raw material producing countries, and only later after the adjustment of Western wages and prices, will western economies be drawn into the upward spiral, with a steady increase in wages, prices, and interest rates once again taking place.
For socialists this phase is also of considerable interest because it is during these upward phases that workers regain their confidence, and combativity having the ability to fight for and win increased pay and conditions. We would expect to see considerable growth of the size and strength of labour movements in Asia in particular, and the development of new radical ideas as part of that, and indeed such developments are beginning to occur. Just as the innovations and changes in technique introduced in the innovation peak during the downturn form the basis for new production in the upturn, so ideas generated during that downturn also form the basis for the development of the Labour Movement in the upturn. That could be seen in the flourishing of ideas at the beginning of the 20th century, which led to the Russian revolution, and also was to be seen in the period after the Second World War with the spread of radical socialist ideas during the 1960’s, which had themselves had their formative period during the 1930’s and 40’s.
If Kondratieff is correct then the next 25 years could be a very exciting time, but the locus of the action may well be in Asia. Already, we see mounting strikes and combativity amongst Asian workers, but we have also seen a rise in strikes and combativity amongst European workers, particularly in France and Germany, as well as a rising tide of militancy and development of new forms and ideas in Latin America with the development on a fairly wide scale of co-operatives such as that at Zanon in Argentina. Crucial as in the past will be the ability to analyse and codify the lessons of these new struggles, and to extend their lessons through the adequate development of Workers Parties.
Kondratieff by Louca
I intend here to look at Kondratieff’s thesis in relation to the criticism of it by economists of different schools, and the work of others such as Schumpeter who used it as part of their analysis of the Business Cycle, of those that try to explain the Long Wave through innovation or other exogenous factors such as the opening up of new markets or territories, and finally to look at whether a Kondratieff cycle can be identified in current trends, and if so what consequences flow from that. A link to Kondratieff’s essay is given in the above link, but English versions are also available in the Review of Economic Statistics 1935, in a collection of his works published in 1998 by Pickering and Chatto, and in a slightly abridged version in the July 1978 Lloyds Bank Review (Issue 129). Kondratieff’s theory was first published in a volume entitled “Problems of Economic Fluctuations” by the Institute for Business Cycle Research which was actually established by economists of the Austrian School.. At the time of its publication this association was not so strange as at that time there was considerable overlap between economists of the Austrian School of Bohm-Bawerk and Marxist economists. Although, Bohm-Bawerk was in his time one of Marx’s harshest critics, his criticism of Marx’s theory, as Hilferding demonstrated, was based not just on a misunderstanding of Marx’s theory, but on a criticism of that aspect of Marx’s work set out in Vol. I of Capital. Most of Bohm-Bawerk’s criticisms were in fact dealt with by Marx himself in Vol. III of Capital. Moreover, despite that criticism Bohm-Bawerk was moved to comment,
“Marx has become the apostle of a wide circle of readers, including many who are not as a rule given to the reading of difficult books.” (Karl Marx and the Close of his System”)
And it was one of the members of Bohm-Bawerk’s private seminar, von Bortkiewicz who provided the first mathematical solution to Marx’s Transformation Problem outlined in Vol. III of Capital. These seminars were attended by both Austrian and prominent Marxist economists such as Rudolph Hiferding. Hilferding was to provide a thorough refutation of Bohm-Bawerk’s critique of Marx – “Karl Marx and the Close of His System”, which also takes apart much of the basis of Austrian and Neo-classical economic theory.
Nor were the founders of the Austrian School such wholehearted supporters of the free market as their current disciples. Bohm-Bawerk, for example, argued that he feared that unbridled free competition would lead to "anarchism in production and consumption." Nor were the ideas of the Austrians solely the basis for a defence of capitalism. Engels in his preface to Capital Vol III writes,
“One need not strain his thinking powers to see that this explanation for the profits of capital (the idea that profits are merely an additional sum on top of their value put forward by Prof. Lexis – AB), as advanced by “vulgar economy”, amounts in practice to the same thing as the Marxian theory of surplus-value: that the workers are in just the same ‘unfavourable condiiton’ according to lexis as according to Marx; that they are just as much the victims of swindle because every non-worker can sell commodities above price, while the worker cannot do so; and that it is just as easy to build up an at least equally plausible vulgar socialism on the basis of this theory, as that built in England on the foundation of Jevons’s and Menger’s theory of use-value and marginal utility. I even suspect that, if Mr. George Bernard Shaw had been familiar with this theory of profit, he would have likely fallen to with both hands, discarding Jevons and Karl Menger, to build anew the Fabian church of the future upon this rock.” (Capital Vol III p10.)
This reference to Shaw relates to the fact that the Fabian socialists, of whom Shaw was a leading member, based their socialist principles on the Neo-classical/Austrian theory of marginal utility. The theory has as one of its requirements the idea of diminishing marginal utility – in other words the more of something that I have the less utility I will derive from each additional unit. On this basis the Fabians argued, quite rightly, that in this case the more wealth someone has, or the more income they have then the less utility they will derive from incremental units. If therefore, you want to increase the welfare of society this can be achieved quite simply. By taxing the wealth of the rich they will suffer only a small loss of utility because they have a lot of wealth to begin with, transferring this wealth to the poor will, however, cause them to experience a large increase in utility because they have little wealth, and any marginal increase will therefore be that much greater. The same is true of an income tax, which reduces the utility of high pay only slightly. Such an approach fitted completely with a Benthamite, utilitarian philosophy, which argued that the basis of morals was that which maximised the greatest good for the greatest number. But as Engels remarks this kind of vulgar socialism based on redistribution had nothing in common with scientific Marxist socialism.
Another economist who participated in these gatherings was Joseph Schumpeter who used much of Marx’s work in developing his own analysis, and who also took up Kondratieff’s Long Wave theory as part of his own analysis of capitalist cycles. Schumpeter said of Marx, in his monumental ‘History of Economic Analysis’,
“the totality of his vision, as a totality, asserts its right in every detail and is precisely the source of intellectual fascination experienced by everyone, friend as well as foe, who makes a study of him’; and elsewhere “at the time when his first volume appeared there was nobody in Germany who could have measured himself against him either in vigour of thought or in theoretical knowledge.”
Schumpeter, himself, was to be a member of the first Austrian Social Democratic government. He occupied the post of Finance Minister, and it was upon his shoulders that blame for the later hyperinflation was to be placed. Mises was invited to also join it, but he declined. Indeed, Mises, was to go on to support (though not actually join) the Austrian clerical-fascists who opened the door to Hitler. Most of the Austrian School economists had been high-ranking functionaries in the regime of the absolutist Hapsburg dynasty, and so were extremely hostile to the introduction of democracy. But by-passed by history they largely sank into obscurity contenting themselves to private life and carping criticism based on a vision of some past golden age of Capitalism and Liberty that had never existed.
