A note on the ‘platform debate’ in Left Unity and on the issue of ‘left reformism’

A debate has opened up among Left Unity (LU) supporters in relation to the political and strategic orientation and organisational form of the ‘Left Party’ (?) those involved in the LU project aim to launch this November. Three competing ‘platforms’ have emerged, each proposing a distinct set of founding principles for the new party. The matter will be settled in a vote at LU’s November conference – which all of those who sign up to be ‘founding members’ of the new party can attend. As one of the signatories of the Left Party Platform (LPP),* I thought I would explain why I support this platform and why I’m not convinced by the others. I thought I’d also make a few remarks in relation to the ‘left reformism’ controversy that has arisen in relation to Left Unity – and, specifically, the SWP’s concerns about (what it sees as) the general orientation of Left Unity.

The first thing to say, here, is that the platform debate is very welcome. To some, no doubt, the emergence of competing factions in Left Unity looks worryingly – perhaps tediously – familiar. We’re all painfully aware, after all, of the left’s tendency to rip itself apart and self-destruct in fractious squabbling given half a chance. But while I wouldn’t say that there is absolutely no danger of this debate spiralling into yet another left group implosion (this time before the organisation has even officially established itself), the debate so far (!) has been relatively restrained and has been conducted (at least it looks this way to me) with patience and evident good will on all sides. Of course, a crunch point in this process will come when one of the platforms wins out over the others in the November vote. Conceivably, people in the unsuccessful platforms may walk out of the organisation. I hope this doesn’t happen – and one of the key responsibilities of those clustered around the victorious platform (whichever it is) will be to be as conciliatory as possible toward the defeated platforms and to stress that there is still a place for them. I have to say, here, however (and I’ll go on to spell this out a bit more below) that it’s much easier to see how those with the SP perspective could continue to organise as a distinct current within a broader party organised along the lines of the LPP vision than it would be if it were the other way round – precisely because the SP vision is not of a broad party capable of encompassing diverse currents.

Nevertheless, despite these real dangers, my overall feeling is that the current debate is a healthy one and, moreover, a necessary one. We do need to set down some fundamental principles and general programmatic and strategic parameters for the group before we start to build it as a party  – we need to know, roughly at least, what kind of thing it is we are trying to build and what kind of things we are trying to do. Further, the current debate in LU (together with the policy commissions process in which any supporter can get involved in discussing future policy for the party) demonstrates in practice our commitment, right from the beginning, to building a thoroughly democratic organisation. This certainly isn’t an organisation in which everything has been stitched up from the start and it won’t be one in which decisions passed down from an elite at the top are rubber stamped by the membership.

As healthy, welcome and necessary as this process of debate may be, however, I’m not, of course, indifferent as to which platform wins out. Indeed, I think it’s absolutely essential for the success of the Left Unity project that the principles and statements set out in the LPP documents are adopted as the basis for the new party. Let me explain why.

Our key task, it seems to me, is to provide a political organisation which could draw together and articulate a wide range of forces on the left. Labour’s almost total abandonment of what we might call traditional social democracy has opened up a political space in which a broad left party could flourish. We need to build an organisation which could appeal to the many many thousands of people who have been left feeling disenfranchised by Labour’s march to the right and which could bring this very large constituency together with various others, including forces further to the left. We need, in other words, a British version of the Front de Gauche, Die Linke and Syriza – all of them multi-tendency organisations in which a broad range of left forces cohere and which, crucially, are able to offer an attractive political home for refugees from established (ex-) social democratic parties. These are the sorts of parties making the running on the left at the moment. Unlike the other two platforms, the LPP is squarely in this sort of mould. It’s a platform which says quite clearly that we want Left Unity to be broad and inclusive and we want it to be these things because, above all, we want it to be big and thus a serious political force!

None of this is to say that I (or, as far as I know, any of the other LPP signatories) intend to build a straightforwardly social democratic party or some sort of Labour Party Mk 2 as is sometimes suggested or implied by our opponents. I certainly don’t. My view is that  the ‘space’ for substantial social democratic reforms within capitalism is much more constrained than it was a few decades ago (and of course that space has only narrowed further in current conditions of serious global crisis). The rightward drift of social democratic parties internationally (in fact, the decomposition and hollowing out of social democracy) should be interpreted with this context in mind – it’s not credible to suppose that this can be explained simply in terms of ideological defeat on the part of the left-wing of social democratic reformism. It’s structural. The point is, however, that not everyone who identifies with the left broadly and who is looking for a serious alternative to Labour is, consciously at least, anti-capitalist. The vast majority of people on the left are generally social democratic and reformist. This sort of political position (in my view) is often held in a rather inchoate, general, instinctive way – the expression of a sort of vague social democratic ‘common sense’ on things like welfare and social equality. We have to attract the large numbers of people like this and provide them with a political home, uniting them with forces further to the left. This means that we need a broad and relatively non-prescriptive set of principles and a general orientation which is equally acceptable as something to sign up to for Old Labour social democrats as it is for revolutionary socialists.

In calling for this sort of party, socialists in the LPP certainly aren’t diluting their own politics – or in the SP’s bizarre argument ‘hiding’ their views and pretending to be social democrats – we’re simply saying that in order to build something serious and worthwhile, rather than yet another pious but small and ineffective sect of the righteous, we have to put forward a broad platform in which several different political currents can co-exist, work together and combine their forces. Socialists in the LPP don’t have to disguise or keep quiet about their socialism. Why should we? It’s just that we feel that it’s perfectly possible to work together in the same organisation with people holding different views rather than demanding that all prospective members sign up to a highly prescriptive list of ‘correct positions’ which will effectively exclude huge numbers of people we could otherwise draw into an organisation providing a leftwing opposition and alternative to austerity.

Working in the same organisation as those with broadly social democratic reformist views, furthermore, provides socialists with the best opportunity to get our ideas across and to win people to our politics. Many of those in the LPP, indeed (far from diluting or ‘hiding’ their views) aim to organise a far left pole of attraction within the broader party with this sort of approach in mind. We believe that people are best won to socialist politics, not by confronting them with a schematic list of revealed truths which they have to sign up for before we’ll work with them, but by working and campaigning with them in political activity in an organic, pedagogical process built on trust and mutual respect.  It’s important to point out, also, that socialists have to remember that they have just as much to learn in this process too – we have to avoid the all too common arrogance among the far left which tends to assume that we socialists are the bearers of enlightened, timeless and final truths and that those who don’t share our views are simply benighted naifs groping around in political darkness.

I’m sure I’m not alone among LPP signatories in that I probably agree with some 80 – 90% of what the SP statements say. It’s just – as indicated above – that I think that the SP approach will narrow the potential reach of Left Unity pretty drastically. It’s almost as if the SP has been designed deliberately to exclude large numbers of people and to restrict the new party to a small group of people who agree with each other on everything. There are plenty of those sorts of parties already in existence. If people wanted to join an explicitly and unambiguously Marxist party they would already have joined one of the existing 57 varieties. It would be a great shame (and in fact thoroughly irresponsible given the political opportunities that have opened up) to produce yet another small socialist sect that no one wants to join. We have to ask ourselves if we’re serious about building a powerful anti-austerity movement of the left or if we’re just posturing. If we’re interested in the former we need to take a leaf out of the European Left’s book and build a broad party of the Front de Gauche/ Syriza type.

I have to say that when I look at the documents and articles emanating from the SP (whatever the undoubted merits of the individuals involved) a lot of it does strike me as self-regarding political posturing. The emphasis in SP arguments is often on ‘being true’ to one’s own beliefs, saying what one ‘really believes’, openly declaring one’s socialist politics, being unwilling to ‘dilute’ one’s socialist or communist principles for grubby reasons of political manoeuvring, opportunism and so on.  Now, as I’ve already pointed out, no one in LPP is asking anyone to hide or dilute their views – we’re just suggesting that it should be possible to work alongside people who don’t agree with you on absolutely everything and that this would be a good idea if we want to build something serious. But the main thing that grabs me about the SP’s arguments in this respect is that it’s all remarkably lifestylist – it’s about presenting and attending to a particular image of yourself and feeling good about it. It’s about staring at your reflection in the mirror and congratulating yourself on your ‘correct positions’. It’s purism, not politics.

In one of the articles in support of the SP a contributor argues (and I certainly don’t mean to pick on the specific individual who I’m sure is a fantastic comrade – it’s just that this argument seems to me to epitomise the SP) that ‘the worst that can happen’ if a narrow platform wins out is that people ‘refuse to stand with us this time’. This, for me, is incredible logic. What is the point of organising a new party of the left if people refuse to join it? I’m interested in building a successful counterpart to the European Left parties overseas, not in pious failure – ‘oh well, no one joined, but at least we had the correct positions’.

In my view the SP would be much better off as an organised leftwing current (one among several others by the way) within a broader party organised along LPP lines. In fact (as Tom Walker has rightly suggested) it seems likely that some of those expressing support for the SP mistakenly assume that the platform debate is all about the setting up of permanent currents/factions within LU – but it’s not, it’s about setting the parameters for the new party as whole. The debate is about whether we have a broad party capable of encompassing several different currents and poles of attraction within it, or whether we have a narrow party without scope for significant differences of opinion. It’s worth making it plain that if the LPP win the vote in November, the SP can continue to exist and organise for their own politics within the new Left Party. If the SP win, however, LPP supporters will not be able to continue to organise as a current within a narrow party. Not because we’ll be forced out or deliberately excluded but because you can’t have a broad left current within a narrow party from which everyone who is not a Marxist is effectively barred.

I have to say that it is not quite clear to me what, precisely, the Class Struggle Platform (CSP) is arguing. They say that the LPP is insufficiently concrete (it’s broad and general for the reasons I’ve explained above) while the SP is too rigid and dogmatic (we agree about that). They seem to be saying that, instead, the new party’s focus should be on putting forward concrete plans for political engagement and struggle on specific issues which they then go on to list. Some of these proposals seem eminently sensible (I’m not sure about the proposal for a mass strike to bring down the government – don’t get me wrong I’m all for a general strike to bring down the government, I just don’t think it’s an immediately implementable demand in the way CSP seem to assume – which just seems like the same old rather abstract far left sloganeering to me), but I’m just not convinced this is an appropriate foundational basis for a new party. I don’t think that necessarily preliminary matters of organisational form and political orientation are settled by saying ‘here’s a list of campaigns, let’s do them’. It doesn’t adequately address the question driving the dispute between the LPP and SP – i.e. should we organise the new party as a broad left political formation or not.

A Note on the SWP and ‘Left Reformism’

In recent weeks there has been a small flurry of articles (and the matter has also come up in talks and event presentations) on the issue of ‘left reformism’ emanating from the SWP. The flurry is, in part, in response to the rise and rise of Syriza – but it also typically addresses the Left Unity initiative. My view is that this is all part of a necessary debate and I welcome it (not least because the SWP have generously given me space to put forward my views in their publications). Nevertheless the SWP’s attitude toward Left Unity does sometimes strike me as unnecessarily suspicious (sometimes veering toward hostility) and I’d like to say something about this briefly. I don’t want to go into the details here about the wider, more theoretical, political debate over the question of state power, ‘Left governments’, ‘centrism’/(left) reform vs revolution and so on. I’m currently preparing a piece on these questions for publication in the near future and there’s no way I can begin to cover all of this in a short note on a website. What I want to address is the way that the SWP seems to be relating to Left Unity – which is one which seems to oscillate (often in the same speech/article) between the suggestion that they’d like to be involved and mild denunciation.

[It's worth pointing out in passing here that I (and I'm sure others in LU feel similarly) find the label 'left reformism' slightly irritating. It's not just that it's often used as a more less pejorative and slightly condescending term to categorise people within a left typology of various kinds of socialists who haven't yet grasped Leninist principles, it's  that it's a very blunt instrument. As suggested above, there are actually many different positions within Left Unity which I'm not sure are all adequately understood if grouped together within a catch-all term like 'left reformism'.]

Simplifying slightly, the SWP postition on ‘left reformism’ (which is the label they apply to Syriza, Die Linke, Front de Gauche, the Left Bloc as well as Left Unity) is that it is, in general, to be welcomed by revolutionary socialists in the Leninist tradition but should be supported critically without any illusions in the capacity for such a strategy to ‘open the way for socialism’. Correspondingly, the SWP approach to specific ‘left reformist’ organisations is to seek to work with them where possible, but to remain critical of the strategy these parties espouse and, above all, to maintain organisational independence rather than seek to dissolve themselves into these formations.

This is all fine as far as I’m concerned. The mystifying thing, however, is that alongside the suggestions that the SWP would like to be involved in LU you also encounter comments about the ‘dangers of left reformism’. There’s nothing unreasonable about the SWP being critical of what it calls ‘left reformism’ – it’s just that these criticisms of Left Unity often seem remarkably and disproportionately vigorous. There’s an awkward duality to the muted polemicising on the one hand and the extended olive branches on the other. It’s also odd to hear, repeatedly, that the SWP refuses to compromise its political independence by dissolving itself into a broad left formation – it’s odd because, as far as I know, no one is asking the SWP to dissolve itself into anything.

I realise that there’s a lot of bad blood between the ISN and SWP and this may be where a lot of the hostility and suspicion comes from. But as far as I’m concerned there’s absolutely no reason why the SWP and LU shouldn’t cooperate in campaigns and struggles (pretty sure we already do). Furthermore, for me (I can’t speak for the organisation as a whole – and I imagine we’ll need to wait until the founding conference when we decide what sort of organisation we’ll be), there’s no reason why the SWP shouldn’t be more directly involved in the party that emerges from LU. Indeed, individual SWP members already are involved in certain LU branches. The only caveat here is that the party that emerges from LU will be an individual member-based party rather than one to which other parties and groups can affiliate as organisations. Our politics are likely to be substantially different from those of the SWP of course, and we (like them) will not want to jeopardise our organisational independence. Furthermore we will reserve the right to be critical of the SWP (just as they refuse to abandon their criticisms of ‘left reformism’) even if we work closely together as I suspect we will.

