Tuesday, 22 December 2009

Happy Christmas/Yule/Festive Season (delete as appropriate!)

One resolution for 2010 is to increase the number of posts I put up here. My PC has been cleared of spyware and other nasties, so I can start again in many ways. I've hit 40, which is the new 30 or something apparently. Anyway, that can all wait. I'm going to have a relaxing few days and recharge my batteries. Hope you have a peaceful and stress-free break from it all too. Hope you've put the sprouts on already...

Monday, 30 November 2009

Quick Note on Media Stuff

As you may be aware, Rupert Murdoch’s News Corp is planning to charge for access to the websites of its publications. It is also drawing up an alliance with Microsoft, while Google will be unable to index News Corp publications when people ‘Google’ for stuff on the Net. There appears to be no set timetable for this to happen, just some time next year.

Rupert Murdoch has never liked the internet, on the grounds that so much of its content is free. He would much prefer it if there were a series of firewalls blocking access unless one is prepared to cough up the readies. I am sure he looks on with envy at the way his mates in the upper echelons of the Chinese Communist Party block access to various internet sites in mainland China.

Glenn 'The Poor Man's Bill O'Reilly' Beck exposes the Chinese Communist connections of Rupert Murdoch on Fox TV. (Hat-tip: News Corpse)

I seriously wonder if people will pay good money (or any money) to access Murdoch’s various publications. I mean, news is much the same wherever one goes. Most people, if they cannot go to websites of The Times and The Sun will go the websites of other newspapers here. Whether it is highbrow stuff, business news, sports coverage to just plain old celebrity gossip, there are more than enough other places to go. I am pretty familiar with the output of The Times, Sunday Times, News of the World and Stun. The only part of the whole ensemble I would think of paying for in its own right is the Sunday Times ‘Culture’ section, and some weekends that would be touch and go (particularly at the moment when all culture/review/book sections of all papers are going through their Xmas Books/Books of the Year phase. It is just one big mutual backscratch amongst writers who get published. It is almost as bad as the period of late Spring/early Summer when the papers give us page after page of their Summer/Holiday reading selections...by the very same people who gave us their recommendations six months before! Give me some proper reviews!).

Perhaps the best comment I have heard about Murdoch’s plan’s is by principled anarcho-capitalist/Libertarian Lew Rockwell:

Neocon billionaire Rupert Murdoch has been threatening to stop Google from indexing his newspapers and other media outlets. Google pointed out that any business may have its site de-indexed on request. Now the Rupester is negotiating with MSMFT to de-Googleize and join up with Bing. Please go ahead, Rupert. Anything that cuts your readership is good for the world.

Moving away from Planet Murdoch, a quick prediction: within the next 5 years ie by 2015, The Guardian and New York Times will merge, probably through a friendly take-over by the former. The Guardian Media Group has wanted to make The Guardian the world’s leading ‘Liberal’ newspaper for a few years now and the New York Times has its financial problems (so has GMG, but not to the same extent). It would be a logical tie-up.

Wednesday, 11 November 2009

Cultural Parish Notices

A few events in the coming weeks people may be interested in going along to.

First a couple of 'big-ups' (as The Kids say) for London's two Roller Derby Leagues. This Friday sees The London Rockin'Rollers present:

Saturday sees another social, this time by The London Roller Girls:

I hope to get along to both. I keep meaning to get along to a match or two, but they keep falling when I'm working, out of London etc. There are a couple in the next few weeks, but I'm working. One of my Resolutions for 2010: watch more Roller Derby! There is a film out, which may hit these shores by the Spring of 2010, about Roller Derby, Whip It, which should help increase its popularity this side of The Pond.

My final Roller Derby plug before moving on...I must mention Vancouver's Terminal City Roller Girls, without which the whole Roller Derby experience would have passed me by:

Hat-tip: Suzy Shameless!

Still with things Vancouverish, my Coova friend and all round clever person Sara Bynoe will be back in Olde Londone Towne next month, for a night of Teenage Angst. I started typing this post having flashbacks remembering writing really bad poetry about the possiblity of nuclear war when I was 13-14, which I was glad to get rid of! Looking back, it could have come in handy for the following. (To make it really Teen Angstist I'm also listening to Simple Minds as I type this- 'Don't you forget about meee....'):

Teen Angst: A Celebration of Inadvertantly Hilarious Adolescent Writing
The London Version

Tuesday, 08 December 2009, 19:00 - 23:00
Bethnal Green Working Men's Club - BASEMENT
42-46 Pollard Row, E2 6NB
London, United Kingdom

Teen Angst is an open mic comedic reading series where everyday people read from their embarrassing old journals, poems, songs, essays (and more), in front of an audience.

Part stand-up comedy, part poetry reading, part karaoke (in the way you go to watch people embarrass themselves).

The night started in Canada in 2000 to launch the website http://www.TeenAngstPoetry.com - Teen Angst has since gone on to publish an anthology Teen Angst: A Celebration of REALLY BAD Poetry (St. Martin's Press, 2005), performed at the LATITUDE FESTIVAL (UK), BUMBERSHOOT (Seattle), THE KGB BAR (New York City), THE INTERNATIONAL HIGH PERFORMANCE RODEO (Calgary) and at London's BOOK CLUB BOUTIQUE.

Guest readers include: Tim Clare, Rhian Edwards, Angry Sam, Cath Drake, and Sophia Blackwell.

Sara Bynoe, creator of Teen Angst and Michelle Madsen from the Hammer and Tongue Poetry Slam.

PLUS ...WIERD AND WONDERFUL foodstuffs and drinkables to plant you firmly back in the heady days of your adolesence.

Contact sarabynoe(at)gmail.com


Finally, the Staffordshire Hoard
exhibition is on at the British Museum. The hoard was discovered not far from where my parents live, very near Lichfield. Hopefully it should be an eyeopener for those who think there was no English history, just The Dark Ages, between the Romans leaving in 410 and the Normans imposing their Yoke in 1066. So that's another event in London to go along and see! (For those who cannot, this may be of interest.)

Wednesday, 4 November 2009

Any old iron, any old iron, any, any, any, old iron?

So, with more of a whimper than a bang, the 'cast-iron' pledge for a referendum on the Lisbon Treaty by 'Call Me Dave' Cameron has bitten the dust. I am a bit surprised, as I thought he would abandon the pledge AFTER the General Election (to keep the Lib Dems onside), not before. Obviously he does not think the 'fruitcakes, loonies and closet racists' of UKIP (as he once called them) are a threat to the Cons electorally, although I can see a fair few resignations and defections from the Conservatives to UKIP in the run-up to the General Election. I thought the promise of a referendum would be kept to keep those Conservative voters thinking of voting UKIP onside until May 7th 2010. Instead 'Call Me Dave' has now had his proverbial 'Clause IV' moment. That is, he has told his Party's faithful to like it or lump it and stop 'banging on' (another Dave-ism) about the EU. Well, Dave's not the 'Heir to Blair' for nothing is he?

I laughed when I saw the BBC report of 'Call Me Dave' promising 'never again' would powers be handed over to the EU without a referendum. I'm surprised he didn't pledge 'peace in our time' and 'it will be all over by Christmas' while he was at it. Frankly I think it is pathetic politics, 'full of sound and fury, signifying nothing.'

Of course, one of the great mysteries of life is why, when one considers the historical record, the Conservatives are considered the 'Eurosceptic' Party in British politics. It was a Conservative government that tried to get into the Common Market (as it was known then) back in the early 1960s. In the early 1970s, it was the Conservatives who got us in. They largely backed a 'Yes' vote to stay in the EEC (as it was known then) in the 1975 referendum. Margaret Thatcher's Government, despite her overblown rhetoric, oversaw the acceleration of British integration into the EC (as it became known). To quote Martin Walker, Margaret Thatcher 'talked like Enoch Powell, but acted like Ted Heath'.

Like the photo of Donald Rumsfeld shaking hands with Saddam Hussein in 1983, this is worth saving from the Memory Hole. Margaret Thatcher campaigning for Britain staying in the European Economic Community in the 1975 Referendum.

She threw away our national veto so the Single European Act (which introduced Qualified Majority Voting) could be passed. It was then passed through Parliament subject to a three-line whip and guillotining of debate. The number of Tory MPs prepared to vote against the SEA hardly made double figures. Then in 1990 it was Margaret Thatcher who got Sterling into the Exchange Rate Mechanism. It was her successor John Major who signed the Maastricht Treaty. Then Tony Blair took up the Conservative trick of talking Euro-sceptic...while passing more integrationist legislation. Now he wants to be President of the EU- I wonder how he is getting on?

Now we have 'Call Me Dave'. The only 'EU-sceptic' move he has made in his years as Con leader has been to (eventually) withdraw from the European People's Party in the European Parliament. As Peter Oborne points out, the aspiring Party leader made the pledge to leave the EPP during the 2005 Leadership contest to attract votes. In contrast, his opponent David Davis promised to withdraw from the Common Fisheries Policy. I hate to sound all practical here, but I think trying to save the British fishing industry is a damn sight more important than where some MEPs sit in the European Parliament. Furthermore, with priorities like that, it is hardly surprising that 'Call Me Dave' has given up on stopping the Lisbon Treaty. He just hopes everybody else stops 'banging on' about it as well.

Monday, 2 November 2009

Getting me down, Part 2: Obamaism!

Emma Goldman Obama-style!

I'm still glad Obama beat McCain a year back, otherwise I think by now that there would have been a serious crisis, with threats to use nuclear weapons, and not necessarily in connection with Iran either. However, after someone decides not to throw themselves over a cliff, you have to stop congratulating them at some point.

I have no time for most of the Republican opposition to Obama. With the notable exception of Ron Paul, most of them are no-nothings who use 'socialism' as a swear word for anything they do not like politically. As Kevin Carson memorably put it, 'anyone who can seriously look at Obama’s economic team and its policies, and suspect him of being a closet "Marxist", probably shouldn’t be allowed to use scissors without adult supervision.' Serious libertarian opposition to Obama I respect a lot more, as it is opposed just as much to the warfare state as the welfare one (the former one is largely supported on a bi-partisan basis).

Possibly the best assessment of Obama from a Libertarian position comes from the pages of Reason magazine:

Obama Is No Radical: But maybe we'd be better off if he were.
Jesse Walker, September 30th, 2009

The conservative firebrand David Horowitz has declared the Obama White House a "radical regime." For the Republican radio host Sean Hannity, the ousted ex-communist "green jobs" czar Van Jones "signifies the radicalism of this administration." Even Andy Williams, the Branson crooner who sang "Moon River" and "Days of Wine and Roses," has joined the chorus, telling Radio Times this week that Barack Obama is "following Marxist theory."

For a chunk of the right—the portion that defines itself by its opposition to "the left"—that's the best explanation for the country's recent political path: Washington has been seized by radicals. But compared to a real radical, Obama is about as middle of the road as Andy Williams' music.

Yes, he gave a job to Van Jones, and if you search his administration you'll find yet more hires whose views are well to the left of most of the country. If you looked through George W. Bush's administration, you'd find hires with views well to the right of most of the country: Eric Keroack, say, the critic of contraception who landed a job atop the family planning office at the Department of Health and Human Services. It's an ideological spoils system, patronage paid to the factions that make up a party's base. And sometimes it has policy consequences, so it's worth monitoring closely.

Yet most people on the right will tell you, quite accurately, that the Bush years didn't do much to shift the country toward greater social or economic conservatism. I expect most people on the left will say something similar when Obama exits office. Thus far, the president's domestic agenda has been many things, but radical it isn't. Radicals make sudden turns. Obama sometimes slams his foot on the accelerator—just look at projected spending for the next few years—but he hardly ever tries to change direction. Radicals tear down centers of power. When Obama is faced with a crumbling institution, his first instinct is to prop it up.

That was most obviously true with the bailouts, a series of corporate preservation programs that began before he took office and have only increased since then. Candidate Obama voted for the Troubled Asset Relief Program, the 2008 bailout for failing financial institutions, and he personally intervened to urge skeptical liberals to support it. After Congress refused to authorize a bailout of the car companies, Obama followed George W. Bush in ignoring the plain language of the law and funneling funds to them anyway. Like Bush before him, Obama took advantage of such moments to adjust the institutional relationship between these nominally private businesses and the state: firing the head of General Motors, urging the company to consolidate brands, pushing for new controls on Wall Street pay. But the institutions themselves were preserved, in some cases enriched. The radical thing to do would have been to let them collapse.

And no, I'm not using "radical" as a euphemism for "free-market libertarian." A radical Obama still might have extended assistance to the people displaced by the corporate failures, perhaps even setting up a generous guaranteed income scheme. He might have broken up the big banks. He might have done all sorts of things, some wiser than others. But he would not have strengthened the corporate-state partnerships bequeathed to him by Bush.

After the bailouts we had the "stimulus" package, which boiled down to this: You're cutting back on unsustainable consumption? Here: Spend more! Around the same time we got the cash for clunkers program, which took that same impulse and added incentives that undermined the salvage business and the second-hand car trade—markets that are far more decentralized, dynamic, and open to the participation of the poor than the automakers that accepted Obama's largesse.

Now we have health care reform. Here you might actually expect the president to veer in a new direction and let a powerful institution die. After all, it's been only six years since he described himself as "a proponent of a single-payer, universal health care plan," and if he were serious about that it would mean the end of the private health insurance industry. Single payer isn't on the table right now, but liberal Democrats are trying to push a "public option"—a government-run alternative for people who'd like to opt out of the available private plans—into the legislation. And the public option is, in the words of single-payer advocate Mark Schmitt, "a kind of stealth single-payer." So in health care at least, Obama's a radical, right?

I don't think so, for two reasons. First, it's increasingly unlikely that a public option will be a part of the bill that emerges, in which case we'll be left with an enormous boondoggle for the industry: a law requiring every American to buy health insurance or else face legal sanctions. Every other powerful institution in the health sector already supports the president's proposals. Indeed, the Pharmaceutical Research and Manufacturers of America, the American Medical Association, and the Federation of American Hospitals are sponsoring a multi-million-dollar ad campaign on the measures' behalf. If the public-option-free version of ObamaCare becomes the face of reform, don't be surprised if the insurers join them.

Second, and more important, a system with more government-provided insurance, even one with only government-provided insurance, would still accept the institutional premises of the present medical system. Consider the typical American health care transaction. On one side of the exchange you'll have one of an artificially limited number of providers, many of them concentrated in those enormous, faceless institutions called hospitals. On the other side, making the purchase, is not a patient but one of those enormous, faceless institutions called insurers. The insurers, some of which are actual arms of the government and some of which merely owe their customers to the government's tax incentives and shape their coverage to fit the government's mandates, are expected to pay all or a share of even routine medical expenses. The result is higher costs, less competition, less transparency, and, in general, a system where the consumer gets about as much autonomy and respect as the stethoscope. Radical reform would restore power to the patient. Instead, the issue on the table is whether the behemoths we answer to will be purely public or public-private partnerships.

