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 "Revolución 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.

Addendum:

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).

Notes

[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...

Short Story Competition

Came second in the contest- pretty close! So with no further ado...

Witch Hunting in the Bowels of England


It was the first Thursday of May 1646 that I went up Primrose Hill to meet Colonel Digby’s men. ‘Apothecary, you are to help us with the Lord’s work.’ It was not the Colonel but a man in all black. ‘I am Hamilton, Witchfinder appointed by our goodly Parliament. Satan does his work not just through misled Kings, but also in every village in England. That is why this God-fearing body of Trained Band, under Colonel Digby, will help me cleanse the lands we see from here of Satan.’

Hamilton continued: ‘We need you, Apothecary, to see if men are using true or false medicines. The latter are Satan’s work. If you spot them you are to tell me of their providence.’

‘Colonel, I have addresses to visit. Satan has caused much mischief around Chalk Farm Tavern, a place of much debauchery and dissoluteness. Order your men to march.’

The Colonel, an old Trained Band officer, ordered his men down the hill. I walked alongside Hamilton. I knew a lot of Presbyters like him in the City.

‘So how do you spot a witch, sir? I have read many books on the matter.’

‘Apothecary, I learnt my trade all over Europe. I find that witches are just poppets of Satan and if you find him in them, they just crumble. I use a method, approved by Scotch brethren, in Yorkshire and Ireland, where Papists blame potatoes, the evil wretches.’

I was pondering Hamilton’s words when we reached the first house where he said Satan was active. ‘Master Bourne, come out. Your wife says you harbour Satan!’ A haggard fellow opened the door. ‘She is telling lies again, just because I prefer the tavern’s company to her nagging and cavorting with other men.’

‘Are you calling your good wife a whore, sir? Let us see if you are possessed by Satan.’ Hamilton brought forward a sharp spiked mace. ‘Behold Satan, leave or you will feel the vengeance of the Reformed Church!’

A loud farting noise came out of Bourne and much unpleasantness followed. ‘Leave me alone! It is just the beer!’

‘Confess or you will hang at Tyburn and be crow sport.’

As six bodies, including Bourne’s, were left to hang outside Chalk Farm Tavern, I asked Hamilton: ‘So that is how you know Satan is inside a man?’

‘Verily. Satan may set a face hard and still, but he cannot stay quiet. Satan needs to move and make noise and when threatened by good Christians he cannot hold himself. Apothecary, some of the science you hold to says other, but it is nonsense. For science cannot purge the soul or the bowels of evil doers.’ I fell silent.

Though for Parliament and God, I did think Hamilton spoke nonsense. However, it seemed the Colonel and his men approved Hamilton’s method and had no qualms about executing those he said had Satan lurking in them. For three weeks we marched to nearly every corner of the land between Primrose Hill and St. Albans, dispensing Godly justice to Satan’s familiars. Colonel Digby made sure we did not abuse the hospitality of the locals, though some did wonder in earshot of me why all Satan’s familiars these days appeared to be men.

I was not called onto do much apothecary-related work, though some men needed painkillers to sleep. The fourth Thursday of May we executed three in the mudtrack locals call West Hampstead. Next morning we marched on Cricklewood, full of surly drunken types. The Colonel’s men used musket shot on four score troubling fellows. After twelve died and Digby threatened the rest that the New Model would arrive by dusk, we marched to the Red Lion by Kilburn Priory, a well-known stop on Watling Street. We had not partaken ale during the campaign but both Digby and Hamilton agreed that a few to celebrate our efforts would not harm.

It was to be more than a few. Our discipline went at the Red Lion. With Hamilton praying, Digby and a few of his men sat at my table.

‘So Apothecary, do you believe Hamilton that farting is a sign of Satan?’

‘Not all the time, Colonel, for our victuals can play a part. Hamilton is a man of God, though, he must know more than us.’

‘Well, boys, we would not be allowed ale if he was a true man of God, for I have been belching and worse since I had my first sip today. I am full of Satan! Hamilton must know!’ He ran to the side room in the inn where Hamilton had gone to pray.

‘Presbyter, do you think Satan owns my buttocks…’ Digby opened the door to see Hamilton on the floor, with the late Bourne’s wife astride him.

‘Save me, she is possessed by Satan…she is full of him!’ screamed Hamilton. The Colonel then heard, he told us afterwards, the worst breakage of the wind in his life.

‘Thou merely talketh turds, false prophet!’ shouted Digby, whose sword sliced both their heads off in moments.

That night our drunken rabble of ninety-seven was no match for the three hundred New Model horse of Captain Croft that had just subdued Cricklewood. Most of the survivors were led off to Tyburn. Due to my medical knowledge I was allowed to help the few injured troopers and tell the whole sorry tale to Croft.

‘Farting the work of Satan? Then all of England is damn’d!’ he exclaimed. ‘This is nonsense, false doctrine that should be suppressed and a capital offence to promote. Apothecary, please say nothing of this, unless you want to join Digby and the others entertaining the mob.’

I swore immediately on King James’s Bible not to say a word. Though for many years, indeed unto the days of the Glorious Revolution, I was occasionally visited at my shop on Philpot Street by the weak-stomached, fearing it was the Devil’s work, and asking me questions about the 1646 ‘Crusade For The Bowels.’

Mid-Summer Blog Post

By way of explanation...

I am very aware that I have not written something on the European Elections, as promised in my last post. In my mind I am having a big debate in recent weeks about where this blog is going & what I want from it. Should it concentrate on current, day-to-day stuff or be a bit more about political theory and big ideas? Should I make a serious effort to be more cultural in my posts? What is the blog trying to achieve and who is it meant to reach out to? (Apart from present company!)In short, I need a re-think and I need time to do so. Otherwise there would be no point in carrying on.