* God, I’m sorry about all the acronyms.

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Why it’s time to realign the Left

First published in Socialist Review May 2013

Radical left parties such as Syriza in Greece and the Front De Gauche in France have made significant gains recently. But what about Britain? Socialist film maker Ken Loach has recent issued a call for a new left party to be formed here too. Ed Rooksby, one of the supporters of the call, explains why he thinks the time is right to launch such a party and what its aims should be. Socialist Review will respond in our next issue.

Radical left parties committed to fighting austerity and able to attract considerable popular support have emerged across Europe – most spectacularly in Greece. We are in desperate need of a similar party in Britain – one which is willing to take the risk of seeking to break the stranglehold of a social democracy that has long since capitulated to neoliberalism and present an unashamedly socialist alternative. Thankfully, for the first time in a long period, the conditions for the emergence of a broad left coalition of forces in the UK capable of attracting large-scale support seem ripe. These conditions have been generated and shaped by four major interconnected political and economic developments.

The first and most obvious of these is economic crisis and austerity. This has posed, in very immediate terms, the question of how best to defend jobs, living conditions and the healthcare, education and welfare reforms won in struggle decades ago, and which are now being stripped back in a determined assault. But it has also posed the question, again in immediate terms, of whether or not capitalism is in fact compatible, over any prolonged and sustained period, with decent welfare provision and conditions of life and work for the majority. For those who conclude that it is not, the further problem of how to build a more democratic and humane alternative is raised. The crisis and austerity confront us with fundamental and pressing questions in relation to organisation and strategy. It is in this context that the idea of the construction of a new organisation of the left has been put firmly on the political agenda.

The second development – one closely meshed with the first – is that it has become painfully apparent to many of the Labour Party’s erstwhile supporters and activists that Labour is not an effective political vehicle for the organisation of resistance to austerity (let alone for the implementation of a counter-offensive against capital). There has, over the past few weeks and months, been a pronounced acceleration of a longer-term process of disillusionment on the part of Labour’s core supporters and activist base and, correspondingly, a growing willingness among many of them to countenance the prospect of leaving Labour to join a new organisation – in particular, the Left Unity initiative associated with Ken Loach’s recent appeal.

Rise of Syriza

The third factor shaping this new conjuncture in the UK is an external one – the international influence and prestige of Syriza. The Syriza phenomenon has demonstrated that it is possible for a coalition of fairly disparate left forces to win mass support with a clear anti-austerity agenda and win such support very rapidly. More than this, Syriza has shown that it is possible for the radical left to challenge seriously for power. The morale-raising psychological impact of this on socialists across Europe should not be underestimated. This Syriza effect interacts with the loosening of Labour’s political hegemony – further contributing to the sense that it is possible to build an effective political force to the left of Labour. It has also created a renewed sense of possibility among more radical left groupings.

There is a fourth development which closely interacts with the third. This is the recent bust-up in the SWP. Whatever you think of it, this has clearly shaken up the political landscape on the left and opened up a new space for realignment. In interaction with the Syriza effect, this has created a very promising situation for building a new, broad coalition.

These are the main developments that together constitute a new conjuncture on the UK left in which a significant realignment of forces has become a definite and realistic possibility. The most exciting and promising development in this respect is the emergence of the Left Unity organisation which sees itself as the embryonic form of a new broad-church party of the left and which models itself in relation to Syriza and other successful groupings such as the Front de Gauche.

The classic strategic dilemma

One of the biggest questions that the conjuncture poses for us is the question of strategic orientation and the associated issue of the organisational form that a new coordination of forces should take.

Of course, here we start to encroach on one of the oldest controversies in socialist thought – the classic reform/revolution debate. Let me draw out (in what cannot be anything other than a very simplified way given constraints of space) the core problems with each of these approaches as they are usually conceived in order to provide the foundations for a different way of approaching the question of socialist strategy.

At the heart of the reformist approach is the idea that the process of transition to socialism can be a wholly evolutionary one of smooth, piecemeal change. The core problem (among many) with this strategy is that, when reformists find themselves in power, they also find themselves responsible for the management of a capitalist economy. Since radical measures aimed at the introduction of socialism must, by definition, endanger capitalist profit, reformist governments find themselves caught on the horns of an impossible dilemma; they require capitalist cooperation for a process of gradual transition to socialism, and yet the introduction of any measure which might lead very far in the direction of socialism would necessarily lose them the cooperation (and earn them the intense hostility) of capital. So, in opposition to reformism, it must be insisted that the transition to socialism cannot be a wholly gradual process but must involve some kind of revolutionary break.

The revolutionary socialist approach avoids the core problem of reformism but, as it is traditionally conceived, has its own particular deficiencies. Again, I cannot outline all of these here, so will focus on the main difficulty.

In one important sense at least there is no absolute dividing line between a strategy of reform and traditional revolutionary socialism. Most revolutionaries believe that the struggle for and winning of reforms increases the democratic capacities of the working class, raises its confidence and educates it politically. Furthermore, many revolutionaries (see, for example, Alex Callinicos’s An Anti-Capitalist Manifesto) appear to believe that revolution is most likely to emerge out of a (frustrated) movement for reform which probes the limits of what the capitalist state is willing to concede and which spills over into something more far-reaching – and so, to this end, the strategy is to seek to place demands on the state which can tip the balance of power in favour of the working class and popular forces.

The defining feature of revolutionary socialism as it is usually conceived, however, is the view that socialists must remain strictly independent of the capitalist state rather than seek to work within it. This, however, is where the strategy runs into a major problem. The first part of this problem is that, in countries such as Britain, with a long established tradition of liberal democracy and, indeed, a long established tradition of reformism, it is difficult to imagine a process of mass radicalisation in anything other than the electoral rise of a party seeking to form a radical government. That is, it is hard to see this process throwing up anything other than a movement committed to the formation of a “workers’ government”. This, indeed, is the way things appear to be working out in Greece.

The second part of this problem is that it is also hard to see how the sort of transitional reforms revolutionaries want to pressure the state to enact would be implemented by government representatives reluctant to do so, let alone deeply opposed to them politically and ideologically. Some concessions could be wrested from a pro-capitalist government, yes – but a whole series of radical reforms that seriously undermine the power of capital? It seems unlikely. The major difficulty in the traditional revolutionary approach, then, is in its rejection of the very idea of taking power within the political structures of capitalism.

The dialectic of change

So neither the traditional reformist approach nor the traditional revolutionary strategy seems adequate. We need, instead, a strategy that seeks to combine elements of both. In his book The Dialectic of Change the Russian theorist Boris Kagarlitsky seeks to elaborate just such an approach. Revolutionary transformation, he argues, can only emerge organically and dialectically from a process of radical reform set in motion by a socialist government. He calls this approach “revolutionary reformism”.

In Kagarlitsky’s view it is only when you grasp the idea that reform and revolution augment and condition each other that you can start to formulate a realistic strategy of socialist change. Kagarlitsky suggests that revolution should be “conceived as a definite and necessary stage, a qualitative leap, in the process of reform” – “revolution is a ‘break in gradualness’, a leap in development”. It is a stage of development which is necessary for the consolidation of the changes – new socialist social relations – which can be brought into being (in some embryonic sense at least) within capitalist society through reform.

Clearly, not all reforms intertwine organically with revolutionary change. Kagarlitsky’s favoured strategy of reform is based on a passage from The Communist Manifesto where Marx and Engels write of the implementation of a series of reforms which may “appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production”.

Marx and Engels indicate that the introduction of reforms which run counter to the logic of capitalism (and which therefore appear in themselves “economically insufficient and untenable”) may set in motion a dynamic of cumulative change – a kind of chain reaction. That is, these initial reforms destabilise capitalism and therefore necessitate the implementation of further reforms which themselves run counter to capitalist logic and, in turn, stimulate further changes and so on. It is in this sense that these reforms “outstrip themselves” – they unleash a process of change which goes much further than the initial effects of the primary reforms themselves. Kagarlitsky believes that the dynamic of cumulative change Marx and Engels sketch out here provides the basis for a strategy of radical reform today.

How could such a process be set in motion? It is the manner in which reforms are implemented that is the crucial factor. Firstly, Kagarlitsky suggests that each reform must be designed to stimulate further reforms which flow from it organically. This demands that each reform is integrated into a well-planned strategic programme. Secondly, he stresses that these reforms must be driven forward by a movement which unites mass mobilisation “from below” with pressure “from above” as revolutionary reformist politicians work within state institutions. Revolutionary reformists within state institutions must be subjected to constant pressure from below. There must be a mass movement outside these institutions, capable of controlling their representatives and forcing them on to implement the reforms they have promised.

Furthermore, “revolutionary reforms” must be designed to strengthen and empower this movement. The growth of popular power would develop the organisational capacity of the mass movement and this would open up opportunities for the further flowering of popular democracy. In this way it can be seen that the dialectic between mass movement and socialist representatives in office would contribute to the momentum of the revolutionary reformist dynamic of cumulative change. Socialist representatives are driven on to introduce reforms which deepen mass democracy which, in turn, encourages the mass movement to pressure leaders for still further changes and so on.

Transitional Programme

What reforms, more concretely, might such a transitional programme include? A few ideas can be suggested. It might begin in its initial stage with an ambitious programme of directed investment. Spending should be strategically targeted and designed to kickstart more sustainable growth, create jobs and reorient the economy away from its reliance on the financial sector. Priority areas for investment could include investment in green, low-carbon infrastructure – particularly in transport and energy.

Radicalisation of the process of reform might throw up further measures including nationalisation of major financial institutions under democratic control and the bringing into public ownership, of a string of industrial firms. Taking a large proportion of the financial sector into public ownership would enable financial resources to be allocated according to social and environmental criteria. Similarly, the nationalisation of industrial firms would allow their activities to be oriented increasingly towards socially useful and environmentally sustainable production. Radical forms of democratic planning could be explored within nationalised firms. Of course, democratic planning and control should not be confined to the narrowly “economic” sector. The entirety of the public sector – the education system, welfare system, NHS and so on – should be opened up to collective, democratic and participatory forms of management.

Of course, it is worth pointing out that such a strategy would depend for its success on the existence of allies implementing similar processes of transformation abroad. Certainly any country attempting to go it alone would- at least beyond a certain point – find itself hopelessly isolated in the face of hugely powerful international economic and political forces. But as we’ve seen with the “Syriza effect” – the process in which the rise of the radical left in Greece has kickstarted moves towards political realignment elsewhere – the emergence of a radical left government in one part of the world is likely to provide a boost to similar movements elsewhere.

Of course, this sort of strategy raises its own problems. Such a left government would certainly arouse the intense hostility of capital and would come under huge pressure to reverse its programme from day one. This pressure would only increase as the dynamic of any transitional programme gathered momentum – if, indeed, it did. But the argument I have developed above suggests that there does not seem to be any plausible alternative strategic approach. It is hard to see how the left in Europe can avoid the problem of taking power in a left government if it is serious about changing society.

Mark L Thomas’ response in the June issue of Socialist Review can be read here.

Paul Blackledge’s and Alex Callinicos’ recent articles in International Socialism Journal also responded, in part, to issues raised in the above piece.

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The European Crisis

First published in Oxford Left Review Issue 10 (June 2013)

In order to think realistically and creatively about matters of socialist strategy – how to resist austerity, how to defeat austerity and even more than this how to set about winning power in order to bring about fundamental change toward a more democratic, humane, equal and sustainable society – we need to be clear about the economic and political context in which we are seeking to operate. In the following I shall put forward some broad-brush observations in relation to the origins, development and trajectory of the current crisis of capitalism focusing in particular on Europe before drawing out tentatively, and giving brief consideration to, a series of possible ‘exit routes’ – two which might be imposed by capital and one which might be implemented by anti-capitalist forces.

Some General Points about the Crisis

It must be emphasised that the current global capitalist crisis is, precisely, a crisis of capitalism. That is, it is a systemic crisis. It is not simply a debt crisis. It is not about ‘profligate government spending’ as the neoliberal right have sought to present it – very successfully so, incidentally, given the way in which this narrative frames much of the debate in the political and media mainstream. It’s not even really about ‘greedy bankers’ or a ‘failure of regulation’ as the dominant narrative on the centre-left tends to suggest. The first of these two (complementary) elements of the centre-left story moralises the crisis in a crudely simplistic way and the second presents it merely as a failing of administrative/ managerial competence. Deeper, underlying structural and systemic determinants – the economic pressures driving risk-taking, profit-maximising behaviour (i.e. the driving logic of capitalism) and militating against the imposition of regulatory constraints on those behaviours (and thus on maximised rapid financial returns) – are ignored and entirely excluded from the picture. It must be insisted, against all this, that the crisis is rooted in the dysfunctional logic of capitalism and that, indeed, this is an extremely serious crisis from which it is very hard to see how capitalism has any immediate prospect of recovery. It is likely to drag on for years.

Just as for capitalist growth and expansion, capitalist crisis unfolds in processes of combined and uneven development. The close international integration of national economies means that a crisis emerging within one of them can be transmitted widely very rapidly. However, while this entails generalisation of the crisis internationally in some respects (and indeed the crisis takes on some specifically and irreducibly international/global features) the effects of the crisis are not evenly distributed and its intensity varies from state to state and from region to region. This unevenness is shaped by national (and in Europe to a certain extent by regional) specificities and ‘path dependencies’ – the relative weight and health of particular economic sectors, the particular configuration of political-economic institutions and the particular constraints and capacities that arise from them, and the specific policy responses to the crisis chosen by governments for example.