So I can't agree with Horowitz, Hannity, or Andy Williams. The president could pal around with militiamen, hook a money hose from the Treasury to ACORN HQ, and sleep each night with a Zapatista plush doll, but as long as his chief concern is preserving and protecting the country's largest corporate enterprises, the biggest beneficiaries of his reign will be at the core of the American establishment.

I'm pretty sure that if Obama had rolled back the bail-outs to Wall Street, restored the civil liberties Dubya, Darth Cheney et al had curtailed and moved to de-escalate the crisis in 'Af-Pak' it would have split a lot of the Libertarian, isolationist elements of the Republican Party away from it. 'Triangulation' is all very well as a political strategy, but you can give the other side too much respect sometimes, especially one that thinks you are a Marxist-Muslim, terrorist foreigner. Furthermore, going out of your way to disrespect the people who voted for you is a good a cue as any for electoral meltdown, as the Conservatives here found out in 97 and NuLab will discover next year.

Getting me down, Part 1: The Banksters Are Back!

A year or so ago, the global financial system was facing its Dunkirk, with most of those oh-so-clever financial 'products' which were bringing it to its knees playing the role of the Luftwaffe's Stuka dive bombers.

'Dammit Squiffy- Collateralised Debt Obligations at 11 O'Clock!'

Now the strutting peacocks of Wall Street and the Square Mile are back, thanks to the largesse of the taxpayer, of course. Like George Orwell, who saw the retreat from Dunkirk as the signal for an English Revolution, only to see the 'Blimps' get back into control, we have seen the chance to change things dissipate bigtime, at least for the moment. In Britain this is much to do with the lack of a serious Left; in the US the election of Obama alleviated much of the mood of panic which existed there last Autumn. In the US it also helps the status quo that the Obama Administration is full of Goldman Sachs alumni and the economics profession has been largely captured the Federal Reserve. Indeed, a case can be made for disputing how much a crisis there was last Autumn and how much it was a confidence trick played by the banksters on the rest of us.

Saturday, 31 October 2009

Writer's Block

Apols for the total silence. Getting myself to sit down and type in recent times has been extremely hard. The ideas are there, but I have been evading the task of grinding something out. I could blame Facebook, but that would be a mere displacement excuse.

November tomorrow- so I am thinking new month, new me, new blog, or something along those lines. I've got some technical probs with my PC, or to be more exact interference with my broadband connection, so I might be computer-free for some time (hopefully, not too long!), as it needs looking at. Before then, thpough, I hope to get some stuff posted up. After it is solved, I have a plan in my mind's eye...

Part of the reason I haven't been blogging has beenme suffering a severe bout of 'what's the bloody point?' Not so much carrying on with my blog, but events in the wider world. I want to expand in my next few posts (or at least one of them), but it is something along the lines of: will things ever get any better? I'll leave it there for the moment, but the Steve Bell cartoon below may give some idea of the type of events which made me think: 'what's the bloody point?'

Forward to November!

Wednesday, 30 September 2009

Notes on British politics

‘All political parties die at last of swallowing their own lies.’ James Arbuthnot, 1735.

I remember a time when I would read almost anything on party political conferences, the latest opinion polls etc. I seem to have given nearly all that up, though I have given the coverage in The Guardian of the current Labour Conference in Brighton a cursory glance. I am increasingly of the opinion that the three main parties’ conferences are a desperate attempt by their party hierarchies to convince the voting public that they are (i) different from the other two and (ii) they are worth voting for. With a bit of luck, none of them will succeed.

I think the current Government is suffering several syndromes the Conservatives suffered from in the years running up to their electoral annihilation in 1997 and which it took them a good decade to recover from (and if Gordon Brown had bit the bullet two years back, we would quite likely now be almost two years into a fourth Labour term with a Conservative Party in an advanced state of disintegration…). One is they may have done the right thing (ie pulled out of the Exchange Rate Mechanism, stopped the financial system from collapsing) but they will not get any credit for it, mainly because the actions they took contradicted a policy they had been advocating with enthusiasm for ages. I remember about a week before Sterling was pulled from the ERM John Major telling the CBI (I think) that it was ‘a dark lonely world outside the ERM.’ Of course, in fact it was the move that allowed Britain to get out of economic recession. Similarly, all Gordon Brown’s paeans to the City of London over the years (‘This is an era that history will record as a new golden age for the City of London. I want to thank all of you for what you are achieving.’ Gordon Brown’s Mansion house speech, 20th June ’07, quoted in Will Hutton ‘high stakes, low finance’ Guardian Review 2/5/09, p.8) makes his current attacks on the banks sound rather, well...pathetic.

Another similarity between the Cons then and NuLab now is the widespread feeling amongst their core supporters is that they are being dropped on from a great height. The high interest rates between 1989 and 1992 drove many small businesses to the wall- the very people who traditionally make up the backbone of local Conservative constituency parties. Although enough feared a Labour victory in 92 to get John Major back to office (then he stuck up VAT- tax bombshell anyone?) any small businesspeople that are left in political life are just as likely to be found in UKIP as the Tories. Similarly, NuLab’s management-speak cobblers about bringing ‘competition’ and ‘choice’ (ie bringing in large corporations to swallow up taxpayers' money with minimal accountability) into the public sector has alienated a wide swathe of people who stood by Labour through the Thatcher/Major years. If the great unsung reason for the collapse of the Tories in the 1990s was the destruction of the Nottinghamshire coalmines in 92/3 which kept open during the 1984-5 Miners Strike (I think the penny then dropped with many Tory voters that the Conservative Party would have no qualms about shafting them when the time came), I think the mass closure of Post Offices under New Labour will one day be seen as the reason why many traditional Labour voters deserted it.

Thirdly, I think it has reached the point where any new initiatives by the Government are greeted with the widespread question ‘Why didn’t you do that before? You’ve had plenty of time.’ Why House of Lords reform now? (Personally, there were three simple approaches to the Lords when Labour took over in 97: leave it as it was; make it 100% elected; & abolish it. Instead we’ve had 12 years of faffing about) Why a referendum on PR? (well at some point in the next Parliament we might just get something about a voting system based on the Alternate Vote, which like Single Transferable Vote, has many pros and cons, but it ain’t PR!) It’s all too little too late.

So is the Labour Party heading for total electoral annihilation? I am going to stick to the prediction I have been making for the last few years- that the Conservatives will be the biggest party, but will not get an overall majority and will form a ‘National Government’ with the Lib Dems and Blairites. (Lord Mandy looks like he'll be onto a winner whoever becomes PM on May 7th next year. Also do not be surprised if ultra-NuLab types like James Purnell end up in the House of Lords if they lose their seats in the Commons. As Harpy Marx suggests, Purnell's embrace of Government by 'Experts' has extremely undemocratic overtones). Maybe the Cons will get an overall majority, but I’m pretty sure ‘Call Me Dave’ will not want to be held hostage to the caprices of the EU-sceptic wing of his party and the ‘my EU, right or wrong’ types of the Far Centre inside the Lib Dems and NuLab will be ready to support the Cameroonies when the time comes. Put it this way, if Nick Clegg becomes Foreign Secretary, you can kiss goodbye to any chance of a Referendum on the Lisbon Treaty, whatever happens in Ireland on Friday. I think speculation that the Cons may call a such a referendum is merely a ruse by the Cameroonies to keep potential UKIP voters onside, which will be dropped ASAP after May 7th.

Although I predict a Con-led 'National Government' after the next Election I can see circumstances (short of Spain arranging to invade Gibraltar to give Gordon his own 'Falklands Factor') where events may conspire towards pushing the Election towards a lot tighter finish than many expect. For a start, there is no enthusiasm out there for a Conservative victory. Not so long back, I read in Private Eye a report from the wedding of former Sun editor and rising News International star Rebekah Brooks (nee Wade) where Shadow Chancellor George Osbourne declared 'It's just like '97!', referring to when Tony Blair became PM. To which comment former Indie editor Simon Kelner replied 'Yes, but there is a difference- nobody likes you.' If you look at the opinion polls the Cons are barely in the 40s, while in the run-up to 97, Labour was often getting over 50%. Maybe it will be enough, but some commentators have expressed their doubts. As Splintered Sunrise has argued, 'Call Me Dave' gets away with a lot, which Gordon Brown does not, as he is an ex-Carlton TV PR flak (one described by erstwhile Sun Business Editor Ian King as a 'poisonous slippery individual' and a 'smarmy bully who regularly threatened journalists who dared to write anything negative about Carlton- which was nearly all the time.' (The Sun 5/12/05 , cited in Larry Elliott and Dan Atkinson Fantasy Island, p.73) and the Media Class love looking after one of their own. If the next General Election is not the Cameroonie mudslide the opinion polls currently suggest, the inabilty of most London-based media to see beyond their noses may be one reason why it will be treated as a shock.

In addition, I think the Government may perform rather better than currently expected if it was to borrow Stanley Baldwin's slogan from the 1929 General Election: 'Safety First.' (This somewhat suggests that the really big economic apocalypse is a few years down the line yet!) Let's be honest: that is how John Major slid home in '92, despite fighting a General Election in the midst of economic recession- fear of something worse. There is something else which makes Neil Kinnock's situation in 92 similar to how David Cameron's situation will be in 2010. That is, both are leading parties that have lost 3 consecutive General Elections. Both after the third defeat faced economic boom times and both saw the only real way of winning the next General Election was by adapting to economic boom times on the assumption that they would continue, although only an economic downturn, casting doubt on the Government's economic competence, gave them a real glimmer of hope. Kinnock had his Policy Review, which embraced the Exchange Rate Mechanism as an anti-inflationary measure. Then Thatcher's Economic Miracle petered out, she got Britain to join the ERM (great patriot as she was) and was replaced as Tory Leader by her Chancellor. Kinnock's New Model Labour Party (as was the phrase then) was confronted with economic recession but was saddled with a deflationary economic strategy based on the assumption of boom times. The rest is history. The Cameroonies thought the Blair/Brown boom would last for ever, and embraced greenery, 'quality of life', wind turbines on roofs etc to try and convince the public or at least media types that they were the true 'heirs to Blair.' Then the Great Boom turned out to be more fart than hurricane and the Cameroonies were left stuggling. They may get away with it- after all Labour supported ERM membership and they were not punished politically when Norman 'Green Shoots' Lamont had to oversee our withdrawal (I don't know what it's like elsewhere but in Britain the expression 'green shoots' is associated with Norman Lamont, who in the 90s was like a 'right-wing' version of the SWP- if you wanted to discredit a policy or cause, you got Norman to endorse it). I can definitely see with economic bad times still a distinct possibility Cameron getting some political fall-guys on board - hello power-hungry Lib Dems and NuLab types. I can see George Osbourne being accompanied on begging bowl trips to Brussels, Beijing and Bombay (ok it's Mumbai, but let's keep the alliteration going here- and it was renamed Mumbai by a Hitler fan!) by Lord Mandy and Vince Campbell (who could be the next Chancellor, despite not being as nice as some think).

Although we have managed thus far to avoid armed police outside every bank, no-one knows how the economic situation will pan out. Whatever the politicians' spin on the matter,the public spending cuts all three main parties are promising after the General Election will be painful, with unknown social and political consequences. There has been a constant drone throughout the Blair/Brown years from Corporate Boot Lickers in the Media and Political Classes about the need for wholesale 'reform' and 'modernisation' of the public sector. (The wonderful thing about this is that you can never 'modernise' or 'reform' enough...one chases constant, moving targets). The Droners agree that it is purely electoral considerations which has prevented 'reform'. In other words, if you want public sector 'reform' you have to ignore the 'public'. Get a Government that has no fear of the public voting it out (massive Commons majority + Purnell's 'GOAT: Government Of All Talents'- without much talent, a cynic might say) and the 'reforms' can go ahead.

On that uplifting note, I will leave you. I've got a copy of one of those books always cited, but hard to get, to read: Alec Nove's 1983 Economics of Feasible Socialism. I need inspiration- I really do!

Monday, 7 September 2009

Marx and the State

I wrote this in the Autumn of 1990. I remember it being envisaged as a companion piece to my previous effort on Lenin's politics. Looking at it now, two points come to my mind.

First, I'm not sure how a programme that envisaged large-scale state control of the economy would go down these days with the working class(es), particularly with the Twentieth Century experience of professedly Marxist regimes pushing through large-scale programmes of state ownership. Where Marx's vision is superior to later attempts in the name of Marx to nationalise the economy is the fact that Marx wanted democratic bottom-up working class control of the economy, as opposed to it being run from high by The Party. I will always prefer Marx's belief that the emancipation of the working class is the act of the working class alone to Trotsky's belief that 'no one can be right against the party' (Geoff Hodgson, The Democratic Economy, p.164).

Second, the model of the 1871 Paris Commune which Marx supports as an example of how post-revolutionary society could be run. It seems in revolutionary situations (ie Russia 1905 and 1917, Germany 1918, Spain 1936-7, Hungary 1956, France 1968, Portugal 1974, Poland 1980-1) power often flows goes to workers' councils. However, these are revolutionary situations. What happens when 'normality' returns? If the revolutionary bodies save the revolution, what then? Can workers councils', however representative of society as a whole and aware of their wider place in society, totally replace other representative institutions? Do the workers councils' come to run the enterprises they represent or do they subordinate themselves to the wider goals of society as a whole? If Big Business and Big Government are dissolved in the revolution what sort of economic enterprises and civic bodies emerge from their ashes? Marx never had to really answer these questions, but after the experiences of the last century of so, those who consider themselves to be his political heirs need to have some answers.

However, without further ado (apols for all the footnotes!):

‘Marx’s objections to the state rest upon the entirely groundless conviction that a “stateless society” is possible.’ Discuss.

Marx, as Ralph Miliband points out, never put forward a systematic theory of the state [1]. When he did write about in any detail, it was basically to either understand the role of states in crisis situations, such as France between 1848 and 1851, or to criticise other thinkers on the subject, such as Bakunin, Bauer, Hegel and the drafters of the Gotha programme. It is also important when talking about Marx’s view on the state that one distinguishes his views from those thinkers often lumped together with him. For instance, it is Engels, not Marx, who speaks of the state eventually ‘withering away’ [2] and Lenin’s State and Revolution is arguably a selective interpretation of Marx’s views. [3]

It is a common interpretation of Marx that he objects to the state primarily because it ‘is but a committee for managing the common affairs of the whole bourgeoisie’, [4] which ‘is merely the organised power of one class for oppressing another’ [5] and is used ‘mercilessly and ostentatiously as the national war-engine of capital against labour.’ [6] I would argue, however, that Marx’s real objection to the modern state is one that runs through his writings, namely its alienating, particularistic nature. This alienation can only be overcome if the state is made universalistic in its interests via universal suffrage. For a long period after the overthrow of capitalism, according to Marx, functions corresponding to that of the capitalist state, albeit in a different context, will be necessary. I will conclude by making some remarks on Marx’s views.