“With the exception of the unlucky Schumpeter, the rival Austrian School economists, most of whom had played important roles in the pre-1918 Hapsburg public life, withdrew into the harbor of private businesses and chambers of commerce and observed the procession of events. They were particularly incensed at the Social Democrats plans for nationalization of certain industries and social insurance schemes. It was during this time that the "Socialist Calculation" Debate with Ludwig von Mises and Friedrich von Hayek erupted. The Austro-Marxian planners had, on their side, the exceptional abilities of several sympathetic Paretian economists -- notably, Oskar Lange and Abba Lerner. Other economists closer to the Marxian tradition, notably Fred M. Taylor, Emil Lederer, Jacob Marschak and Henry Dickinson, participated in this debate on the Marxian side. “Source:
Austrians
“In spite of the deep hostilities between Social Democrats and Conservatives in post-First World War Austria, their basic ideas on the business cycle and on macroeconomic policy were not substantially different. Both considered inflation as potentially dangerous, and neither advocated demand expansion as an approach to the very high level of unemployment. The explanation lies in part in the intellectual tradition of the Austrian School of economics in the years before 1914, when such leading socialist figures as Otto Bauer, Karl Renner, Rudolf Hilferding, and Otto Neurath were active participants in the Bohm-Bawerk Seminar, as was Joseph Schumpeter (Marz, 1986) and Ludwig von Mises. The traumatic experience of the inflations of 1919-22--and most particularly the hyperinflation of October 1921 to May 1922--certainly contributed to a reluctance to rely on monetary expansion and has influenced Austrian (and German) social democratic policy to this day. We return to the consequences of the post-First World War inflations later in this paper.
To understand Hayek's place as a fourth generation star of the Austrian School of economics, it is important to appreciate that neither its founder Carl Menger, nor Menger's two (rival) successors--Eugen von Bohm-Bawerk (1851-1914) and Friedrich von Wieser (1851-1926) were radical antisocialists. Bohm-Bawerk was a true liberal and his Privatseminar in the decade before 1914 was enriched by important controversy with Marxist thought.(*) The leading Marxist participants already referred to were unquestionably influenced by the methodology and approaches of that school in various ways which would take us too far afield were we to treat them in this essay. Austro-Marxist approaches to macroeconomic policies were conditioned by the intellectual formation of those of its leading lights who were trained in economics in the best years of the Austrian school before 1914.
Wieser has been described as the central figure of the Austrian school: central in time, central in the ideas he propounded, and central in his influence insofar as he was the holder of the central chair during nearly two decisive decades. His socioeconomic credo was summarized as follows: "Building on a strong Catholic and conservative foundation he was an interventionist liberal ... with quite an admixture of racist sentiment who still found it possible to admire Marx. Above all, he was an admirer of the state as guided by the supreme wisdom of his own bureaucratic class." (Streissler, 1986) The anti-interventionist, antisocialist current in the Austrian School, which so appealed to Lionel Robbins in the 1920s, was the singular contribution of Ludwig von Mises (1881-1973), and was ultimately carried into the Anglo-American world by his favorite protege, Hayek. Here it must be noted that Mises' extreme anti-interventionism was not shared by all the members of his seminar.”
Source Polanyi:
Polyani
The above link gives an excellent background to Austrian economics and its degeneration into the current apologist sect that should more correctly be described as Misean than Austrian.
An example, of how far, the Austrian economic theory has degenerated from its originators such as Bohm-Bawerk into a purely ideological apologia for capitalism is given in this article critiquing Kondratieff by the rather wretched Murray N. Rothbard (this is a man who believes that there should be a free market in babies!!!) who is one of the leading spokesman for the Austrian School and US Libertarianism.
Rothbard on Kondratieff
Rothbard as I said above is a pretty wretched economist who seems incapable of even reading other economists work honestly let alone presenting a honest criticism of it. In one work I have reviewed elsewhere he claimed that Marx argued that inflation was caused by wage increases, despite the fact that Marx specifically in a number of places including some pamphlets, produced specifically for the purpose, argues exactly the opposite case. In the above work Rothbard says,
“What was wrong about the 1780s, for example? No particular depression there.”
No that is true, but then as Kondratieff says in his work,
“The rise lasted from the end of the 1780’s or beginning of the 1790’s until 1810-17”there is no real contradiction there. But what Rothbard is doing here is he has taken 54 years as being the period of the long wave, and then mechanically looked at individual years, to make his case. However, Kondratieff never said that the period of the long wave was 54 years. On the contrary, he said the period he had analysed showed the period ranging between 40 and 60 years.
Rothbard goes on,
“Fifty-four years from 1789 brings us to the "expected" trough year of 1843, a year in which everything was smooth sailing.”
But according to Kondratieff,
“The decline lasted from 1801-17 until 1844-51”
slap in the middle of which was the crisis of 1847, and was indeed part of a long period in which there had been repeated crises. It was a time when Britain, as the workshop of the world, was repeatedly flooding the world markets to an extent that it took on some occasions more than three years for the world market to absorb the glut of English textile exports, where thousands of workers died from starvation in the textile manufacturing centres, where troops had to be stationed in the main cities to quell the violence that resulted from it, and from the rising tide of working class opposition represented by the Chartists.
Rothbard then continues,
“The third alleged Kondratieff horror point, or trough year, was 1896.”
But Kondratieff writes,
“The rise lasted from 1890-96 until 1914-20.”
In other words yet again Rothbard picks on a particular year whereas Kondratieff says quite openly that such precision is not possible any more than it is possible to be specific about say the business cycle, which at the time varied between 7 and 11 years, and in addition infers years as cycle troughs which do not even tally with the troughs set out by Kondratieff. In short, it is the typical falsification of views used to make a point by a charlatan.
Rothbard adds to this falsification when he says,
“Really, on one and only one ground: each of these years was a trough point for the index of wholesale prices. All the other alleged confirmations of the Kondratieff troughs were simply of prices, or else of monetary phenomena reflected in prices.”
But had he taken the trouble to actually read Kondratieff, or was minded to tell the truth, then he could not make this comment. Kondratieff actually makes the point himself that his data would not mean much unless he could show cycles in physical production. So alongside his series on wholesale prices and bond prices (British Consols, and French Rentes) he also gives series detailing the production and consumption of coal, pig iron, and lead. In another table for France, England, United States, Germany and the Whole World he also gives data for Oat acreage in France, and Cotton acreage in the US as well as other data on Foreign Trade, wages, Savings Bank Deposits etc. In order to ensure that the data is not subject to variations due to fluctuations in prices, he also reduces all prices to a gold price.
Nor is Rothbard’s argument that, even during the downward phases of Kondratieff’s long wave, production and living standards rose, convincing. It is quite possible that, in a constantly upward moving trend line, that phases of decline can be masked by the overall upward trend. Analysis for example of Stock Markets shows that during a secular Bull Market there will be downward movements, but the low point of these downward movements may still be higher than the previous low. In fact, Rothbard later acknowledges that Kondratieff’s actual analysis takes this secular trend on board and, using established statistical techniques, removes it from the data, alongside any effects from the 7-11 year business cycle, which are removed by using a 9 year moving average. But, Rothbard only refers to this in order to criticise Kondratieff for its use, implying that to take out the secular trend is a falsification of the data. Were Kondratieff arguing that no such secular trend exists, that the downward leg of the long wave takes prices and production back down to the same level as the trough of the previous down leg, then Rothbard’s objection would be valid, but Kondratieff makes no such claim, and what’s more it would be a ridiculous argument to make. The whole history of mankind, with or without capitalism, has been one of steadily rising productive capacity, not in some linear fashion, but nevertheless on a secular upward curve. Kondratieff spells it out,
“Even granting the existence of long waves, one is, of course, not justified in believing that economic dynamic consists only in fluctuations around a certain level. The course of economic activity represents beyond doubt a process of development, but this development obviously proceeds not only through intermediate waves but also through long ones."