One important feature of this international unevenness is that the crisis tends to become concentrated at any given time in one or two particular locations. It is not just, then, that the uneven development of the crisis is expressed in differing levels of intensity from place to place, but that the crisis becomes focused and condensed within a particular economy or economies. Developments in those particular locations take on a general significance – the unfolding of the crisis in these places manifests a sort of concentrated expression of the international crisis in general. Certainly the development of the crisis internationally can turn very rapidly on developments in these locations. These sites in which the crisis is concentrated and condensed need not include the location in which the crisis first emerges – indeed the geographical epicentre(s) of the crisis can shift. In the current crisis the epicentre of global economic instability has moved from the US to Europe. It began as a crisis in the US mortgage market and has been transformed into a European sovereign debt crisis and a crisis of the institutions of the EU and Eurozone. Furthermore, this European crisis, which condenses the global crisis, has a particular focal point of its own – Greece. It is in Greece, then, that the global crisis is manifested in its most concentrated form and it is for this reason that whatever happens in Greece over the next few months – economically but also politically – is likely to have hugely significant international ramifications.

Dimensions of the Crisis in Europe

We’ve been told regularly over the past few months that the European crisis has ‘turned the corner’. Each time the proclamation has been proven wrong by subsequent events, only for the proclamation to be repeated a few weeks later which, in turn, proves to be mistaken – and so on. Recent economic figures show the seriousness of the situation. Eurozone GDP contracted for three consecutive quarters in 2012, following 0% growth in the first quarter of that year. The fourth quarter saw growth fall by 0.6%, following a drop of 0.1% in the previous quarter. Clearly things are not improving. The last quarter of 2012 also saw some of the worst GDP figures for major states in the EU: Italy minus 0.9%, France minus 0.3%, and even Germany saw its GDP decline by 0.6%. ‘Peripheral’ southern European economies such as Spain, Portugal, Cyprus and particularly Greece are, of course, suffering the worst effects of this crisis. In Spain, for example, unemployment currently stands at about 26% – youth unemployment at 52%. In Greece, which has seen a cumulative reduction in GDP by about 20% over the past four years and which is expected to have contracted by 25% by the end of 2014, the unemployment rate stands at about 27% – with youth unemployment at 61.7%. About a third of Greece’s population (that’s about 3.9 million people) are now thought to live in poverty.

The fact is that Europe is in a deep, intractable crisis and nobody really knows how it can be overcome. As we’ve seen, the crisis in Europe (the most acute, focal point of which is Greece) condenses the global crisis and so stagnation in Europe both manifests in sharp form, and also itself drives and reproduces, the great world recession.

How did we get here?

The current crisis represents the breaking down of a series of temporary solutions to a major crisis of capitalism that emerged in the 1970s. In effect, the international economy has gone full circle and returned, after a few decades of (largely debt-fuelled) growth based on various temporary fixes, to the relative stagnation in which it languished around forty years ago. In order to understand the crisis today, then, we need to examine the development of the global economy over the past few decades.

Robert Brenner1 has argued that the advanced capitalist economies entered a crisis of profitability at the end of the 1960s. Indeed, according to Brenner, these economies have suffered from relatively low rates of profit ever since. One major reason behind the crisis of profits that emerged in the late 1960s was that firms encountered increasing constraints on opportunities for profitable investment as the post-war boom petered out. The effects of this can be seen in the marked slow-down in rates of growth from the 1970s onwards compared to previous decades (the average rate of annual GDP growth in Western Europe from 1950-73 was 4.79%, while from 1973-03 it averaged 2.19%).

Capitalism responded to this crisis in several ways. It sought to ‘go global’ in order to seek out cheaper pools of labour and to open up new investment opportunities abroad. Under Thatcher and Reagan especially, it launched an assault on trade unions and pushed up unemployment in order to weaken organised labour and drive down wage costs at home. Finance was also, increasingly, deregulated in order to soak up excess capital looking for profitable outlets. Some of the initial solutions, however, soon created further problems for capital. Repression of wages, of course, drove down workers’ spending power and thus reduced the rate of effective demand. Capital’s solution to this problem was to extend the credit system and to ramp up debt-fuelled consumer spending. This strategy intertwined with wider moves to deregulate finance and with the rapid acceleration of ‘financialisation’. Credit-fuelled consumption, together with asset price inflation drove growth for a while. However, this solution, in turn, eventually became the source of serious problems for capitalism because it ‘ultimately led to working-class over-indebtedness relative to income that in turn led to a crisis of confidence in the quality of debt instruments’.2 The crisis that emerged in the US ‘sub-prime’ market brought into full view the extent to which major financial institutions had become perilously overextended and, indeed, the extent to which growth had been reliant on ballooning of debt.

What we saw, then, from the 1970s onwards was a series of temporary fixes to a deeper structural problem in which each fix raised further problems that had, in turn, to be temporarily solved with further fixes. Indeed Capitalism, as David Harvey points out,3 never really resolves its crisis tendencies – they are merely shifted around, postponed and held off. Capitalism finds a way of overcoming one crisis only to discover, sooner or later, that the terms of this solution, in turn, throw up new problems which develop into a new crisis.

It is worth noting that ‘financialisation’ represented a response to very real pressures on profitable accumulation – it was a way of soaking up excess capital given the weakness of profitability in the productive sector. The deregulation of the financial markets and the concomitant extension of credit and debt did not simply represent, as social democratic and Keynesian theorists tend to suggest, an ideologically driven, bad policy choice on the part of neoliberals. A solution to the problems we face then, cannot be as simple, as some sort of return to the post-war ‘Keynesian consensus’ in which financial regulation is tightened up and the financial markets put back in the box from which they escaped after the 1970s. The real structural pressures to which ‘financialisation’ was a response are still there and remain unsolved.

The Eurozone Dimension

The crisis in the Eurozone intersects with this deeper, wider crisis of capitalism more generally. The Eurozone crisis, however, has a number of specific features and emerged in a relatively distinct historical process closely bound up with particular effects emerging from the institutional architecture of the Euro. European Monetary Union (EMU) flowed logically from closer and closer economic integration among European economies and from the institutional/legal structures (such as the Single European Market) which reflected and accelerated this process. One of the key factors driving economic integration in Europe – from the mid-1980s especially, after a period of so-called ‘Eurosclerosis’ in the 1970s – was the intensifying global competition which set in after the petering out of the post-war boom as outlined above. Monetary Union, as the most advanced and ambitious form of economic integration in Europe, functioned as a joint strategy among European elites for defending and improving the global competitiveness of the region in the context of a general and sustained crisis of profitability. EMU was rooted in world crisis from the start then – it has always been, in a sense, an expression of this underlying crisis of profits. As the most recent in a series of successive fixes to this underlying global crisis (financialisation) broke down, however, EMU itself became a key source and driver of the global recession we are now experiencing.

The key weakness of EMU from the start was the ‘one size fits all’ approach embodied in its ‘discipline and convergence criteria’ for membership and perpetuated in its ‘stability and growth pact’. This yoked together economies as diverse as Germany, Greece, Finland, Ireland, the Netherlands and Cyprus in a deeply inflexible system. One of the key problems was that some of these economies are strong exporters and others are not. Inevitably major trade imbalances between national economies within the Eurozone emerged. Germany in particular ran huge trade surpluses (driven in part by sustained wage repression) while countries like Spain and Greece ran corresponding deficits. Further, the surplus from exporter economies (particularly Germany) was increasingly recycled into the property market in Spain, driving the speculative property boom there, and also into financing Greek borrowing to cover its trade deficit. For countries like Greece, then, a vicious cycle of debt emerged in which – unable to deploy the traditional instruments for rectifying trade imbalances (devaluation, allowing inflation to rise) because of the constraints imposed by EMU membership – it had to borrow more and more to cover its growing trade deficit and the more it borrowed to finance imports the larger this deficit grew.

It is worth making plain that for a several years this dysfunctional arrangement suited countries like Germany very well – after all it bound stronger and weaker economies together in an intra-European core and periphery relationship which helped to underpin export driven growth in Germany in particular. It was only after the eruption of the Euro crisis that, suddenly, Greek ‘profligacy’ was discovered and loudly denounced by German politicians and EU elites.

The ‘credit crunch’ of 2008 eventually brought these structural imbalances to the surface. As the effects of the sub-prime crisis in the US rippled outwards and deepened into global financial crisis the money loaned to southern Europe by northern banks suddenly looked very vulnerable. The crisis in Greece was finally precipitated in 2009-10 when, on coming to power, the new Papandreou government announced that the country’s debts had reached 300bn Euros and, shortly afterwards, announced that its 2009 budget deficit was four times the limit imposed by EU rules. The emergence of an acute sovereign debt crisis in Greece heightened fears about heavy indebtedness elsewhere in the Eurozone – particularly in Spain, Ireland and Portugal. The EU’s and IMF’s response was to insist on severe austerity measures in return for emergency loans and bailouts to stricken economies. It soon became clear that EMU (and perhaps even the EU itself) was in no small danger of disintegration and possible collapse.

Of course, the current crisis in Europe is not confined merely to members of the Eurozone – the current situation in the UK, for example, cannot be attributed directly to effects arising within the structures of EMU. Nevertheless the various sovereign debt crises that have emerged within the Eurozone are key drivers of the crisis in the EU more widely which is, in turn (since the economy of the EU as a whole is the largest in the world), at the core of the continuing global turbulence.

Austerity in Europe

Austerity has been implemented unevenly across Europe – but it is the favoured response of European political and economic elites to the crisis. It is quite clear, however, that as a strategy for economic recovery austerity is failing miserably and is, in fact, making the economic situation much worse. As Meadway explains, there is a simple mechanism at work here:

Cuts in government spending shrink demand in the economy. As demand shrinks, firms sell less. Firms that sell less cut wages and make redundancies. Demand falls still further, and a vicious circle of decline is established. Cutting spending to reduce a deficit leads to bigger deficits as unemployment rises and taxes fall. Austerity is self-defeating.4

The self-defeating logic of austerity is, of course, most plain to see in Greece where it has been implemented in its most vicious forms and where the economy contracted severely.

Why, given its clear failure, do states remain committed to austerity? The basic intention behind the austerity drive is to ensure that the costs of the crisis are shifted away from capital as much as possible and born, instead, by ordinary people. In the Eurozone this has, in addition, a key international dimension in that it is the loans of over-extended northern banks that ‘the troika’ is, in particular, seeking to protect and it is the ordinary population of the southern states who are being forced to pay the price. The determination to stick to austerity despite its dire effects reflects the determination of European elites to defend the banks come what may.

Nevertheless the fact remains that, plainly, austerity is not succeeding as a means of overcoming the crisis. This must be just as clear, now, to the political elites driving austerity as it is to those being forced to endure the suffering it inflicts. The determination to stick with this approach does not at all imply that European elites have any confidence any longer that it will work. Indeed, the current situation seems to be characterised by a certain ideological bewilderment on the part of those elites. They do not know how to end the crisis. They continue with austerity only because they have no idea what else they can do – they can see no other acceptable alternative. The strategy, such as it is now, is simply to keep going in the desperate hope that something turns up.

The Future

How might the crisis in Europe unfold over the next few years and what ‘exit routes’ might emerge? Of course no firm predictions can be made but it is possible to discern three distinct possible paths. The first of these – which is also, in my view, the most likely – is that the crisis simply drags on for several years. That is, Europe remains mired in a condition of relative stagnation as political leaders attempt to ‘muddle through’ the crisis in the hope that generalised austerity can squeeze wages and the ‘burden’ on capital presented by public spending enough to restore profitability to the point at which ‘normal’ rates of capitalist growth can return. Nevertheless it is quite hard to see how profitability can recover without massive destruction of overaccumulated capital – the underlying basis of the current crisis. In other words, capitalism probably needs a major slump in order purge itself of the dead weight which currently weighs it down – but, of course, the political and social costs of a severe depression would be so high that most governments are unlikely to let this happen. All of this raises the interesting prospect of the possible political ‘normalisation’ of capitalist crisis and stagnation.

A second path of development – something that has been mooted among EU elites – is some form of managed breaking up of the Eurozone as it is currently constituted and its radical reconstruction. This would involve the ejection of southern European economies from the Euro and the formation of a smaller and more tightly integrated Eurozone made up of core northern European economies. Full fiscal and banking union among these core economies would occur – responsibility for the banking system and for taxation and public spending would be taken away from constituent states and given to supranational institutions. This might be a way of abolishing the structural problems and imbalances within the Eurozone and ensuring that they do not re-emerge. This process might be accompanied by the break-up of the EU as it currently exists, too, or perhaps the emergence of a ‘twin-track’ EU in which the tightly integrated Eurozone states co-exist with a more loosely integrated ‘outer Europe’.

However, this would be a difficult path for the Eurozone to take for several reasons. First, it would put northern banks’ loans at great risk and the process of disentanglement as southern European economies left the Euro would be a pretty perilous process for all concerned. Secondly there are considerable political obstacles in the way of fiscal and banking union among core EU states – not least that many citizens in the states involved are likely to be hostile to the idea. A third problem is that this root and branch reconstruction of the Eurozone would take several years to organise – therefore, it could not provide a quick route out of the Eurozone crisis. The final problem is that this process of reconstruction would not necessarily provide any means of addressing the underlying crisis of profitability.

There is a third path, however. This is probably the least likely of all to happen – but it is the one that socialists must fight for. The point of departure for this route would be the breaking of austerity by mass resistance and the implementation of a series of reforms which would alter the balance of class power in favour of the working class and other popular forces and which would set in motion a process of transition beyond capitalism. What happens in Greece over the next few months is key to this process. We have seen that it is in Greece that the crisis of capitalism is condensed in its most acute form. This makes Greece the weak link in the contemporary imperialist chain – and a socialist breakthrough at this point would send shockwaves through the entire system. In the general election of June 2012 Syriza – the coalition of the radical left in Greece – narrowly missed (by 2.8% of the vote) becoming the largest party in the Greek parliament. A situation which would have been unthinkable a few years ago – a radical anti-capitalist party in Europe on the verge of winning power (in a country where the present governing coalition might fall apart at any minute) – has become a reality. If Syriza can take power and bring austerity to a halt in Greece it would provide an inspiring example to people elsewhere in Europe and help to deepen and radicalise anti-austerity struggles across the continent.