For Marx, what makes politics and the state so alienating and distant for the ordinary person in bourgeois society is the complete appropriation of political functions by the state at the expense of civil society. The feudal system, even though it ‘excluded the individual from the state…as a whole’, had a civil society with ‘a directly political character’, and ‘the vital functions and conditions of life in civil society was still political…’ [7] The overthrow of feudalism by the bourgeoisie ‘turned state affairs into affairs of the people’ and ‘unfettered the political spirit that had…drained away into the various cul-de-sacs of feudal society.’ [8] Through the bourgeois state politics became ideally independent ‘from the other particular elements of civil society’- ‘the emancipation of civil society from politics.’ [9] In bourgeois society, says Marx, man has a dualistic nature; ‘on the one hand…a member of civil society, an egoistic and independent individual, on the other…a citizen, a moral person.' [10]

Under capitalism, says Paul Thomas, ‘Citizenship and private life became exclusive spheres of activity for the first time…vocation and political status were no longer linked organically…while he formally belonged to the state (as its citizen), actively participated only in civil society.’ [11] This lack of activity in the affairs of the state shows, believes Marx, that man is being alienated from his species-being in such a political system, for in fact ‘the affairs of the state…are nothing but the modes of existence and activity of the social qualities of men.’ [12] Under capitalism man’s ability to be a citizen in the interests of his fellow men in distorted, in Marx’s eyes, by the selfish particularism of his private interests, which makes him see the rest of society as unimportant to him. The result for Marx is that ‘real man is the private man of the present constitution of the state.’ [13]

The state in bourgeois society, says Marx, claims to be above the narrow particularistic interests of men in civil society, Indeed, Hegel describes the bureaucracy that accompanies the state as the ‘universal class’, which benevolently has the interests of society in general at heart- ‘the paradigm of mediation between the particular and universal’, as Avineri comments. [14] The problem, says Marx, is that the state cannot be ‘universal’ in a capitalist society. There are several reasons for this.

Firstly, the existence of the state by definition is evidence that there is a difference between the ideal postulate of universality and the actual existence of particularism within society. This is due to the state existing in only one part of actual life, while other spheres of life lie open to penetration by civil society. [15] If the state attempts to appear more aloof and independent from society, says Marx, the state is further removed from its professed raison d’etre, universalism. [16]

Secondly, the state is presented as being ‘universal’ just at the stage of the development of capitalism when it becomes more and more under the particularistic influence of the bourgeoisie. [17] Following the collapse of feudalism, civil society is freed from politics, and so capitalist property relations are able to penetrate the supposedly independent political realm of the state, [18] and the latter ‘can do, and may do, only what the prevailing mode of production…permits.’ [19]

Thirdly, the existence of bureaucracy says Marx is the institutionalised form of political alienation, and behind the facade of universalism it supports sectional interests. [20] Under capitalism ‘bureaucracy identifies the interests of the state with particular private goals in such a way as to make the interests of the state into a particular private goal opposed to other private goals.’ [21]

In fact, the state and the capitalists are similar alienating forces for Marx, says Thomas: ‘Before the capitalist…the…worker is powerless, and lacks substance; before the alien state and…bureaucracy, society itself is powerless.’ [22] Society ‘abdicates all will of its own and submits to the order of an alien will,’ [23] even when it thinks it controls the state via elections. This is because ‘the participation of civil society in the…state’ is 'through deputies’- an 'expression of the…separation and merely dualistic unity’ of the universalistic, citizen and particularistic bourgeois. [24]

Marx says in The Civil War in France that ‘the working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes.’ [25] At the same time, though, Marx scathingly criticises the Anarchists, especially Bakunin, for believing that the destruction of the capitalist state is the main priority of revolutionaries. [26] There seems to be a contradiction between these two views, but this contradiction can be resolved by taking into account Marx’s statement in the Critique of the Gotha Programme that ‘Freedom consists in converting the state from an organ superimposed upon society into one completely subordinated to it…’ [27] The function of the state in capitalist society must, believes Marx, become the functions of all society, which would be achieved by overcoming the alienation of the state from civil society, and civil society from politics.

In On Bakunin’s ‘Statism and Anarchy’ Marx says that ‘when class rule has disappeared, there will no longer be any state in the present sense of the word…’ [28] Phrases like this are often taken to mean that Marx believes in a ‘stateless society’ without qualification. In fact, Marx believes something not dissimilar to the state, to say the least, would be necessary in the post-revolutionary period. For instance, in The Communist Manifesto, Marx says that the communications, financial and transport systems, along with ‘all instruments of production’, should be put ‘in the hands of the State’. [29] Avineri says that works such as The German Ideology, The Eighteenth Brumaire and Das Kapital suggests that ‘even in its higher stage socialist society will require direction and planning at least in economic production.’ [30] Would this not require a state? Jon Elster refers to the ‘crude communism’ of the 1844 Manuscripts, which is the first stage of the transition to communism in Critique of the Gotha Programme, as ‘a form of state capitalism’. [31] Indeed, it is hard to see a state not being in existence to regulate a society where everyone works for society on an equal basis.

Marx, however, defines the state differently for the capitalist and post-capitalist periods. Under capitalism, the state is ‘the government machine’ which ‘forms a special organism separated from society'; [32] while after the revolution, it is ‘the proletariat organised as the ruling class’ [33] or alternatively, ‘nothing but the revolutionary dictatorship of the proletariat’. [34] For Marx, the state will be different after the revolution because it will be used by what he sees as the true ‘universal class’, namely the proletariat. Since the functions of the present state will be run by the proletariat directly- and not through the alienated, and alienating, forms of a bureaucracy ‘usurping pre-eminence over society itself’- the interests of the ‘universal class’ will be genuinely synonymous with the universal interests of society. [35]

For Marx, it is essential that if the state is to disappear in the form it takes in capitalist society, after the revolution, democracy and elections are essential. In his Critique of Hegel’s ‘Philosophy of Right’ Marx says that ‘In democracy the formal principle is at the same time the material principle…it is…the true unity of universal and particular.’ [36] Democracy is important as well for not only bringing together man’s dualistic nature in society, but for dissolving the society that brings about such a dualism in man. He believes that ‘Within the abstract political state, the reform of voting advances the dissolution of this political state, but also the dissolution of civil society’ [37] and ‘in true democracy the political state disappears.’ [38] As Thomas notes, this belief in democracy as being the antidote to the state is a recurring theme in Marx’s works. [39]

The Paris Commune of 1871 is for Marx by far the best example, if not the only example, of how it is possible to have ‘the reabsorption of the state power by society as its own living forces instead of as forces controlling and subduing it, by the popular masses themselves…’ [40] The Commune had in this context, says Marx, several positive features. Universal suffrage was used to choose the members of the Commune, who were also made accountable by being ‘revocable at short terms’, [41] and being paid workmen’s wages. All other functions, including the judiciary, were likewise made to be ‘elective, responsible, and revocable.’ [42] The coercive arms of the state, the standing army and the police, were replaced by a National Guard, ‘the bulk of which consisted of working men’ [43] in effect an ‘armed people’ [44] with ‘an extremely short term of service’ to prevent an anti-democratic coercive force appearing in the Commune. [45] The Commune also attempted to break down ‘the spiritual force of repression’ by relieving the churches of their property, and opening ‘The whole of the educational institutions…to the people gratuitously.’ [46]

The Commune, says Marx, was also ‘a working, not a parliamentary, body, executive, and legislative at the same time.’ [47] This breaking down of the division of labour, so common in the Commune, is for Marx its most positive feature. The Commune showed that it was possible to contemplate ‘the destruction of the State power which claimed to be the embodiment of that unity independent of, and superior to the nation…from which it was but a parasitic excrescence…the repressive organs…were to be amputated, its legitimate functions to be wrested from an authority usurping pre-eminence over society itself, and restored to the responsible agents of society.’ [48] The Commune, with its breakdown of the division of labour, democratic accountability and genuinely universalistic goals showed for Marx that the state could be ‘transcended’. [49] There would not be a ‘stateless society’, but a society that consciously controls the present functions of the state.

It has been fashionable ad nauseum to criticise Marx’s vision by citing the ‘Actual Existing Socialist’ societies of the Twentieth Century. It has also been said more than once that Marx does not understand bureaucracy. This is nonsense, considering that Hegel’s view on bureaucracy was one of the reasons that Marx broke intellectually with the former, except on one count. Marx says more than once about France that the state bureaucracy ‘originates from its days of absolute monarchy’[50] and ‘the decay of the feudal system.’ [51] He also though that the existence of bureaucracy in Germany was the result if its backwardness. [52] Marx does not seem to regard bureaucracy as a modern institution, let alone the wave of the Twentieth Century future. Marx’s views on bureaucracy can partly be blamed for the often disastrous inability of socialists since Lenin to understand bureaucracy.

Avineri suggests another flaw with Marx’s vision of post-revolutionary society. ‘Marx’s vision of revolution is based on universal criteria’, he says, ‘yet its realisation ultimately depends on historical circumstances that by nature vary from one place to another’, and this ‘may…frustrate attempts to achieve his universalistic postulates.’ [53] If Avineri is correct, and the success of Marx’s vision of a future society depends on a virtually simultaneous worldwide socialist revolution, I fear that his seemingly plausible post-revolutionary societal order will remain a vision.


1. R. Miliband ‘Marx and the State’ in T. Bottomore Karl Marx, p.128
2. S. Avineri The Social and Political Thought of Karl Marx, p.202
3. C. Hitchens Karl Marx: The Paris Commune 1871, p.19
4. K. Marx ‘The Communist Manifesto’ in D. McLennan, ed., Karl Marx: Selected Writings, p.223
5. Ibid, p.238
6. K. Marx ‘The Civil War in France’, in ibid, p.540
7. K. Marx ‘On the Jewish Question’ in ibid, p.55
8. Ibid, p.55
9. Ibid, p.56
10. Ibid, p.57
11. P. Thomas Karl Marx and the Anarchists, p.67
12. Quoted by Miliband in Bottomore, op cit, p.130
13. Ibid, p.131
14. Avineri, op cit, p.23
15. Ibid, p.203
16. Ibid, p.203
17. Thomas, op cit, p.69
18. Ibid, p.68
19. Ibid, p.78
20. Avineri, op cit, p.48
21. Ibid, p.24
22. Thomas, op cit, p.100
23. Ibid, p.100
24. K. Marx ‘Critique of Hegel’s “Philosophy of Right”’ in McLellan, op cit, p.33
25. Marx ‘Civil War in France’ in ibid, p.539
26. Avineri, op cit, p.239
27. K. Marx ‘Critique of the Gotha Programme, in McLennan, op cit, p.564
28. K. Marx ‘On Bakunin’s “Statism and Anarchy”’, ibid, p.563
29. Marx ‘Communist Manifesto’, ibid, p.237
30. Avineri, op cit, p.202
31. J. Elster Making Sense of Marx, p.449
32. Marx ‘Critique of Gotha Programme’ in McLennan, op cit, p.566
33. Marx ‘Communist Manifesto’, ibid, p.237
34. Marx ‘Critique of Gotha Programme’, ibid, p.565
35. Marx ‘Civil War in France, ibid, p.555.
36. Marx ‘Critique of Hegel’s “Philosophy of Right”, ibid, p.28
37. Ibid, p.35.
38. Quoted in Thomas, op cit, p.59
39. Ibid, p.75
40. Marx, ‘Civil War in France’ in McLennan, op cit, p.555.
41. Ibid, p.541-2.
42. Ibid, p.542
43. Ibid, p.541
44. Ibid, p.541
45. Ibid, p.542
46. Ibid, p.542
47. Ibid, p.542
48. Ibid, p.543
49. Avineri, op cit, p.203
50. Marx ‘Civil War in France’, in McLennan, op cit, p.539
51. K. Marx ‘The Eighteenth Brumaire of Louis Bonaparte’ ibid, p.316
52. Avineri, op cit, p.49
53. Ibid, p.20


S. Avineri, (1968) The Social and Political Thought of Karl Marx
T. Bottomore, ed, (1979) Karl Marx
J. Elster (1985) Making Sense of Marx
C. Hitchens, ed, (1971) Karl Marx: The Paris Commune 1871
D. McLennan, ed, (1988) Karl Marx: Selected Writings
P. Thomas (1980) Karl Marx and the Anarchists
B. Wolfe (1967) Marxism: One Hundred Years in the Life of a Doctrine

Tuesday, 18 August 2009

The Crisis and the Left...or the Crisis of the Left?

Won't get fooled again?

Nice was a very good place to visit... but bit hot though even for a sun worshipper like me!

I've being mentally pottering about a bit since I got back a month or so. One of the subjects I've been contemplating is why 'the Left' has, to be honest, done pretty abysmally politically since global capitalism hit the fan big-time last summer. Apart from Obama's victory (I wonder how many natural Republicans stayed at home on US Presidential Election day in disgust at the Bush Admin going 'all socialist' in bailing out Wall Street?) and the centre-left taking power in Iceland (and they want to join the EU! Talking about frying pans and fires) the crisis has pushed very little of the Western world towards the 'Left' or 'progressive' politics if electoral results are anything to go by.

Now the City of London and Wall Street have got the spring back in their step (thanks to billions of pounds and dollars off us taxpayers). I'm not sure about the US, but I would say in Britain, with a General Election in the offing, the Government will move heaven and earth to stop the economic system collapsing here until after we've (or maybe half the population) has voted. Once that's over, it seems whoever is in power will cut back state spending hard, while just tut-tutting whenever the City pays itself outrageous bonuses for looking at computer screens all day.

So, where did it all go wrong, for us out here 'on the Left'? I'm not going to give a quick easy answer (I don't sell Trotskyite newspapers in my spare time!) but it should be pretty obvious that the same old ways of thinking and acting politically are way past their proverbial sell-by date and the fridge needs defrosting. Bigtime.

I'm not going to say any more the moment. However, you may like to read these two pieces. One is from yesterday's Guardian, asking why the Left has not taken political advantage of capitalism's problems in the last year or so. The other is a serious impressive piece from the IWCA about how we got here and how we might, just might, get out.

Has the left blown its big chance of success? The collapse of unfettered capitalism should have been a golden opportunity for the left. So where did it all go wrong?
Andy Beckett,The Guardian, Monday 17 August 2009

It is a rare sunny summer morning and I am on the bus from Stoke Newington to Bloomsbury in central London. In these old, slightly earnest parts of the capital, leftwing politics runs deep: from Karl Marx writing in the British Library to communes in the 70s to today's dogged socialist flyposters. This morning's bus ride does not disappoint. Seated in front of me, en route to Marxism 2009, the pre-eminent British gathering of the international radical left, are a clean-cut man and woman in their early 20s. He is wearing a crisp new T-shirt that reads "RevoluciĆ³n Bolivarana". She has a large rucksack. They are speaking German, but the word "socialism" recurs.