In other words, just as say, in the Stock Market, a secular Bull Market is characterised by a larger number of rallies than sell-offs, and by higher highs, and higher lows, so an upswing in the long wave is characterised by a greater number of up years than down years, and vice versa. During a down leg of the long wave some down periods such as during the Depression might be very down indeed, but this does not mean that taken as a whole even the down leg of the cycle will not show overall growth, for the very reason Kondratieff sets out, that the long waves themselves are set within the context of a secular upward trend of human productive capacity. In order to see the wood from the trees it is necessary to remove that background trend.
Kondratieff not only removes this secular trend from the output figures, but from the price data too. So, Rothbard demonstrates again, clearly that either he hadn’t actually read Kondratieff or that he really doesn’t understanding economics or statistics very well when he says,
“And second, the cause of the booms and of the subsequent contractions is all too clear. Namely, monetary inflation brought about by war finance. The so-called "Kondratieff" is merely a description of war and peace.”
Despite the fact that Kondratieff makes clear that he has both taken account of secular price movements, and has taken account of monetary inflation by reducing prices to a gold price!!!!
Rothbard persists with this nonsense,
“The severe 1973–75 recession filled the hearts of the Kondratieffites with joy: the peak had arrived on schedule! But inflation still continued. The next big recession came swiftly, but still there seemed to be always recovery, and inflation continued throughout.”
This is all the more ridiculous coming from an Austrian whose theory defines inflation not as an actual rise in prices, but a rise in money supply!!! If during that period the consequences of the huge monetary expansion were removed as Kondratieff did then this inflation would disappear too.
Rothbard’s article was written in 1984, he went on,
“Well, here we are, ten years after the "primary peak," so surely the time for the Big Bang is Now. And yet, instead of that, the economy seems to be bubbling along, recovering nicely. Inflation is still continuing, despite all the propaganda about the problem being over.
Time is inevitably running out on the Kondratieffites. For there will be no Big Bang, no repeat of 1929.”
OOOooops. What do you know, almost right on cue, three years after Rothbard predicted everything was hunky dory and there would be no repeat of 1929 along came the crash of 1987, which was even bigger than 1929, and 58 years after it, right in the comfort zone for Kondratieff’s theory.
He went on,
“The point is that there is no permanent depression, and there is not, and will not be, any deflation. The idea that we are right now in the midst of a Kondratieff depression, but that the deflation is being masked by inflationary bank credit, cannot be the way out.”
Of course, the Austrians sing a rather different tune now. Now the Austrians proclaim doom and gloom in abundance, depression and deflation that is only being hidden by monetary excess.
In fact, in recent years, Kondratieff has in fact found favour amongst some of the Austrian brethren. The last English version of his work published in 1998 by Pickering and Chatto, was promoted by the English Fleet Street Letter, a part of the Agora Publishing network, and edited by Lord Rees Mogg, which regularly quotes from and provides hyperlinks to the Mises Institute and other Misean websites. They also publish other newsletters and quote the work of financial analysts who use the Elliot Wave which is a relative of Kondratieff’s wave analysis, but then Agora’s strategy appears to be publish as many newsletters as you can each saying something different so that having covered all the angles you can at some point in the future claim you predicted such and such an event.
So why then was Rothbard at pains to make this attack on Kondratieff whose work was first published by an Austrian Institute, and whose work was certainly taken seriously by one of the foremost orthodox economists of the 20th century – Joseph Schumpeter. The answer is given in Rothbard’s answer to why business cycles occur.
“We have already seen a hint of the solution: that inflation and the inflationary boom are caused by bank credit expansion generated by governments. In fact, government's central banking system provides the key causal element for all business cycles, a cause exogenous to the market economy. Continuing government intervention sets in motion business cycles by generating inflationary booms. Because these booms distort the signals of the market place in interest rates and in relative prices they bring about grave distortions of production and prices, which must be corrected by recessions and depressions.
In short, government intervention cripples the market economy, and recession or depression is the painful but necessary adjustment by which the market reasserts itself, and liquidates the distortions committed by the government's inflationary boom.”
In short, it is a repetition of the idiotic Say’s Law – the idea that left to its own devices the market economy would not suffer any crises, and markets would always clear. But, of course, the problem with this idea is that the data does not support it. The first downturn in the trade cycle was in 1825, before credit was a major part of economic activity. Throughout the early part of the 19th century, when crises occurred at regular 5 yearly intervals, the Bank of England issued gold currency only in quantities required for circulation, and the use of gold, silver and copper ensured that any surplus currency was thrown out of circulation, yet serious crises occurred during this period.
See the following.
Gold as Money
Its true that capitalism did develop commercial credit to resolve some of its problems in speeding up circulation and trade, but this was certainly not exogenous to the system as Rothbard tries to portray, but was developed by capitalists themselves though Bills of Exchange and Discount houses. Its also true, as Marx demonstrates in Vol. III of Capital, that once this credit becomes established it develops its own dynamic, and in turn affects the business cycle, being one of the reasons why the cycle is extended to a 10 year cycle from a five year cycle, and that in allowing the business cycle to be extended it increases the ferocity of the downturn, but all of this is endogenous to the system not exogenous. Even during the 1920’s, monetary expansion in the US was actually lower than the increase in output, so that rather than being inflationary it was deflationary. But Rothbard cannot admit to these facts, which contradict his case, because that would be to admit that crises are endogenous to capitalism, and, unlike the original Austrians, today’s Miseans are mere apologists for capitalism. They cannot admit of it having any faults, and so must place the blame elsewhere, and if that blame can be put on government interference so much the better.
In this he is right,
“The cause of the boom-bust cycle is not some mystical periodic Force to which man must bend his will; the fault, dear Brutus, is not in our stars but in ourselves, that we are underlings.”
But not for the reason he intends. There is no reason why such cycles should control us. The only reason they do is because we allow our economic destinies to be determined by a mystical force – the market – rather than take control of our economic activity in the same way that we took control of agricultural production rather than believe in the benevolence of the invisible hand of God.
What then of the more substantive criticisms of Kondratieff. Trotsky and others argued that there were exogenous factors, which intervened that were the explanations of certain periods of heightened activity such as wars and revolutions. Kondratieff responds to this criticism by saying that what appear as exogenous forces are themselves the result of endogenous aspects of the cycle.
“Wars and revolutions also influence the course of economic development very strongly. But wars and revolutions do not come out of a clear sky, and they are not caused by arbitrary acts of individual personalities. They originate from real, especially economic circumstances. The assumption that wars and revolutions acting from the outside cause long waves evokes the question as to why they themselves follow each other with regularity and solely during the upswing of long waves. Much more probable is the assumption that wars originate in the acceleration of the pace and the increased tension of economic life, in the heightened economic struggle for markets and raw materials, and that social shocks happen most easily under the pressure of new economic forces.