Of course, a party seeking to utilise the capitalist state apparatus to implement a radical left-wing programme of reforms would face many great difficulties and dilemmas. Here we start to encroach on one of the oldest controversies in socialist thought – the classic reform/revolution debate. It seems unlikely to me that there is any strictly reformist road to socialism, but it is also my view that there is no reason why revolutionary transformation should not emerge organically and dialectically from a programme of transitional reforms. In any case it is hard to see how a process of socialist transformation in countries with established parliamentary democratic institutions could entirely bypass these structures. One of the interesting things about the unfolding crisis in Greece is the way in which it maps closely onto the classical Marxist conception of a pre-revolutionary situation in all but one key respect. We can observe a certain level of decomposition of certain state apparatuses in Greece (demoralisation of the police for example and its increasing penetration by, and collusion with, far right forces), the collapse of the political centre and the increasing polarisation of social forces for example. However, there is little sign as yet of any proliferation of workers’ councils/soviets and nothing corresponding to the emergence of a ‘dual power situation’. The resistance of ordinary Greek people is finding political expression in the rise of a party committed to forming a united government of the left within (and against) capitalism. One of the most urgent tasks for the international radical left today is to return to, and rethink, the idea of the ‘workers’ government’, because it is in this direction that Syriza – at the vanguard of socialist struggle today – is heading.

1 Brenner, Robert (2005) The Economics of Global Turbulence (London, Verso)

2 Harvey, David (2010) The Enigma of Capital: And the Crises of Capitalism (London, Profile Books), p. 117

3 Ibid. p. 117

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So what’s the problem with champagne socialism?

First published in the Guardian 16 April 2013 (an edited version also published in the paper edition on 17th April)

A political scandal has blown up in the past few days in France over revelations about the apparent wealth of ministers in François Hollande’s government. In le grand déballage – the great unpacking – the Socialist government was revealed to contain several multimillionaires. Hollande and his ministers face embarrassing accusations that they belong to a group (highly unpopular in France) known as the gauche caviar – or what British people call champagne socialists.

Hollande’s concern about the application of this epithet to his government is understandable. It’s bound up with certain tropes about the left with significant populist appeal that the right are fairly skilled in using for political advantage. While in Britain the cork-popping in public squares recently may have brought a new meaning to the term champagne socialist, it’s usually associated with condescending derision of the left in relation to purported hypocrisy and self-deception.

The right often focuses on the comfortable lifestyle of particular figures from the left and extrapolate from this a couple of apparent conclusions. The first of these is a wild generalisation – that wealthy leftists are somehow representative of all. Leftwing views, that is, are really only held among privileged (and, it has to be said, largely fictional) layers in society – “ivory tower academics”, “Hampstead liberals”, “the metropolitan liberal elite” and the “chattering classes” for example. The second is that the very existence of wealthy socialists is indicative not just of the hypocrisy of certain individuals but also of a fundamental and fatal problem for egalitarian politics. If rich socialists who profess to believe that inequality is unjust won’t actually give their wealth to the poor then what are we to make of that apparent belief? It could be argued that you should look first to what these socialists practise rather than to what they preach – and what they practise could be said to be quite in keeping with the conservative view that humans are naturally acquisitive and self-seeking.

The first line of argument is easy to deal with. Of course it’s true that many of the best known leftwing figures historically came from fairly privileged backgrounds. Indeed there’s a good case for regarding one of the fathers of modern socialism – the factory-owning, high-living,Friedrich Engels – as, in some ways, the archetypal champagne socialist. It’s clearly ridiculous, though, to argue that leftwing political convictions are to be found only among the well-off. To the extent that a disproportionate number of influential figures on the left have come from better-off backgrounds, this state of affairs is easily explicable in terms of structural social inequalities. Those with educational advantages and other privileges in terms of “cultural capital” for example are more likely to flourish than those without – in whatever particular pursuit they seek to succeed.

What about the second line of argument? This is more difficult to deal with – but by no means impossible. You might respond that there’s no contradiction in, say, calling for higher taxes on the rich and being wealthy yourself. You might argue that social inequality is a political matter which, therefore, can only be addressed politically through, say, state redistribution rather than through individual philanthropy. You might also argue that, in fact, well-off people with leftwing convictions are, by definition, particularly principled people. After all, wouldn’t it be easier for them to vote and campaign for policies in their own economic interests rather than against them? You could say that the existence of wealthy leftists provides evidence precisely against, rather than for, the conservative assumption that humans are inherently selfish. Here’s a group of people with significant material advantages – and yet they call for the reduction or elimination of these advantages in society as a whole. Perhaps this is why those on the right despise champagne socialists so much.

Nevertheless, the question “if you’re an egalitarian, how come you’re so rich”, is a pretty hard one to answer convincingly – as indeed the egalitarian philosopher GA Cohen shows in his celebrated article (later abook) which uses that question as its title. Cohen provides several ways in which a relatively well-off egalitarian might respond to the question, but isn’t fully persuaded by any of them.

One way of dealing with this problem, however, is to argue that the left isn’t really concerned centrally with equalities per se but with human wellbeing. What socialists want to see is a world in which everyone has equal access to the resources they require in order to flourish. This would involve social equality in a broad sense – a society in which everyone was equally free to thrive – not absolute equality of everything. You might then look at your own condition and ask yourself if you have more than you really need in order to live a fulfilling life and more than you could reasonably expect to get in a society in which resources were distributed fairly. Thinking in this way would probably suggest that holding great wealth as a socialist is very difficult to justify, but it certainly wouldn’t suggest that all those who aren’t poor are in an ethically indefensible position.

Of course it’s not just the right who criticise champagne socialism. Indeed, another useful way of thinking about the issue is best brought out by examining a common objection to champagne socialism from the left. Perhaps counter-intuitively Marxists are not the most vociferous critics of the phenomenon. Those most hostile are usually those associated with labourism. Indeed one of the deepest rooted myths in British labourism in relation to a great historical betrayal pivots on the idea of champagne socialism. Ramsay MacDonald has long been reviled in the British labour movement as a traitor who sold out his party to form a National Government in 1931 . This betrayal is often explained in terms of MacDonald’s lifestyle – it’s claimed that he was corrupted by the high-society company he is supposed to have kept. This narrative is in keeping with the Labour left’s tendency to focus on the personal integrity of political leaders rather than on the broader structural conditions in which they operate. The disappointments of the past and present can be blamed on the purported failings of leading figures within the party. From this perspective, champagne socialism has always been a kind of corruption which has repeatedly derailed the parliamentary socialist project.

While personal integrity is important, Marxists would argue that this concern with champagne socialism and its apparently deleterious consequences for the labour movement is a kind of moralism that misses the structural determinants of Labour’s failure to transform society radically. The problem here is that labourism seeks to manage capitalism in such a way that unjust social inequalities are abolished – but capitalism does not work that way. Similarly, Marxists would argue that a moralistic focus on the relative wealth of specific individuals is a distraction from the real issue – which is not whether this or that “rich egalitarian” should donate more to charity, but how people can change the system that gives rise to structured social inequalities of power and wealth and that constantly reproduces them.

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The Crisis and Socialist Strategy

First published in two parts on the Left Unity website April 2013

In the first part of a two-part essay, Ed Rooksby, assesses the economic crisis today and sketches some broad strategic principles for a radical left party in Britain.

It must be clear now to all those with some grip on reality that Osborne’s austerity strategy simply isn’t working. The most recent figures show that UK GDP fell by 0.3% in last quarter of 2012 and that the economy was stagnant for the year as whole (with only a blip of growth driven by the Olympics in in the third quarter preventing overall contraction in 2012). It’s not just in Britain, of course, that austerity has plainly failed. The last quarter of 2012 also saw some of the worst GDP figures for major states in the EU: Italy minus 0.9%, France minus 0.3%, the UK minus 0.3% and even Germany saw its GDP decline by 0.6%. Eurozone GDP contracted for three consecutive quarters in 2012, following 0% growth in the first quarter. The dreadful economic and social consequences of austerity are plain to see in countries like Portugal and Spain – and, at their most extreme, in Greece.

Tragically – though it shouldn’t come as a great surprise – the Labour party leadership seem utterly incapable of offering any sort of opposition to austerity. At best they promise to cut public spending in a slightly less vicious manner than the current government. This isn’t an alternative that’s likely to inspire many people.

Radical left parties committed to fighting austerity have emerged across Europe – in Germany, in France and (most spectacularly) in Greece. We are in desperate need of a similar party in Britain – one which is willing to take the risk of seeking to break the stranglehold of a social democracy that long since capitulated to neoliberalism and present an unashamedly socialist alternative. The emergence of Left Unity is a very exciting step in this direction.

If we are going to try to build a socialist, anti-austerity, anti-neoliberal party we need to be clear about the economic and political context in which this process of construction is to take place and, from this, to extrapolate a set of strategic parameters and principles to guide us. I’d like to contribute to this process in some small way here by putting forward some broad-brush observations about the economic crisis and by making some tentative suggestions in terms of strategic orientation which seem to me to follow from these.

The Crisis
The Tory-Lib Dem government usually claims that the crisis was caused by ‘profligate’ public spending (although how exactly spending on schools and hospitals in the UK precipitated a global crisis is never quite explained) – and, closely bound up with this is the idea that the key pre-requisite of economic recovery is slashing of ‘unsustainable’ public debts and deficits.  These claims are nonsense. For one thing, as Reinhart and Rogoff have concluded from a detailed study of 44 countries over 200 years, ‘the relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP.’ The UK’s gross public debt at the end of 2007 (i.e. before the financial crisis took hold) stood at less than 50% of GDP – which, incidentally, was far lower than the average across the Eurozone and the OECD and 10% lower than Germany’s public debt/GDP ratio.  For another thing, as James Meadway points out, the ‘UK’s most sustained period of economic growth, over the post-war boom, was a period of exceptionally high public debt.’ Both the public debt and deficit shot up after the onset of financial crisis and recession, but the direction of causation is immediately obvious here – the coalition’s claim that sharp rises in public debt and deficit precipitated the crisis is, in fact, to get things back to front.

Whatever else they may be, the coalition leadership is not stupid and the political narrative they have settled on is certainly not simply a misunderstanding on their part – the claim that the crisis stems from fiscal profligacy and that, therefore, the solution is to roll back public spending is a deliberate falsification designed to justify attacks on the public sector and the welfare system. However far from the truth it may be, this narrative has been enormously successful and has now attained a sort of hegemony within popular and media discourse, largely framing the terms of mainstream debate in relation to the recession. Like many such hegemonic ideological strategies, the narrative has an uncomplicated, simple to grasp core message – that the crisis was brought on by the last government ‘spending too much’ – which can be propagated with ease through endless repetition in the Tory press and in political sound-bites. The apparent ease with which the banking crisis was smoothly and seamlessly transmuted, in the popular imagination, into a crisis of public finances bears witness to perhaps one of the most brilliantly effective ideological manoeuvres in recent political history. Unsurprisingly the Labour leadership have more or less capitulated to this narrative and do their best to reproduce it.

Widespread popular acceptance of the notion that public spending somehow caused the crisis helped to prepare the ground for Osborne’s austerity programme. As a political strategy to provide ideological cover for an assault on the public sector, this has so far proved fairly effective. As a strategy for economic recovery, however, austerity is failing miserably and is, in fact, making the economic situation much worse. As Meadway explains, there’s a simple logic to this:

Cuts in government spending shrink demand in the economy. As demand shrinks, firms sell less. Firms that sell less cut wages and make redundancies. Demand falls still further, and a vicious circle of decline is established. Cutting spending to reduce a deficit leads to bigger deficits as unemployment rises and taxes fall. Austerity is self-defeating.

As Meadway also points out, this is the sort of ‘death spiral that helped define the Great Depression’. The austerity mongers of today have simply disregarded one of the biggest lessons of the 1930s which is that governments need to stimulate demand in times of economic crisis, not suffocate it.

A defining feature of the recession today is a major crisis of demand and, intimately bound up with this, a serious deterioration in ‘business confidence’ in future growth prospects. Private sector investment has collapsed – it wasnoted in 2012 that investment by firms was down by about £48 billion from its 2008 peak – but there is no shortage of liquidity or savings in the economy. Indeed, the Financial Times reported last year that ‘companies globally are awash with cash’ and that UK firms, specifically, are sitting on an estimated £750 billion (Lex, ‘UK corporate tax: a missed opportunity’, FT, 12 March 2012). As Burke, Irvin and Weeks amongst others have noted, ‘No sustained recovery can take place without breaking this pattern’ – and since the private sector is unwilling to invest, the public sector must take over this investment function. The situation calls, in other words, for a classically Keynesian stimulus strategy of state driven investment to boost demand and thus, in turn, to boost ‘business confidence’.

Nevertheless it is important for the left to go beyond calls for a Keynesian type stimulus. Keynesian inspired social democratic analyses of the crisis tend to argue that it was brought on by the inherent weaknesses of the particular model of capitalism that has been dominant for the last thirty or so years – neoliberalism – and the process of ‘financialisation’ that has accompanied it. The call, from these quarters, essentially, is for the reining-in of finance capital and for a return to the much more strongly regulated, mixed-economy, model of capitalism that characterised the pre-1970s post-war order. But this does not take adequate account of the deeper, systemic determinants of the crisis. It is also far too optimistic about the capacity of the planet to absorb for much longer a return to high rates of growth in consumption. We need to develop a better grasp of the longer-term and systemic determinants of this crisis and a better appreciation of the limits to further growth which make any attempt to return to ‘business as usual’ on the part of capitalism hugely problematic.