The papers today are full of the recession as usual. On the Today programme, David Cameron has been talking about emergency cuts in government spending, and a union leader has been fiercely defending the wages of public sector workers. It could almost be the heady days of the mid-70s, when capitalism seemed to struggle for breath and all political bets appeared to be off.

At Euston station, the couple get off the bus. I follow them, past the looming tower of Network Rail headquarters – once the chaotic private-sector Railtrack, until it was nationalised – and into the complex of meeting rooms hosting Marxism 2009. But the atmosphere inside comes as something of a shock. It is the final, supposedly climactic day of the conference. The speakers are reasonably intriguing and diverse – the radical playwright David Edgar, the dissident Labour MP Jeremy Corbyn, the rising young union boss Mark Serwotka. And yet, Marxism 2009 feels little different from most such leftwing summits in Britain over the last quarter century. The corridors are animated rather than feverish. Attendees greet each other as old friends and comrades rather than eager new converts. The pavement outside has moderately busy stalls for the usual causes: opposition to Israeli land occupations, opposition to the British National Party.

At one table, a weatherbeaten man sits alone selling DVDs of "activist news" and collecting names and addresses. The sky above turns overcast, then steadily darkens. It starts to pour, but he does not move. As the rain soaks his hair and jacket, he sits still and erect, impressively defiant but a bit absurd. The ink on his list of names starts to run.

The last year should have been a happy one for the left. The great global lab experiment in unfettered finance capitalism has blown up. Bankers have become pariahs. Taxes on the rich have gone up. The pages of the financial press have had a frequent air of panic. New Labour has fallen out of love with the free market. Above all, the rightwing economic and political ideas first popularised by Margaret Thatcher in the 70s have, finally, lost their air of impregnability.

"These are the best circumstances to make the left case we've known for an awful long time," says Neal Lawson, head of the leftwing pressure group Compass, "since way back before 1979, since back to the 30s." Geoff Mulgan, the former Labour strategist and a longtime observer of the left, agrees: "This is a moment that should be incredibly propitious for the left. Capitalism is collapsing. You don't get more propitious than that."

There is also the widening recognition that free-market countries have deep social as well as economic problems. Earlier this year Richard Wilkinson and Kate Pickett, at the time almost unknown outside academia, published The Spirit Level: Why More Equal Societies Almost Always Do Better. Its findings about the failings of the most fiercely capitalist countries, such as Britain and the US, in everything from obesity to violent crime to mental health, received overwhelming acclaim in both the rightwing and liberal press. Wilkinson says he is now "absolutely deluged with invitations to speak: to religious groups, to civil servants, to government". In academia he senses an intellectual tide running leftwards: "In a lot of different subjects there's a move towards a fundamental recognition of how social people are. In neurology, epidemiology, social psychology, child development, there's lots of evidence that humans do better if they're collaborative."

And yet, in Britain and most comparable countries the left is not thriving. Quite the opposite. The Brown government's mild tilt to the left has made it no more popular. At the European elections in June, left-leaning parties, whether in office or opposition, cautious or militant, were trounced across the continent. Votes went instead to mainstream conservative parties or far right and anti- immigration groups. Over the summer the broader political debate, particularly in Britain, has shifted in the same direction: "The crisis of the financial markets has become a crisis of public spending – it's incredible!" says Hilary Wainwright, editor of leftwing magazine Red Pepper. "Public servants are going to be scrutinised down to the last paperclip, while bankers are not going to be scrutinised down to the last million they have received from the government."

Has the left missed its moment? The radical American writer Rebecca Solnit fears so. "It felt like last October [the peak of the banking panic] was the golden moment to put forward an alternative vision," she says. "What's been dismaying is that there has been so little coherent response from the left since." Lawson wonders whether the sheer size of the political opportunity presented by the financial crisis has induced paralysis: "All our Christmases have come at once, but we don't know what to do about it."

At Marxism 2009, the best-attended session of the morning is "Where is the radical left going?". The main speaker is Alex Callinicos, for decades now one of the key theorists in the Socialist Workers Party (SWP), the tirelessly agitating British fringe party that has organised the conference. In the airless main hall, in front of a stage backdrop reading "Capitalism Isn't Working!", Callinicos, concise and dapper in a black shirt, delivers a strikingly downbeat speech. "The forward march of the radical left in Europe has been halted," he says. "We're in a situation that is in a sense quite problematic . . . It's not a uniform picture of stagnation or retreat. The left bloc in Portugal got 10% of the vote in the European elections . . . But the ruling classes are desperately grabbing bits of Keynesianism. So a left economic policy based on Keynesianism, when Keynesianism has entered the mainstream, isn't very powerful."

This theme – that governments everywhere have borrowed the left's traditional tools for taming capitalism to deal with the financial crisis, thus stealing the left's clothes – is repeated often at the conference. It is met with looks of resignation but also grim satisfaction from the audience. The infinite deviousness of "the ruling classes" and the immense difficulty of the left's task are a given in these halls. In 2004, Solnit published a much-praised book, Hope in the Dark: the Untold History of People Power, challenging the instinctive pessimism of many leftists. "A lot of activists," she wrote, "specialise in disappointment." She adds now: "Despair is a black leather jacket that everyone looks good in. Hope is a frilly pink dress that exposes your knees."

It is quite hard to imagine Jon Cruddas in a frilly pink dress. The prominent leftwing Labour MP for the raw suburb of Dagenham in east London is all shirtsleeves and strong handshakes when we meet in Westminster. But he is one British socialist who still sees the recession as an ongoing political opportunity. Crisis on the left or not, his own trajectory seems upward: elected as an MP in 2001, he won the most first-preference votes in the Labour deputy leadership contest only six years later (Harriet Harman won via second preferences), and is spoken of by some as a potential party leader if Labour, as is quite possible, moves truly leftward after a general election defeat.

"The 15th of September 2008, the day Lehman Brothers went bust, could be the day the world turned," he begins with characteristic confidence. "The whole politics of Blair and Cameron looks like the product of more benign times." Cruddas, unlike some on the left, supported the subsequent bank bail-outs – "you couldn't let the whole system collapse" – and does not think the apparent amelioration of the financial crisis that has followed means a return to economic and political business as usual. "This is the early knockings of this crisis. You've still got trillions of pounds of debt around. The assumption in here" – he nods impatiently towards the House of Commons – "is that we tinker with this economic system, and then go back to 60 consecutive quarters of growth. But out in the country people know different. There is no economic status quo any more. There is a hunger for political ideas. I helped do an e-book on the crisis. Cost £250 to produce, put it on the web, 50,000 copies gone – bang. There is a space for a populist left politics – around [opposition to] ID cards and Trident, around taxes, tax justice – that wasn't there a year ago."

But Cruddas says people wanting this politics to crystallise will have to be patient. Rightwing ideas have been so dominant for so long in western politics and economics that they may only slowly loosen their grip. "This is going to take years. There was a long lag between the Wall Street Crash in '29 and the New Deal [the first effective left-of-centre response to it]." In the meantime, he warns, "There could be a different new form of politics, much more populist, dangerous, fascistic, like the BNP." With only the faintest hint of ostentation, Cruddas, who has a philosophy PhD, quotes part of a famous passage by the Italian Marxist thinker of the 20s and 30s Antonio Gramsci: "The old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear."

To less upbeat observers than Cruddas it is the left that displays "morbid symptoms". Mulgan says: "A lot of the left literature feels like it's just words, just rhetorical. [Groups such as] Compass don't feel like they're part of a real social movement. It's very different from a generation ago."

Until well into the Thatcher era, the left in Britain was a complete and vigorous political world. It had a mass membership through the unions and the Labour party. It had credibility and charismatic figures: even establishment papers such as the Times feared and sometimes respected Tony Benn or the National Union of Mineworkers. And it had potent ideas from the likes of Gramsci and Marx and Keynes. All of these elements have decayed since the 80s; but none so damagingly, especially in the light of the financial crisis, as the left's thinking about the economy.

"The left just gave up on economics," says the economist Paul Ormerod, who retains sympathy for the cause. "Marx and Keynes cast such long shadows. There was too much of the left saying, 'It's all there in the old masters.'" Marx died in 1883 and Keynes in 1946; by the 80s – some would say much earlier – the world economy had changed sufficiently to invalidate some of their ideas. Yet the left was more interested by then, Ormerod argues, in other issues such as race and gender and sexuality. Lawson agrees: "We've had a hollowed-out generation of economic thinkers."

Since the 80s, Ormerod says, rightwing economists "have taken over in treasuries and central banks all over the world". Western universities, too, have become production lines for rightwing economics graduates – and for graduates who do not even consider a complete faith in the free market to be a political position at all. Meanwhile, the left has suffered a broader crisis of confidence: as Lawson puts it, "We've had the intellectual stuffing knocked out of us – the fall of communism, the fall of postwar social democracy."

By the early 21st century, even fresh and successful leftwing books such as Naomi Klein's The Shock Doctrine or Empire by Michael Hardt and Antonio Negri assumed that global capitalism was immensely strong, "in the midst of conquering its final frontiers" in Klein's words. Most of the left, just like most other political schools of thought, did not see the great financial collapse of 2008 coming. Since the recession set in, the left has not been able to play what should have been its electoral trump card: "We told you so."

Solnit considers this picture of universal leftwing retreat too bleak. She sees signs of radicalism in Barack Obama's administration, for example on green issues. She points out that anti-globalisation and left-leaning environmental groups across the west remain energetic and creative, and that some have paid attention to economics. "I do feel like there are a lot of small alternatives out there: community agriculture, people living by barter, people living off the grid. That revolution is slow and incremental. It's been going on since the 60s. That continues." In Hope in the Dark, she criticises those who "expect . . . a punctual reaction" from the left to big political or economic events "and regard the lack of one as a failure". The way politics works, she writes, "is more complicated than cause and effect".

At Marxism 2009 there is the occasional reminder that leftwing politics still has potential. In the conference bookshop, for the most part a well-visited mausoleum of nostalgic volumes – Glorious Summer: Class Struggle in Britain 1972 – there is a brief, more forward-looking pamphlet on sale for £1. Visteon: How Workers Occupied and Won is an SWP account of the factory occupations in Northern Ireland and England this spring at the car component manufacturer Visteon. It is written in the usual overdone party style – "Now we have the template for resistance" – but suggests that the left's response to the global slump may not be completely toothless.

In March, with the motor industry in free-fall, Visteon, a spin-off of Ford, abruptly closed its UK plants and sacked all its workers. Staff reportedly received "six minutes" to clear their lockers, and redundancy terms far inferior to those they had been promised when Ford created the company nine years earlier. Kevin Nolan, a Unite union official at the Visteon factory in Enfield in north London, was one of those fired.

"I've always been a middle-of-the-road working man," he says. "I always voted Labour but I wouldn't say I was too leftwing." Yet the mass sackings radicalised him almost instantly. "I started thinking, we've got to come up with something. This was a corporation which had decided to use the recession to walk away. The initial plan was to ram a car through the main gates. Then we found a gate round the back of the factory open – no one knows the plant better than the worker – and we could just walk in." Once inside, Nolan and between a third and two-thirds of the Enfield workforce (accounts vary) blocked up the entrances to the plant with plastic crates, climbed on to the roof and fire escape, and announced that they would occupy the premises until they were offered satisfactory redundancy terms.

Nolan and many of his colleagues had never been on strike, but they made beds out of cardboard on the chilly shopfloor and dug in. Local people, some with no connection to the plant, brought them food and blankets. Members of the SWP arrived. "I said to them, 'I used to think you were a bunch of nutcases,'" says Nolan. "But they were very, very helpful." The Enfield occupation acquired a revolutionary tinge: "Don't Need Politicians, Don't Need Bosses, Workers Take Control," read one placard prominent in the TV and web coverage.

The Visteon sit-ins led to pickets of Ford dealerships and the threat of walkouts at Ford factories. In May, after less than five weeks' campaigning, the Visteon workers were granted redundancy payments close to what they had originally demanded.

Other British factory occupations have followed, most recently at the Vestas wind turbine plant on the Isle of Wight. But the ability of such well-publicised local episodes to restore a lasting momentum to the left is far from obvious. Over the last 20 years, there have been intermittent waves of leftwing militancy – the huge and vivid anti-globalisation protests of the 90s, for example – while the underlying political assumptions of Britain and similar western countries have continued to move rightwards. The modern left, its internal critics say, has become too fragmented, too utopian and divorced from how most people live. Wainwright asks: "What is the underlying social force that's going to be the basis of the left? In the mid-20th century it was the factory worker and the union member. There are far fewer of them now." Solnit says: "I don't see the networks in which great ideas circulate."

Other people think the left has just run out of ideas. "The feeling is still around that the left doesn't have any solutions," says Wilkinson. "Actually, our society is full of alternative ways of organising things" – he cites the success of the Co-operative Bank, built on ethical investments – "but the left desperately needs a developed ideology . . . an analysis of society." When capitalism had its last great crisis of confidence in the 70s, the British right had a set of remedies and a whole alternative worldview – later called Thatcherism – ready and waiting, decades in the making. Neal Lawson refers provocatively but also enviously to the early Thatcherites' political and intellectual "brilliance".

This time, perhaps the real challenge to the tottering status quo is not from the left at all. "The greens share a lot of the ideas of the left," says Mulgan, "but they are not in coalition with it, they are suspicious of it." Climate change is almost certain to make environmentalism more powerful. "The dominant sectors of the economy in 10 or 20 years' time," Mulgan predicts, will not be banking and property but "environmental services, health, education. This will be good for the left."

Maybe. Yet the left used to aim to change society rather than wait for society to change in its favour. For the bankers, who seemed to be facing near-extinction less than a year ago, the prospect of much more slowly losing their dominance over western economies to Mulgan's caring capitalists may not seem such a bad deal.

At the closing rally of Marxism 2009, with all the seats eagerly taken but the air stale as ever in the main hall, the SWP's national organiser Martin Smith interrupts his speech to read a short poem by the radical American writer Langston Hughes called Dream Deferred. It is an odd but stirring interlude, at least at first. The hall goes completely quiet; the heavyset, middle-aged Smith switches from bare-fisted rhetoric to the ambiguity – half defeatism, half defiance – of Hughes' verse: "What happens to a dream deferred?/. . . Maybe it just sags/Like a heavy load/Or does it explode?" But Smith rushes too quickly through the words and the moment is gone.

Attendees at Marxism 09. If Martin Smith wanted to wow the SWP foots soldiers with poetry, he should have adapted John Cooper Clarke's 'Evidently Chickentown': 'the f***ing scene is f***ing sad, the f***ing news is f***ing bad...the f***ing folk are f***ing daft...everywhere in Trotsky Town.'

