Journal of Socialist Theory

Critique Notes 74

The annual Critique Conference is to be held on 14 May 2016 at Central, Malet Street, London (formerly ULU). The theme will be on War and Capitalism, within an overall context of the Russian Revolution of 1917, its history, meaning and continuing influence. As usual, Critique will be having a panel at the Left Forum in New York, this year with the same title as the theme below.

Obituaries to Follow

We need to note that a member of the editorial board, Paddy O’Donnell, died on Sunday 3 April. He had written for Critique, organised at least one Critique Confer­ence, and played an important role on the Editorial Board, particularly in the earlier years. An obituary will appear in a later issue. Anthony Eastwood, who was close to Critique, attended conferences and gave a substantial donation many years ago, died a few months ago. Tanya Frisby, who greatly helped and facilitated the devel­opment of Critique in its early years, died in Glasgow on Saturday 16 April.

The Insoluble Crisis

In the first few months of 2016 we were threatened with a plunging stock market, rapidly declining demand for raw materials, and a threat to profits. By April the mood had lifted and stock markets rose, at the end of the month it was clear that profits were static or declining in the USA. As indicated in earlier Notes, we can expect fluctuations, some deeper than others, with some prices going through the floor and others through the roof for as long as this crisis lasts, although there is no reason to assume that it will end. Neither euphoria nor deep gloom is justified, just yet. The system has been coming to an end for some time, but there is good reason to think that it is playing in its own last act. The question is how long it will take.1

However, the political-economic crisis continues to deepen, in spite of talk of recov­ery. (For some right-wing commentators, of course, the crisis ended some time ago,and now we are going into a new one.) It is a global crisis so that no country is immune. Unsurprisingly, the withdrawal of speculative money from the third world has helped the latter crash.

The capitalist class is in the greatest trouble. Capital has no solution for the present crisis. On the one hand the line of the right is for austerity and a rollback of history to the point where there is a ‘small state’ with little taxation, no welfare and no economic role. This reactionary utopia has reached a dead-end. The confrontation with the Greek population has exposed its nature and aims to the world, and fuelled a reaction everywhere. The French government has had to retreat in the face of massive demon­strations in the first quarter of 2016. In Spain, Ireland and Portugal elections have altered the Parliamentary arithmetic away from the right.

On the other hand, the alternative ruling class reaction is well expressed by the International Monetary Fund (IMF),2which is a nominally independent body domi­nated, in reality, by orthodox economists usually trained in the USA. It has been con­sistently calling for a change in strategy away from austerity to growth for some time. It is calling for a change in fiscal policy and for investment in infrastructure. This limited Keynesian policy has not been met in the past with overwhelming joy by the right, in general. Obama once talked of investing in railways, but never did any­thing. In Germany the infrastructure remains in desperate need of repair, while in the UK the government continues to cut expenditure. However, the IMF specifically refers to the outflow of money from the third world and the limited funds going back to it as part of the problem, although it is really a question of why capital flowed to the third world in the first place immediately after the crisis.

The Left

It is not clear how long it will take for the population to fully understand its meaning and move to an alternative. Instead we are faced with the rise of the far right and the beginnings of a left movement in America and the developed part of Europe. In the former Stalinist controlled countries like Poland and Hungary, far-right governments have taken power with apparent dictatorial appetites, without any left.

Proving yet again the impossibility of socialism in one country, Cuba and Venezuela are being compelled to concede to the market. In fact, even social democracy in one country is difficult if not impossible, as we are seeing both in Europe and South America.

The shift to the left is proceeding, albeit relatively slowly, even if it is a surprise to the right. The latter’s reception of Jeremy Corbyn, Bernie Sanders and Pablo Iglesias has been contemptuous to the point of idiocy, so reinforcing the left. These leaders and their programmes are not identical and none of them are revolutionary but they rep­resent a sudden and very considerable jolt to the official line of the right that the left has vanished without trace.