I am off to Nice in a couple of weeks time for my annual holidays. Going to visit Monaco (to see if it does seem smaller than Hyde Park!), Cannes and maybe cross over into Italy. One big consequence is that I am currently re-learning my French (1981-86 GCE O Level Grade D; 1998-99 GCSE Grade A) so that I can survive without constantly saying 'Parlez-vous Anglais?'. As I want to make a decent fist of this, it is taking up a lot of my spare time. Consequently, I'm leaving the big and final decisions about my blog until after my grand vacance.



Nice at Night- Bigger Than Hyde Park..


Refreshed and relaxed, I hope to start again seriously with this blogging lark towards the end of July. Before I go, I do hope to post my short story for the latest (well, the first since early 2007) short story competition at work. I will wait until the result (or at least until voting has finished) before it appears here. I think it is good- but I would say that!

In the meantime (and one of the reasons that my guilty conscience forced my to put something up here today), I saw this today about the nature of blogging. It made me think: just by keeping going, I am a blogging success!


The long tail of blogging is dying: The popularity of blogging seems to be fading as people turn to the easier aspects of social media: status updates and tweeting
Charles Arthur, The Guardian, 25 June 2009

Blogging is dying. Actually, no, let me qualify that. The long tail of blogging is dying. I say this with confidence. That confidence is based on two things: my anecdotal, but wide-ranging, analysis of what and how people remark on content from this section, and the surveys carried out by Technorati – which provides the Guardian with the feedback data that appears on our web pages. The interesting question is, what has replaced that blogging?

First, to my anecdotal analysis. Since the relaunch of this section in September 2005, we've included blog pingbacks among the "letters" section, recognising that people might not want to write a letter, or even send us an email (to tech@guardian.co.uk) when they have an opinion about something we've written. Instead, they might write a post on their own blog. Since January 2006 I've automated the process of searching for those blogposts. (Put simply: collect the links from the section – which I do anyway, stored on a MySQL database on my laptop – then input them into blog search engines via a preconfigured script.)

I'd then follow these posts. There were always a certain number of splogs – spam blogs – which simply pick up keywords and dress them with Google AdSense adverts. Boring, but easily ignored. Then there would be the blogs that copied entire articles – annoying (it denies us page views and advertising revenue), though usually they're easily persuaded not to persist. Then there would be those who had read the piece and had comments and insight, which we could extract for inclusion in the Letters and blogs section. Of course, the number of physical letters we received about what appeared here was absolutely tiny: months would go by without any arriving. Email remained the principal source, though blogs quickly began to make up the majority of content.

But recently – over the past six months – I've noticed a new trend: fewer blogs with links, and fewer with any contextual comment. (I'm defining a blog here as an individual site, whether on Blogger or Wordpress or an individual domain, with regular entries.) Some weeks, apart from the splogs, there would be hardly anything. I didn't think we'd suddenly become dull. Nor was it for want of searching: mining for blog comments, I use Icerocket.com. Technorati.com and Google's Blogsearch.

Where is everybody? Anecdotally and experimentally, they've all gone to Facebook, and especially Twitter. At least with Twitter, one can search for comments via backtweets.com – though it's still quite rare for people to make a comment on a piece in a tweet; more usually it's a "retweet", echoing the headline. The New York Times also noticed this trend, with a piece on 9 June about "Blogs Falling In An Empty Forest", which pointed to Technorati's 2008 survey of the state of the blogosphere, which found that only 7.4m out of the 133m blogs it tracks had been updated in the past 120 days. As the New York Times put it, "that translates to 95% of blogs being essentially abandoned".

I see it: NetNewsWire, my RSS feed reader, has nearly 500 feeds. When one of them hasn't been updated for 60 days, it turns brown, like a plant dying for lack of water. More and more of the feeds I follow are turning brown. Why? Because blogging isn't easy. More precisely, other things are easier – and it's to easier things that people are turning. Facebook's success is built on the ease of doing everything in one place. (Search tools can't index it to see who's talking about what, which may be a benefit or a failing.) Twitter offers instant content and reaction. Writing a blog post is a lot harder than posting a status update, putting a funny link on someone's Wall, or tweeting. People are still reading blogs, and other content. But for the creation of amateur content, their heyday for the wider population has, I think, already passed. The short head of blogging thrives. Its long tail, though, has lapsed into desuetude.

PS Another conundrum I am wrestling with is how to integrate my Facebook postings and musings with those of this blog...Tootle pip for the mo!

Bits on books, publishing, bookshops & writing

I will turn to the European/Local election results and the implications for British politics/the next General Elections in the next few days, as I am still trying to think matters through.



In the meantime I'm bringing together a few articles about writing and the world of books. Without sounding too alarmist, it seems that the traditional business models for writing, publishing and selling books are going through a challenging period. This surely cannot be blamed on the existence of the Internet and economic downturns alone. Moreover, I'm not too enamoured by the thought of e-books. I like the fact that with dead tree (hopefully recycled) books you can fold pages, scribble in ink, pencil or marker pens or read them in the bath or on the toilet without much chance of getting electrocuted. However, perhaps I am a member of one of the final generations to think like this.



Anyhow, onto the articles. First of all, have we seen the death of the professional writer, or at least of the writer who can live by writing alone? Ian Jack seems to think so.

The age of the gifted amateur has returned: The woes of publishing make it easy to forget that Fielding, TS Eliot and others were part-timers
Ian Jack, The Guardian, Saturday 2 May 2009

We are in the twilight years of a certain kind of paid employment: the business of inking words on paper, to be read by a large audience that is largely unknown to the author. The crisis in newspapers is especially acute. But neither is book publishing immune. Advances against royalties are tumbling, staff have been cut, publishers take far fewer risks. The recession offers only a small part of the explanation. The fact is that generations are now growing up with the idea that words should be read electronically for free - a new human right - which has grave consequences for the people paid to compose and edit them. Writers and journalists like me, old enough to know manual typewriters, tend when we meet to congratulate ourselves on having seen "the best of it", meaning the years when a career could be based solely - mortgage secured, lunches enjoyed, etc - on small or large acts of English composition, often flawed.