Reading the article depressed me. This IWCA one, which I read later yesterday, gave me 'optimism of the will' to quote Tony Gramsci:

Economic democracy: the need for a vision (part 1)

In politics, being competitive in the realm of ideas is a prerequisite to being competitive anywhere else. The following is the first part of an attempt to start mapping out an explicitly pro-working class vision upon which a wider movement might be built, namely that of economic democracy as opposed to state socialism or ‘free-market’ capitalism. Part 1 attempts to cover the philosophical underpinning, the ‘why’ of economic democracy; part 2 will begin looking into the ‘what’ and ‘how’.

Introduction: grand strategic failure, or how the left managed to make an enemy out of the working class

The left currently lies utterly defeated, while the right reigns triumphant. So much so that, even in the early stages of a profound crisis for the capitalist system on a par with the Great Depression, the left has no response. One needs only to compare the political state of play now to then to see how profoundly the left has been vanquished. Then, the capitalist class was running so scared that both strategic concessions to the left (in the form of social democracy) and alliances with fascism were felt necessary if the threat from the left were to be beaten back. Now, no such danger is felt. What public anger there is, when it’s focussed politically, goes in favour of the far-right, as they are the only major players doing what should be the left’s bread and butter of at least acknowledging day-to-day working class concerns. What currently passes for the ‘left’ has in large measure abandoned class politics for identity politics, which has succeeded only in preparing the ground for the advance for the BNP (if politics is allowed to become racialised, and the left prioritises non-whites in general as their constituency, then why wouldn’t the white working class give their allegiance to those they perceive as the ‘white party’?). The white working class now regards the left, when they regard it at all, with suspicion and hostility, as an enemy rather than an ally.

If the left is to even survive, let alone advance, understanding the errors that have led it to this pass is crucial. What is the left even for, in its current state? What is the goal? Throughout the twentieth century, its goal has been, brutally summarised, state control of the economy, not as a means to an end but as an end in itself, as a priori the highest form of socialism. This is an ideological commonality that has encompassed, in its differing forms, both the dictatorial left in the Communist bloc and the Parliamentary left in Western Europe, including the left in the Labour party here. Socialism has, in practice, become synonymous with state control in one form or another. But while state control of the economy may have been the goal of the left, there is nothing to suggest that this was, or is, a particular goal or aim of the working class. If anything explains the parting of ways between the left and the working class, then, at bottom, it is this: the adherence by the left to undemocratic, top-down and fundamentally anti-working class methods.

However, there is no reason why socialism should be synonymous with dictatorship or coercion. The eminent American political scientist Robert Dahl made the elementary observation in 1947 that there were two, potentially contradictory, schools of left wing economic thought: one advocating central control of the economy in the hands of the state, and the other advocating workers’ control, where “workers will no longer be merely passive victims of the productive process, but direct participants in the control of productive enterprises”[1], and that, crucially, “after a decade or more of debate over the extent of worker participation in nationalised industries, in 1944-45 the British Labour party flatly rejected the notion that workers were entitled to participate directly in governing state-owned firms [italics added]“[2], coming down firmly on the middle class, Fabian tradition of state control. This, in microcosm, exemplifies the left’s grand strategic failure in the twentieth century. Why this happened is complex (though there is not scope to discuss it here, the influence that Bolshevism, as seemingly the form of socialism most likely to succeed, had on the wider left was crucial[3]), but certainly a major factor in this country was the fact that much of the leadership on the left came from the middle class, in particular the Fabians, resulting in the left drifting away from the pursuit of purely working class goals. The Fabians were an intellectual grouping/think tank formed in 1884 which advocated the ‘gradualist’ road to state socialism, and whose key members, Sidney and Beatrice Webb, founded the London School of Economics in 1895. Clement Attlee, aside from being a public school educated social worker, served as head of the Fabian Research Bureau[4]. Marx and Engels once wrote of middle class socialism:

“A part of the bourgeoisie is desirous of redressing social grievances, in order to secure the continued existence of bourgeois society… The Socialistic bourgeois want the living conditions of modern society without the struggles and dangers necessarily resulting therefrom. They desire the existing state of society minus its revolutionary and disintegrating elements. They wish for a bourgeoisie without a proletariat. The bourgeoisie naturally conceives the world in which it is supreme to be the best; and bourgeois socialism develops this comfortable conception into a more or less complete system. In requiring the proletariat to carry out such a system, and thereby to march straight into the New Jerusalem, it but required in reality that the proletariat should remain within the bounds of existing society, but should cast away all its hateful ideas concerning the bourgeoisie”[5].

The Fabians were a perfect example of this, and Fabianism was such a ‘complete system’. This socialism -the strand which came to dominate the Labour party from at least Attlee until the formation of New Labour, when all pretences to socialism were dropped- is one in which the benevolent middle class rules. They saw the working class as a potential winning horse in history, albeit one that needed the firm hand of a middle class jockey. Their attitudes to the independent, risen working class were spelled out quite explicitly at the moment of truth by Beatrice Webb on the second day of the greatest working class uprising this country has ever seen, the 1926 General Strike, which she described as “a monstrous irrelevance in the sphere of social reform” and forecast would be “the death gasp of that pernicious doctrine of ‘workers’ control’ of public affairs through the trade unions, and by the method of direct action”, something she considered to be an “absurd doctrine… a proletarian distemper which had to run its course - and like other distempers, it is well to have it over and done with at the cost of a lengthy convalescence”. Of the strikers she wrote that “There will be, not only an excuse but a justification of victimisation on a considerable scale” and praised scabs as “patriotic blacklegs!”[6]. John Maynard Keynes, although more of a Liberal by inclination, still had enough in common with the Fabians, and they with him, to be able to join them, sharing as they did a technocratic view of how systematic state action might allow industrial society to be run successfully from the top down without engendering crisis after crisis. In this regard, Keynes’ capitalism was no different from the Fabian’s socialism. Keynes’ view of the working class ran thus: “When it comes to the class struggle as such, my local and personal patriotisms, like those of every one else, except certain unpleasant zealous ones, are attached to my own surroundings. I can be influenced by what seems to me to be justice and good sense; but the class war will find me on the side of the educated bourgeoisie… How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement?”[7].

When the middle class left saw that the working class wasn’t going to deliver them the victory they wanted -at least not on their terms- the fishing around for another potential agent of historical change began, with students and ethnic minorities being anointed by the left as the new proletariat, and the ‘old’ proletariat being summarily dumped. The social democrats who so easily transmuted into New Labour are made of the same timber as the former Communist apparatchiks who so easily became free-market thugs after the fall of the Berlin Wall: the only concern is to be on the winning side. With friends like these…

1) Their neo-liberalism: how the right won the battle of ideas

“Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” Milton Friedman.

A look back at the twentieth century will show that the right always fought the class war in a more ruthless and strategically astute manner than the left. While the left was fully embracing statism after World War II -and before-, the right had the sense to begin exploring other avenues. The smarter elements realised that if the communist threat was to be repulsed, the right had to relinquish some of its own excessively statist tendencies -at least in the developed world- and go down another path. The left’s embrace of top-down/anti-democratic methods allowed the right -the side who brought us two world wars and the Great Depression- to increasingly paint themselves as the defenders of freedom and democracy, against the threat posed to these values by state socialism. Throughout the latter part of the twentieth century, the claim that there was more freedom to be had under capitalism than socialism found some resonance beyond the right’s natural constituency, including parts of the working class, for the simple reason that there was a certain amount of truth to it. While the left, instead of looking to extend democracy into the economy, abolish class distinctions and end the exploitation of man by man, was busying itself trying to make a moribund, unsustainable, inherently flawed and undemocratic state socialism work, the right were formulating a defence of free-market capitalism predicated upon the notion that it was, in fact, a form of economic democracy. Milton Friedman, the most feted economist of the twentieth century alongside Keynes, wrote in his prime philosophical work:

“Freedom is a rare and delicate plant. Our minds tell us, and history confirms, that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom… By relying primarily on voluntary co-operation and private enterprise, in both economic and other activities, we can insure that the private sector is a check on the powers of the governmental sector and an effective protection of freedom of speech, of religion, and of thought… Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion - the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals - the technique of the market place. The possibility of co-ordination through voluntary co-operation rests on the elementary -yet frequently denied- proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed. Exchange can therefore bring about co-ordination without coercion. A working model of a society organized through voluntary exchange is a free private enterprise exchange economy- what we have been calling competitive capitalism”[8].

So for Friedman, power in a free market economy lies with the invisible hand of the sovereign individual. As Friedman quite rightly notes, “the great threat to freedom is the concentration of power”, and it is the free market which decentralises, disperses and devolves economic power. It is the consumer, through the independent exercise of his demand, who determines what is produced. The distribution of wealth, like the rest of the economy, is shaped simply by the combined outcome of individuals utilising their talents and exercising their initiative as a free, rational agents in the marketplace, where “all transactions are bi-laterally voluntary and fully informed”. For Friedman, the private sector of the economy is completely free and democratic, with the sole threat to individual freedom and liberty coming from an over-powerful or too-large state sector.

Thirty-nine people in a hotel in Switzerland

This defence of capitalism did not originate with Friedman: he took it from Friedrich von Hayek (who in turn was inspired by Ludwig von Mises). It is useful to briefly look at the formation and influence of this ideology, as it demonstrates how seriously the right take the task of defending their interests, the importance they attach to winning the battle of ideas, and how the pro-working class movement has fallen short in these regards. In 1947 Hayek convened a conference of like-minded intellectuals at the Swiss resort of Mont Pelerin on the banks of Lake Geneva. This grouping, which included a young Friedman and another future Nobel Prize-winning Chicago School economist, George Stigler, all saw themselves as classical liberals and believers in free markets and individual liberty, following in the tradition of Adam Smith. They had a shared concern with what they identified as the rise of a collectivist, statist consensus -encompassing communism, fascism and Keynesianism- among politically minded people, particularly the intelligentsia. The Mont Pelerin group saw it as their task to revitalise the tradition of classical liberalism as a means of defeating the statist menace. Hayek was quite clear that he saw his task as winning the hearts and minds not of the masses, but of the elites: he ascribed the rise of collectivist ideologies to “the lack of a real programme, or perhaps I had better say, a consistent philosophy of the opposition groups… what to the politicians are fixed limits of practicability imposed by public opinion must not be similar limits to us. Public opinion on these matters is the work of men like ourselves, the economists and political philosophers of the last few generations, who have created the political climate in which the politicians of our time must move”[9]. This was an attitude shared by Keynes and Sydney Webb of the Fabians, who said in 1886 that “Nothing is done in England without the consent of a small intellectual yet political class in London, not 2000 in number. We alone could get at that class”[10] (the LSE was founded precisely for this reason). Hayek was of the view that a prerequisite to re-establishing economic liberalism as a political force was re-establishing it as an intellectual force. There had been a previous attempt in 1938 in Paris to commence a classical liberal counter-offensive, motivated by the rapturous response that Keynes’s General Theory received upon publication in 1936 -‘Le Colloque Walt Lippmann’, named after the American writer who had similarly identified a collectivist groundswell in 1937- , but the war had interrupted the effort. The Mont Pelerin meeting in 1947, following on from the publication of Hayek’s great anti-collectivist tract The Road to Serfdom in 1944, marked the formal beginning of that ultimately successful campaign: this is where ‘neo-liberalism’ comes from, this gathering of thirty-nine people in a hotel in Switzerland in 1947[11].

‘Autonomous spheres in which individuals are supreme’

For Hayek, liberalism stood in direct contrast to collectivism. Where collectivism looks to centralise ownership of property and decision-making power in the hands of the state with the intention of consciously directing society toward some pre-determined goal, liberalism sought to decentralise property and decision-making power as far as possible down to the individual. Hayek lamented that “For at least twenty-five years before the spectre of totalitarianism became a real threat, we had progressively been moving away from the basic ideas on which European civilisation has been built… According to the views now dominant the question is no longer how we can make the best use of the spontaneous forces found in a free society. We have in effect undertaken to dispense with the forces which produced unforeseen results and to replace the impersonal and anonymous mechanism of the market by collective and ‘conscious’ direction of all social forces to deliberately chosen goals” [12]. This for Hayek amounted to “an entire abandonment of the individualist tradition which has created Western civilization… Although we had been warned by some of the greatest political thinkers of the nineteenth century, by de Tocqueville and Lord Acton, that socialism means slavery, we have steadily moved in the direction of socialism”[13].

Hayek denounced the progressives of his time who had been seduced by the notion that socialism might lead to increased freedom. Hayek was of the view that the only means the socialists had to achieve their goals were centralisation and statism. As noted above, in this he can hardly be blamed, because by 1944 the left had by and large embraced solely centralised, statist methods. Hayek asserted that, because of this, notions such as ‘individualist’ or ‘democratic’ socialism were contradictions and oxymorons. Socialism, like any other ideology which sought to consciously direct society toward some goal instead of simply making “the best use of the spontaneous forces found in a free society”, could only ever be a genus of the greater species of collectivism, and thus all the dangers inherent in any other form of collectivism applied to socialism, no matter how superficially noble the goals of socialism were:

“the ‘economic planning’ which is the prime instrument of socialist reform, can be used for many other purposes. We must centrally direct economic activity if we want to make the distribution of income conform to current ideas of social justice. “Planning”, therefore, is wanted by all those who demand that “production for use” be substituted for production for profit. But such planning is no less indispensable if the distribution of incomes is to be regulated in a way which to us appears the opposite of just. Whether we should wish that more of the good things of this world should go to some racial elite, the Nordic men, or the members of a party or an aristocracy, the methods which we shall have to employ are the same as those which could ensure an equalitarian outcome… The common features of all collectivist systems may be described, in a phrase ever dear to socialists of all schools, as the deliberate organisation of the labours of society for a definite social goal… The various kinds of collectivism, communism, fascism, etc., differ between themselves in the nature of the goal towards which they want to direct the efforts of society. But they all differ from liberalism in wanting to organise the whole of society and all its resources for this unitary end, and in refusing to recognise autonomous spheres in which individuals are supreme. In short, they are totalitarian in the true sense of this new word which we have adopted to describe the unexpected but nevertheless inseparable manifestations of what in theory we call collectivism [italics added]“[14].

