Reform or Revolution? By William Bowles

10 February 2009

In 1945, following the defeat of Fascism, the Labour Party was swept into power with a mandate to bring about radical change to British society. There followed the nationalization of transport, energy, communications, the establishment of the National Health Service, an overhaul of education (actually done by the preceding Tory government in 1944), and massive investment in public housing.

We were promised Socialism, what we got however was a ‘reformed’ capitalism, Keynesianism, and for domestic consumption only, elsewise it was ‘business as usual’, except that the state was broke and in debt up to its eyeballs to the US (a debt only recently paid off).

The reality however was that those changes were demanded by the organized working class through its trade unions and constituency (local) Labour Parties and of course supported by our minuscule left. In other words, it was propelled by grassroots activism and importantly, they were demands that could not be ignored. British capitalism was not only broke it was backward in a big way. Had they not reformed capitalism, in all likelyhood there would have been a real revolution (not that the US would have allowed it anymore than it did in France and Italy). It really was the case of the Labour government heading off revolution at the pass, but then this has been the Labour Party’s role since its founding.

The post-war Labour government effectively bought off the working class without altering one iota of its imperialist mission: the defence of Empire, even if now it was no more than a poodle for US imperialism and literally on the frontline of the Cold War.

This view of the role of the Labour Party doesn’t sit well with many on the left, especially those who cut their teeth during that post-war period, wedded as they were (and many still are) to the idea of reforming a Labour government slowly, ever so slowly, leading us, we were led to believe to a real socialist society. Just how wrong they were is surely obvious now even to the most myopic.

The contrast with ‘New’ Labour’s response to the latest and worst crisis of capital could not be more illuminating and the reasons obvious to those who look. The labour movement is a shadow of its former self, the constituency Labour Parties pretty well emasculated and a left even more marginalized and fragmented than it has ever been. This is the real legacy of ‘reformism’.

Thus without pressure from below, New Labour is free to act in the interests of the class it really represents, the capitalist class. What’s left of the organized working class whilst it may have the occasional spat with New Labour, especially the critical (to the state) public employees unions, as long as the interests of their members are protected, we can expect nothing of substance from the trade unions to challenge the power of the state and capital.

But what of the ‘professional’ classes, who are now the key section of the working class in a de-industrialized and corporate/security state capitalism? The state, as I’ve pointed out before, is only too aware of just how vulnerable it is to the actions of those who actually manage capitalism, even issuing a warning via the MoD of the dangers of a pissed off ‘middle class’ and not just here but right across the EU.

The problem for New Labour is that it is prevented from buying off key sections of the working class because it refuses to intercede directly into running the key but virtually bankrupt section of the economy, the financial sector. In turn, this is impacting directly on the real economy. So even protecting workers’ mortgages by instituting a moratorium on foreclosures doesn’t work if they lose their jobs. It’s become a vicious downward spiral, a classic example of Stafford Beer’s negative feedback in action.

But clearly the ‘neo-liberal’ model of capitalism has not only ran out of road but has brought about an unmitigated disaster for capitalism, destabilizing the global circuit of capital in its entirety, that in turn brought about the so-called credit crisis that finally spilled over into the real economy. Obvious when you consider that contemporary capitalism can only survive and prosper through the use of credit, without which working people simply cannot afford the products of their own labours. And as proof of this, it is in countries that have the highest levels of personal debt, the US and the UK, where the crisis has impacted the most.

But because the globalization of the financial sector connects all economies together via the world’s fiat currency, the dollar, inevitably the crisis has cascaded onto every economy that is dependent on the dollar as the main vehicle for trade in key commodities such as oil.

These new circumstances raise immense theoretical and practical challenges for the left. Born of the organized industrial working class of the 19th century, socialist revolutionaries have, for the past century and a half, viewed the industrial working class as the ‘vanguard’ of a socialist revolution, led by a ‘vanguard’ Marxist party, a model that has also clearly failed.

Thus our ‘vanguard class’ now lives in places like China and India that are for the most part pre-industrial societies, one of which, China claims to have already had its socialist revolution! Frankly, it’s a bizarre situation for which there is no precedent, which explains in part why the left are having such a hard time coming up with explanations let alone solutions.

What can we learn from the current crisis? It seems to me that there are four connected strands that presage the crisis: 1) The falling rate of profit that led to the export of manufacturing to cheap labour markets first in Latin America and then Asia; 2) The commensurate destruction of the organized working class in the (former) manufacturing countries, that enabled the capitalists to depress wages and destroy the gains of the previous decades; 3) The revolution in information technology that led to the globalization of finance capital and also made possible the international division of production/distribution, all of it controlled from the major centres of capital, the US and the UK; 4) All of which led to vast over-production and the collapse of the capitalist ‘market’.