This way of living reached its full bloom only recently, between the late 1980s and early 2000s, when the enormous expansion in newspaper pagination and a burst of new lifestyle magazines increased the demand for wordage and publishers bid against each other to pay out large advances (the sums look incredible now - £500,000 for a first "literary" novel) for no other reason, it sometimes seemed, than to give an editorial director crowing rights over his rivals. What nobody considered (certainly not me) was that paid authorship rested on certain technical, social and legal developments, old but far from ancient, that were about to be undermined and overtaken by a new technology that was much more democratic. In other words, that paying an author to read his work wasn't an unchallengeable habit set in stone, like buying bread from a baker, but the result of two German inventions, moveable type and the rotary press, and two British ones, copyright law and that first large audience for print known as "the reading public".

Before Gutenberg devised his letterpress, literary production lay in the hands of scriveners, and writing was a spare-time hobby sustained by the patronage of the church or aristocrats. For a long time, the printed book did little to change this. Among writers, the play offered the best chance of a full-time writing career because a play had paying audiences - Shakespeare got a tenner for Hamlet whereas more than 60 years later Milton earned only a fiver from the first printing of Paradise Lost. By the 18th century, reading had spread from the aristocracy to the bourgeoisie. Alexander Pope received £5,000 for his translation of the Iliad when an agriculture worker's wage was 10 shillings (50p) a week, while Daniel Defoe wrote his way out of debt and had enough left over to set himself up in a country house in Stoke Newington.

But these were exceptions. Patronage declined, and the writer at the end of the 18th century was often poorer than his equivalent had been at the beginning. Books were luxury items. A literate craftsman on £1 a week was hardly likely to fork out 13s 6d for a copy of Tom Jones, which meant that its author, Henry Fielding, depended for his living on his post at Bow Street magistrates court.

Only with the swelling of the British middle class did writing become a real possibility as a career. In 1812, the editors at the Edinburgh Review reckoned that there were "probably not less than 200,000 persons who read for amusement and instruction, among the middling classes of society". The Review paid its contributors well; it was anxious to establish the writer as a professional. Walter Scott is the most famous example of a new breed, exchanging a legal salary of £1,300 for a series of furiously written novels that sometimes earned him £20,000 a year, a lot of which went into building his Gothic castle in the Scottish Borders. By the time Dickens, Balzac and Dumas were producing their highly profitable serial novels, the triangular foundations of the modern book trade - author, publisher, bookseller - had already been laid. Writers got advances against unwritten work and then flattered booksellers at "trade dinners" to persuade them to up their orders. A bestselling author could make a small fortune for his publisher: Byron for John Murray, Dickens for Chapman & Hall, the word of God for William Collins, who bought a country house and a steam yacht by selling 300,000 bibles a year.

Until now, remarkably little about literary production has changed. Some authors - JK Rowling is the modern Scott - generate big profits, while others - let's think of Ian McEwan as Byron - certainly earn enough to keep wolves from their various doors. A misleading idea has arisen, however, that writers generally can earn enough money to do nothing else. The idea is ignorant of history, of TS Eliot keeping himself comfortable on academic stipends and a publishing house directorship, of Angus Wilson superintending the reading room at the British Museum. It may be that we have it because authorship is now so visible, with the author turned into a small celebrity. But we can all be authors now and publish ourselves on the web. What you might call the moral and aesthetic case for writing - to think, imagine and describe and then communicate the result to an audience - can be satisfied online. It just doesn't make any money. The age of the gifted amateur is surely about to return.

At British and American universities, this future has to be kept as a woeful secret. A great paradox of the age is that while newspapers continue their inexorable decline and publishing cuts its costs, journalism and creative writing degrees have never been more popular. Year on year, journalist applicants stood a quarter higher at 13,229 for courses beginning this autumn. Creative writing can now be learned at nearly every British institute of higher learning. Figures are hard to come by, but Britain is probably turning out about 1,300 "creative writers" every year.

Why do young people apply? Because they think they can be the next Zadie Smith. Why do universities encourage them? Because money can be made from fees. Is this responsible behaviour? We need to weigh the smashed hopes of creative writers against the financial needs of their tutors, who are themselves writers, and earning the kind of money that writing would never supply. A closed little dance: tutors teach students who in turn teach other students, like silversmiths in a medieval guild where a bangle is rarely bought though many are crafted, and everyone lives in a previous world.

So if the world of the professional full-time writer is under threat, whither the book and book industry?



The decline and fall of books: Traditional bookshops are closing; vending machines are churning out novels; and e-books are the new paperbacks; so is this the final chapter for the book industry?
Nicholas Clee,The Times, May 7, 2009

Like so many prototypes of supposedly revolutionary inventions, the Espresso Book Machine (EBM) fails to impress. Sited in a branch of Blackwell's in Charing Cross Road, London, the machine resembles an oversized photocopier with extra bits. Can this be part of, as a Blackwell's executive has claimed, “the biggest change since Gutenberg”?

It is an attractive idea. Wouldn't it be marvellous to go into a shop knowing that if the book you wanted was not in stock, you could get it printed specially for you? Or that you could browse the catalogue and get copies of whatever you fancy in minutes. Blackwell's claims that the EBM offers 400,000 titles, which are digitised texts from libraries and other sources. On receiving an order, the machine takes about 20 minutes to set up the file and then prints a perfectly acceptable paperback book in five minutes. A 400-page book costs about £9. Those produced from digital files look good; those produced from books that have gone through a scanner look a bit rough.