At this point, however, there is no genuine left-wing party as opposed to numerous grouplets. It is hard to predict its evolution but these proto-left movements are its pre­decessors, with all the faults of the early version. It has been easy to fall into a mood of despair given the fact that next year it will be a century since the Russian Revolution, when Lenin and Trotsky proclaimed a new world. However, Stalinism is defeated without hope of revival and capital has reached a real dead-end. It can continue but it is like the fabled horse with a dead rider.

The Political Economy of Modern Liberalism or Social Democracy

Lawrence Summers’s return to the classic Keynesian analysis of slow or negative growth as a period of stagnation, based on underconsumption and its underlying unequal social relations, has considerable support. It may be supported by the Robert Gordon view that we are now in a period of low innovation with consequent low rates of growth.3The explanation of political economic change in terms of non­social variables allows analysts to take a less critical line on society.

Paul Mason4has turned to the Kondratiev cycle, which bases itself on technical change over time, which in turn leads to periodic ups and downs. He brings out the fact that it is preparing the world for a potentially better future. This is discussed in the next paragraph. Trotsky pointed to the fact that Kondratiev got the idea from his—Trotsky’s—outline of a political economic waves, first outlined in 1921, which was very different. Indeed it was diametrically opposed in that it rested on class relations. The problem with any long-term theory of decades-long cycles is that there is insufficient historical data to prove the argument. This is certainly true of the Kondratiev cycle and one could make the same point of the long-wave theory. However, they are not of the same material. The long-wave theory does not require that there be identical or close to identical periods of time. One can argue that the variables, dependent as they are on consciousness and historical battles whether using arms or words and movements, are elastic. Hence the theory is not bound to the exact amplitude of the wave or even that there will be a wave-like shape. In fact, what Trotsky did, unlike Kondratiev, was to weave a relationship between ruling class consciousness, the class struggle and the economy. In effect the long wave is a period in which the class struggle is fought out anew. In contrast, the Kondratiev cycle is technical, like a number of other attempts to find a relation between economic cycles and technical developments. Whether Trotsky was histori­cally right or wrong in less important than his projection of a relation between con­sciousness, class struggle and investment/consumption. I will try to unravel the point.

In the first place, when looking at crisis there are the socio-technical and political economic aspects of the falling rate of profit, disproportionality and underconsump­tion. It is clear that the global economy has reached the point where there is a surplus relative to demand, whether of raw materials, means of production/investment goods, of consumer goods in relation to effective demand or of finance in relation to invest­ment opportunities. The surplus is worse than it appears in that it is both actual and potential. Thus, for example, automobile firms are capable of producing an output that is a several multiples of what is actually manufactured. In reality, it is still worse, in that there are innovations in the wings that could make this surplus much bigger. Today we often read articles worrying about mass unemployment as a result ofmass automation. (The logical conclusion of those not indoctrinated by capital would be that we are approaching an era of abundance and we should take measures in accordance with such a reality. In a sense it is the ultimate end of profit but this is another matter.) This much is clear even if not usually put in this form. It underlies the present crisis, but it is under control because firms reduce production levels to correspond to demand.

They are able to do so because we do not have classic 19th century capitalism but forms of monopolistic competition, which allow firms to control their output. This point has been discussed before but it has become an important issue that will be explored in a forthcoming article.

There is a further consequence. Capital has the opportunity and the means to become fully conscious of itself and hence of its need to control its environment. The ruling class has also been forced by its overthrow in Russia and China in particular to consider its future history and hence its strategy and tactics. It is true that there are no open seminars on how capital needs to rule. It is also true that capital has been hesi­tant to establish research institutions that would openly proclaim the nature of capi­talist rule. One could argue that it does not need to do so as economics courses, business schools and social science in general perform that job. However, capital rules in part by proclaiming that it does not rule. Indeed, it argues that it does not exist. There are only highly intelligent, productive, efficient and innovative people who rise to the top and perform a superb job of running enterprises. High salaries and profits are necessary to reward such rare people.