These four strands are completely interlocked, thus depressing wages worked as long as there was plenty of credit to keep the ‘wheels of industry’ turning. But once the credit was turned off, the entire thing collapsed like a house of cards.

Likewise with the export of manufacturing, dependent as it is on the aforementioned credit-fueled consumption.

This process can be seen at work most clearly in the global collapse of the automobile industry, which aside from weapons is the single biggest driving force of capitalist accumulation, employing millions worldwide not only in the actual manufacturing process but also in virtually every other aspect of the economy so central is the automobile to capitalist societies.

Thus the collapse of the banking system is in fact a symptom not a cause, the cause being over-production and the inability of working people to maintain consumption at a level that makes capitalist production profitable. That the entire edifice is managed by a bunch of crooks and fraudsters, is merely indicative of the nature of a system that is at its core driven by personal greed.

The two pillars of our ‘property-owning democracy’ as Maggie Thatcher termed it, owning a house and car have gone belly-up, big time. There could be no better illustration of the irrational nature of capitalist production than our dependence on these two commodities for our collective survival.

Historically, revolutions in science and technology have powered a succession of expansionist phases of capitalist production going back to the canal, steam, the railway, electricity, the internal combustion engine, airplanes, and finally telecommunications/media (and all driven in one way or another by waging war).

So for sure, we can unpack the causes of the current crisis of capital, there is no shortage of excellent analyses, but what we cannot do is offer a workable alternative that offers a way out of our predicament, aside that is from slogans and exhortations which frankly offer us nothing. Worse still, we have no left to do it with and a population totally decoupled from the political process.

Yet it’s obvious that we are running out of time, so the immediate question is: does capitalism have a solution? The current buzzword seems to be stimulus. This is what my thesaurus has to say on the word:

this sports facility has been a stimulus to the economic restoration of our city spur, stimulant, encouragement, impetus, boost, prompt, prod, incentive, inducement, inspiration; motivation, impulse; informal shot in the arm.

But seeing as the essential ‘impetus’ to ‘kickstart’ the economy is the idea of an ‘inducement’ to ‘motivate’ us to spend, what is the ‘incentive’ being offered that will ‘prod’ us into spending?

Lower interest rates? Apparently not even if they hit zero percent. Tax breaks? No damn good if you don’t have a job. The one thing missing from the current attempts at ‘boosting’ the economy, investment in infrastructure is conspicuous by its absence. This was at the heart of Roosevelt’s ‘New Deal’, at least that’s the mythology. In reality it was WWII that ‘kickstarted’ the economy, at least it did the US economy and we’ve been paying for it ever since.

So it seems I’ve come full circle, for the core of ‘old’ Labour’s postwar ‘stimulus’ was state-financed investment in infrastructure, something the capitalists were not prepared to do—afterall where’s the profit in health, education and housing if it’s not privately owned?

And this time round? Well obviously the dogma of the ‘free market’ precludes state investment in anything except bailing out the financial sector, the ones who who got us into this mess in the first place!

So does capitalism have a solution aside from war as the penultimate ‘stimulus’ that is? Judging by all the prevarication and hot air being spilled by our illustrious ‘leaders’, they are totally clueless or at the very least not prepared to do what is necessary to save peoples’ jobs, afterall, when all is said and done, without a job working people are screwed.

The one positive aspect of the current situation is the fact that increasingly the ‘natives’ are getting decidedly restless, with mass actions occurring with increasing frequency across the planet. But protests are one thing, bringing about real change is quite another. Nevertheless, it does seem as if the idea of socialism is once more on the agenda, and the idea can only grow as the slump deepens (we are afterall, only in the opening phase of the capitalist meltdown).

But are we prepared for it, what of the vast security/surveillance system and quasi-fascist ‘anti-terror laws’ put in place under the guise of the ‘war on terror’? A recent piece in the Mail On Sunday highlights the kinds of steps being taken by the state to keep tabs on what are called ‘domestic extremists’. The unit called the CIU or Confidential Intelligence Unit and managed by Association of Chief Police Officers will monitor (and no doubt infiltrate) the activities of diverse groups ranging from animal activists to groups opposed to airport expansion.

But how long before these activities are extended to anybody who opposes government policies, for there can be no doubt that as in the past, the state views any opposition to the primacy of the state as extremely dangerous to the status quo, especially as the latest crisis of capital is, in all likelyhood, even greater than the Crash of 29.

These are extremely dangerous times, the capitalist system is teetering on the edge of collapse and as it has done in the past, it will resort to whatever measures it needs to protect the interests of capital including the establishment of a police state. All the necessary legislation is in place to clamp down on any opposition. We have already seen the use of ‘anti-terror’ laws to clamp down on legitimate protest, this is in spite of all the claims of ‘New’ Labour that the vast array of laws would not be used to suppress ‘legitimate’ protest.

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