On May 6, Amazon unveiled a new Kindle e-reader (a widescreen version of the handheld device for reading electronic books). “You never have to pan, you never have to zoom, you never have to scroll. You just read,” said Jeff Besos, Amazon's chief executive, at the New York launch. It is yet another indication that the book industry could do with a new way of distributing and selling books.

Booksellers are struggling to make a go of shops with large ranges of slow-turning stock, and they are paying prohibitive rents. Leading publishers are gambling scary sums of money on books by top authors and celebrities and struggling to underpin their lists with less glamorous titles. Authors, unless they are talented or lucky enough to make the bestseller lists, look on as these firms' ever fiercer battles over dwindling margins eat into royalty payments.

No doubt future generations of the EBM will be less clunky. Then the machine will be well adapted to conform to the theory advanced by Chris Anderson, the author of The Long Tail. Businesses would thrive, Anderson argued, by supplying deep ranges of items, many of them selling in small quantities to niche audiences. Amazon is an example. The internet retailer promotes bestsellers heavily, with deep discounts. But it really scores in offering a huge catalogue of titles - many more than a terrestrial bookshop can stock. Even more profitable is Amazon's Marketplace business, through which it acts as a middleman for sellers of second-hand and out-of-print books.

The effects of Amazon's activities can be seen all around Blackwell's on Charing Cross Road, once the heart of London bookselling. Now only Foyles, Borders and Blackwell's remain. Blackwell's specialist neighbour, Sportspages, is long gone. Another specialist, the crime and science-fiction bookshop Murder One, closed recently, blaming competition from the internet. The art booksellers Zwemmers and Shipley have disappeared too, and the women's bookshop Silver Moon survives as a department within Foyles. Murder One was a great shop to browse in. But even the most conscientious supporter of independent bookselling must have found Amazon too tempting to ignore. Buy from Amazon and you start getting recommendations of new titles. If you made a trip to Murder One you could not be confident that, for example, every title in Andrew Taylor's Lydmouth series would be there; they are all on Amazon, though some are second-hand.

A visit to Blackwell's on a weekday afternoon illustrates another problem for terrestrial booksellers. There are fewer than ten customers in the shop. They have the run of thousands of square feet of selling space and of thousands of titles. Many of these titles attract buyers just two or three times a year; and those long-awaited sales may bring in no more than the price of a paperback. Meanwhile, Blackwell's is paying premium rents.

Booksellers have managed to make profits from this bizarre business model by balancing new titles, which sell quickly, with deep ranges of stock. The bestsellers pull in customers and generate instant turnover and profits; the backlist ensures continuing custom. The problem now is that profits from the bestsellers have sharply declined. The abandonment of retail price maintenance on books in 1995 allowed supermarkets and Amazon - the only retailers to achieve substantial growth in their book businesses in the past few years - to discount bestselling titles at levels that specialist booksellers struggle to match. As a result, independent bookshops have largely given up selling celebrity memoirs and other mass-market titles. Waterstone's, as the biggest bookseller in the country, has to try to compete, but by offering far deeper discounts than it would like. In its last set of financial results, Waterstone's profit margin was less than 3 per cent. Its latest strategy is the “Discover” campaign, an effort to promote its shops as unrivalled places to find expected or unexpected gems.

From the producer's end, the economics of the book business are just as challenging. The leading publishing houses are international giants, hungry for bestsellers, which are very expensive to acquire. Last autumn, Transworld had a huge hit with Paul O'Grady's memoir At My Mother's Knee. This spring, the company signed up a further volume from the chat-show host, but reportedly had to double its previous advance, to £2 million - because O'Grady, or his agent, wanted to match the sum that Dawn French had received for her memoir, Dear Fatty. So Transworld has paid twice as much for a book that will probably sell half as well. Another company found itself similarly penalised for success: to buy a second novel by the author of an unexpected bestseller, the publisher was asked to pay a sum equivalent to the profit it had made on her first book. It meant that the new book was almost certain to be unprofitable unless it reproduced the earlier success. It didn't.

In spite of the scary economics, celebrity books and other blockbusters have made a lot of money for publishers in the past few years. Will our appetite for such books be as strong in a credit crunch? It must be doubtful. Publishers are praying that the trend can survive, however, because the economics of the rest of their businesses is also looking dodgy.

The publishing model has a lot in common with the bookselling one: in theory, the bestselling titles bring in the turnover and profits and the rest of the list provides the bedrock of the business. But publishing the so-called “midlist”, or any book that does not come with some kind of marketing angle, has become more difficult. A book has to be “promotable”: the author will be young and attractive, or have an interesting CV; the work will tell an extraordinary story. Biographies of literary figures outside the top rank, or novels with undemonstrative virtues, do not cut it.

The reason why Tindal Street Press - an Arts Council-funded imprint in Birmingham - was able to publish Clare Morrall, the Booker Prize-shortlisted novelist, and Catherine O'Flynn, the Costa award-winning writer, is that no big publisher saw the potential of these authors' novels. (They do now: Morrall is with Sceptre and O'Flynn with Penguin.) Some acclaimed authors have moved to small houses: Maggie Gee (formerly HarperCollins), for example, is now with Telegram Books, and Tibor Fischer (formerly Chatto & Windus) is with Alma Books.

Practices that have been normal in the book industry for years are becoming unsustainable. You pay an author an advance - say £15,000 - that is probably too large, even though it is too small as recompense for what may have been a year's work. You print 1,000 hardbacks and manage to sell 800 copies to booksellers. Lorries bring them to your warehouse and take them out again to the shops. The book gets a few reviews, but no recognition from prize jurors. Half of the copies come back and they, along with the 200 that never left, get pulped. A year later, the paperback comes out. Richard and Judy fail to recommend it, the booksellers do not select it for their three-for-two promotions. The lorries go to and fro again and more books get pulped. No wonder publishers are looking for new authors through low-cost ventures such as HarperCollins' Authonomy, a self-publishing website, and Macmillan New Writing, which pays no advances.