“Wars and revolutions, therefore, can also be fitted into the rhythm of the long waves and do not prove to be the forces from which these movements originate, but rather to be one of their symptoms. But once they have occurred, they naturally exercise a potent influence on the pace and direction of economic dynamics.” (Kondratieff)
I think this might well be open to question. It is rather mechanical, and determinist. It is certainly true that the drive for imperialist war such as the First World War could largely be placed in the context of a drive to get hold of sources of raw materials, and to get control of markets, and that came at the end of a Kondratieff upswing. A similar case could be made for the Anglo-French Wars at the beginning of the 19th century, which also came at the end of a Kondratieff upswing. But the same could be said about the Second World War, which came during a Kondratieff downswing. Similarly, during the post-war Kondratieff upswing there were plenty of wars and revolutions too, but it is hard to place these within Kondratieff’s explanation. Most of them appear to come within Trotsky’s definition in terms of the revolutions, most of which occurred as part of a national liberation struggle. It is possible to argue that such struggles originated in a weakness of the former colonial power, but this seems to be stretching the explanation somewhat. Nor do the main wars occurring during the period fit the description either – Korea, Vietnam. Again these had more the character of purely politically driven events than a scrabble for markets and raw materials.
Its possible to see in some of these events, for example Suez, or even the CIA overthrow of Mossadegh in Iran, a neo-colonialist/imperialist drive for markets and raw materials – the most important being oil, and it may be argued that the emergence of the US even by the 1950’s as the main western superpower, and development of a kind of ultra-imperialism as described by Kautsky might explain the fact that such expansion was done almost exclusively under the tutelage of the US. It is also possible to see during this time the role of the US in opening up new territories in Asia, and Latin America as new markets, and sources of raw materials but without the kind of inter-imperialist scramble of previous cycles due to the dominant position of US imperialism. But Kondratieff also addresses the extent to which this is cause or effect.
“As regards the opening up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century. Likewise, the Argentine and Canada, Australia and New Zealand, were discovered long before he end of the nineteenth century, although they begin to be entwined in the world economy to a significant extent only with the coming of the 1890’s. It is perfectly clear historically that, in the capitalistic economic system, new regions are opened for commerce during those periods in which the desire of old countries for new markets and new sources of raw materials becomes more urgent than theretofore. It is equally apparent that the limits of this expansion of the world economy are determined by the degree of this urgency. If this be true, then the opening of new countries does not provoke the upswing of a long wave. On the contrary, a new upswing makes the exploitation of new countries, new markets, and new sources of raw materials necessary and possible, in that it accelerates the pace of capitalistic economic development.”
In trying to explain the basis of rather than challenge the existence of the long wave Schumpeter put forward the idea that its determination was the introduction of new techniques. In other words the long wave was nothing more than an innovation cycle. This idea is taken up in an interesting essay by George Ray in the January 1980 Lloyds Bank Review (Number 135) “Innovation in the Long Cycle”. As Ray comments,
“Innovation is indeed a cornerstone of Schumpeterian business cycle theory, according to which its economic impact is immense. Schumpeter’s thesis, in its most simplified form, stated that the upturn in the first Kondratiev cycle (1790-1813) was largely due to the dissemination of steam power, the second (1844-74) to the railway boom, and the third (1895-1914/6) to the joint effects of the motor car and electricity. These all fitted Kuznets’ requirement of an all-pervasive influence on all, or many sectors of the economy.”
Ray goes on to refer to the work of Mensch (G. Mensch “Das technologische Patt” Franfurt 1975 and also in “Stalemate in technology”, Ballinger, Cambridge, Mass. 1979) who in suggesting the need for a “new push of basic innovations” to lift the world out of its depressed state of the time also identified clusters of such basic innovations during the last 200 years, which correlated with Kondratieff’s cycle. These were in or around 1770, 1825, 1885, and 1935 with not much since – remember this was written in 1975. Ray compares these two sets of data and concludes,
“Long cycles do seem to appear, albeit with no great regularity and not simultaneously in both areas….The lags between Mensch’s innovation peaks and Kondrtiev’s are approximately 40 years (more precisely:44,49,41, and 32 years respectively).
Kondratiev’s three troughs followed the innovation-poor periods with an even more uniform lag of about 50 years. Given the difficulties of measurement, this apparent regularity provides food for thought since, if the high ‘technological content’ of each of the long wave theories – most explicitly Schumpeter’s – is considered, this surely must be the most important macro-economic aspect of innovation.”
Kondratieff looks at this Schumpeterian approach. He comments.
“Changes in technique have without doubt a very potent influence on the course of capitalistic development. But nobody has proved them to have an accidental and external origin.
“Changes in the technique of production presume 1) that the relevant scientific-technical discoveries and inventions have been made, and 2) that it is economically possible to use them. It would be an obvious mistake to deny the creative element in scientific-technical discoveries and inventions. But from an objective viewpoint, a still greater error would occur if one believed that the direction and intensity of those discoveries and inventions were entirely accidental; it is much more probable that such direction and intensity are a function of the necessities of real life and of the preceding development of science and technique.
“Scientific-technical inventions in themselves, however, are insufficient to bring about a real change in the technique of production. They can remain ineffective so long as economic conditions favourable to their application are absent. This is shown by the example of the scientific-technical inventions of the seventeenth and eighteenth centuries which were used on a large scale only during the industrial revolution at the close of the eighteenth century. If this be true, then the assumption that changes in technique are of a random character and do not in fact spring from economic necessities loses much of its weight. We have seen before that the development of technique itself is part of the rhythm of the long waves.”
Ray picks this up in relation to Schumpeter and Mensch. He looks at the various innovations identified by Schumpeter in relation to the Kondratieff waves. First, the steam engine.
“But what was the ‘basic’ advance, invention or innovation that eventually sparked off the first (steam-power induced) Kondratiev upswing around 1790? Many would attribute it to Watt – but then Watt did not invent the steam engine, it had been introduced long before by Newcomen (1712), or indeed in a simpler form by Savery (1698); Watt’s further developments (separate condenser in 1769 and the rotative engine in 1781) were undoubtedly very significant improvements. In fact, none of these great men invented the steam engine; their merit as innovators is beyond question – but whose was the ‘basic’ innovation? The first scientist who understood the power of steam and the uses of cylinder and piston was Hero of Alexandria, in the first century AD!”
In similar vein.
“We can now ask the same question as before: What – and whose – was the basic invention? Kondratiev’s second upswing started in 1844 – Stephenson’s first locomotive came into operation in 1814; the Stockton-Darlington railway, the first to be built for public transport and not for coal haulage alone, opened in 1825. But Trevithick had built a locomotive to haul coal in Wales as early as 1804. Who was the ‘basic innovator’ – or does the laurel go back to the steam engine?”
And finally for the third upswing.