Hayek believed that collectivists of all stripes shared the same fanatic, authoritarian mindset. He was of the view that “the conflict in existence between the National-Socialist ‘Right’ and the ‘Left’ in Germany is the kind of conflict that will always arise between rival socialist factions… They competed for the support of the same type of mind and reserved for each other the hatred of the heretic. But their practice showed how closely they are related. To both, the real enemy, the man with whom they had nothing in common, is the liberal of the old type. While to the Nazi the communist, and to the communist the Nazi, and to both the socialist, are potential recruits who are made of the right timber, although they have listened to false prophets, they both know that there can be no compromise between them and those who really believe in individual freedom”[15]. For Hayek, attempting to pursue any kind of all-encompassing societal goal poses a grave threat to freedom, because of the near-impossibility of defining a ‘social goal’ or ‘common purpose’ that every individual agrees upon, and state action -or collective action of any kind beyond where the agreement of an aggregate of individuals exists- invariably infringes upon individual freedom and autonomy:

“The attempt to direct all economic activity according to a single plan would raise innumerable questions to which the answer could be provided only by a moral rule, but to which existing morals have no answer and where there exists no agreed view on what ought to be done… It is the price of democracy that the possibilities of conscious control are restricted to the fields where true agreement exists, and that in some fields things must be left to chance. But in a society which for its functioning depends on central planning, this control cannot be made dependent on a majority being able to agree; it will often be necessary that the will of a small minority will be the largest group able to agree among themselves on the question at issue. Democratic government has worked successfully where, and so long as, the functions of government were, by a widely accepted creed, restricted to fields where agreement among a majority could be achieved by free discussion: and it is the great merit of the liberal creed that it reduced the range of subjects on which agreement was necessary to one on which it was likely to exist in a society of free men. It is now often said that democracy will not tolerate “capitalism”. If “capitalism” means here a competitive system based on free disposal over private property, it is far more important to realise that only within this system is democracy possible. When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself”[16].

And in addition to offering the best, and only, prospect for freedom and democracy, it is also the natural, organic development of the market economy which has made possible the complex division of labour we see today, all organised in a voluntary, non-coercive manner by the mysterious genius of the price mechanism, something a centrally directed economy could never hope to match. It is the price mechanism which diffuses economic decision-making power and information, which

“enables entrepreuners, by watching the movement of comparatively few prices, as an engineer watches the hands of a few dials, to adjust their prices to those of their fellows. The important point here is that the price system will fulfil this function only if competition prevails, that is, if the individual producer has to adapt himself to price changes and cannot control them… It is no exaggeration to say that if we had had to rely on conscious central planning for the growth of our industrial system, it would never have reached the degree of differentiation, complexity, and flexibility it has attained. Compared with this method of solving the economic problem by means of decentralisation plus automatic co-ordination, the more obvious method of central direction is incredibly clumsy, primitive, and limited in scope. That the division of labour has reached the extent which makes modern civilization possible we owe to the fact that it did not have to be consciously created, but that man tumbled on a method by which the division of labour could be extended far beyond the limits within which it could have been planned. Any further growth of its complexity, therefore, far from making central direction more necessary, makes it more important than ever that we should use a technique which does not depend on conscious control”[17].

For Hayek, the only legitimate function of government is to design a legal framework within which humans, as free, autonomous agents, can pursue their own goals in a rational manner. Anything beyond this is illegitimate and contrary to the principle of individual freedom. Economic liberalism “is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority”[18].

The myth of the market economy

“A great intellectual and moral advance was thus, it is claimed, frustrated by the intellectual and moral weaknesses of the mass of the people; what the spirit of Enlightenment had achieved was put to nought by the forces of selfishness. In a nutshell, this is the economic liberal’s defence. Unless it is refuted, he will continue to hold the floor in the contest of arguments.” Karl Polanyi, 1944.

The Hayekian interpretation of classical liberalism has become intellectually dominant over the past thirty-plus years. The free-market view of the world forms the philosophical -though not necessarily the methodological- inspiration for mainstream neo-classical economics, and also public choice theory in the field of political science and the New Institutionalist school in economic history[19]. Its dominance in the intellectual world is reflected in the influence it wields in the political world: it spawned Thatcherism, and then New Labour, over here; Reagan/Bush and then Clinton in the US; it has seen off the socialist challenge and has become increasingly dominant worldwide since the fall of the Berlin Wall. It lays claim to being the modern-day descendant of the classical liberal tradition of Adam Smith and Alexis de Tocqueville of individual freedom being guaranteed through limited government and private property, and thus to capitalism being the highest stage of progress, the embodiment of classical liberal principles, and the culmination of the Enlightenment project.

So goes the modern day capitalist story. Unquestionably it is seductive, and in addition to the intellectual effort in producing it there has been a huge public relations effort to sell it[20]. But is it true? Is the Hayek/Friedman view of contemporary capitalism -voluntary co-operation of autonomous individuals in free markets, no conscious control beyond individual agreements, and the invisible hand of the free market determining the distribution of goods, resources and wealth, except where prevented from doing so by fanatic collectivists- objectively accurate? On the first page of the foremost text on US business history, Alfred Chandler states:

“modern business enterprise took the place of market mechanisms in coordinating the activities of the economy and allocating its resources. In many sectors of the economy the visible hand of management replaced what Adam Smith referred to as the invisible hand of market forces. The market remained the generator of demand for goods and services, but modern business enterprise took over the functions of coordinating flows of goods through existing processes of production and distribution, and of allocating funds and personnel for future production and distribution. As modern business enterprise acquired functions hitherto carried out by the market, it became the most powerful institution in the American economy and its managers the most influential group of economic decision makers [italics added]“[21].

Chandler’s former colleague at Harvard Business School, William Lazonick, states that “The superior development and utilization of productive resources increasingly requires that business organizations have privileged access to productive resources. Inherent in such access is the supersession of market coordination to some degree. The shift from market coordination to planned coordination within business organizations has become an increasingly central characteristic of a successful capitalist economy… privileged access to finance, labour and technology by firms and industries may be critical to the process of industrial innovation writ small and the process of economic development writ large [italics added]“[22]. Milton Friedman once cited the pencil as an example of a commodity brought into being solely by the complex, unconscious co-ordination of the market[23]. In 2005 the US free-trade economist Pietra Rivoli produced a more documented study of a single commodity: the t-shirt. Intending her piece to act as a riposte to the anti-globalisation movement and a defence of free markets, she instead found that “the key events in the T-shirt’s life are less about competitive markets than they are about politics, history and creative maneuvers to avoid markets. Even those who laud the effects of highly competitive markets are loathe to experience them personally, so the winners at the various stages of my T-shirts life are adept not so much at competing in markets but at avoiding them… it is only at the retail level, and after it is tossed into a Salvation Army bin, that my T-shirt’s life is a story about markets rather than politics”[24]. Sir Alec Cairncross, head of the Government Economic Service from 1964 to 1969, wrote “The bigger the average size of business unit the more is organised and planned rather than left to the operation of market forces. The possibility of a parallel growth in government planning is suggested almost inevitably by successful business planning; and coordination of the activities of large businesses becomes itself an object of government policy”[25]. John Kenneth Galbraith, economic adviser to the Kennedy administration, concluded that:

“we have an economic system which, whatever its formal ideological billing, is, in substantial part, a planned economy. The initiative in deciding what is to be produced comes not from the sovereign consumer who, through the market, issues the instructions that bend the productive mechanism to his ultimate will. Rather it comes from the great producing organisation which reaches forward to control the markets that it is presumed to serve and, beyond, bend the customer to its needs. And in so doing, it deeply influences his values and beliefs… Planning exists because it [the price mechanism] has ceased to be reliable. Technology, with its companion commitment of time and capital, means that the needs of the consumer must be anticipated - by months or years. When the distant day arrives, the consumer’s willingness to buy may well be lacking. By the same token, while common labor and carbon steel will be forthcoming in response to a promise to pay, the specialized skills and arcane materials required by advanced technology cannot similarly be counted upon. The needed action in both instances is evident: in addition to deciding what the consumer will want and will pay, the firm must take every feasible step to see that what it decides to produce is wanted by the consumer at a remunerative price. And it must see that the labor, materials and equipment that it needs will be available at a cost consistent with the price it will receive. It must exercise control over what is sold. It must exercise control over what is supplied. It must replace the market with planning… The modern large Western corporation and the modern apparatus of socialist planning are variant accommodations to the same need. It is open to every free born man to dislike this accommodation. But he must direct his attack to the cause. He must not ask that jet aircraft, nuclear power plants or even the modern automobile in its modern volume be produced by firms that are subject to unfixed prices and unmanaged demand. He must ask…that they not be produced”[26].

The Cambridge economist Ha-Joon Chang has demonstrated how that, contrary to the Friedman/ Hayek view, economic development has almost always depended not on the free market, but on state intervention in the economy, up to and including the development of IT, the internet and biotechnology[27]. In his analysis of economic liberalism which still stands up today, the great economic historian Karl Polanyi wrote in 1944 that “Economic history reveals that the emergence of national markets was in no way the result of the gradual and spontaneous emancipation of the economic sphere from governmental control. On the contrary, the market has been the outcome of a conscious and often violent intervention on the part of a government which imposed the market organisation on society for noneconomic reasons… There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course. Just as cotton manufactures -the leading free trade industry- were created by the help of protective tariffs, export bounties, and indirect wage subsidies, laissez-faire itself was enforced by the state… This paradox was topped by another. While laissez-faire economy was the product of deliberate state action, subsequent restrictions on laissez-faire started in a spontaneous way. Laissez-faire was planned; planning was not”[28]. In his foreword to the 2001 edition of Polanyi’s great work, Joseph Stiglitz -2001 Nobel Prize winner and chief economist of the World Bank between 1997 and 2000- states: “Polanyi exposes the myth of the free market: there never was a truly free, self-regulating market system. In their transformations, the governments of today’s industrialized countries took an active role, not only in protecting their industries through tariffs, but also in promoting new technologies”[29].

We could continue in this vein, but let one more example suffice. The American historian Michael Hogan has described the type of capitalism that gradually evolved in the US in the decades after World War One, and which picked up pace in response to the Depression, as ‘corporative neo-capitalism’, which “married the older traditions associated with the localized and fragmented political economy of the nineteenth century, including individualism, privatism, competition, and antitrust, to the twentieth century trend toward an organized capitalism characterized by national economies of scale, bureaucratic planning, and administrative regulation. The result as it unfolded after the First World War was something of a hybrid economic order: an American brand of corporative neo-capitalism that went beyond the laissez-faire political economy of classical theory but stopped short of statist syndicalism”[30]. For Hogan, the real intent behind the Marshall Plan -the massive US aid programme to rebuild Western Europe after World War II- was to transplant this model of capitalism there in order to prevent the continent from falling out of the capitalist sphere. Thus, the continued presence and survival of capitalism in Europe after 1945 was not spontaneous or organic, but was the product of a conscious act of external foreign policy intended to implant a semi-market, semi-collectivist form of economic organisation, the type of which had evolved in the US, into western Europe in order to prevent it from ‘going Red’ (and to provide a market for American exports). Other methods of preventing Europe ‘going Red’ included the subversion of free elections in Italy and installing a military dictatorship in Greece.

“Who will do the managing? For whose benefit? What will be the goals? Who will set them? How?”

This picture of capitalism, it scarcely needs to be said, somewhat contradicts the free market view of Friedman and Hayek. Lazonick refers to this view, quite accurately, as ‘the myth of the market economy’. Suffice to say that all this lays waste to Hayek’s view of the modern-day capitalist sphere as any kind of spontaneous, unplanned, free, anarchistic economic democracy (Hayek does not even like the word ‘economy’, preferring instead ‘catallaxy’). If any further proof were needed, the huge state-coordinated rescue of the global banking system in recent months -necessitated by the disaster produced by the deregulation and marketisation of the financial sector, and which has been successful to the point that, rather than a second Great Depression, we are instead only going to have the worst recession since the 1930s- has, one would like to think, exploded ‘the myth of the market economy’ once and for all[31].

Why is this significant? The Hayek/Friedman world view associates capitalism with freedom by associating capitalism with markets -free, unconscious markets-, and markets with freedom. Under this prescription, no-one holds illegitimate, coercive power or authority over anyone else (except trade unions): we’re all free to choose, your fate is what you make it. But if we determine that capitalism and the market mechanism aren’t synonymous; that capitalism, far from being unconsciously directed by the invisible hand propelled by the combined action of individuals, is in reality consciously planned and managed to a significant degree; that it didn’t evolve organically; that Western civilisation isn’t the product of the ‘individualist tradition’; that capitalist development entails a general move away from market principles rather than towards them, with capital controlling the market rather than vice-versa, what then? Michael Reagan set the question perfectly in 1963:

“from a market-regulated economy we have shifted to one directed by the personal, visible hands of governmental and corporate managers… the dominant and dynamic part of our economy is “free enterprise” only in that firms are privately owned… The automatic economy is dead. “The managed economy” is the phrase that applies to both the public and the private sectors, and it also indicates the specific quality of the mixed economy: that both elements are managed. Once we begin to look at our system as one that is consciously planned rather than impersonally directed by market forces, some essentially political questions come to the fore. Who will do the managing? For whose benefit? What will be the goals? Who will set them? How?” [32]

These are indeed political questions. Friedman would answer by saying ‘we all do, as sovereign individuals, via the free market’. He may even have genuinely believed it, but objective, non-ideological analysis shows it to be nonsense: capitalism is collectivist. The myth of the market economy acts as fine propaganda for contemporary capitalism, and this is what makes the myth so resilient: while the (first) Great Depression finished off free-market economics in reality, it still couldn’t do it in theory, because the theory has such ideological value in obfuscating basic, objective reality about where power lies. However, as we have seen, once confronted it is easy enough to debunk. Why the so-called ‘intellectual’ or academic left have been unwilling -or perhaps just unable- to draw attention to the gaping holes, contradictions, lies and flat-out smears in the ruling class’s current governing ideology (Hayek’s equating of German working class anti-fascists with the Nazis they killed and died fighting, whilst saying nothing of the Nazis immediate clampdown on the German left upon taking power, or the fact that it was the German middle class ‘liberals of the old type’ who made the most enthusiastic Nazis of all, being perhaps the most disgusting and slanderous[33]) is a question for them to answer. However, overturning the positive part of Hayek’s thesis is futile unless we can also overturn the negative part, namely that all alternatives to ’competitive capitalism’ are inherently totalitarian and illiberal (and in this Hayek does have a good deal of supporting evidence behind him, namely the twentieth century), and thus capitalist freedom, whatever its flaws, is as good as it gets. It is to this task that we now turn, and again, we find that, once there is a willingness to face the question, some answers are quite readily available. For as we are about to find, not only is the Friedman/Hayek worldview not descriptively accurate, it is also not the only possible interpretation -or even a particularly credible one- of the classical liberal tradition. This opens up a potentially great opportunity for our side, namely that of turning Hayek’s philosophical weapons against himself, of claiming the notions of freedom and democracy -and even classical liberalism and the Enlightenment tradition- for the pro-working class side, where they used to reside and where they should have been kept all along.

2) Our neo-liberalism: economic democracy

In his prime philosophical work (one which has been utterly neglected by the left in the decades since), Noam Chomsky wrote in 1970:

“I think that the libertarian socialist concepts -and by that I mean a range of thinking that extends from left-wing Marxism through anarchism- are fundamentally correct and that they are the proper and natural extensions of classical liberalism into the current era of advanced industrial society [italics added]“[34].