This is where digital technology, such as the EBM and electronic devices, including the Sony Reader, comes in. Printing thousands of books that sit in warehouses or on booksellers' shelves, only to be pulped, is unsustainable. But remember the long tail: there may be a demand, albeit “niche”, for these texts. It makes sense to create digital files that can be downloaded or printed according to demand.

This prospect causes book industry figures to look with alarm towards their counterparts in music, where digital downloading, legal and illegal, has caused turmoil. It seems that consumers expect digital books to be cheap. But giants such as Penguin and HarperCollins will not be able to remain profitable if all their books cost less than, say, £10; and authors' rewards from these books, unless sold in large quantities, will be trifling. Worse, many consumers expect digital content to be free. While digital piracy is a minor problem for the book industry, it will grow.

Perhaps the digital revolution will decentralise publishing and bookselling, as Gutenberg's movable type did in the 15th century. Publishing, printing and bookselling may come together again. Will the bookshop of the future consist of a few hundred bestsellers and a print-on-demand machine? At Blackwell's, such a prospect required an imaginative leap. The EBM would print only some out-of-copyright works and those only if purchasers knew exactly what they wanted. The customers' terminal in the store was not functioning: you had to ask the bookseller to search for a title. The copyrighted works that various publishers are making available had not yet come through, and there was no search function on Blackwell's website.

A Gutenberg-style revolution is not, on this evidence, expected in the next few months. But if you are a lover of well-stocked bookshops, then you should enjoy them while you can.

Nicholas Clee is the joint editor of the book industry newsletter BookBrunch and the author of Eclipse (Bantam Press)

Perhaps it is not the future of the book we should be worried about, but the future of the serious book:

You can't be serious :Celebrity memoirs, declining libraries, the web and now the recession have all spelled bad news for publishing. Once thriving genres such as political and literary biography are ailing. Is it the end for quality non-fiction? Andy Beckett, The Guardian, Saturday 16 May 2009



Imagine dropping that in the bath...

Colin Robinson has been in publishing since 1976. He has worked for fusty companies and radical ones, for earnest independents and empire-building corporations, for Britons and Americans: as an editor, always involved in the slightly precarious business of putting out serious books. But recently he started noticing something about the way books are treated that disturbed him. "Here in New York" - Robinson lives in a fairly intellectual part of Manhattan - "books are quite often left out in the street. If people are moving, they don't take their books with them."

There may be a harmless explanation. Manhattan apartments are small. Some people always get rid of books once they've read them. Yet Robinson has some cause to see the phenomenon as a symptom of something ominous. On 3 December last year, despite what he describes as an editorial list "filled with erudite, well-written books", he abruptly lost his job at the American publisher Scribner.

So many other editors were sacked in New York that day, it almost instantly became known in the closely connected worlds of American and British publishing as "Black Wednesday". In recent months, such culls have become grimly routine in many industries. But among those who write, publish and sell serious non-fiction - the biographies, histories, travel and science books researched and written with a degree of subtlety for a general audience - the bad news seems to have been building up since long before the current recession.

The range of titles stocked by British libraries has been falling for decades. The net book agreement, which in effect subsidised the British book business, has been dead for a decade and a half. In that time, book retailers have concentrated increasingly on the genres that are easiest to sell. Book prices have collapsed. Within many publishers, sales and marketing considerations have come to trump editorial ones, and most authors of serious non-fiction have had to accept smaller advances and smaller print runs.

Meanwhile, review space for their books in most newspapers has shrunk. The time their work spends on the shelves of bookshops has shortened. The competition for readers' attention - from the internet, from secondhand books sold online, from the seemingly ever-expanding celebrity culture - has sharpened. Bestsellers and "brand-name authors" squeeze out less established titles and writers more than ever before. Supermarkets and chain bookshops squeeze out independent booksellers. The number of books published in Britain - well over 100,000 a year and growing, five times as many as in 1970, which is far more than in comparable countries - means that all books fight for air. The computerisation of British bookselling, more advanced than almost anywhere in the world, casts an increasingly cold eye on serious books' commercial performance.

At the same time, wider cultural shifts - the evaporation of the idea of a literary canon, a less deferential attitude to experts, changing reading habits in the digital age - may be making serious, would-be definitive books less attractive to a broad public. Once-thriving serious genres such as political memoirs, literary biography and literary travel writing all appear to be ailing.

"The fat years of the printed word are over," says John Sutherland, the academic and author of several books on the history of publishing. "Even if books get dirt cheap, readers simply don't have the time or motive to invest in them. The old cultivated readership is not as solid as it was. The safe library sale doesn't exist any more. There's been a loss of authority in the serious book." A former bookseller who is now a freelance literary publicist says: "There are plenty of good books going missing. Books that take five years to write. Publishers used to put them at the front of their catalogues. Nowadays the print runs are tiny for these books, about 2,000. Publishers say they can print more copies, but if they're printing 2,000 of something they're not going to get behind it. Because of publishers' falling profit margins, production values have gone down on some of these books. You're seeing paper that's turning yellow before it gets out of the shop. You've got publishers and literary agents blaming the bookshops and vice versa. You've got people going to literary festivals who'll pay £10 for a ticket to an author event but won't pay £20 for a history book."