As a result, the important discussions take place behind closed doors. Some are at well-known conferences, like the World Economic Forum, and others are at clubs or quietly between people in private. One school of thought argues that capital effectively delegates its functioning of ruling to bureaucrats and elected governments. This, however, does not explain how the particular strategy of the time is evolved which allows political parties to develop their line. In the case of the so-called neo-liberal line, Milton Friedman and others of his ilk produced the necessary literature and the audience was receptive. It was a strategy suitable for finance capital but it was little more than a return to the status quo ante bellum. It took the world back to the disastrous economic line of the 1930s, before Keynes. How did the capitalist class do this?

The EU

The referendum on the EU in the UK has global ramifications. After all, the UK is the principal partner of the global hegemon—the USA—or to put it another way the US ruling class incorporates sections of the UK ruling class. The fact that intelligence is shared between the USA, the UK and the ex-UK ‘white’ colonies—Australia and Canada—is some indication of who is who and what is what. It is not in the interests of the USA that the UK leaves the EU. The UK objected in the 1950s to the attempt to bring Germany and France together in the first moves towards a federal Europe, in the shape of the European Coal and Steel Community. Today the British Empire is regarded as part of history, but in the post-war period the Commonwealth was impor­tant to the UK economy. The sterling area in the immediate post-war period allowed the UK to pool international currency holdings for the dominions, including for instance, South Africa, so effectively subsidising Britain. These Imperial forms do not exist, as in the earlier incarnation, but there are vestigial forms, not least of which are the various small territories that are used as tax havens. However, it is not as if the independent members of the Commonwealth have no direct or indirect relation to the UK. The UK handed over its assets to the USA, albeit in a different shell. The result in the present time is that there is a tight relationship between a subordinate UK and the USA. That applies particularly to influence over the rest of the world. De Gaulle, unsurprisingly, when rejecting the UK as a partner in the early EU, proclaimed the UK to be a Trojan horse.

France in an alliance with Germany, which was at first subordinate, was attempting to resurrect its European and global role that necessarily required a conflict with the USA/Britain. It is surprising, at first sight, that the USA wanted the UK to join what eventually became the EU. De Gaulle was right—the USA needed a friend in the coun­sels of what looked like a future federal Europe. However, there clearly was a conflict between the ruling class of the UK/USA and that of France. The success of the left in 1968 leading to the resignation of De Gaulle meant that the writing was on the wall for an independent European ruling class. The Stalinist party in France played a crucial role in containing the left, assisted by advice from the USSR, which saw the left as highly dangerous. Between the decline of Stalinism and the challenge to the strength of the French ruling class, the Europeans settled for a lesser international role. France lost its dominance and that was sealed with the re-unification of Germany, something both France and the UK did not like but accepted. France accepted the UK as a partner.

The UK is now inferior to both France and Germany in industrial terms. That was achieved under Thatcher and Blair through de-industrialisation and a vast expansion of finance capital. This has partly meant that the UK has built up a considerable array of independent small and medium-sized enterprises, SMEs, which reinforced the Tory base. However, the ruling class in the UK is now quite weak, as it rests on a finance capital, much of which is invested abroad, largely in the USA, and a relatively weak industrial sector, a large part of which is foreign owned, like the car industry. The

British-owned finance sector in the UK, with two of the largest banks—first and third in rankings—in the world in 20085is a weaker section of what has increasingly become an onshore island in the UK, the City of London, dominated by international finance capital. As part of finance capital, the UK is very close to the USA. The SMEs on the other hand do not like the mildly social democratic ethos of European Labour Law, and given their often dire status, they prefer no regulation at all.

This leads to a conflicted result in which small capital tends to support an exit from the EU, while non-British capital such as the Japanese and US wants direct entry to Europe. This is not just a question of imports/exports, as the Brexit campaign makes out. Capital wants to have a simple relationship with investment and subsidi­aries across the UK and the EU., without having to deal with two separate and con­flicting administrations. The same generally applies to large British capital like Shell and BP and the banks.