“Turning again to the originators of the upswing in the third long cuycle, Lanchester and Austin designed their first cars in 1895 but they had been preceded by Daimler (1887) as well as by others in Europe (France produced 500 cars in 1893). The idea of the internal combustion engine, however, originated much farther back in time, in the late 17th century. With electricity we are in similar trouble: the ‘basic’ invention may have been that of Faraday in 1831, but he could not, of course, have presented his theories in that year without the outstanding achievements of scientists like Benjamin Franklin (1749), Galvani (1791), Volta (1800), Ampere (1822) and others.
…
“Neither Kondratiev nor Schumpeter lived long enough to see the peak of the recent upswing in the 1960’s; it was probably attributable to a combination of major innovations in the chemical industries (catalytic cracking, synthetic materials and fibres, anti-biotics), in aircraft (jet engine, helicopters), in the electrical/electronic industry (TV, computers), and perhaps even in the peaceful application of nuclear power.”
In other words, Ray gives support to Kondratieff’s idea that these innovations are not exogenous to the system. The ‘basic’ innovation may actually be made some considerable time before its application affects economic development. What is important is not the innovation but its application, and its application depends upon a certain level of economic development having occurred, a certain level of technical development having taken place such that the innovation can be implemented. For example, had Leonardo actually produced his flying machine, it is unlikely that it would have been a viable commodity to produce, or even if it had it is unlikely to have been a product which had great economic effects. Only at the point where the economy has developed, trade has reached a certain level, and the potential for producing aeroplanes on a scale for use in passenger and freight transport, warfare etc. exists could such an innovation have any significant consequences for the economy in general. As Kondratieff says, the innovations are introduced to meet requirements of the time, they are endogenous effects not exogenous causes of the upswing. But having been introduced the cause and effect nexus reverses, once introduced the invention does play a crucial role in stimulating economic development.
As Ray puts it,
“Only the widely-based rapid diffusion of some major innovations can be assumed to play any part in triggering off the Kondratiev – or any other - long-term upswing.”
Bearing in mind that Ray was writing in 1980, the year Micrososft started, and probably five years before PC’s even began to be widely used in business let alone in the home, he sets out the possibilities for the innovations that might become widely diffused in the next Kondratieff upswing.
“There are many who believe that the next great innovation, following in significance the motors of earlier Kondratiev cycles and comparable to them in width and depth of impact on the economy, will be the microprocessor. The importance of micro-electronics can be seen already in many areas and it is not surprising that the ‘microprocessor revolution’ has begun to merit serious discussion. It has been emphasized that the microprocessor is a chameleon and that it takes on the character of whatever program has been fed into it; it can detect a guided missile, operate a coffee dispenser, regulate the use of petrol in a car or control an industrial process. If properly programmed it can be used almost anywhere, in communications, in metal machining, and in widely varying applications, from libraries’ bibliographies to medical diagnosis. It is conceivable that it could be a candidate to lead a technological upheaval, giving the necessary push for a swing up out of Mensch’s ‘technological stalemate’.”
Ray looks at this in terms of past cycles.
“Mensch’s innovation peaks followed each other with a lag of 50-60 years; the most recent one was in 1935 – the next on that basis, should follow some time after 1985. Kondratiev’s cycles required about 25 years from trough to peak; if we consider 1975 as the trough, the peak will only be reached by 2000, but in the meantime should come the upswing. On past experience, if the indications in Table 1 are accepted, this is too soon after the innovation peak in 1985, since earlier there used to be 40 years between the peaks of the two series – but then the time lag between the innovation peak (1935 and the economic trough (1975) was also shorter than the 50 years observed earlier.”
But I would take issue with Ray here. Looking back from the tech wreck of 2000 it seems attractive to place a Kondratiev trough in that year as 25 years on from 1975. Moreover, looking at the growth of microprocessor based innovations from the mid 1980’s onwards, and particularly during the 1990’s with the development of mobile phones, laptop computers, and a myriad other devices would seem to confirm the 25-year upswing from the trough of 1975.
This is argued by Ian Gordon.
The Long Wave Analyst
However, I think Gordon's dates are wrong. I would argue that the Kondratiev upswing began after the war around 1949 – Gordon himself talks about this upswing reaching a peak in the 1960’s, so the trough could not conceivably arrive in 1975 less than ten years later.
The chart here looks more relevant to me.
Angelfire Kondratieff Charts
I would argue that the upswing ended in the early 70’s and was marked by the blow-off inflation, followed by the crash of 1974. This position is also that adopted by Ernest Mandel – Long Waves of Capitalist Development (1980). On that basis from around 1974 until around 2000 we were in a downswing. How can that be reconciled with the introduction of new technologies, and birth of new industries during that period? On the basis that Kondratieff sets out that it is set within the long term trend of upward human productive development. Moreover, in reality the period from 1974, whilst being a period of innovation has also been a period of relative economic underperformance in historical terms. Innovations resulted in lower real prices as would be expected in a Kondratiev downward leg. This movement has been masked by the printing of paper money by western governments. The slump of 1974-5 despite expansionary monetary policies dragged on into the recession of the early 80’s, which itself dragged on into the recession of the early 90’s. The upturn in the 90’s witnessed in the West was based actually on the cut in real wages of US workers, and the attacks on wages and conditions by Thatcher in Britain. Moreover, the upturn in those countries has during the 90’s been based largely not on real economic growth founded on increasing wealth and rising real incomes, but has been founded on the very shaky (and ultimately wealth destroying foundation) of massive amounts of debt.
Another factor, however, that needs to be taken into account is Kondratieff’s statements about the US, whose development was slightly out of step with Europe. Moreover, Kondratieff looks at the development of the wave in terms of those economies, which are the dominant and emerging economies of the time. It is possible to argue that the application of the wave to the world economy might show the US experiencing a slightly different pattern than elsewhere, for some of the reasons mentioned above, and others I will come to. Kondratieff’s cycle is broken down into four not 2 phases. The Spring Phase is marked by growth, falling unemployment, rising productivity and stable prices. The Summer Phase is where the cycle reaches its peak and is marked by changes in the psychology of people who have become accustomed to a more affluent lifestyle. Prices rise as capacity utilisation begins to hit a maximum and constraints force up prices. The Autumn phase is often described as a plateau. The limitations of the previous phase begin to exert their influence, but in an attempt to maintain lifestyles, and sustain the boom increasing debt is accumulated.
“Excesses of the plateau period effect a collapse of the price structure. This exhaustion of accumulated wealth forces the economy into a period of sharp retrenchment. Generally, the secondary depression entails a three year collapse, followed by a 15 year deflationary work out period. The deflation can best be seen in interest rates and wages that have shown a historic alignment with the timing of the Long Wave - peaking with and bottoming at the extremes.
Kondratieff viewed depressions as cleansing periods that allowed the economy to readjust from the previous excesses and begin a base for future growth. The characteristic of fulfilling the expectations of the previous period of growth is realized within the Secondary Depression or Down Grade. This is a period of incremental innovation where technologies of the past period of growth are refined, made cheaper and more widely distributed. Incremental innovation consolidates industries.
As increment innovation narrows profits and increases
The Down Grade sees one final period of recession before transitioning to a new period of growth. The final recession is mild with very low inflation and appears far more severe than it will be remembered for later in the Growth Cycle.