Neil Belton, an editor at Faber with a long track record in serious non-fiction, is almost as bleak: "The book trade and publishing industry has embraced its inner philistine. The bigger book chains have semi-withdrawn from interest in serious books. The number of publishers that are committed to trying to bring these books to an audience is smaller. When they are interested in serious authors, the big publishing conglomerates are often chasing only the very big names, people established in their fields." The literary agent Peter Straus, previously a publisher at Picador, is also worried: "It is more and more difficult to place good books. Retail's changed. Advances have come down in the last two years. So many books haven't sold. There are too many books published. The harsh realities of the market will impinge on certain writers, certain publishers, certain agents."

In his 2000 polemical history The Business of Books: How International Conglomerates Took Over Publishing and Changed the Way We Read, the veteran American publisher André Schiffrin calls this process "market censorship". But one person's market censorship is another person's market realism. Clare Alexander, like Straus a well-known agent previously involved in serious publishing, gives an example. "Between about 2003 and 2006, a lot of agents and publishers thought history was the new rock'n'roll. The advances people were paid were ridiculous: £100,000-plus for books that were not going to sell. Now the same sort of books are getting probably about £30,000. Some of the advances in serious non-fiction used to be seriously out of kilter."

Until 2006, Scott Pack was the head buyer at Waterstone's, Britain's most dominant bookshop chain. "Historically, publishers have published too much of this [serious] stuff," he says. "Fifteen years ago, there were tens of millions of pounds of unsold stock sitting in bookshops. A publisher would put out a book on Henry VIII, say, and distribute 10,000 up and down the land. Then the publisher would be sitting there saying, 'We sold 10,000 - didn't we do great?', when really only 2,000 copies of the book ever sold. Nowadays bookselling is more professional, more commercial. It's not as nice ... A bookseller can return unsold books to the publisher after three months. Or if the book is in a three-for-two promotion, after four weeks ... But we see much better what the true sales of serious books are."

Pack argues that those who fear for such titles in the modern marketplace are being snobbish and pessimistic. "In the last 10 years, the British book industry has been selling more books. More people are reading than ever before. Some of those extra readers are buying the kind of books you find in supermarkets - misery memoirs, mass-market crime - so, yes, the market share for heavyweight non-fiction will be smaller ... There used to be a lot of noise around these books. They were books made for great reviews. But people didn't want to buy them."

Currently writing a book blog called Me And My Big Mouth, Pack is practised at making populist, intellectual-baiting arguments. Elsewhere in our interview, he dismisses upmarket publishers and reviewers as "the intelligentsia" and unsold books as "dead stock" and "rubbish". Yet he insists that it is still perfectly possible for a good, serious book to find a readership: "The vast majority are stocked in ones and twos. They can stick around, pick up word-of-mouth, sell steady."

How such gradual success can be achieved given the ruthless stock control of the book chains is not something Pack explains. Yet some publishers of serious titles share his optimism. "The market for really good books has not diminished," says Stuart Proffitt, the publishing director of Penguin Press, identified by Schiffrin and others as a rare example of a corporate-owned publisher making a success of upmarket books. Proffitt cites Rosemary Hill's erudite biography of the Victorian architect Augustus Pugin, published by Penguin to great acclaim in 2007. So far it has sold more than 17,000 copies in hardback and paperback combined, according to Nielsen BookScan, the US market research corporation that records British book sales. David Kynaston's history of the Attlee era, Austerity Britain, has sold 65,000 copies; Kate Summerscale's reconstruction of a Victorian murder investigation, The Suspicions of Mr Whicher, more than 305,000; Richard Dawkins's anti-religious polemic The God Delusion more than 687,000.

Proffitt concedes that such successes take more effort than they used to: "You have to think more carefully than ever before about every aspect of a book's publication, how it looks, how you communicate its existence." But he insists that the fears for serious books are overblown. "People in the book business are always saying there's a crisis and we're going to hell in a handbasket."

On that point, at least, Proffitt has it over the doom-mongers. Book publishing is a melodramatic business: unpredictable, characterised by very public successes and failures, with even its seasoned practitioners consequently subject to sudden mood swings. In 1934, Geoffrey Faber, one of the founders of Faber, wrote despairingly: "The market is glutted. General publishing is therefore fast degenerating into a gambling competition for potential bestsellers." In 1979, the senior American publisher Jonathan Galassi warned that serious books were becoming "high-risk ventures for modern publishers who have inherited the overhead[s] of big business along with its management techniques and managers, and who have become increasingly reluctant to invest even very modest sums in projects which promise little in the way of immediate return". Non-academic publishing, he went on, may become "nothing more than the calculated marketing of slickly packaged materials, another 'leisure-time' industry ... unconnected to ... the intellectual and cultural roots of the society it purports to serve".

Today, such prophecies look both uncannily accurate and too apocalyptic. On the ground floor of the flagship branch of Waterstone's in Piccadilly, central London, the categories of goods on sale are listed on the wall as follows: "Bestsellers. Gift Wrap & Cards. Humour. Indoor Games. London. Magazines. Maps. Travel. Travel Literature." A huge, mural-sized poster advertising an in-store event by the entertainer Rolf Harris dominates the main entrance. Where books are on display, many of them are in the three-for-two promotions that, once restricted to deals on baby wipes or orange juice in supermarkets, have become central over the last decade to the operation of British chain bookshops.

But there is still serious non-fiction here and there. In recent weeks, there was a place in the front window for Iain Sinclair's chewy new history of Hackney, and a prominent table of thoughtful titles picked by Nick Hornby, including What Good Are the Arts? by the academic and critic John Carey. Esoteric history, the extended critical essay - both titles come from genres whose commercial prospects have been repeatedly written off.

And yet, something is undeniably shifting in the climate for serious books. You can see it in the Piccadilly Waterstone's and in the other cavernous chain bookshops along nearby Charing Cross Road, the traditional heart of British bookselling. Carpets and shop-fittings are worn. Shelves are half-filled. Customers are sparse, even on a weekday lunchtime. There is less bustle, less atmosphere, in these shops than when they opened a decade ago. There is a sense that good times have come and gone.