Political Dimension

There is also a political dimension. The early movement and formation of the EU were dominated by parties with a social democratic ethos. This permitted the passing of rules protective of the worker and consumers, limited though they are. That eventually led to the unions supporting the EU, although much of the left did not do so for some time. However, for the last 20 or more years the European Commission has taken a very right­wing line, in favour, for instance, of privatisation. That has made it impossible to support the EU without qualification for the unions or the left. It can be argued that the politics is temporary but there is no obvious way of changing it. Its right-wing nature was illus­trated in an extreme way with the crucifixion of Greece. The situation is made worse with the shift to the extreme right of former Stalinist countries—Poland and Hungary —let alone the example of Latvia, which still has annual Marches of Nazi veterans.

The slogan put forward by Trotsky for a United States of a socialist Europe is not being implemented by the EU of course and it is not a step towards that goal either. On the contrary, not only is the EU fundamentally undemocratic but it remains more of a league of independent nations, most of whom are dysfunctional. The richer countries do not help the poorer countries to the required extent. There is no attempt to deepen a EU-wide division of labour in which all parts are able to develop a highly educated workforce able to find the necessary jobs in their own country.

The Future of the EU and Eurozone

The continuing crisis in the Eurozone as well as the EU makes a British withdrawal from the EU important for the future of the larger Entities. It does look very much as if a Brexit could act as the removal of the kingpin, causing the whole edifice to topple. The Southern European countries of Italy, Portugal and Spain remain in econ­omic and political trouble while Ireland and France are not far behind. The Eastern European countries receive subsidies from the EU and hence remain dependent, even if they may think twice about joining the Eurozone. Unless Germany is prepared to subsidise the less wealthy Western countries, or the ruling class relaxes further its line on austerity, it is very likely that one or more countries will have a potential bank­ruptcy follow by a Greek-style bailout. The situation in Greece remains unstable with the possibility of a further denouement leading to the collapse of an already discredited government and the emergence of a new political formation. That could lead to a stronger line which might lead them to be forced out of the Eurozone which would, in turn, steer them to bank nationalisations and expropriation of private property. The social democratic governments in other countries might then be partially or wholly destabilised. While this is only a possibility, it is clear that Portugal and Spain are in difficulty and that France and Italy could quickly become unhinged. While Italy, for instance, does not have a budgetary problem, like the UK, it has a huge government debt ratio to GDP, which cannot continue expanding. The UK’s indebtedness is much lower than that of Italy but its balance of payments deficit is unsustainable. One might show that every country has a particular weakness that does not appear to have a solution and the EU makes for a problem rather than a sol­ution. The logic, therefore, tends towards dissolution and perhaps the formation of a much smaller entity around Germany.

On the other hand, neither the USA nor Germany wants the dissolution of the EU or Eurozone even if there are particular German political parties and perhaps regions that would want to withdraw. From the point of view of the Imperial power, the USA, the EU forms a coherent political and military unit that they can influence much more easily than they could 28 separate states. The USA has made clear that this is their view not just in relation to the EU but also much earlier when the USSR was breaking up. Germany would sustain a considerable defeat if the EU did break up, both in terms of trade and in ease of control over their subsidiaries in the various EU countries. One might therefore expect that they would do their best to sustain the EU, although they might not be able to sustain the Eurozone.

It is also possible that Wolfgang Munchau may be right to argue that the EU will gradually waste away, as it keeps failing to solve its crises.6He argues that there are four parts to it: migration; East-West divide; the Euro; and Brexit. The migration issue has been temporarily held, but the East-West divide looks like getting worse, as the relative dependency and poverty of Eastern Europe leads to a very different poli­tics. As argued above, the Eurozone crisis and Brexit remain. Given the uneven nature of history, it is unlikely to take such a relatively peaceful form. Munchau’s pessimism is almost certainly justified so that we should really regard the EU/Eurozone/Brexit as a part of the continuing long-term indeed never-ending crisis.