Within the Down Grade is a consolidation of social values or goals. Ideas and concepts introduced in the preceding period of growth while radical sounding at the time become integrated into the fabric of society. Often these social changes are supported by shifts in technology. The period of incremental innovation provides the framework for social integration.”
Source:
K-Waves
As is argued here the Kondratieff Winter is associated with the clearance of debt. It is quite possible that for the US the huge amounts of debt that have been accumulated during the 90’s, together with the massive supply of liquidity and the ability of the US to use its position as the holder of the world’s reserve currency, have extended the Autumn phase of the cycle for it, whilst others primarily China, India and other Asian countries have already begun the Spring phase. The application of the cycle in the above link predicted the bottoming of US stock prices fairly accurately as coming at the end of 2002 with an upswing from 2003 leading to another fall in 2005-6, which also looks potentially likely.
Kondratieff looked at one other supposed explanation of his long wave.
“There remains the question whether the discovery of new gold mines, the increase in gold production, and a consequent increase in the gold stock can be regarded as a casual, outside factor causing the long waves…..
“These fluctuations are by no means simply a function of inventors and of the discoveries of new gold mines. On the contrary, the intensity of inventors’ and explorers’ activity and the application of technical improvement in the sphere of gold production, as well as the resulting increase of the latter, depend on other, more general causes. The dependence of gold production upon technical inventions and discoveries of new gold mines is only secondary and derived.
“Although gold is a generally recognised embodiment of value and, therefore, is generally desired, it is only a commodity. And like every commodity it has a cost of production. But if this be true, then gold production –even in newly discovered mines – can increase significantly only if it becomes more profitable, i.e. if the relation of the value of the gold itself to its cost of production (and this is ultimately the prices of other commodities) becomes more favourable. If this relation is unfavourable, even gold mines the richness of which is by no means yet exhausted may be shut down; if it is favourable, on the other hand, even relatively poor mines will be exploited.
“What is the relation of the value of gold to that of other commodities most favourable for gold production? We know that commodity prices reach their lowest level toward the end of a long wave. This means that at this time gold has its highest purchasing power, and gold production becomes most favourable.
“We, therefore, can suppose theoretically that gold production must in general increase most markedly when the wave falls most sharply, and vice versa.”
However, he points out that the reality is not this simple. Changes in technique, and new discoveries will affect the cost of production so that it may become more profitable to produce. This, of course will only be in the short run because these lower productions costs will affect all producers reducing the value of gold, such that profitability is unaffected. And of course these discoveries and changes in technique are more likely when the price of gold is high. Moreover, the actual relation of gold prices and production to the wave will be affected by a time-lag.
“In reality, therefore, gold discoveries and technical improvements in gold mining will reach their peak only when the long wave has already passed its peak, i.e. perhaps in the middle of the downswing. The available facts confirm this supposition.”
He goes on to give details of gold discoveries during the 19th century. If we take 1974, as the peak of the last upswing Kondratieff’s thesis is again confirmed. Gold prices continued to rise considerably past this point throughout the 1970’s reaching their peak in the early 80’s.
If Kondratieff’s thesis is right then the last upswing began in 1949 according to most observers. That upswing ended, most would argue in 1974, and sure enough 1974-5 witnessed the worst slump since the 1930’s. Moreover, despite the kind of lower real interest rates that Kondratieff predicted growth remained sluggish well into the 1980’s. It only picked up as a result of the attacks on workers pay and conditions pushed through by Thatcher and Reagan. But further slowdown occurred through the 90’s with the world’s second largest economy Japan going into a recession in 1990 that has lasted more than 15 years and has been accompanied by the kind of low interest rates, and price deflation predicted by Kondratieff. The US has seen real wages fall for 20 years, and despite blips real interest rates have been falling in the US for 20 years too.
But if Kondratieff is right then the downswing that began around 1974 should now be ending and the world should be on the verge of a new upswing. Are there any grounds for believing that might be true? As far as the major economies are concerned, and the US in particular, the answer at first glance appears to be no. Europe is experiencing low growth and high unemployment, the UK has higher growth, lower unemployment but at the expense of huge levels of debt and has been achieved by a steady erosion of workers pay and conditions over the last 20 years. The US is a similar picture to the UK but writ large. Sooner or later the huge borrowing of the UK and US will cause a massive crisis. But it is that crisis which might, together with other factors, be the very basis of the new upswing. Every upswing of the cycle has seen new economies enter the fray. Britain led the way up at the beginning of the 19th century, and held the dominant position in its latter half, but the latter half saw the emergence of France, Germany and the US. The beginning of the 20th century saw Germany emerge as a dominant economic force alongside the US. The post-war period saw Japan develop rapidly as well as Germany. But in line with Kondratieff’s observations the basis for this emergence was set in the preceding period. We now see the emergence of China and India as increasingly important economic powerhouses, and the basis of that emergence is fully in keeping with Kondratieff’s observations. Having reached a peak of the cycle, dominant economies begin to decline, but the nature of the decline is not uniform. Real wages decline, but do not necessarily decline enough, prices decline but again not necessarily enough. But during this intervening period other economies in this case China and India, where wages, prices and interest rates are already low can begin to develop using the latest techniques, and thereby with their lower wages, prices, and interest rates begin to capture market share. It is they that have in place the more dynamic economies to take advantage of the upswing of the long wave when it begins.
But at the end of the down leg, there is likely to be a considerable blow-off. According to Kondratieff the upswing at the beginning of the 20th century ended around 1914-20, with the downswing beginning in the same period. If 1914 is taken as the start date, then the Depression of the 1930’s begins towards the end of the subsequent down-leg, and it is possible that this down-leg would have been more pronounced had the Second World War not intervened. Even allowing for the War it is not until a few years after the end of the war that we can detect a real upswing in economic activity overall. The accumulation of contradictions in the capitalist system that have been stored up during the last downswing from 1974 are likely to cause a similar blow-off before the commencement of the new upswing, at least as far as the now dominant western economies are concerned, and even allowing for the new economies entering a Spring Phase of the cycle, this Depression in the West will have serious effects for them too. It is this blow-off which will see real wages and conditions in the West decimated, the liquidation and appropriation by capital of large amounts of wealth, accumulated by workers during the upswing from 1949 to 1974, in the form of residential property, but now at risk because of high levels of personal debt, which will by increasing the stock of capital, and at the same time sharply raising the rate of exploitation and rate of surplus value, provide the basis for the new upswing.
That upswing will be marked by an even greater development of China, India and other Asian economies whose workers will fight for and get increasing real wages, which will provide the basis for the kind of consumer driven economy that developed in the West after WWII, it will see a scramble for commodities around the world which has already begun, with a 20 year increase in those commodity prices, and consequent effect on the economies of the raw material producing countries, and only later after the adjustment of Western wages and prices, will western economies be drawn into the upward spiral, with a steady increase in wages, prices, and interest rates once again taking place.