Good times have never been the norm for serious books in Britain. "From its very beginning, the publishing industry relied on books which could command a large market," writes John Feather in his still-relevant 1988 study A History of British Publishing. "The economics of production ... meant that it could not do otherwise." The 19th century brought mass literacy and a countrywide network of bookshops and publishers, but the business became ever more narrowly focused on producing commercial titles and selling them at a discount. "Booksellers could only afford to stock the most popular and fast-selling," writes Feather, "and had no space on the shelves for ... perhaps more worthwhile works which would sell more slowly and in smaller numbers. The bookshops ... were being squeezed out of business as a market mechanism for serious literature." By the 1890s, so many bookshops had closed and serious books were becoming so marginalised that a consensus formed that book discounting should be banned: the net book agreement was the result, and came into force on 1 January 1900.

For the next three-quarters of a century, British publishing and bookselling were diverse, slow-changing enterprises, relatively tolerant of high-minded books and "ramshackle to the cold business eye", as John Sutherland put it in a 1978 study of the book business. The arrival of state funding for libraries further softened the environment for cerebral writers. In 1965, Britons borrowed 10 books for every one they bought. "With any serious non-fiction book," says Clare Alexander, who entered publishing in 1973, "you knew you could sell 1,500 to the libraries." This enabled mainstream publishers to profitably put out books whose high-street sales were barely in the hundreds - and whose content can seem startlingly uncommercial by current standards. In 1975 Jonathan Cape published Leninism Under Lenin, a labyrinthine theoretical work by the Belgian Marxist historian Marcel Liebman. An equivalent work nowadays would be issued in Britain by a small academic press.

Yet the old British book business had its downsides. Bookshops were often dusty places, glacial in their book-ordering processes and off-putting to young or less educated customers. Even the influence of libraries, Sutherland argues, was not always benign: their preference for books that could be read in a fortnight, the standard lending time, helped keep postwar British writing terse and cramped.

But the tweediness of it all can be overstated. In 1935, in the middle of the depression, Penguin introduced the mass-market paperback to Britain, sold at first through branches of the brash American-owned chainstore Woolworth's, prefiguring today's supermarket book trade. Penguins were initially criticised as crassly commercial and middlebrow, yet soon became seen as a new, accessible form of quality publishing. In the late 1940s, the Better Books chain pioneered the idea of the bookshop as a bright and appealing space, "a social centre with a coffee bar, poetry readings and other literary events", notes Randall Stevenson in The Oxford English Literary History. Meanwhile, wider social changes, such as the growth of higher education, and technical bookselling ones - the introduction of "tele-ordering" in 1979, allowing books to be ordered in days rather than weeks or months - gradually created a bigger potential market for serious titles.

In the 1980s, that market finally materialised. Tim Waterstone was an unemployed man with six children who had already been a tea broker in India, a manager for a brewer and, most recently, the overseer of a disastrous attempt by WH Smith to set up a subsidiary in America, for which he had been fired. In 1982, he used his severance pay and money from friends and relations and the NatWest bank - the latter through the Conservative government's loan guarantee scheme for entrepreneurs - to set up a bookshop in a prosperous part of west London, which was relatively unaffected by the early 1980s recession. The rest of the Waterstone's story has long become bookselling legend: the new shop's daringly deep and heavyweight stock; its unfusty decor and helpful staff; its armchairs for browsers and friendly opening hours. For the next decade and a half, Waterstone's added branches, evangelised for "serious culture", as Waterstone characterised his books, and made literary biography and enigmatic travel writing seem viable high-street products.

New readerships appeared. "In the 90s," says Sutherland, "just before the pension penalty for early retirement came in, there was a mass retirement of teachers. Suddenly, there was a vast number of extremely competent readers who had a lot of time."

The book boom, too, was part of a broader cultural surge that produced the Independent, Channel 4 and scores of new television production companies. The free-market country being created by Margaret Thatcher, however much liberal writers might deplore its harshness, was opening up new possibilities for serious culture, while the non-market mechanisms that protected it, such as the net book agreement, remained largely in place.

During the 1990s this happy equilibrium between commerce and art in the British book business began to break down. By 1989, Waterstone's, like many new 1980s businesses, found that it had expanded too fast and borrowed too much money. Waterstone sold his bookshops to his old corporate foe, WH Smith. Gradually, over the next dozen years, the shops began to stock a narrower range of books.

To a certain extent, Waterstone's was responding to wider developments. Bestseller lists had been published in Britain since 1974, but it was only in the 1990s, with the belated installation of electronic point-of-sale technology in most bookshops, that accurate sales figures for every title became available. Meanwhile, British publishing, which had seen many of its old independent firms taken over by big corporations in the 1980s, had become much more business-oriented. By the mid-1990s, Neil Belton says, "a lot of bigger publishers were ambivalent about the net book agreement". Together with many booksellers, they thought that the freedom to discount titles would improve their profits. In 1995, the agreement in effect collapsed.

That same year, Amazon started selling books via the internet - making even the most rarefied titles universally available, at least in theory, but also offering books at deep discounts and beginning slowly to drain bookshops of their customers. By 2000, British bookselling was beginning to resemble its 19th-century self again: highly competitive, more interested in clever price promotions than clever books. That summer, Waterstone's sacked the manager of its popular Manchester branch, Robert Topping, for refusing to narrow his eclectic stock in favour of bestsellers.