The Unprincipled Attack on the Left by the Right in the Name of Civil Rights

The issue of anti-Semitism has exploded in the UK as a means of attacking the left. Although there are some statements which are anti-Semitic, they are not coming from anti-Semites in the left. The press at this time, April-May 2016, has taken up the theme of an anti-Semitic Labour Party precisely in order to give publicity to the right wing of the Labour Party, in its struggle to unseat Jeremy Corbyn and the left of the Labour Party. It is not at all clear that any of the people charged with anti-Semit­ism are actually personal anti-Semites. Whether their statements were intended to be anti-Semitic is doubtful. Nonetheless, one could argue that their statements are anti- Semitic, given the history of anti-Semitism, and the present super-charged atmosphere in Europe.7

Anti-Semitism has a long history, which one can argue goes back to the later period of the Roman Empire, particularly to Constantine the Great. Nonetheless, the rise of capitalism during the transition from Feudalism led to numerous massacres and mass deportations, but its political victory began the emancipation of the Jews. Cromwell invited the Jews to return to England. Robespierre argued powerfully for the Jews to be given citizenship in 1790 and Napoleon carried the process forward. The reaction­ary period which followed, however, meant that Heinrich Heine and the father of Karl Marx had to convert in order to be accepted in German society, but they were accepted. In the period of the middle of the 19th century there was a movement among Jews to assimilate as a solution to the ‘Jewish Question’. That was brought to an abrupt end with the Tsarist Pogroms and the wave of anti-Semitism that fol­lowed the Paris Commune. The purpose of this potted history is to make a series of points. First, that the periods or perhaps worst periods of persecutions tend to be during the transition periods from one socio-economic system to another. Second, that the current period is one in which the persecutions coincide with the decline of capitalism. Third, that the persecutors like the Tsarist autocracy, the French Right, etc., came from the right, and far right.

Mature capitalism in principle, is colour blind, gender blind and ethnic group blind. The capitalist class will get the highest surplus value and so profits when it can utilise the skills of its workforce to the full, other things being equal. On the other hand, when the system is threatened, when the working class has established itself and the organ­isations it needs, when its structure can no longer hold, one of the means of control is either the introduction or continuation of the older forms of discrimination, among them anti-Semitism.

The seminal work on Jewish history is of course that of Abram Leon: The Jewish Question.8While one can criticise individual aspects of his work, the general thesis, in my opinion, remains correct. He effectively argues that the Jewish people came to form a particular layer in society, which he called the ‘people-class’. They were formed in their evolution through the ancient world into feudal society. They were attached to the market. This did not mean that they were exclusively concerned with money but rather forms of occupation or activity which related to the market, as opposed to the vast majority in Europe who were serfs. There were of course excep­tions but the general thesis seems to hold. During the period of transition to capital­ism, they were effectively competitors of the rising bourgeoisie, while the declining aristocrats, owners of the land, needed money. The regime then turned on the Jews to acquire their assets and to provide the impoverished population with an object for their anger. Once capitalism was established, the Jews became acceptable. The problem, of course, is that capitalism became viable in (say) Holland much earlier than in (for instance) Tsarist Russia., leaving the Jewish population subject to depre­dations in one country or another down to the 19th century. However, by 1871 when the Paris Commune rose, capitalism itself was in trouble, as indicated above. The dis­content of the population with the capitalist system, which at the simplest level was a question of wages and standard of living, could not be easily solved, without the threat that the working class would demand a share in power, if not all power. The old sol­ution, used with the decline of feudalism, resurrected its head. As anti-Semitism remained embedded in part of the population, particularly in the peasantry, this was not difficult.