For socialists this phase is also of considerable interest because it is during these upward phases that workers regain their confidence, and combativity having the ability to fight for and win increased pay and conditions. We would expect to see considerable growth of the size and strength of labour movements in Asia in particular, and the development of new radical ideas as part of that, and indeed such developments are beginning to occur. Just as the innovations and changes in technique introduced in the innovation peak during the downturn form the basis for new production in the upturn, so ideas generated during that downturn also form the basis for the development of the Labour Movement in the upturn. That could be seen in the flourishing of ideas at the beginning of the 20th century, which led to the Russian revolution, and also was to be seen in the period after the Second World War with the spread of radical socialist ideas during the 1960’s, which had themselves had their formative period during the 1930’s and 40’s.
If Kondratieff is correct then the next 25 years could be a very exciting time, but the locus of the action may well be in Asia. Already, we see mounting strikes and combativity amongst Asian workers, but we have also seen a rise in strikes and combativity amongst European workers, particularly in France and Germany, as well as a rising tide of militancy and development of new forms and ideas in Latin America with the development on a fairly wide scale of co-operatives such as that at Zanon in Argentina. Crucial as in the past will be the ability to analyse and codify the lessons of these new struggles, and to extend their lessons through the adequate development of Workers Parties.
Sunday, 1 June 2008
What is Their Problem?
The AWL have asked me not to write more than three or four lines in future in comments on their Discussion Board. They are of course entitled to impose such a restriction on me or anyone else. What I can’t understand is why they have asked me to abide by this limit now. Last year after I wrote some short articles on the AWL’s politics, and the way they were contradictory in respect of the position of Albert Glotzer – whose position in respect of Israel they supported see here, here, and here - the AWL, first deleted my posts several times, and then when I persisted deleted my account. They said it was due to a little technical difficulty, an answer I questioned seriously, See here.
Eventually, after some discussion and the fact that other Left groups were picking up on the issue my account was restored, and I was requested to keep my comments to a more moderate level, which I agreed to do, and to post long comments here on my blog. That I have been doing, though I was again requested to reduce the number of my comments a few months ago again as a fairly lengthy debate arose over the National Question. But since then I have posted far fewer comments to their discussion board. In the last month I have posted only a handful, and most of them not very long comments. In fact during the last few weeks one reason for that is that I have been engaged in a couple of lengthy debates with anarcho-capitalists on another board – See here, for instance.
Meanwhile, on the WL Board a discussion between the reactionaries Mikey and Paul Bogdanor against Tony Greenstein runs to 47 long posts! bluerose799, posts a number of long posts, putting out Albanian racist sentiments against Serbians referring to them as “beasts”, and so on. So why is it that my handful of posts provoke a demand that I limit myself to just 3 or 4 lines???? One reason seems to be that I posted a comment almost immediately after an article by Trotsky attacking petit-bouregois moralism had been put on the Board. My comment pointed out that Trotsky’s article could just as easily have been written about the petit-bouregois moralism of the Shachtmanite Third Camp, the tendency to which the AWL has aligned itself.
But why should that be a problem. In relation to another discussion on Ireland the other week Seam wrote that there should be more discussion and debate. I agree, so why does the AWL want to restrict that debate when it comes to the discussion of ideas it finds awkward? Surely, a Marxist organisation with a firm beleief in its ideas can respond adequately to the arguments of a single individual like myself can’t it? The AWL said to me “your comments force people to respond to your ideas, not to ours”, and the purpose of the Board is for us to get our ideas over. As far as I am aware I am forcing no one to do anything. Surely, anyone who puts forward there ideas can likewise be accused of forcing those that disagree with them to respond to their ideas. On that basis the only discussions would be between people who agreed with each other, and what is the point of that.
Lenin argued that the Bolsheviks should be a Pure party. He rejected the idea of freedom of criticism, because it would mean that those such as the Economists and Revisionists who had some of the better theoreticians would be able to influence the ordinary workers in the Party. But, we saw the ultimate consequecne of dealing with ideas, you cannot defeat ideologically, by means of organisational bureaucracy and split in what happened to the Bolsheviks. Long before Stalin became dominant within the Party Lenin was standing up at a party Congress and saying to Kollontai and the Workers Opposition, “If you are serious about your arguments against us, you should be taking up arms against us, not bringing resolutions to the Congress.” That is the logic of the leninism that the AWL still adheres to. It is what leads it to respond to arguments it cannot handle with the same kind of rudeness, and limitation that the Bolsheviks descended into. The AWL defends the principle of free speech, compared to other Leninist organisations its site is far more open but there can be no limits put on free speech, certainly there should be none in the Labour Movement other than against fascists. As the AWL once said in relation to free speech and the Cartoons – a position on which I defended the AWL 100% - its eeasy to give someone free speech when they agree with you, but it only means something if they are also free to disagree with you.
Eventually, after some discussion and the fact that other Left groups were picking up on the issue my account was restored, and I was requested to keep my comments to a more moderate level, which I agreed to do, and to post long comments here on my blog. That I have been doing, though I was again requested to reduce the number of my comments a few months ago again as a fairly lengthy debate arose over the National Question. But since then I have posted far fewer comments to their discussion board. In the last month I have posted only a handful, and most of them not very long comments. In fact during the last few weeks one reason for that is that I have been engaged in a couple of lengthy debates with anarcho-capitalists on another board – See here, for instance.
Meanwhile, on the WL Board a discussion between the reactionaries Mikey and Paul Bogdanor against Tony Greenstein runs to 47 long posts! bluerose799, posts a number of long posts, putting out Albanian racist sentiments against Serbians referring to them as “beasts”, and so on. So why is it that my handful of posts provoke a demand that I limit myself to just 3 or 4 lines???? One reason seems to be that I posted a comment almost immediately after an article by Trotsky attacking petit-bouregois moralism had been put on the Board. My comment pointed out that Trotsky’s article could just as easily have been written about the petit-bouregois moralism of the Shachtmanite Third Camp, the tendency to which the AWL has aligned itself.
But why should that be a problem. In relation to another discussion on Ireland the other week Seam wrote that there should be more discussion and debate. I agree, so why does the AWL want to restrict that debate when it comes to the discussion of ideas it finds awkward? Surely, a Marxist organisation with a firm beleief in its ideas can respond adequately to the arguments of a single individual like myself can’t it? The AWL said to me “your comments force people to respond to your ideas, not to ours”, and the purpose of the Board is for us to get our ideas over. As far as I am aware I am forcing no one to do anything. Surely, anyone who puts forward there ideas can likewise be accused of forcing those that disagree with them to respond to their ideas. On that basis the only discussions would be between people who agreed with each other, and what is the point of that.
Lenin argued that the Bolsheviks should be a Pure party. He rejected the idea of freedom of criticism, because it would mean that those such as the Economists and Revisionists who had some of the better theoreticians would be able to influence the ordinary workers in the Party. But, we saw the ultimate consequecne of dealing with ideas, you cannot defeat ideologically, by means of organisational bureaucracy and split in what happened to the Bolsheviks. Long before Stalin became dominant within the Party Lenin was standing up at a party Congress and saying to Kollontai and the Workers Opposition, “If you are serious about your arguments against us, you should be taking up arms against us, not bringing resolutions to the Congress.” That is the logic of the leninism that the AWL still adheres to. It is what leads it to respond to arguments it cannot handle with the same kind of rudeness, and limitation that the Bolsheviks descended into. The AWL defends the principle of free speech, compared to other Leninist organisations its site is far more open but there can be no limits put on free speech, certainly there should be none in the Labour Movement other than against fascists. As the AWL once said in relation to free speech and the Cartoons – a position on which I defended the AWL 100% - its eeasy to give someone free speech when they agree with you, but it only means something if they are also free to disagree with you.