This, it scarcely needs to be said, could hardly differ more from Hayek’s conclusion. For Hayek, the culmination of the classical liberal tradition is capitalism, while for Chomsky it is socialism. Both Chomsky and Hayek are major thinkers and great intellects, so what accounts for the difference?

Chomsky agrees with Hayek that the central idea of classical liberalism was “an opposition to all but the most restricted and minimal forms of state intervention in personal and social life”[35]. However, for Chomsky the reasoning that led to this conclusion was more important than the conclusion itself. What fundamentally motivated it was the desire to protect individual freedom against the threat posed to it by over-powerful institutions of all kinds (”the great threat to freedom is the concentration of power”, after all). However, the classical liberals were pre-capitalist: in their time, the great overbearing institution simply was the state, and it was thus primarily against state power that their critique was directed. As far as the private economy was concerned, Adam Smith’s experience, as pointed out in the introduction to a recent edition of Wealth of Nations, was one of “pre-industrial, small-scale technology. He does not anticipate the high technology, multinational interests of modern institutions”[36]. Smith knew a world of economic agents of approximately equal size, and his arguments in favour laissez-faire and the ‘invisible hand’ were predicated on this. He could not foresee that economic agents would come into being who would be strong enough to overpower the market (or more accurately, would have to overpower the market if they were to be viable). It is thus disingenuous to simply transpose the classical liberal critique of state power, and its assertion of private property and unfettered free trade as the best guarantors of individual freedom, into the present era as a defence of corporate industrial capitalism, for this critique necessarily neglects the modern-day influence of private power, the private control of capital and the means of production, and the power this wields over the individual.

For Chomsky, the ideals of the Enlightenment liberals were articulated most profoundly by the German philosopher Wilhelm von Humboldt, a man for whom Hayek himself had “the highest regard”[37]. Humboldt’s view of human nature was that man is born “To enquire and to create, these are the centers around which all human pursuits more or less directly revolve… The true end of Man…is the highest and most harmonious development of his powers to a complete and consistent whole. Freedom is the first and indispensable condition which the possibility of such a development presupposes [italics added]“[38]. On the importance of free choice, and the lack of it, in human activity, Humboldt states that:

“all peasants and craftsmen might be elevated into artists; that is, men who love their labour for its own sake, improve it by their own plastic genius and inventive skill, and thereby cultivate their intellect, ennoble their character, and exalt and refine their pleasures. And so humanity would be ennobled by the very things which now, though beautiful in themselves, so often serve to degrade it… But still, freedom is undoubtedly the indispensable condition, without which even the pursuits most congenial to individual human nature can never succeed in producing such salutary influences. Whatever does not spring from a man’s free choice, or is only the result of instruction and guidance, does not enter into his very being, but still remains alien to his true nature; he does not perform with truly human energies, but merely with mechanical exactness… a man’s pursuits react beneficially on his culture, so long as these, and the energies allied with them, succeed in filling and satisfying the wants of his soul; while their influence is not only less salutary, but even pernicious, when he directs his attention more to the results to which they lead, and regards the occupation itself as merely a means. For anything which charms us by its own intrinsic worth, awakens love and esteem, while what is only looked on as a means to ulterior advantage, merely appeals to self-interest; and the motives of love and esteem tend as directly to ennoble human nature, as those of interest to degrade it”[39].

The crucial point here is that Chomsky notes that Humboldt’s view on the importance of free activity, as opposed to effect of work carried out under external command, has a remarkable continuity with the arguments Marx made fifty-odd years later about the alienating effects of wage labour under capitalism:

“His labour is therefore not voluntary, but coerced; it is forced labour. It is therefore not the satisfaction of a need; it is merely a means to satisfy needs external to it. Its alien character emerges clearly in the fact that as soon as no physical or other compulsion exists, labour is shunned like the plague. External labour, labour in which man alienates himself, is a labour of self-sacrifice, of mortification… For labour, life activity, productive life itself, appears to man in the first place merely as a means of satisfying a need -the need to maintain physical existence. Yet the productive life is the life of the species. It is life-engendering life. The whole character of a species -its species-character- is contained in the character of its life activity; and free, conscious activity is man’s species character. Life itself appears only as a means to life… If he treats his own activity as an unfree activity, then he treats it as an activity performed in the service, under the dominion, the coercion, and the yoke of another man”[40].

So Marx -the communist- and Humboldt -the classical liberal- both laud the importance of free labour and free activity; decry the enervating, ruinous effects of work performed out of compulsion or merely as a means to ‘maintaining physical existence’; and recognize that man is not truly liberated unless he is able to pursue free conscious activity of his choosing. They differ only in that Humboldt was writing prior to the advent of industrial capitalism, and was as unaware of the institution of capitalist wage labour as Adam Smith was of the multinational corporation: Humboldt’s philosophical commitment to human freedom, liberation and emancipation is the same as Marx’s.

The capitalist ‘original sin’

The institution of capitalist private property is key here. As alluded to above, the definition of ‘property’ that Adam Smith dealt with was quite different from that of Hayek’s. It is not just that the rough equality of agents is no more: a more fundamental class change has taken place, as Marx illustrates: “In England serfdom had disappeared in practice by the last part of the fourteenth century. The immense majority of the population consisted then, and to a still larger extent in the fifteenth century, of free peasant proprietors, however much the feudal trappings might disguise their absolute ownership… they enjoyed the right to exploit the common land, which gave pasture to their cattle, and furnished them with timber, fire-wood, turf, etc”[41]. Thus, the individual had free access to the means of production, or at least subsistence. He was independent. However, this independence was removed at the end of the fifteenth and start of the sixteenth centuries, at the dawn of the capitalist era, by the process of enclosure. The rising capitalist class simply removed the common lands from the peasantry by force: “the great feudal lords, in their defiant opposition to the king and Parliament, created an incomparably larger proletariat by forcibly driving the peasantry from the land, to which the latter had the same feudal title as the lords themselves, and by usurpation of the common lands… the English working class was precipitated without any transitional stages from its golden age to its iron age”[42]. The expropriation of the land created the large landholdings the nascent capitalists needed, and turned the previously independent peasants into landless proletarians who had to sell their labour-power if they were to survive.

This institutional arrangement continues essentially to this day. Robert Dahl notes that something similar happened in post-Revolutionary America. The American economy was characterised by what he calls “agrarian democratic republicanism… a self-regulating egalitarian order”[43]: that is, a Jeffersonian republic of free independent farmers typified by a wide and thorough dispersal of land holdings, at least among white males. But, again, the republic of free, independent farmers did not survive the birth of industrial capitalism. Where previously land was abundant, easily available and widely diffused, with the dawning of capitalism it became increasingly narrowly concentrated and accordingly scarce, restricting access to the individual, again turning independent farmers in wage labourers. But as Dahl notes, in this entirely different context “radical conservatives were amazingly successful in transferring to corporate property the ideological justification for private ownership that was at the heart of the older ideology of agrarian democratic republicans”[44], which is essentially the same trick as pulled by Hayek and the neo-liberals. What both Dahl and Marx illustrate for us here is the ‘original sin’ of capitalism and its central institution of private property. Far from the institution of capitalist private property guaranteeing individual freedom and independence, the origin of capitalism is characterised by the removal of the means of independence -the right of access to property- from the mass of the population, turning them into rightless proletarians. This stands in direct contradiction to the stated view of another of the great figures of the Enlightenment, and the American Revolution, Thomas Paine:

“There are two kinds of property. Firstly, natural property, or that which comes to us from the Creator of the universe - such as the earth, air, water. Secondly, artificial or acquired property - the invention of men. In this the latter, equality is impossible; for to distribute it equally it would be necessary that all should have contributed in this the same proportion, which can never be the case; and this being the case, every individual would hold on to his own property, as his right share. Equality of natural property is the subject of this little essay. Every individual in the world is born therein with legitimate claims on a certain kind of property, or its equivalent”[45].

Paine is not concerned with equalitarian outcomes, as Hayek dreads, but with independence: every human has, in the state of nature, a legitimate claim on an equal share of the gifts of nature -property- as of right. Capitalism, and capitalist private property removes this right. Hayek denounces socialism as “totalitarian” on the grounds that it “refus[es] to recognise autonomous spheres in which individuals are supreme”, but doesn’t capitalist private property do precisely this, by removing from man his means of independence? And how then can anyone’s decision to sell their labour-power under capitalist conditions constitute a “transaction that is bi-laterally voluntary”, as Friedman would have it?

“Transforming the proletariat into free men by eliminating the commodity character of labour, ending wage slavery and bringing the commercial, industrial and financial institutions under democratic control”

This brings us to the heart of the difference between Hayek’s and Chomsky’s differing interpretations of the classical liberal tradition. It will be remembered that at the start we introduced Robert Dahl’s conception of there being two traditions of left-wing thought, one advocating state control of production, the other advocating workers’ control of production, and that, while it never suited Hayek’s purposes to mention it, the two strands are very different. The former shares with state fascism the goal of centralising economic decision-making power in the hands of the state, while the latter has the aim of decentralising economic decision-making power as far as possible down to the productive individual, and for this reason it can also be seen as a legitimate modern-day interpretation of the classical liberal tradition: where it differs from Hayek’s interpretation is that while his argues for the decentralisation of economic-decision making power down to capital, our interpretation -what we have been calling economic democracy- argues for the decentralisation of decision-making power down to labour. This is what Chomsky means when he refers to “a range of thinking that extends from left-wing Marxism through anarchism” being the “proper and natural extensions of classical liberalism into the current era of advanced industrial society”.

One can only accept the Hayekian interpretation of classical liberalism as either right or legitimate if one accepts the capitalist ‘original sin’ as either immutable or desirable. In Hayek’s case, it was probably the latter: just as Keynes never hid his loathing for the working class, Hayek never hid his contempt for democracy. For Hayek, it was perfectly right and natural that the ownership of the means of production should remain in private hands; that capital should exercise dominion over labour, rather than the other way round. Further, if political democracy ever threatened the private control of capital, Hayek made it clear that of the two it should be political democracy that be done away with[46]. To steal a term beloved of the American lunatic right, and to use it against one of their own, we can think of Hayek’s right-wing liberalism as liberal fascism, as opposed to state fascism, in that he wants power in the several visible hands of capital rather than the single visible hand of the state, while still controlling, rather than being controlled by, labour. Chomsky comments that:

“The modern conservative tends to regard himself as the lineal descendant of the classical liberal in this sense, but I think that can be maintained only from an extremely superficial point of view, as one can see by studying more carefully the fundamental ideas of classical libertarian thought as expressed, in my opinion, in its most profound form by Humboldt… classical liberal ideas in their essence, though not in the way they developed, are profoundly anti-capitalist. The essence of these ideas must be destroyed for them to serve as an ideology of modern industrial capitalism”[47].

What Hayek did was to destroy the democratic essence of classical liberal ideas in order to provide a philosophical justification for, and defence of, private, undemocratic, top-down control of the economy and the means of production, cloaked in the Enlightenment ideal of individual freedom. This is in keeping with a long strand of Western thought. Kenan Malik writes that “the Enlightenment, and the emerging capitalist society that accompanied it, established for the first time in history the possibility of human equality but did so in social circumstances that constrained its expression”[48]. The ‘social circumstances’ he refers to is the institution of capitalist private property. Although the Enlightenment was formally committed to freedom and equality for all, the property relation necessarily put paid to that in reality. This led to capitalist apologists casting around for other explanations, rather than structural ones, for class inequality, and thus the modern-day concept of race was born. Hayek’s perversion of the ideals of the Enlightenment is no different from those first racists. For Hayek, and those who share his anti-democratic mindset, the Enlightenment project is complete. For those of us who don’t, like Chomsky, there is another step to go:

“And if there is something degrading to human nature in the idea of bondage, as every spokesman for the Enlightenment would insist, then it would follow that a new emancipation must be awaited, what Fourier referred to as the “third and last emancipatory phase of history” -the first having made serfs out of slaves, the second wage earners out of serfs- which will transform the proletariat into free men by eliminating the commodity character of labour, ending wage slavery and bringing the commercial, industrial and financial institutions under democratic control [italics added]“[49].

This is the only long-range goal for our side to pursue. Everything else is meaningless and a diversion. Anyone who is not committed to this vision has no right to think of themselves as either progressive or a friend of the working class.

Conclusion: the need for a vision

“Our demands most moderate are: we only want the earth.” James Connolly.

Does such a vision seem, at present, highly speculative? Absolutely. Is there any prospect of achieving these goals in the immediate future? Of course not. A frank assessment is that we are no closer to achieving these goals now than when Marx died. Probably further away, in fact. Equally, one could say that the situation looked hopeless for capital when those thirty-nine people gathered in Switzerland in 1947, that the onward march of socialism seemed unstoppable. They were fully cognisant of the fact that they wouldn’t achieve their aims in the short term either. It would take a long, attritional, generational campaign to win the hearts and minds of their constituency -the elites- over to their way of thinking, to make them believe that socialism could be defeated, and capital reign triumphant again. After all, let us take a moment to consider what they were facing, what Hayek really feared. Keynes’ general theory emerged in the 1930s when Britain was troubled by inflation and unemployment. Then, as in the 1970s, there was debate about how these problems should be tackled. The economic liberals of the day, led by Lionel Robbins and Hayek at the LSE (while the LSE was a largely Fabian institution, the economics department had become radically liberal under Robbins’ leadership) ascribed these difficulties to wages being rigid and thus too high. They argued that the root causes of wage rigidity -which Robbins identified as trade unions and unemployment insurance- needed to be removed so that wages could fall and the economy return to equilibrium: “only such measures go to the root of the difficulty. The others are at best are temporary palliatives which do nothing to eradicate the fundamental disease”[50].