The Anti-Semites are on the Right

The representative of the Israeli Embassy on the BBC1 10 a.m. programme on Religion 1 May 2016 argued that, although the left had fought anti-Semitism, there were examples of left-wing anti-Semites like Proudhon, Bakunin and Stalin. This is stretch­ing the concept of the left. If one includes anyone who is critical of the status quo in capitalism to be left wing then the Israeli representative is correct. There is no doubt that Stalin and Stalinism were not just anti-Semitic but among the worst perpetrators of acts of anti-Semitism that the world has seen. This journal has made that clear. Can one call Stalinism left wing? It was a reaction to the Russian Revolution of 1917 from the right. It introduced and maintained high levels of inequality in all respects. It was brutal in form and totally opposed to the forms of civil liberties accepted by the left. Bakunin attacked Marx in anti-Semitic terms and Proudhon was no better. They were both anarchists of a kind that would fall outside the left as we understand it today. The people accused of anti-Semitism do not fall into a Stalinist or anarchist category. There are of course left-wing anarchists but that is another matter. However, it can of course happen that the left sees anti-Semitism as a form of discrimination employed to divide the population in order to maintain capitalism at the present time, whatever the age of the practice. The left stands for the abolition of all forms of social inequality. Hence it is automatically and inherently opposed to anti-Semitism, unlike Conservatives and the Labour Right, who accept the market and its forms of subjection and inequality, since they accept the market.

The fact is that Hitler used a pre-existing form of anti-Semitism, common in Europe. As is well known, anti-Semitism in Poland during the Second World War led to the killing of Jews by native Poles. There were of course ordinary Poles who helped and hid Jews also. Today we have seen the rise of anti-Semitism in formerly Stalinist countries, who are led by the right. This includes the Ukraine, Poland and Hungary. It has been noticeable that the right-wing Israeli government has not been in the forefront of protests. The Ukrainian government’s rehabilitation of Stepan Bandera, the leader of the main Ukrainian nationalist organisation, which co-operated if not supported the Nazis in their occupation of the Soviet Union, has not been opposed. The present Ukrainian government actually passed a law declaring criticism of Bandera and his de facto pro-Nazi organisation to be a crime.9The point is that this is genuine anti-Semitism involving governments but the protests have been limited.

In Central and Eastern Europe, the Jewish population was wiped out during the war and the replacement of the market by Stalinism meant that the original basis of anti­Semitism no longer existed. In the West the post-war boom together with the rise of social democracy and the remnants of the ideology used to fight the war meant that open anti-Semitism became less acceptable and eventually illegal. It was the socialist movement that played a crucial role in reducing or eliminating anti-Semitism in Western Europe, whether through legislation, education or training in their organisations.

As we have seen above, there is now a recrudescence of anti-Semitism, probably reflecting the continuing crisis together with the failure of the Eastern European states to re-industrialise and provide the highly skilled jobs that were implicitly prom­ised. The wiping out of industry and the return to market forms of income and expen­diture have impoverished large sections of the population from the intelligentsia onwards. The ruling class has turned to pre-war methods of control.

It is, however, a new twist in the history of anti-Semitism that the right should try to pin anti-Semitism on the left as a means of winning control over a party.

The Failure of Zionism

Finally, it is clear that the greatest growth of anti-Semitism is in Arab or Moslem nationalist organisations or states. This was made particularly clear in France. It is interesting that Rosa Luxemburg’s warning on Zionism—that it would lead to a con­centration of anti-Semitism around Israel—has come true. It is a direct answer to the

Zionist claim that it has solved the question of anti-Semitism—by having an all-Jewish state. Instead it has a state with enemies on every side. In that sense, it has failed in its task. Unfortunately, it is worse than that in so far as it has expropriated the local popu­lation and left them in a permanent state of misery. Inevitably much of the world takes a highly disapproving view.

Clearly, it is inhuman to call for the population of Israel to be deported as some have done. In fact, it would not even help the non-Jewish population, since it is not land in itself that will determine prosperity. The only solution is a single country with equal rights for all and since this cannot be achieved under capitalism we have to conclude that only socialism will solve the problem.

Some years ago, writing in these Critique Notes, I argued very firmly against con­ceding at any level to anti-Semitism in countries surrounding Israel. A socialist is an internationalist wherever he or she lives. The fact that a state has a ruling class that is oppressive and exploitative does not make all its inhabitants either oppressive or exploitative. There is a real question whether one should deal with such people pol­itically by standing on the same platform or indeed have anything at all to do with them. In general, Marxists oppose nationalists as people who bring together exploiters and exploited, and historically the nationalists always turn on the left when they judge the time is ripe. Anti-Semites are even worse.