Delving deeper
It must be emphasised that the current global capitalist crisis is, precisely, a crisis of capitalism. That is, it is a systemic crisis. It is not simply a debt crisis. The crisis is rooted in the dysfunctional logic of capitalism and, indeed, this is an extremely serious crisis which is likely to drag on for years.

The current crisis represents the breaking down of a series of temporary solutions to a major crisis of capitalism that emerged in the 1970s. In effect, the international economy has gone full circle and returned, after a few decades of (largely debt-fuelled) growth based on various temporary fixes, to the relative stagnation in which it languished around forty years ago. In order to understand the crisis today, then, we need to examine the development of the global economy over the past few decades.

Robert Brenner has argued that the advanced capitalist economies entered a crisis of profitability at the end of the 1960s. Indeed, according to Brenner, these economies have suffered from relatively low rates of profit ever since. One major reason behind the crisis of profits that emerged in the late 1960s was that firms encountered increasing constraints on opportunities for profitable investment as the post-war boom petered out. The effects of this can be seen in the marked slow-down in rates of growth from the 1970s onwards compared to previous decades (the average rate of annual GDP growth in Western Europe from 1950-73 was 4.79%, while from 1973-03 it averaged 2.19%).

Capitalism responded to this crisis in several ways. It sought to ‘go global’ in order to seek out cheaper pools of labour and to open up new investment opportunities abroad. Under Thatcher and Reagan especially, it launched an assault on trade unions and pushed up unemployment in order to weaken organised labour and drive down wage costs at home. Finance was also, increasingly, deregulated in order to soak up excess capital looking for profitable outlets. Some of the initial solutions, however, soon created further problems for capital. Repression of wages drove down workers’ spending power and thus reduced the rate of effective demand. Capital’s solution to this problem was to extend the credit system and to ramp up debt-fueled consumer spending. This strategy intertwined with wider moves to deregulate finance and with the rapid acceleration of ‘financialisation’. Credit-fueled consumption, together with asset price inflation drove growth for a while. However, this solution, in turn, eventually became the source of serious problems for capitalism because, as David Harvey notes, it ‘ultimately led to working-class over-indebtedness relative to income that in turn led to a crisis of confidence in the quality of debt instruments’. The crisis that emerged in the US ‘sub-prime’ market brought into full view the extent to which major financial institutions had become perilously overextended and, indeed, the extent to which growth had been reliant on ballooning of debt. What we saw, then, from the 1970s onwards was a series of temporary fixes to a deeper structural problem in which each fix raised further problems that had, in turn, to be temporarily solved with further fixes.

It is worth noting that ‘financialisation’ represented a response to very real pressures on profitable accumulation – it was a way of soaking up excess capital given the weakness of profitability in the productive sector. The deregulation of the financial markets and the concomitant extension of credit and debt did not simply represent, as social democratic and Keynesian theorists tend to suggest, an ideologically driven, ‘bad policy choice’ on the part of neoliberals. A solution to the problems we face then, cannot be as simple, as some sort of return to the post-war ‘Keynesian consensus’ in which financial regulation is tightened up and the financial markets put back in the box from which they escaped after the 1970s. The real structural pressures to which ‘financialisation’ was a response are still there and remain unsolved.

We must also take ecological considerations into account. There is an overwhelming consensus amongst climate scientists that the planet cannot absorb the huge amounts of COcurrently being pumped out into the atmosphere for very much longer without triggering irreversible climate change. Furthermore, human activity since industrialisation has had a hugely damaging effect on the Earth’s biosphere as a result of demand for ever increasing amounts of food, water, mineral resources, fossil fuels, timber and so on – and this destruction is continually accelerating. Massive deforestation, pollution, destruction of entire ecosystems and species extinction are some of the effects. This ecological crisis is largely driven by capitalism’s insatiable need for expansion. The logic of perpetual accumulation for accumulation’s sake compels capitalism to plunder more and more of the planet’s resources, burn greater and greater quantities of fossil fuels and fill the atmosphere with more and more CO2. It is surely clear, however, that infinite growth on a planet with finite resources is a logical absurdity. We are approaching the point at which the planet can no longer support ever increasing rates of consumption – and thus we are approaching the point at which the economic system becomes wholly incompatible with ecological sustainability.

So we’ve seen that the current crisis is the latest (and most serious) of a series of crises that have plagued capitalism since end of the post-war boom and stems from the underlying structural problem of low profitability. We have also seen that financialisation and neoliberalism represented responses to real pressures on profits on the part of capital. Given all of this it is difficult to see how a stable, long-term solution to the current crisis can be found within the confines of the current system except through massive destruction and devaluation of overaccumulated capital (letting unprofitable firms and banks go bust) to restore the rate of profit – but this would be a dangerous strategy which would almost certainly involve an extremely serious slump. Further, we have also seen that the planet is, anyway, unable to support for much longer any return to perpetually accelerating growth in consumption – capitalism is simply incompatible with ecological sustainability.

So while, in the short term, a public spending stimulus is needed to drag the economy out of the immediate crisis of stagnation and to get people back to work we also need to develop plans for massive structural reform of the economy so that we can begin to shift society towards a new economic model which is ecologically sustainable and governed by the priority of satisfying democratically determined human needs rather than by the insatiable and destructive drive for profit.

In the second part of this essay, I’d like to put forward some ideas about the sorts of measures that a radical left party might campaign for and seek to implement as part of this wider strategy.

PART 2

In the second of a two part essay, Ed Rooksby sketches some broad strategic principles for a radical left party.

 In the first part of this essay I argued that the current crisis must be seen as a systemic crisis of capitalism which is rooted in an underlying structural problem of low profitability. I also suggested that while a classically ‘Keynesian’ policy of public spending is necessary to drag the economy out of stagnation in the short term – to get people back to work and to reverse the current decline in living standards for ordinary people – this could not work as a longer term solution. This is for two reasons. First, such a strategy would do nothing to tackle the underlying problem of capitalist profitability. What capitalism really needs in order to get back to ‘healthy’ rates of growth is large-scale destruction of overaccumulated capital and, alongside this, further squeezes on wages – in other words it requires a major slump and deterioration in living standards for the majority in order to recover. It is hard to think of a better illustration of the deeply dysfunctional nature of this system. The second reason, as we saw, is that even if it were possible to get back to ‘normal’ rates of growth in some relatively painless way, capitalism’s logic of infinite accumulation and perpetual growth is clearly incompatible with ecological sustainability. The left, then, needs a strategy that combines ‘Keynesian’ measures in the short term but in which those measures are combined with other reforms which generate a transformative socialist dynamic.

The Classic Strategic Dilemma

Of course here we start to encroach on one of the oldest controversies in socialist thought which is the question of whether or not it is possible to reform capitalism out of existence – the classic reform/revolution debate. Let me draw out (in what can’t be anything other than a very simplified way given constraints of space) the core problems with each of these approaches as they are usually conceived in order to provide the foundations for a different way of approaching the question of socialist strategy.

At the heart of the reformist approach is the idea that the process of transition to socialism can be a wholly evolutionary one of smooth, piecemeal change without the necessity for any kind of revolutionary break. The core problem (among others) for this strategy is that when reformists find themselves in power they also find themselves responsible for the management of a capitalist economy. Since radical measures aimed at the introduction of socialism must, by definition, endanger capitalist profit, reformist governments find themselves caught on the horns of an impossible dilemma; they require capitalist cooperation for a process of gradual transition to socialism, and yet the introduction of any measure which might lead very far in the direction of socialism would necessarily lose them the cooperation (and earn them the intense hostility) of capital. So, in opposition to reformism it must be insisted that the transition to socialism cannot be a wholly gradual, cumulative process, but must involve some kind of revolutionary break.

Another key problem with this strategy is that the structure of traditional reformist parties tends to internalise and reflect the top-down structure – active representative minority and passive electorate mass – of capitalist democracy. Reformist parties tend to focus purely on electoral activity and are suspicious if not downright hostile to extra-parliamentary forms of political activity such as strikes and demonstrations. In this way the organisational culture and practice of reformist parties demobilises the mass of people. Since socialist change must necessarily involve the active participation of the majority in the reconstitution of social relations, mass demobilisation has the effect of helping to preserve the status quo.

The revolutionary socialist approach avoids the core problems of reformism but, as it is traditionally conceived, has its own particular deficiencies. Again, I can’t outline all of these here, so will focus on the main difficulty.

In one important sense at least, there is no absolute dividing line between a strategy of reform and traditional revolutionary socialism. Most revolutionaries believe that the struggle for and winning of reforms increases the democratic capacities of the working class, raises its confidence and educates it politically. Furthermore, many revolutionaries (see for example Alex Callinicos’ An Anti-Capitalist Manifesto) appear to believe that socialist revolution is most likely to emerge out of a (frustrated) movement for reform which probes the limits of what the capitalist state is willing to concede and which spills over into something more far-reaching  – and so, to this end, the strategy is to seek to place demands on the state which can tip the balance of power in favour of the working class and popular forces. The defining feature of revolutionary socialism as it is usually conceived, however, is the view that socialists must remain strictly independent of the capitalist state rather than seeking to work within it. This, however, is where the strategy runs into a major problem. The first part of this problem is that in countries such as Britain with a long established tradition of liberal parliamentary democracy and, indeed, a long established tradition of reformism in the labour movement, it is very difficult to see how the process of mass radicalisation the revolutionary approach envisages would not find expression in the electoral rise of a party seeking to form a radical government within the capitalist state. That is, it is hard to see this process of radicalisation throwing up anything other than a movement committed to the formation of a ‘workers’ government’. This indeed is the way things appear to be working out in Greece. As Richard Seymour has pointed out it was only after Syriza clearly committed itself to the aim of forming a united government of the left that it became the major radical challenge to austerity in Greece that it is today.

The second part of this problem is that it is also very hard to see how the sort of transitional strategy of reforms revolutionaries want to pressure the state to enact would be implemented by government representatives reluctant to do so, let alone deeply opposed to them politically and ideologically. Some concessions could be wrested from a pro-capitalist government, yes – but a whole series of radical reforms that seriously undermine the power of capital? It seems unlikely. The major difficulty in the traditional revolutionary approach, then, is in its rejection of the very idea of taking power within the political structures of capitalism.

Kagarlitsky – the Dialectic of Change

So neither the traditional reformist approach, nor the traditional revolutionary strategy, seems adequate. We need, instead, a strategy that seeks to combine elements of both. In his book, The Dialectic of Change, the Russian theorist Boris Kagarlitsky seeks to elaborate just such an approach – a strategy for revolutionary change which centres on a process of preparatory reform.  Revolutionary transformation, he argues, can only emerge organically and dialectically from a process of radical reform set in motion by a socialist government. He calls this approach ‘revolutionary reformism’.

Kagarlitsky’s argument is based on the premise that ‘Marxism is not an ideology of revolution but a theory of social development’.  In Kagarlitsky’s view, Marx sees an organic, dialectical unity between reform and revolution in the process of social change. It is only when one grasps the idea that reform and revolution augment and condition each other that one can start to formulate a realistic strategy of socialist change.

Kagarlitsky suggests that revolution should be ‘conceived as a definite and necessary stage, a qualitative leap, in the process of reform’ – ‘revolution is a “break in gradualness”, a leap in development’.  It is a stage of development which is necessary for the consolidation of the changes – new socialist social relations – which can be brought into being (in some embryonic sense at least) within capitalist society through reform.

Clearly, not all reforms intertwine organically with revolutionary change. Kagarlitsky’s favoured strategy of reform is based on a passage from The Communist Manifesto where Marx and Engels write of the implementation of a series of reforms which may:

“appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.”

Marx and Engels indicate that the introduction of reforms which run counter to the logic of capitalism (and which therefore appear in themselves ‘economically insufficient and untenable’) may set in motion a self-powering dynamic of cumulative change – a kind of chain reaction. That is, these initial reforms destabilise capitalism and therefore necessitate the implementation of further reforms which themselves run counter to capitalist logic and, in turn, require and stimulate further changes and so on. It is in this sense that these reforms ‘outstrip themselves’ – they unleash a process of change which goes much further than the initial effects of the primary reforms themselves. Kagarlitsky believes that the dynamic of cumulative change Marx and Engels sketch out here provides the basis for a strategy of radical reform today.

How could such a process be set in motion? It is the manner in which reforms are implemented which is the crucial factor for Kagarlitsky. Firstly, he suggests that each reform must be designed to stimulate further reforms which will flow from it organically. Each reform must be designed to generate a kind of momentum which drives forward an unfolding series of further changes. This demands that each reform is integrated into a well-planned strategic programme. The movement driving forward these reforms must be careful to regard each reform, primarily, as a means to the desired end of socialism, rather than as an end in itself.

Secondly, Kagarlitsky stresses that these reforms must be driven forward by a movement which unites mass mobilisation ‘from below’ with pressure ‘from above’ as revolutionary reformist politicians work within state institutions. Revolutionary reformists within state institutions must be subjected to constant pressure from below – there must be a mass socialist movement outside these institutions, capable of controlling their representatives and of forcing them on to implement the reforms they have promised. This implies that the mass movement must possess substantial independence from politicians in state office. Furthermore, ‘revolutionary reforms’ must be designed to strengthen and empower this movement. The extension of popular democracy would contribute to the revolutionary reformist dynamic in which each reform ‘outstrips itself’. Socialist representatives are driven on to introduce reforms, which contribute to the deepening of mass democracy which, in turn, encourages the mass movement to put pressure on their leaders for still further changes and so on.

Transitional Programme

What reforms, more concretely, might a transitional programme include? Much would depend on the specific circumstances in which such a programme came onto the immediate political agenda. But a few ideas can be suggested.