Keynes argued, on the other hand, that the solution to unemployment was the reflation of the economy through public spending, increasing aggregate demand to levels sufficient to produce full employment, something that even ‘equilibrium’ in a laissez-faire economy could not guarantee. The liberals denounced Keynes’ solution as inherently inflationary, as unsustainable, a “lingering disease” in Robbins’ words, and they were right, as the 1970s eventually proved. Yet in the 1930s the Keynesian path was chosen. Why? This was just a few years after the 1926 General Strike, which had been provoked by an attempt to cut the wages and increase the working hours of British miners. As Robbins acknowledged, his prescription entailed the “extreme difficulty” of taking on organised labour again. Keynes’s prescription sidestepped this difficulty, which is why it was chosen. Simply put, in the 1930s the state and capital were unable to impose the wage cuts and reforms that the neo-liberals of the day demanded because the working class was too strong to take on. Cockett summarises the significance of this thus:

“The central charge against Keynes was that he had constructed a new ‘system’ of economics which was based not on economic theory, but on a strictly political judgement that it was impossible to lower wages in Britain during the depression… Keynes was fully aware of the fact that governments could not afford to offend the unions in the political circumstances of the late 1920s and early 1930s by tackling the real problems of the economy, the rigidity of wages, the plethora of ‘restrictive practices’ and the concomitant uncompetitiveness of British industry - in this respect the 1926 General Strike was, indeed, a watershed in industrial relations, as the politicians were thereafter afraid that the body politic itself would not survive another attempt to drive down wages in a depressed industry as the coal-owners had eventually succeeded in doing after the General Strike itself had collapsed. It was the spectre of class war that haunted the deliberations of both politicians and economists as they grappled with the problems thrown up by the depression… by working from the premise that the coercive power of organised labour was such that it was politically impractical to reduce wages as part of a solution to the problem, Keynes had already conceded Marx’s argument. The moment when economists and politicians accepted Keynes’ alternative, mild inflation, to class war was the moment when the class war was effectively won by the industrial proletariat, because…only the massed battalions of organised labour stood to gain in the Keynesian system of demand-management… In the long run, Keynes was, in fact, running up the white flag on behalf of capitalism, and negotiating an honourable withdrawal. It was a very English revolution - virtually unnoticed at the time, and presided over by an old Etonian”[51].

This is the danger Hayek recognized, this is why the right were so scared of the Keynesian settlement. We can only dispute Cockett on one point: rather than running up the white flag, Keynes was launching a holding action, a temporary class compromise in order to preserve capitalism. In the time this compromise bought, Hayek and those around him were able to construct a philosophical and economic alternative rooted in the ideals of classical liberalism and the Enlightenment, whereas all the left had to offer was more moribund, discredited bureaucratic socialism. When the Keynesian compromise fell in the 1970s, capital was ready, and this time they won, and were able, though not without resistance, to put into effect the pro-business restructuring of the economy they had been unable to in the ‘30s.

What does this tell us? The right won because they had a vision and were prepared to play the long game. For any movement, having a long-term vision is crucial. Without a vision one cannot set goals. Without goals there can be no strategy, and without a strategy there are no day-to-day tactics. More importantly, if you have no vision then what are you even in business for? So when it comes to outlining a vision, the criticism that it might be momentarily unrealistic or distantly utopian is meaningless. It took the neo-liberals decades before they started making significant gains (1974 in Chile, when the Chicago Boys won the favour of Pinochet ahead of the old-fashioned tyrants in his court; 1975 to take the Tory party from the hated Keynesian appeaser Heath here). Now they are triumphant worldwide. They stuck to their task throughout because they had a clear vision they believed in - and a nightmare to avoid. The pursuit of any political aim is necessarily a ruthless, dirty business, making it all the more important that the aim itself be pure. If the vision is in any way wrongheaded, perverted, polluted, vague, ill-defined or compromised, so will be the campaign to achieve it (evidence: the twentieth century). But if one has a coherent philosophy, one can then begin the long process of building a practical economic model, and then a political strategy for attaining it.

One also needs opportunity. As quoted above, Milton Friedman once said “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around”. And just as the neo-liberals seized the opportunity presented by the crisis of Keynesianism in the 1970s, because the ideas lying around were theirs, so the current, chronic crisis of neo-liberalism -a crisis we are entering, not exiting- offers an historic opportunity to fill the huge (and growing) political, philosophical and moral vacuum for those who are bold enough to take it. But there are no silver medals in history, and while this may be an opportunity, it is also a time of great danger. If our side fails to summon up the courage and ambition to meet this challenge, we can be assured that less congenial types will (and already are), and the insidious drift to the right will continue.

Furthermore, the vision itself is a selling point. The first step in any successful campaign is the winning of hearts and minds. Hayek, Keynes and the Fabians knew this, but their constituency first and foremost was the elites. Our job is to win the hearts and minds of the masses. Hard, honest, pro-working class work on the ground does this, as the IWCA already knows, but ideas can travel where local work and limited resources cannot. As we have seen, Hayek ascribed the lack of success of the anti-collectivist tendency in the early part of the twentieth century to “the lack of a real programme, or perhaps I had better say, a consistent philosophy of the opposition groups”. Our side is currently in the same position: the pro-working class elements opposed to the neo-liberal orthodoxy -whether they be groups or individuals- are isolated and scattered for a similar reason, and it is the BNP -who do have a “consistent philosophy”- who are hoovering up. A resolutely pro-working class philosophy could unify them, provide something to gather around. A winning, long-term, pro-working class vision demonstrates credibility and ambition, and our vision is a winning one. Hayek, correctly, described “the craving for freedom” as “the strongest of all political motives”[52]. This is what lies at the root of our vision: nothing less than the completion of the Enlightenment project and the emancipation of all mankind, the “transformation of the proletariat into free men”. Nothing less will now do and, unlike Hayek who so successfully stole the language of freedom, we actually mean it.


Having here outlined the philosophical underpinning of economic democracy -the ‘why’, if you like-, part two of this piece will begin to look into the ‘what’ and ‘how’, by attempting to sketch out some basic principles and reviewing the existing theory and practice of micro- and macroeconomic democracy, such as it is. The IWCA has not pulled the concept of economic democracy out of thin air: indeed, before the Fabians were allowed to take over, it was a live current of the mainstream British labour movement. Areas to look into include: the Mondragon co-operative in the Basque country, apparently the greatest example extant of worker-managed industry (and perhaps other examples in Spain); worker-managed enterprises in the former Yugoslavia, and elsewhere, including the United States; the theoretical work of the economists Jan and Jaroslav Vanek; an examination of state-led moves toward ‘economic democracy’ in Sweden and Denmark in the 1970s, and the exploration of similar themes here during the same timeframe; contemporary writers who have written of, or expressed some sympathy for, the concepts of economic democracy including Stiglitz, Chomsky, Robin Archer, David Harvey, Richard Wilkinson; and a historical sketch of the workers control/economic democracy strand in Britain and abroad, including the Independent Labour Party, Karl Polanyi, Walter Kendall, James Connolly and Rosa Luxemburg. Also: democratic control of pension funds; and the impact of capital liberalisation (a question of profound strategic importance).


[1]Robert A. Dahl (1947), ‘Workers’ Control of Industry and the British Labor Party’, American Political Science Review, 41(5) (Oct., 1947), p875-900 (pdf available on request).

[2]Robert Dahl (1985), A Preface to Economic Democracy (Berkeley and Los Angeles: University of California Press), p143. See also note 1.

[3] For some further discussion on the Bolshevik question see http://www.redaction.org/open/contents.html.

[4] http://www.lse.ac.uk/resources/LSEHistory/fabian.htm

[5] Karl Marx and Friedrich Engels (1848, 1992), The Communist Manifesto (Oxford: Oxford University Press), p33. Available online at http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch03.htm#b

[6] The Diary of Beatrice Webb, vol. 4: 1924-1943 (1985), Norman and Jeanne MacKenzie (eds.) (London: Virago), p77, 78 [4th May, 1926].

[7] John Maynard Keynes, ‘Am I A Liberal?’ (1925), p297 and ‘A Short View of Russia’ (1925), p258 in The Collected Writings of John Maynard Keynes, Volume IX (1972): Essays in Persuasion (1931), (London: MacMillan).

[8] Milton Friedman (1962), Capitalism and Freedom (Chicago: University of Chicago Press), p2, 9, 13.

[9] Quoted in Richard Cockett (1994), Thinking the Unthinkable: think-tanks and the economic counter-revolution, 1931-1983 (London: HarperCollins), p111, 112.

[10] http://www.lse.ac.uk/resources/LSEHistory/fabian.htm

[11] The definitive guide to the growth, development and influence of neo-liberal ideology in the UK is Richard Cockett (1994), Thinking the Unthinkable: think-tanks and the economic counter-revolution, 1931-1983 (London: HarperCollins); see also Philip Mirowski and Dieter Plehwe (eds.) (2009), The Road From Mont Pelerin: the making of the neoliberal thought collective (Cambridge, MA: Harvard University Press); and Juan Gabriel Valdes (1995): Pinochet’s Economists: the Chicago School in Chile (Cambridge: Cambridge University Press). The philosophical influence of Hayekian liberalism was clearly evident by 1976 in the Tory policy statement The Right Steps, http://www.margaretthatcher.org/archive/displaydocument.asp?docid=109439.

[12] F. A. Hayek (1944, 2001), The Road to Serfdom (London: Routledge), p13, 21.

[13] Hayek, p20, 13.

[14] Hayek, p34-5, 59, 60.

[15] Hayek, p8-9, 30.).

[16] Hayek, p61, 73.

[17] Hayek, p52. See also F. A. Hayek (1945), ‘The Use of Knowledge in Society’, American Economic Review, 35(4), available at http://www.virtualschool.edu/mon/Economics/HayekUseOfKnowledge.html.

[18] Hayek, p37-8.

[19]As one of the earliest New Institutionalist texts put it: “in the beginning, there were markets” (Oliver Williamson (1975), Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press) p20). For some background on public choice political theory, see Adam Curtis’s BBC documentary series The Trap (http://video.google.com/videoplay?docid=404227395387111085)

[20] Alex Carey (1995), Taking the Risk Out of Democracy: corporate propaganda versus freedom and liberty (Champaign, IL: University of Illinois Press); Elizabeth Fones-Wolf (1994), Selling Free Enterprise:the business assault on labor and liberalism, 1945-60(Champaign, IL: University of Illinois Press).

[21] Alfred D. Chandler, Jr. (1977): The Visible Hand: the managerial revolution in American business (Cambridge, MA: Harvard University Press), p1.

[22] William Lazonick (1991), Business Organization and the Myth of the Market Economy (Cambridge: Cambridge University Press), p8.

[23] Milton and Rose Friedman (1980), Free To Choose: a personal statement (New York: Harcourt Bruce Jovanovich). Friedman took this from an essay (http://www.econlib.org/LIBRARY/Essays/rdPncl1.html) by Leonard Read of the United States Chamber of Commerce, also founder of the ‘libertarian’ think tank ‘Foundation for Economic Education’ and, like Friedman, an attendee at the first Mont Pelerin conference.

[24] Pietra Rivoli (2005), The Travels of a T-shirt in the Global Economy (Hoboken, NJ: John Wiley and Sons), x, p212.

[25] Alec Cairncross (1970), ‘The Managed Economy’ in Alec Cairncross (ed.), The Managed Economy (Oxford: Basil Blackwell), p7.

[26] John Kenneth Galbraith (1967, 2007), The New Industrial State (Princeton: Princeton University Press), p8, 27, 41.

[27] Ha-Joon Chang (2002), Kicking Away the Ladder: development strategy in historical perspective (London: Anthem Press).

[28] Karl Polanyi (1944), The Great Transformation (Boston: Beacon Press), p250, 139, 141. In particular see chapters 11-13 for Polanyi’s full critique of contemporary economic liberalism. It is politically and historically significant that The Great Transformation should have emerged in the same year as The Road to Serfdom, yet it is the latter book which is now so celebrated while the other is almost forgotten. It shows that just having the right ideas is not enough, they need to be prosecuted as vigorously as the neo-liberals did theirs.

[29] Joseph Stiglitz, ‘Foreword’ in Polanyi (1944, 2001), xiii

[30] Michael J. Hogan (1987), The Marshall Plan: America, Britain and the reconstruction of Western Europe, 1947-1952 (Cambridge: Cambridge University Press), p3.

[31] US Treasury Secretary at the time of the crisis, Henry Paulson, has recently said that without the bail-out the US “could have gone back to the sorts of situations we saw in the Depression… I remember talking about, for instance, German leaders who were explaining to me that people in the old east were unhappy with the big discrepancies in wealth, but they at least believed in the system and believed in some form of market-driven capitalism, but that if we had a meltdown of the system, this could even lead to chaos or people even questioning the basic system”: http://blogs.wsj.com/deals/2009/07/16/paulsons-version-of-financial-armageddon-people-in-the-streets/.

[32] Michael D. Reagan (1963), The Managed Economy (New York: Oxford University Press), p4, 13, 18.

[33] For a more informed, less offensive perspective, see Eve Rosenhaft (1983), Beating the Fascists?: the German communists and political violence, 1929-1933 (Cambridge: Cambridge University Press).

[34] Noam Chomsky (1970, 2005), Government in the Future (New York: Seven Stories Press), p8. Audio of the lecture available at http://tinyurl.com/me7s42

[35] Chomsky, p9.

[36] Kathryn Sutherland, ‘Introduction’ in Adam Smith (1776, 1993), Wealth of Nations (Oxford, New York: Oxford University Press), ix.

[37] C. R. McCann (2002), ‘F. A. Hayek: The Liberal as Communitarian’, Review of Austrian Economics, 15:1, p25. See also Hayek’s remarks on Humboldt as one of the keepers of the liberal flame in Germany in chapter 12 of The Road to Serfdom, ‘The Socialist Roots of Nazism’.

[38]Wilhelm von Humboldt (1791, 1969), On the Limits of State Action (Cambridge: Cambridge University Press), p76, p16.

[39] Ibid, p27, 28, 29.

[40] Karl Marx (1844, 1977), Economic and Philosophic Manuscripts of 1844 (Moscow; London: Progress Publishers; Lawrence & Wishart), p66, 68, 71.

[41] Karl Marx (1867, 1976), Capital, volume 1 (London: Penguin), chapter 27, ‘The Expropriation of the Agricultural Population from the Land’, p877.

[42] Ibid., p878, 879.

[43] Robert Dahl (1985), A Preface to Economic Democracy (Berkeley and Los Angeles: University of California Press), p71, 70.

[44] Ibid, p72.

[45] Thomas Paine, ‘Agrarian Justice’ (1795) in The Thomas Paine Reader (1987), Michael Foot and Isaac Kramnick (eds.) (London: Penguin), p471-2.

[46] See the final section of chapter 5 of The Road to Serfdom, ‘Planning and Democracy’. See also Hayek’s remarks in praise of the Pinochet regime in Chile -the first neo-liberal state, an admiration shared by many senior Thatcherites (Cecil Parkinson openly said during his time as Thatcher’s trade minister that the Chilean economic experiment under Pinochet “is very similar to what we’re trying to develop now in Great Britain”), Chicago School economists and James Buchanan, father of public choice political theory- and the fascist Salazar regime in Portugal, in a 1981 interview with the Chilean newspaper El Mercurio: http://www.fahayek.org/index.php?option=com_content&task=view&id=121

[47] Chomsky, p10, 15.

[48] Kenan Malik (1996), The Meaning of Race: race, history and culture in Western Society (Basingstoke: MacMillan), p40.

[49]Chomsky, p18-19.

[50] Lionel Robbins (undated, 1930s), Committee of Economists Draft Report, Lionel Robbins papers, London School of Economics archives.

[51] Cockett, p44, 45.

[52] Hayek, p25.

Whether you agreed with all, some or none of the above, I hope you agree that the above is a seriously impressive piece of work! It just Part 1 too...