Nine years on, Topping is still in bookselling. He owns and runs two shops, one in Ely in Cambridgeshire and one in Bath. If you like serious books but usually go to the chains, visiting a Topping shop is initially a shock, but then deeply reassuring. "Topping & Company Booksellers of Ely" says the archly old-fashioned sign above the door. Inside, the front of the shop is full of solid biographies, footnoted histories, books on classical music, painting and religion. There are no price promotions, no author posters, no prominently displayed celebrity titles; just plain but expensive-looking wooden bookshelves, neatly jammed with books from the floor to the ceiling and covering every wall through three storeys of small rooms. If you are looking for a John Banville novel, there are seven titles, rather than the couple you usually find in a modern bookshop. If you like the late JG Ballard, there is his genial recent autobiography but also The Atrocity Exhibition (1970). There are newspaper reviews carefully cut and mounted on a pinboard.

Topping is a vicar-ish man in cords and spectacles, but he is not some airy nostalgic. "In the age of the internet, you have to have as wide a stock as you can," he says. "I have to pay the bills myself, so I can see if it works." The computerisation of bookselling, he goes on, ought to help rather than harm serious books: "Distribution is faster, ordering is faster, so a shop can buy single copies and then restock." Is there any sort of serious book that he does think is becoming obsolete? He looks blank for a few moments. "There is this thought that the three-volume life doesn't work these days ..." He pauses again. "Does it work? I suppose not ... But if you believe enough, you can make a book sell."

His shop is busy. Topping chose its site carefully: Ely is a pretty place full of tourists and retired academics, 20 miles from the nearest chain bookshop. But he thinks location is not central to selling serious books: "My hunch is you could do this anywhere."

Belton agrees. "I don't see any evidence that readers are unwilling to grapple with serious ideas in book form, as long as the book is readable. You always hear nonsensical things: 'People aren't interested in science books any more. People aren't interested in history.' That's so wrong. There will always be new subjects, new syntheses, in every field." Peter Straus adds: "In the early 90s, people said political memoirs didn't sell, and then there was Alan Clark's diaries. Anything's possible if the book's good enough." Clare Alexander says: "I don't think the readers of serious books have disappeared. What's happened is a breakdown in delivery. From October onwards - a quarter of the year - bookshop budgets are absorbed by celebrity books."

Some aspects of the life of a serious book have probably changed for good. Anyone who has been writing them for mainstream publishers in the last decade, as I have, will have sensed the new pressures and opportunities: to get your book into the shops at the optimum time of year, to be realistic about its commercial prospects, to promote it through the ever-multiplying media. Randall Stevenson, who is the head of English literature at Edinburgh University, is an advocate of picking your way through dense postmodern texts, yet he senses a new deference in non-fiction to impatient readers. "I read popular science, and it drives me round the bend, all the attention-grabbing and cute fact boxes." The packaging and titles of serious books may also sugar their contents a little more than they used to. Colin Robinson says: "There's quite a retro quality to even the most serious books now. Novels with an old-fashioned soldier on the cover. Books called The Lost City of X."

The internet could have something to do with this. The American scientist Maryanne Wolf, in her book Proust and the Squid: The Story and Science of the Reading Brain (2007), shows that how we read, and what we are easily able and therefore willing to read, is not set, but depends on the kind of texts we are used to interpreting. "I do wonder," she writes, "whether typical young readers view the analysis of text and the search for deeper levels of meaning as more and more anachronistic because they are so accustomed to the immediacy ... of on-screen information."

This may be too pessimistic. Research into the internet's effect on reading is in its infancy. Despite decades of predictions to the contrary, the appetite for demanding non-fiction has survived the advent of newspapers, radio and television - and, in Britain, a popular culture with a particular ability to absorb talent and themes that in other countries would be channelled into grand state-of-the-nation volumes. In fact, many publishers think the noise and immediacy of the web will make slow, quiet immersion in a book seem more, not less, appealing. And books, unlike most digital media, are not directly dependent on recession-affected advertising revenues.

Other economic and social trends remain favourable: the growth of higher education; the proliferation of literary festivals; the falling costs of book production. Tellingly, more people than ever are writing books. "People are infatuated with the romance of writing," says Sutherland. "I can't tell you how many students of mine I recommend an agent to." Dying artforms tend not to attract so many new practitioners.

The crisis in serious non-fiction has probably been overdone. There is a crisis in British bookselling, thanks to the internet, the recession and the particular competitiveness of the British high street - Alexander cites the ever-increasing rents for retail premises. Some non-fiction genres, such as literary biography, are in decline, at least for now. But other serious genres, such as economics and nature writing, are on the rise. Most types of book go through these cycles of boom and bust. In unsettling times, books that try to explain the world may flourish.

In truth, it is too early to tell: serious non-fiction takes time to research and write and sell. But in the meantime, it may be a good idea for authors of such titles to be realistic about their place in the economic order. As John Feather writes in his history of British publishing, before Waterstone's, before agents and advances, before the invention of the modern book business: "The medieval author worked for himself, for God or for a patron, or indeed for all three." I'm not sure that career path would be so popular now.

I tell myself and others I would like to be a full-time writer. However, I fear if I was to become one, I would get detached from the 'real world' and quite possibly end up like Martin Amis. That is a fate I would wish on few!



'I've read the new Martin Amis.' 'Neither have I.' (to use a Peter Cook-ism)

I think writers, like Denis Healey said of politicians, need a 'hinterland' outside their profession, or they get trapped in their own bubble world. The thought of having to write, as opposed to wanting to write, does not appeal to me much (unless the money was really good!). So I will keep writing, when I feel like it, and one day I might just hit the jackpot.

PS There is another short-story competition at work. I've submitted something, which I will publish here once the results are out, towards the end of the month.

He came he saw...

Apols for the lack of any posts in recent weeks. Partly illness, partly busy with other stuff, largely because I feel anything I say will be left high and dry by the way political events are going in Britain. I've decided that, with the European/local elections on June 4th that it might be safer to leave things until after the results for them come out.

Suffice to say, I will be voting No2EU, Yes2Democracy on June 4th.