A socialist economic strategy might begin in its initial stage with an ambitious programme of directed investment. This spending should be carefully and strategically targeted – investment would be designed to kick-start more sustainable growth, create jobs and to reorient the economy away from its excessive reliance on the financial sector and debt-fuelled consumption toward more productive economic activity. Priority areas for investment should include investment in green, low-carbon infrastructure – particularly in transport and in energy. A major scheme to make existing homes and businesses more energy efficient would also generate considerable employment and help to reduce the national carbon footprint still further. In addition, a publically funded project to build new, affordable and energy efficient houses would create still more jobs.

Further, government policy should include a strategy for the managed downsizing of the financial sector. The authors of the ‘Green New Deal’ have put forward some useful ideas in this respect.  They suggest, for example, that tighter controls on lending and credit creation are introduced. This might include the reintroduction of stringent ‘fractional reserve requirements’ on private banks. They propose the forced demerger of large banking and financial groups and (bound up with this) the separation of retail from investment banks. They suggest that all derivative products and other exotic financial instruments should be subjected to strict regulation – only products approved by government would be allowed to be traded. Further, they argue for the imposition of robust capital controls to allow the state to exert control over the national inflow and outflow of capital and thus restore some measure of ‘policy autonomy to democratic government’  in the face of otherwise destabilising international  financial movements. Coupled with the channelling of investment – perhaps via a National Investment Bank – into manufacturing production and research and development, measures like these would help to rebalance and restructure the economy away from over-reliance on the financial sector.

Radicalisation of the process of reform might throw up further measures including nationalisation of major banks and financial institutions under democratic control and the bringing into public ownership under democratic control, too, of a string of industrial firms. Taking a large proportion of the financial sector into public ownership would allow financial resources to be allocated according to social and environmental criteria. Similarly, the nationalisation of industrial firms would allow their activities to be oriented increasingly towards socially useful and environmentally sustainable production. Furthermore the bringing into public ownership of much of the heavy manufacturing and engineering sector would help to facilitate the major, coordinated industrial restructuring and research and development investment that would be necessary for the design and construction of a green national energy infrastructure.

Radical forms of collective democratic planning and management could be explored within nationalised firms. Democratic control at the level of the firm would be integrated into a wider, national system of democratic planning. Broad, strategic macro-economic parameters might be decided at the national level – perhaps on the basis of a series of alternative plans drawn up by planning experts which could then be voted on by the population as a whole or by democratically elected national representatives. Within these established overall guidelines the details of the national plan could then be progressively filled out on a decentralised basis – at a regional and local level, and also at an industrial sector and production unit level – on the basis of democratic deliberation, negotiation and majority voting. Of course, democratic planning and control should not be confined to the narrowly ‘economic’ sector. The entirety of the public sector – the education system, welfare system, NHS and so on – should be opened up to collective, democratic and participatory forms of management.

It is worth pointing out that, of course, such a strategy would depend for its success on the existence of friends and allies implementing similar processes of transformation abroad. Certainly a country attempting to go it alone with such a strategy would – at least beyond a certain point – find itself hopelessly isolated in the face of hugely powerful international economic and political forces. But as we’ve seen with the ‘Syriza effect’ currently – the process in which the rise of the radical left in Greece has kick-started moves toward political realignment and fresh thinking on the left elsewhere – the emergence of a radical left government in one part of the world is likely to provide a boost to similar movements elsewhere.

Of course, such a strategy raises its own problems. In particular some would object that it doesn’t really overcome the problems of classical reformism. Such a left government would certainly arouse the intense hostility of capital and would come under huge pressure to reverse its programme from day one. This pressure would only increase as the radical dynamic of any transitional programme gathered momentum – if, indeed, it did. But the argument I developed above is that there doesn’t seem to be any plausible alternative strategic approach. It is hard to see how the left in Europe can avoid the problem of taking power in a left government if it is serious about changing society. Indeed, much of the contemporary left’s thought in relation to strategy often seems to me, precisely, to be an exercise in avoidance – dancing around the question of government power.

All of the above might seem like an idle exercise in building castles in the air. Certainly in Britain we are as far as ever from a political situation in which the elaboration of a transitional programme becomes an immediate concern – though for the left in Greece it is certainly a pressing priority. Nevertheless the process of left realignment in the UK associated with Left Unity does raise broad questions in relation to strategic orientation alongside all the more immediate tactical considerations. Certainly, if Left Unity grows these broader questions will have to be addressed. Further, the on-going deep crisis of capitalism internationally and the processes of political radicalisation this will continue to drive will keep throwing up big questions of strategy that cannot be avoided.

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An Alternative Economic Strategy

[Note: this was written in June 2012 for the Labour Left's Red Book Vol.2. This publication does not appear to have come out and shows no sign of doing so. Figures are slightly out of date now. Please also note that it was written for a particular audience and I'm much less confident about the possibility of a left-wing Labour government than I may appear to be in this piece!]

It must be clear now to all those with some grip on reality that George Osborne’s austerity strategy simply isn’t working. The most recent figures show that the UK economy has slipped back into recession with two consecutive quarters of negative growth (-0.2% in the last quarter of 2011 and -0.3% in the first quarter of 2012). These figures in isolation, furthermore, do not tell the full story about the dire circumstances in which the British economy languishes. As Paul Krugman has pointed out, since the crash of 2008 the UK economy has fared worse than it did even in the 1930s at the time of the Great Depression.[1] It’s not just in Britain, of course, that austerity has clearly failed. The dreadful economic and social consequences this strategy are plain to see in countries like Portugal and Spain – and, at their most extreme, in Greece.

Thankfully an economic and political alternative, spear-headed by the new French President, Francois Hollande, is emerging in Europe. In Britain, however, the Labour leadership still remains wedded to a remarkably timid critique of the government’s austerity programme. It is true that Miliband and Balls insist, like Hollande, on the need for growth, but their criticism of government policy hinges on the idea that the coalition is cutting ‘too far, too fast’ . In other words the Labour leadership do not reject austerity as such – they call, merely, for a less vicious version of the coalition’s programme of cuts.

As I have pointed out elsewhere[2], it is interesting to compare the timidity of Labour Party thinking today with the relative ambition and creativity of party thinking during the last period of economic downturn. During the crisis of the 1970s a collection of figures and groups clustered around the Labour left produced a radical, left-wing programme for economic recovery – ‘the Alternative Economic Strategy’, or AES.  At the heart of the AES was the idea that a well-designed programme of state driven investment could not only stimulate growth and thus provide a solution to the pressing, immediate problem of economic stagnation but could also combine this with a longer-term, fundamental restructuring of the economy in the interests of the vast majority. As I hope to show here, some elements of AES thinking provide useful resources for the construction of a socialist alternative to austerity today.

In what follows I outline the nature of the current economic crisis and explain how it emerged from longer-term trends and developments. I then specify a series of possible measures and policies which could be implemented as part of a programme for recovery and socialist change, drawing especially on the resources provided by the AES.

The Crisis

The Tory-Lib Dem government usually claims that the crisis was caused by ‘profligate’ public spending under Labour (although how exactly spending on schools and hospitals in the UK precipitated a global crisis is never quite explained) – and, closely bound up with this is the idea that the key pre-requisite of economic recovery is slashing of ‘unsustainable’ public debts and deficits.  These claims are nonsense. For one thing, as Reinhart and Rogoff have concluded from a detailed study of 44 countries over 200 years, ‘the relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP.’[3] The UK’s gross public debt at the end of 2007 (i.e. before the financial crisis took hold) stood at less than 50% of GDP – which, incidentally, was far lower than the average across the Eurozone and the OECD and 10% lower than Germany’s public debt/GDP ratio.[4]  For another thing, as James Meadway points out, the ‘UK’s most sustained period of economic growth, over the post-war boom, was a period of exceptionally high public debt.’[5] Both the public debt and deficit shot up after the onset of financial crisis and recession, but the direction of causation is immediately obvious here – the coalition’s claim that sharp rises in public debt and deficit precipitated the crisis is, in fact, to get things back to front.

Whatever else they may be, the coalition leadership is not stupid and the political narrative they have settled on in relation to the debt and deficit is certainly not simply a misunderstanding on their part – the claim that the crisis stems from fiscal profligacy and that, therefore, the solution is to roll back public spending is a deliberate falsification designed to smooth way for, and to justify attacks on, the public sector and the welfare system. This is an objective to which, of course, many Tories (and Orange Book Liberals) have long been committed. The Tory-Lib Dem narrative, however far from the truth it may be, has been enormously successful and has now, indeed, attained a sort of hegemony within popular and media discourse, largely framing the terms of mainstream debate in relation to the recession and austerity. Like many such hegemonic ideological strategies, the narrative has an uncomplicated, simple to grasp core message – that the recession was brought on by the last government ‘spending too much’ – which can be propagated with ease through endless repetition in the Tory press and in political sound-bites. The degree to which this simplistic narrative has been successful in shaping popular understanding of the crisis can be appreciated when you look back at how far the terms of mainstream debate have shifted since the onset of the financial crisis. In the initial stages of the crisis, popular anger was directed at the banks and media stories in relation to the financial crisis tended to highlight ‘irresponsible risk taking’, ‘greed’ and so on, on the part of bankers. Then, relatively abruptly, in 2009/2010, the blame shifted from the financial system to public spending – this was the point at which the neoliberal right, which had initially been stunned and disoriented by the crash, started to gather its wits and formulate the ‘fiscal profligacy’ narrative which now dominates political and economic discourse. The apparent ease with which the banking crisis was smoothly and seamlessly transmuted, in the popular imagination, into a crisis of public finances bears witness to perhaps one of the most brilliantly effective ideological manoeuvres in recent political history.

Widespread popular acceptance of the notion that public spending somehow caused the crisis helped to prepare the ground for Osborne’s austerity programme. As a political strategy to provide ideological cover for an assault on the public sector, this has so far proved fairly effective (as the 270,000 public sector workers sacked last year can attest). As a strategy for economic recovery, however, austerity is failing miserably and is, in fact, making the economic situation much worse. As Meadway explains, there ‘is a simple mechanism at work’[6] here:

Cuts in government spending shrink demand in the economy. As demand shrinks, firms sell less. Firms that sell less cut wages and make redundancies. Demand falls still further, and a vicious circle of decline is established. Cutting spending to reduce a deficit leads to bigger deficits as unemployment rises and taxes fall. Austerity is self-defeating.[7]

As Meadway points out, this is the sort of ‘death spiral that helped define the Great Depression’.[8] The austerity mongers of today have simply disregarded one of the biggest lessons of the 1930s which is that governments need to stimulate demand in times of economic crisis, not suffocate it.

The core, defining feature of the recession today is indeed a major crisis of demand and, intimately bound up with this, a serious deterioration in ‘business confidence’ in future growth prospects. Private sector investment has collapsed – investment by firms is down by about £48billion from its 2008 peak[9] – but there is no shortage of liquidity or savings in the economy. Indeed, the Financial Times recently reported that ‘companies globally are awash with cash’ and that UK firms, specifically, are sitting on an estimated £750 billion.[10] As Burke, Irvin and Weeks amongst others have noted, ‘No sustained recovery can take place without breaking this pattern’[11] – and since the private sector is unwilling to invest, the public sector must take over this investment function. The situation calls, in other words, for a classically Keynesian stimulus strategy of state driven investment to boost demand and thus, in turn, to boost ‘business confidence’.

Nevertheless it is important for the left to go beyond calls for a Keynesian type stimulus. Keynesian inspired social democratic analyses of the crisis tend to argue that it was brought on by the inherent weaknesses of the particular model of capitalism that has been dominant for the last thirty or so years – neoliberalism – and the process of ‘financialisation’ that has accompanied it. The call, from these quarters, essentially, is for the reining-in of finance capital and for a return to the much more strongly regulated, mixed-economy, model of capitalism that characterised the pre-1970s post-war order. But this analysis does not take adequate account of the deeper, systemic determinants of the crisis. It is also far too optimistic about the capacity of the planet to absorb for much longer a return to high rates of growth in consumption. We need to develop a better grasp of the longer-term and systemic determinants of this crisis and a better appreciation of the limits to further growth which make any attempt to return to ‘business as usual’ on the part of capitalism hugely problematic.

Delving deeper

The current crisis represents the breaking down of a series of temporary solutions to a major crisis of capitalism that emerged in the 1970s. In effect, the international economy has gone full circle and returned, after a few decades of (largely debt-fuelled) growth based on various temporary fixes, to the relative stagnation in which it languished around forty years ago. In order to understand the crisis today, then, we need to examine the development of the global economy over the past few decades.

Robert Brenner[12] has shown that the advanced capitalist economies entered a crisis of profitability at the end of the 1960s. Indeed, according to Brenner, these economies have suffered from relatively low rates of profit ever since. The reasons for this are disputed – various explanations have been put forward. These are complex and I cannot set them out here. Nevertheless, one determinant is clearly capitalism’s tendency toward overaccumulation of capital.  The logic of capitalism is one of perpetual accumulation – capitalists are forced, under pressure of competition, to recapitalise and reinvest in expansion a proportion of the surplus they produce. The corollary of accumulation at the level of the firm is, at the aggregate level of the economy as a whole, economic growth. The volume of capital flow must constantly increase. If capitalists encounter blockages in this process – if they fail to expand the volume of surplus they produce – the effect must be that they run into severe problems. At the level of the economy as a whole, absence of growth brings recession or depression.  All of this requires, of course, that new profitable outlets for investment are found so that the surplus can be absorbed and accumulation can continue. Overaccumulation of capital – lack of profitable investment opportunities – lies at the root of capitalism’s crisis tendencies. One major reason behind the crisis of profits that emerged in the late 1960s, then, was that firms encountered increasing constraints on opportunities for profitable investment as the post-war boom (founded, amongst other things on the opportunities opened up by the massive destruction of capital in the war and by post-war reconstruction) petered out. The effects of this can be seen in the marked slow-down in rates of growth from the 1970s onwards compared to previous decades (the average rate of annual GDP growth in Western Europe from 1950-73 was 4.79%, while from 1973-03 it averaged 2.19%).