The BNP in Stoke
Last week the Guardian ran a lengthy article on the BNP in Stoke, and the possibility that it could win the Mayoral election next year.
The article provoked letters from local MP’s and from Jason Hill, Secretary of the North Staffs Campaign Against Racism and Fascism.
The article and letters have also provoked a serious discussion within Norscarf, mainly from Labour Party members who recognise that the BNP’s rise is at least partly if not wholly due to the inadequacy of the labour Party in responding not only to the real needs of working class people, but also the fears and prejudices of such people that are fostered by Capitalism. Unfortunately, most of that discussion is lost when it comes to understanding what needs to be done to remedy that situation. A lot of it has centred around bureaucratic measures of internal re-organisation, scrapping the District Labour party, and placing control of elections back in the hands of the CLP’s. The problems of the Labour party and how to deal thereby with the rise of the BNP cannot be addressed by such measures. They can only be addressed by changing the politics of the Labour Party. That will require serious socialists to engage in its day to day work, to turn it outwards to the working class communities, to engage their concerns, and help organise them to deal with their problems – as indeed, the Guardian article showed the BNP are now doing.
But, the message coming from the Labour Party shows it is heading in completely the wrong direction. As I said in my blog a few weeks ago, where the Labour Party needs to be clearly demarcating itself from the Tories and Liberals it is instead looking to blur those discussions even further with a Popular Front with Liberals and Tories against the BNP.
In the same measure that Labour went backwards, in Stoke, the BNP continued to move forward, becoming now the fourth largest Party. Opposition to the BNP has often been on very skaky ground, indeed often an apolitical opposition. It has focused on the argument, for instance, that the BNP are not effective Councillors, they don't go to meetings, don't speak at meetings, don't deal with problems. In some instances that may have been true, but it was always open to the question, or comment, "Well God help us when they do then!"
In fact, in response to the BNP's gain of 3 seats from 6 to 9 (they have all three Councillors in one ward) Stoke Central MP, Mark Fisher, commented that the BNP had been 'good local candidates who've worked harder than Labour'." The local Anti-fascist group Secretary in the internal discussion criticised Mark for his use of the word "good", a point that Mark has accepted was not well chosen, but agreed that, "Of course, the point that Mark is making is perfectly valid: that the BNP have worked harder as community politicians than the Labour Party."
The reaction of the LP establishment in Stoke was pretty abysmal if not altogether surprising. Labour shares power in an unholy alliance on the Council with the Independents, Tories and Liberals. It went from 23 seats to just 16. Labour's establishment seemed more concerned about what effect this would have within their Popular Front in terms of how many Chairs of Committees they would have! At a time when the election showed that workers have failed to turn up to vote Labour as they find it increasingly difficult to discern them from the Tories, the Council's elected Labour Mayor, Mark Merdith, called for "a period of conciliation and progress on the Council, rather than political sparring and point scoring."
He said that many of the Councillors had lost their seats because they had taken difficult decisions, such as the Council's decision to close many of the City's failing schools. But what this amounts to is saying that they lost seats for the entirely deserved reason that instead of standing on the side of the workers whose Party they are, they stood instead with the Tories, and Liberals. Instead of learning the lesson of that, and realising that the LP, as the Party of the working class, should be taking hard decisions in the other direction, hard because it means standing up against the capitalist class, and against Brown's Government, all they could offer was more of the same! Outgoing Council Leader, and former MEP, Mike Tappin, commented that the decisions that cost him his seat were the right decisions for the City!!!! Tappin, is an educated man, he was County Councillor in the same ward and at the same time that I was a City Councillor, he's a college lecturer. So how come he can come up with such drivel. What is this City if it isn't the people that live in it? And the vast majority of those people are workers, the workers that the LP is supposed to represent. So no Mike, the workers of the City, and, therefore, the City itself has told you clearly these were not the right decisions! You should have been acting in support of the workers, and you didn't. That was the only thing required of you and you failed. That's why you paid the price, that's why the BNP is growing in strength.
At least that is better than some of the Norscarf members, however, who in the internal discussions have come out with a terrible Third periodist reaction of responding to the inadequacy of current Labour politics by proposing to support virtually anyone, including the Liberals and Greens, other than Labour, the BNP and UKIP!
The message it seems to me is clear. New Labour has disappeared up its own arse. Its very premise, the only reason that ordinary LP members tolerated it, was because it was winning, and after a period of so long out of office, for a Party based on electoralism, that was a powerful incentive. But not only is New Labour now not winning, but it has led Labour to the worst defeats in 40 years, as far back as the period of Harold Wilson and his attacks on the working class through In Place of Strife. There is no reason for ordinary LP members to tolerate New Labour toryism any longer, indeed if Labour is to have any chance of winning the next election by getting back its core working class support, more importantly if the BNP are to be prevented from entrenching themselves as a major alternative worker's party - in that very basic sense of being a party to which workers turn for answers to their problems - then New Labour has to be ditched, and ordinary rank and file members have to begin by turning out into the Community, have to become a Party of radical opposition, including, and especially to Labour Councils themselves where they attack workers interests, and thereby rejuvenate the Party at its grass roots level, providing the new fresh forces the Labour Movement needs to take the battle forward.
In the late 70's early 80's, I remember being in a Party that was totally corrupt, where meetings took place often just twice a year, where the only discussion was about how much money had been taken at Bingo at the local Community Centre, where it was virtually impossible for anyone to join - whether you were a Leftist or not - and seeing that Party transformed through new blood coming into the party, not because the LP had turned Left, but because a group of us went out and got stuck into community issues in workers districts, spoke to people on the doorsteps week in week out, and persuaded them to come and shake things up. In short time we had a functioning active organisation, and Labour votes soared, communities were covered in Labour posters, and community organisations like Tenants and Residents Associations were established, and so on.
The BNP seem to have learned that lesson. The Provos and other political groups also seem to have learned it, but the Left still want to do "real politics", is still more concerned about not being able to hold sterile debates at CLP meetings, and Conferences. Both the LP and the Left need to learn and learn quickly from these events. Nor is the option of the Left trying to do this kind of Community work through some kind of alternative workers party a viable option. The Left is too weak. Those of us that did it 20 years ago got burned out, and we were only able to do it, because we were able to use the lever of the LP Branch to mobilise other active - not necessarily very Left - members of the Branch to shoulder some of the burden. IF the left is not to miss the boat, it has to learn the lesson the BNP has learned, it has to make itself relevant to ordinary working people. It will not do that on its present course and politics, and even if it could it is too small to have any dramatic effect. It can only do that by getting stuck into the Labour Party and utilising its numbers to turn outwards effectively to the working class.
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