Capitalism responded to this crisis in several ways. It sought to ‘go global’ in order to seek out cheaper pools of labour and to open up new investment opportunities abroad. Under Thatcher and Reagan especially, it launched an assault on trade unions and pushed up unemployment in order to weaken organised labour and drive down wage costs at home. Finance was also, increasingly, deregulated in order to soak up excess capital looking for profitable outlets. Some of the initial solutions, however, soon created further problems for capital. Repression of wages, of course, drove down workers’ spending power and thus reduced the rate of effective demand. Capital’s solution to this problem was to extend the credit system and to ramp up debt-fuelled consumer spending. This strategy intertwined with wider moves to deregulate finance and with the rapid acceleration of ‘financialisation’. Credit-fuelled consumption, together with asset price inflation drove growth for a while. However, this solution, in turn, eventually became the source of serious problems for capitalism because it ‘ultimately led to working-class over-indebtedness relative to income that in turn led to a crisis of confidence in the quality of debt instruments’.[13] The crisis that emerged in the US ‘sub-prime’ market brought into full view the extent to which major financial institutions had become perilously overextended and, indeed, the extent to which growth had been reliant on ballooning of debt.

What we saw, then, from the 1970s onwards was a series of temporary fixes to a deeper structural problem in which each fix raised further problems that had, in turn, to be temporarily solved with further fixes. Indeed Capitalism, as David Harvey points out,[14] never really resolves its crisis tendencies – they are merely shifted around, postponed and held off. Capitalism finds a way of overcoming one crisis only to discover, sooner or later, that the terms of this solution, in turn, throw up new problems which develop into a new crisis. As all of this suggests, crisis is inherent to capitalism. Crises are not anomalous events, deviations from the ‘natural’ or normal functioning efficiency of capitalism. They are part and parcel of the logic of the system. They stem from capitalism’s systemic imperative – perpetual accumulation (for accumulation’s sake) under the pressure of competition.

Further, Harvey suggests that capitalism may well find it particularly difficult to find its way out of this crisis and get back to adequate rates of long-term growth.  Capitalism, he suggests, is running into serious constraints in relation to the ‘capital surplus absorption problem’ and this, indeed, is a key problem underlying the current crisis. It is generally agreed, as Harvey points out, that a ‘healthy’ capitalist economy must expand at a rate of about 3 per cent per annum. This means, of course, that more and more capital surplus must be absorbed – more and more profitable investment outlets for this growing surplus must be found every year.  In 1950 global capitalism needed to absorb $0.15 trillion in surplus capital, in 1973 it needed to find new outlets for $0.42 trillion and, if we are to return to 3 per cent compound growth today, $1.6 trillion in surplus capital would need to be profitably invested. If sustained growth returns the world economy will need to absorb some $3 trillion in surplus capital by 2030.[15] This, Harvey remarks, is ‘a very tall order’.[16] The depth of the current crisis may well be a reflection of this problem.

It is worth noting that ‘financialisation’ represented a response to very real pressures on profitable accumulation – it was a way of soaking up excess capital given the weakness of profitability in the productive sector. The deregulation of the financial markets and the concomitant extension of credit and debt did not simply represent, as social democratic and Keynesian theorists tend to suggest, an ideologically driven, bad policy choice on the part of neoliberals. A solution to the problems we face then, cannot be as simple, as some sort of return to the post-war ‘Keynesian consensus’ in which financial regulation is tightened up and the financial markets put back in the box from which they escaped after the 1970s. The real structural pressures to which ‘financialisation’ was a response are still there and remain unsolved.

One of the biggest problems humanity currently faces is, of course, the looming ecological crisis. There is an overwhelming consensus amongst climate scientists that the planet cannot absorb the huge amounts of CO2 currently being pumped out into the atmosphere for very much longer without triggering irreversible climate change. Furthermore, human activity since industrialisation has had a hugely damaging effect on the Earth’s biosphere as a result of demand for ever increasing amounts of food, water, mineral resources, fossil fuels, timber and so on – and this destruction is continually accelerating. Massive deforestation, pollution, destruction of entire ecosystems and species extinction are some of the effects. This ecological crisis is largely driven by capitalism’s insatiable need for expansion. The logic of perpetual accumulation for accumulation’s sake compels capitalism to plunder more and more of the planet’s resources, burn greater and greater quantities of fossil fuels and fill the atmosphere with more and more CO2. It is surely clear, however, that infinite growth on a planet with finite resources is a logical absurdity. We are approaching the point at which the planet can no longer support ever increasing rates of consumption – and thus we are approaching the point at which the economic system becomes wholly incompatible with ecological sustainability.

We have seen, then, that the current crisis is the latest (and most serious) of a series of crises that have plagued capitalism since the petering out of the long post-war boom and stems from a major underlying structural difficulty – chronic overaccumulation of capital. We have also seen that financialisation and neoliberalism represented responses to real pressures on profits on the part of capital – these processes were not simply ideologically determined choices on the part of political leaders. Given all of this it is difficult to see how a stable, long-term solution to the current crisis can be found within the confines of the current system except through massive destruction and devaluation of overaccumulated capital (letting unprofitable firms and banks go bust) to restore the rate of profit – but this would be a dangerous strategy which would almost certainly involve a prolonged serious slump. Further, we have also seen that the planet is, anyway, unable to support for much longer any return to perpetually accelerating growth in consumption – capitalism is simply incompatible with ecological sustainability. So while, in the short term, a public spending stimulus is needed to drag the economy out of the immediate crisis of stagnation and to get people back to work we also need to develop plans for massive structural reform of the economy so that we can begin to shift society towards a new economic model which is ecologically sustainable and governed by the priority of satisfying democratically determined human needs rather than by the insatiable and destructive drive for profit.

Back to the AES

The AES was formulated in broadly similar economic circumstances to the ones we are in currently. The basic thinking behind the strategy centred on the notion that the crisis then could be ‘resolved’ in one of two general ways – in the interests of big business and the wealthy or in the interests of ordinary people. The first kind of ‘resolution’ would involve an attack on wages, the labour movement, the public sector and the institutions of the post-war consensus (and this, indeed, was the way things worked out with the coming to power of Thatcher). The second, alternative route, however, would involve a ‘resolution’ of the crisis in such a way that would produce a much more egalitarian and democratic society. For more radical variants of the AES, this second route would entail the beginnings of a transition to socialism rather than to a beefed-up version of the post-war mixed economy system. Most variants of the AES shared all or most of the following key elements in common:[17]

  • A major policy of expansion to stimulate growth and reduce unemployment based primarily on increases in public spending
  • A democratically determined national economic plan which would identify national macroeconomic priorities and coordinate these with planning at the level of the firm
  • Nationalisation of major financial institutions
  • Stringent controls on international capital movements
  • A National Investment Bank to channel financial resources in line with strategic national economic priorities
  • An industrial strategy based on extended public ownership of key firms and statutory planning agreements with large private firms
  • Powers to control prices and imports
  • The democratisation of the economy through the involvement of trade unions in the planning process and through introduction of industrial democracy in nationalised industries
  • The radical redistribution of income and wealth through for example a steeply progressive tax system

At the core of the AES, then, was a plan for the massive reflation of the economy, which it was hoped would pull the economy out of recession and increase employment – but this public spending stimulus would be harnessed in such a way that would lead to major restructuring of the economy and to radical social transformation. In particular, power would be shifted away from big business and big banks and a strong measure of democratic control would be asserted over the economy. This was a serious response to the crisis of the 1970s which sought to find a radical, socialist resolution of the problems it was clear that the social democratic form of Keynesian demand management that had characterised the ‘post-war consensus’ could not deal with – and which was spurred on by the realisation that if a left-wing route out of crisis was not found, the free market right were waiting in the wings to unleash their own brutal form of resolution.

In some ways we find ourselves in a similar situation today. We are in a deep crisis and it is clear that the policies of economic management that have characterised the past few years – (tacitly) based on credit fuelled growth and asset price inflation – are simply not viable anymore. We face a free market right insistent on austerity which, as it becomes clear to them that their current policies are not working, is likely to turn to even more vicious measures. Beecroft’s recent proposals on labour market ‘flexibility’ are an early indication of the sort of route they are likely to go down – attempts to dilute or remove important workers’ rights and force down wages. We desperately need to assert a left alternative and it seems to me that the AES provides some useful resources for thinking about the kind of programme that might be needed. Of course, I am not going to suggest that the AES could be transplanted wholesale into current circumstances. Clearly it was formulated in a specific conjuncture and there are parts of it that would not be appropriate or relevant today.  Nevertheless there are elements of AES thinking that we can draw on.

An Alternative Economic Strategy for Today

As we have seen, the only way to break out of the current spiral of decline is to end austerity and to boost growth through raising demand. A socialist economic strategy would begin with a massive stimulus package financed through public borrowing. Such a programme should more than pay for itself (and, further, help to reduce the accumulated debt) through the kick-starting of economic growth and thus the generation of increasing tax revenues and the lowering of unemployment benefit payment costs. Furthermore, restructuring of the tax system – stamping out tax avoidance, implementing a robustly progressive income tax regime in which the wealthy and the super-rich are required to pay their fair share and the implementation of a land value tax together with a ‘Robin Hood tax’ on the banks and perhaps a ‘Tobin tax’ on international currency transactions (though the latter would require international coordination) – would raise enormous funds to cover government investment.

 

Direct government spending is not the only way to deliver an economic stimulus. As we’ve seen one of the AES policies was for the utilisation of a National Investment Bank. Indeed such an institution has been proposed by several commentators today as a means for addressing the current crisis. Burke, Irvin and Weeks, for example, propose that a National Investment Bank could draw directly on the financial resources of the part-nationalised banks (the government still owns 83% of RBS and  41% of Lloyds-TSB) to invest in sectors of the economy prioritised by the government.[18] Such an institution, further, would be able to raise large funds from private capital markets.

This spending would be carefully and strategically targeted – investment would be designed to kick-start more sustainable growth, create jobs and to reorient the economy away from its excessive reliance on the financial sector and debt-fuelled consumption toward more productive economic activity. Priority areas for investment should include investment in green, low-carbon infrastructure – particularly in transport and in energy. The UK has long suffered from low rates of investment in public infrastructure and a major investment push to bring it up to international standards would generate jobs and growth. One of the major areas for investment should be renewable energy based on wind, wave and solar power which would radically reduce carbon emissions and also create jobs in manufacturing, construction and engineering. A major scheme to make existing homes and businesses more energy efficient would also generate considerable employment and help to reduce the national carbon footprint still further. In addition, a publically funded project to build new, affordable and energy efficient houses would create still more jobs.

In addition, government policy should include a strategy for the managed downsizing of the financial sector. The authors of the ‘Green New Deal’ have put forward some useful ideas in this respect.[19] They suggest, for example, that tighter controls on lending and credit creation are introduced. This might include the reintroduction of stringent ‘fractional reserve requirements’ on private banks. They propose the forced demerger of large banking and financial groups and (bound up with this) the separation of retail from investment banks. They suggest that all derivative products and other exotic financial instruments should be subjected to strict regulation – only products approved by government would be allowed to be traded. Further, they argue for the imposition of robust capital controls to allow the state to exert control over the national inflow and outflow of capital and thus restore some measure of ‘policy autonomy to democratic government’[20] in the face of otherwise destabilising international  financial movements. Coupled with the channelling of investment – perhaps via the National Investment Bank – into manufacturing production and research and development, measures like these would help to rebalance and restructure the economy away from over-reliance on the financial sector.

The sort of programme outlined above incorporates, or at least echoes, some of the policies that went to make up the AES of the 1970s and early 1980s. Though the AES was associated with the left of Labour there is no reason why the programme I have just described could not be implemented by a ‘moderate’ left-of centre party committed to mildly social democratic objectives – there is no reason, given the seriousness of the current crisis, why the current leadership of the Labour Party could not commit itself to a similar set of policies without too much trauma. If we on the left, however, want to go beyond a sort of green ‘muscular Keynesianism’ toward a programme for the far-reaching democratisation of the economy and for a transition toward an economic logic based primarily on production for need rather than for profit – as, indeed, I suggested is necessary given the scale of the ecological crisis we face, given capitalism’s inherent tendency towards crisis and given the deep structural crisis of capitalism currently which is likely to place severe limits on growth over the long-term (though growth via stimulus is certainly possible, we are unlikely to repeat the experience of the decades long post-war boom before slump sets in again) – we will need to push, in addition, for measures resembling the more radical components of the AES.

A more radical programme would include, in addition to the above, nationalisation of major banks and financial institutions under democratic control and the bringing into public ownership under democratic control, too, of a string of industrial firms. Taking a large proportion of the financial sector into public ownership would allow financial resources to be allocated according to social, ethical and environmental criteria. Similarly, the nationalisation of industrial firms would allow their activities to be oriented increasingly towards socially useful and environmentally sustainable production. Furthermore the bringing into public ownership of much of the heavy manufacturing and engineering sector would help to facilitate the major, coordinated industrial restructuring and research and development investment that would be necessary for the design and construction of a green national energy infrastructure. As advocated by the architects of the AES, our socialist strategy could include the development of compulsory planning agreements between the government and large private firms. These planning agreements would allow the government to secure major firms’ compliance with national strategic economic objectives. The planning agreements system would also be designed to allow access to information on major private firms’ investment plans, product development, import requirements and so on which would help with the identification and modification of national planning objectives.

Radical forms of collective democratic management and workers’ control could be explored within nationalised firms. Furthermore, as proponents of the AES suggested, trade unions and worker delegates could be involved in the formulation of planning agreements alongside government representatives and employers in order to democratise, to some extent, planning in private firms. Democratic planning at the level of the firm would be integrated into a wider, national system of planning. Broad, strategic macro-economic parameters would be decided at the national level – perhaps on the basis of a series of alternative plans drawn up by planning experts which could then be voted on by the population as a whole or by democratically elected national representatives. Within these established overall guidelines the details of the national plan could then be progressively filled out on a decentralised basis – at a regional and local level, and also at an industrial sector and production unit level – on the basis of democratic deliberation, negotiation and majority voting. Workers’ councils within nationalised industries under democratic control, for example, would be responsible for the day to day running of their firm but would manage productive activity within the planning framework elaborated democratically at, for example, sector, local, regional and national levels. Of course, democratic planning and control should not be confined to the narrowly ‘economic’ sector. The entirety of the public sector – the education system, welfare system, NHS and so on – should be opened up to collective, democratic and participatory forms of management.

The basic aim of such a radical strategy would be to introduce a socialist logic to the functioning of the economy (and society more widely) that would help us begin to break with the logic of capitalism. As ordinary people, through experience of democratic planning, became more confident in their capacity to make investment decisions and organise production and so on collectively, this logic could be progressively extended to encompass the entirety of the economy.[21] Of course, different kinds of socialists will have different views in relation to whether and to what extent such a process of socialist transition could be a smooth and gradual one. Many would argue that, sooner or later, such a process of transformation would encounter intense (and structurally embedded) forms of resistance from capital that would necessitate a choice between retreat and complete reversal of socialist reforms or, alternatively, a swift and radical break with capitalism. But socialists of many persuasions could agree on something like the package of reforms described above as at least a way of starting a process of socialist transition – whatever shape we think such transformation must take eventually. It is also worth pointing out that such a strategy would depend for its success on the existence of friends and allies implementing similar processes of transformation abroad. Certainly a country attempting to go it alone with such a strategy would – at least beyond a certain point – find itself hopelessly isolated in the face of hugely powerful international economic and political forces. But socialists have long known that socialism must be international if it is to exist at all.

Of course it might be objected that it is very difficult to see how a radical strategy such as the one described above could ever even come on to the political agenda, let alone be implemented, in the UK. Making this objection, however, would be to underestimate the depths of the current crisis and the potential for a further very drastic worsening of the international economic situation. At the time of writing, the Eurozone is teetering on the edge of collapse – which threatens to plunge us into another acute financial crisis at least as serious as the one that hit in 2008 and, perhaps, an extremely serious global slump. Even if this nightmare scenario is avoided, the international economy looks set for years of stagnation or low growth – especially if the architects of austerity continue to have their way. This means years of growing unemployment and increasing hardship for many. It’s in these conditions that socialist ideas are likely to gain more and more traction – but only if the left is prepared to think big and articulate clear and ambitious solutions appropriate for the enormity of the problems we face.  I’ve suggested, here, that some of the ideas developed amongst the British left during the last major economic downturn – the ideas that went to make up the AES – provide valuable resources to help us in relation to this task.


[10] Lex, ‘UK corporate tax: a missed opportunity’, Financial Times, 12 March 2012

[12] Brenner, Robert (2005) The Economics of Global Turbulence (London, Verso)

[13] Harvey, David (2010) The Enigma of Capital: And the Crises of Capitalism (London, Profile Books), p. 117

[14] Ibid. p. 117

[15] Ibid, pp. 26-27, p. 216

[16] Ibid, p. 27

[17] This summary of the AES’s key features follows quite closely, but is not identical with, the summary provided in Conference of Socialist Economists London Working Group (1980) The Alternative Economic Strategy: A Response by the Labour Movement to the Economic Crisis (London, CSE Books), p. 6.

[20] Ibid, p. 24

[21] A detailed model of a democratically planned economy is set out in Devine, Pat (1988) Democracy and Economic Planning: the Political Economy of a Self-Governing Society (Cambridge, Polity).

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The Current Conjuncture in Britain on the Left: Toward Left Unity

First published on Left Unity March 25 2013

For the first time in a long period the conditions for the emergence of a broad left coalition of forces in the UK capable of attracting large-scale support seem ripe. These conditions have been generated and shaped, in my view, by four major interconnected political and economic developments. These developments themselves comprise a series of intertwining factors, some of which are best conceptualised as ‘structural’ and some of which pertain to a more subjective sense of possibility among people on the left.

The first and most obvious of these is economic crisis and austerity. This has posed in very immediate terms the question of how best to defend jobs, living conditions and the reforms and concessions in relation to healthcare, education and welfare won in struggle decades ago and which are now being stripped back in a determined assault. But it has also posed the question, again in immediate terms, of whether or not our current economic system is, in fact, compatible, over any prolonged and sustained period, with decent welfare provision and conditions of life and work for the majority – whether or not recession and government attempts to roll back social reforms won in previous phases are predictable, cyclical features of capitalism. However you answer this second question you are forced to confront further questions: how best to push back capital’s war of attrition against welfare (which has been a feature of international capitalism for the last 35 years or so – austerity is simply the intensification under conditions of acute crisis of longer term tendencies) and impose some sort of renewed post-war social democratic settlement, or how best to go beyond capitalism itself and build a more democratic, humane and sustainable alternative.  The crisis and austerity that is, confronts us with fundamental and pressing questions in relation to organisation and strategy. It is in this context that the idea of the construction of a new organisation of the left has been put firmly on the political agenda.

The second development is closely meshed with the first and is that it has become painfully apparent to many of the Labour Party’s erstwhile supporters and activists that Labour is not an effective political vehicle for the organisation of resistance to austerity (let alone for the implementation of a counter-offensive against capital). Of course, many socialists will never have had much faith in Labour’s capacity for seriously and radically advancing the interests of working people – especially in the context of economic crisis when capital’s demands for wage repression and ‘labour discipline’ for example become much more pressing on states – but recent developments have shaken the faith of many more people who previously were prepared to give Labour the benefit of the doubt, or to hope that it might be reformed and won to a more left-wing perspective from within. Ed Miliband’s rapid dash to the right on issues like immigration after his victory in the Labour leadership election of 2010 as the putative candidate of the left (those horrified ‘Red Ed’ references in the tabloid press seem absurd, indeed, quaint now in retrospect) was a big disappointment to many of the party’s activists and supporters. More recently, we’ve seen and heard Ed Balls say that Labour would be ‘ruthless’ in power about cutting public spending and Jon Cruddas claim on Newsnight that ‘food banks are here to stay’ even under a Labour government – indeed that the emergence of food banks across the country is a ‘positive development’. Add to this the grotesque spectacle in the past few days of the Labour front bench refusing to oppose government proposals for removing the right to strike for Home Office employees and, further, party leaders putting pressure on Labour MPs to abstain in a vote on a crucial ‘workfare’ bill and it must be obvious to all but the most blind that Labour is just a lost cause for the left. There has, I think, over the last few weeks and months been a pronounced acceleration of a longer term process of disillusionment on the part of Labour’s core supporters and activist base and, correspondingly, a growing willingness among many of them to countenance the prospect of leaving Labour to join a new organisation – in particular, the Left Unity initiative.

The third major factor shaping this new political conjuncture in the UK is an external one – the international influence and prestige of Syriza (and perhaps, to a lesser extent, the Front de Gauche). The Syriza phenomenon has demonstrated that it is possible for a coalition of fairly disparate left forces to win mass support with a clear anti-austerity agenda and to win such support very rapidly. More than this Syriza have shown that it is possible, not just to build up and organise a mass movement of resistance to austerity, but also to challenge seriously for power.  Of course the specific economic and political conditions of Britain and Greece are very different – most obviously the crisis is much more acute in the latter – and so we cannot think that Syriza provides a ready-made organisational/strategic model which we can somehow transplant wholesale into the UK. Nevertheless it does provide us with useful lessons and guidelines. Perhaps the most important dimension of the Syriza phenomenon, however, is its morale-raising effect. Socialists across Europe are looking at Syriza and, for the first time in a very long time, are thinking, ‘My God, we really can challenge for power and we really can win!’ The psychological impact of this should not be underestimated.

The Syriza effect interacts with and strengthens the second development mentioned above – the loosening of Labour’s political hegemony – further contributing to the sense among many of its erstwhile supporters and activists that that it is possible to build an effective political force to the left of Labour. It has also contributed a renewed sense of possibility among more radical left groupings. Not least Syriza has convinced many radicals used to working in small, relatively isolated groups that in fact the reformist and revolutionary left can work together effectively in a common organisation which is characterised by democracy, pluralism and a culture in which it is accepted that not all political differences can, will or need to be resolved into a common ‘line’ in order for the coalition to operate successfully:  the kind of organisational structure/culture that Simon Hardy has described in terms of ‘dynamic tension’.  The Syriza effect, then, has encouraged a broad range of people on the left to start thinking seriously and with confidence about building new alliances, and, moreover, to act on this sense of possibility.

There is a fourth development which closely interacts with the third. This is the recent partial implosion of the SWP. Whatever you think of recent events in that party (and I’m in no position to comment knowledgeably on them, so I won’t try) the SWP bust-up has clearly shaken up the political landscape on the radical left, loosened the SWP’s erstwhile hegemony over that terrain and thus put things substantially in flux. I would certainly be against taking a sectarian or hostile approach to SWP members (and there is, I think, some danger of this at the moment) but I also think it’s true that the recent splitting and weakening of the SWP has had at least one positive effect in that it has opened up a new space for realignment among radical left forces and the left more widely. In the context of, and in interaction with, the Syriza effect discussed above this has created a very promising and exciting situation for building a new, broad coalition.

These then are, in my view, the main developments that, in intersection and interaction, constitute a new conjuncture on the UK left – one in which a significant and lasting realignment of forces has become a definite and realistic possibility. The conjuncture poses big questions for us all. The main one, of course, is the question of the organisational form that a new coordination of forces should take. This question can only be resolved finally in practice and part of the very process of realignment will be to experiment with forms of organisation and coordination – a settled structure can’t be imposed at the outset, but must be allowed to emerge more or less organically.

Nevertheless, three broad models so far seem to have emerged, at least in embryonic form. These are by no means entirely mutually exclusive models – but they do have important differences of emphasis which would take the emerging movement off on divergent trajectories of development should any of them become dominant.

The first of these is what we might call the ‘Owen Jones model’. In a recent article Owen made the entirely welcome and valuable call for a new ‘networked movement of the Left’ which would encompass activists from both within and outside the Labour Party. Owen is quite clear however that he does not favour the establishment of ‘yet another party of the Left’ and argues that the main task of the networked movement would be to put pressure on the Labour Party in order to force it to the left. While I believe that the general strategy of building a mass movement in order to push sympathetic political representatives in parliament and government to the left and in order to hold them to their promises is right (or that at least it should form part of a wider strategy on the part of the radical left) I do not believe that it’s at all feasible to centre such a strategy on the Labour Party. It should be entirely clear to all observers by now that the central core of Labour is thoroughly impervious to socialist ideas – and in fact that it always has been. The Labour right has a permanent stranglehold on the party and indeed, more than this, the party is structurally embedded in the capitalist status quo. The idea that the party can be won or forced very far to the left – let alone to the extent that it might seriously challenge core capitalist interests – is simply wishful thinking. Sadly many talented socialist activists over the years have thrown themselves into a war of position within the party seeking to win it to the left only to be lost forever within the party’s labyrinthine bureaucratic committee structures never to be seen again (and this is indeed what these structures are designed to do – contain, exhaust, demoralise and absorb the Labour left).

The second model is the ‘People’s Assembly’ currently supported by a range of left figures such as Mark Steel and Tony Benn, and in which the driving force seems to be a previous splinter group from the SWP – Counterfire. While, again, this is a very welcome development and there is no reason not to support it wholeheartedly, I am slightly sceptical about this project and would not want to see this approach form the centrepiece, as it were, of a new organisational model. The main problem here is that I think we need a firmer structure – we need a party form (like that of Syriza). If we are serious about changing society for the better then we need to be serious about taking power too – and for this we need to be organised into a party structure. There is no reason, as I’ll argue below, why this party should not (like Syriza) take a relatively decentralised, pluralistic form – but we do need some sort of central coordination in order to be effective.

The third model – and the one I think is most promising – is the Left Unity model. Left Unity (there’s a statement its rationale here and some ideas about basic principles here) sees itself as the embryonic form of a new broad church party of the left. It models itself in relation to Syriza and to other successful groupings like the Front de Gauche. It seeks to provide a unifying, coordinating structure within which relative disparate groups and elements on the left can work together and pool their resources. It is precisely the sort of thing that we need. Already the most open and outward looking radical socialist groups such as Socialist Resistance and the ACI, together with the new International Socialist Network – all of these groups themselves relatively pluralistic works in progress – have pledged their support. But, more than this, the most encouraging thing about Left Unity is that, with the help of Ken Loach’s recent appeal, it seems to be pulling in traditional Labour supporters alienated by the party’s inexorable drift to the right. Winning over a sizeable chunk of Labour’s constituency of activists and supporters has long been the Holy Grail of the radical left and Left Unity seems, so far, to be pulling this off – there is a long way to go here, but it’s certainly made a promising start.

Of course, an alliance of revolutionaries, reformists and ‘left reformists’ within a federal type party structure raises all sorts of organisational and strategic dilemmas and potential problems – but what possible sort organisation doesn’t raise its own difficulties? Not the least of these is that it will have to confront the classic (and in my view inevitable) dilemma of socialist strategy – the reform/revolution problem. Certainly a party which aims to transform society fundamentally and which also commits itself to a political strategy that would involve, if it was successful, actually taking part in, or even forming, a government faces the problem of whether it is possible to use state power to help effect a transition to socialism or whether such an approach would, inevitably, saddle it with the responsibility of managing capitalism in capitalism’s interests.

Of course this is not an immediate problem in the UK – though it certainly is for Syriza in Greece. Nevertheless if Left Unity continues to develop we will need to give some serious thought to big strategic matters. I hope to contribute some thoughts in relation to the big strategic picture in a later article on this site.

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