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Critique Notes 85

Published: 29 May 2019

There will be a Critique Conference to be held in the Marx Memorial Library on Saturday 1st February on the subject of the ‘Transition Period’ between capitalism and socialism. The question being discussed is the nature of the present period and its characterisation. This involves both an analysis of society in the last century from the time of the October Revolution in Russia to the present and the dynamics of the present situation. Speakers include Professors Michael Cox and Hillel Ticktin.

Ruling class reaction

Last Critique Notes discussed the possible range of forms of contemporary ruling class political action which could be taken to preserve its privileges, following elections in which far right figures or parties have assumed power. In these Critique Notes, I want to explore the ways in which the ruling class has been losing power.

The ruling class in capitalism has needed different forms to maintain control over the workforce depending on the stage of capitalism. Capitalism had emerged from an earlier system in which labour power was not free, and it retained some of these forms very late in its history. After all, slavery was only abolished by Abraham Lincoln in 1865 and by Brazil in 1888. At the same time, there was an evolution towards Imperialism, in which the workforce in the conquered colonial or semi-colonial countries were compelled to work with the use of poll taxes, confiscation of land, etc. In the UK, however, Disraeli extended the vote to the skilled male working class in 1867.

Historically, Capital has used the force of the state, as in unfree labour, and concessions to a section of the workforce to maintain its domination. The classical form of control, however, is through commodity fetishism in which the means of survival – housing, food, transport, clothing, etc. – are only obtained through purchase of the necessary commodities, and that is secured through working for a wage. As long as there is an excessive supply of workers willing to work for a wage, the capitalist can secure a profit. Where the balance of power switches to workers, whether through uniting in unions, through a shortage of labour, technical problems, difficulty in sale, etc., it is another matter. With the elimination or reduction of direct force, the unity of the workforce in its own organisations and the extension of the franchise to all citizens over 18-21, the ruling class entered a period of instability.

The issue showed itself in stages, however. By 1870, in the UK, it was clear that some form of continuing concession was necessary. A section of the male proletariat got the franchise. That process went further in Germany in this period. However, only the less intelligent members of the ruling class could fail to recognise that they could only achieve, at most, a delay in time by extending the franchise. The other factors which played a critical role were the two World Wars and Imperialism itself.

Imperialism allowed the ruling class to redirect the energies of the workforce of the developed countries towards subordinating other countries, and so allow them to enjoy the fruits of conquest. The result was both economic and ideological. The European powers could indoctrinate their populations with tales of superiority of white men, and other elements of an overarching ideology, while the political and economic administrators of the Empire were joined by businessmen, highly skilled workers and a workforce who founded international banks and industrial firms. The Empire provided the Imperial working class and the rising middle class with the jobs and wealth which predisposed them to support the status quo. At the same time, millions died in this process of European and American conquest.

War, in itself, provides a means of uniting the population of the country, ostensibly, against a dangerous enemy. The First World War achieved this objective in its first years but had created its opposite by 1917. (The October Revolution in October/November 1917 proclaimed a new objective in ending the war.) Once conquest of territory was subordinated to the development of industry in the quest for wealth, war could no longer have the same objectives. The Cold War took the apparent form of a contest of ideologies policed through an arms race. In fact, the Soviet Union was always inferior economically and in terms of war like capability. Nor was its ideology Marxist, or any real danger to capitalism itself. That has been amply demonstrated by its end, and by the fact that its population were no ideological danger to the rest of the world.

The end of the Cold War removed the justification for militarisation of the developed countries and there was a substantial reduction in military expenditure in the USA. The decolonisation of the Third World reduced the potential surplus transfer to the developed countries.

There were dangers in such an apparently peaceful scenario. In the first instance, the economic balancing act in a declining capitalism could not be maintained and the fall of the modern economy expressed itself clearly first in the plunge of the Stock Exchanges in March 2000 followed by the collapse in 2006-8. The relatively low rate of growth combined with a return of funds invested in third world countries in the last few years. That has left much of the underdeveloped world in a dire situation, as shown in Brazil, South Africa, Argentina, etc.

The huge monetary IMF intervention in Argentina plus the election of a far-right President in Brazil is expected to hold the fort. The apparent failure of the soft left in Venezuela, in addition, is acting as a reason for the right to proclaim its eternal right to rule. Eastern Europe, on the other hand, remains mired in the failure of both Stalinism and liberal democracy.

The blowback for the USA and Western Europe is that it has no excuse for either large scale military expenditure or large scale investment in underdeveloped countries with which to receive substantial dividends. The ideological justification of the Cold War is no longer there but nor is there any desire for massive internal economic expansion, such as occurred after the Second World War. That leaves the world in long term low to negative growth. Japan has led the way. While there may be ups and downs, mutatis mutandis, the 1929-39 scenario is closer to the present.

The present situation as outlined appears highly unstable, but there is no immediate solution other than socialism, and that has no mass presence at this time. The organised left is distinguished both by its relatively small numbers and by its inability to establish itself as a force. On the other hand, discontent is rising and there are clear indications that change towards the left will be demanded.


In a remarkable article,1 Janan Ganesh, a former advisor to Osborne, the former Conservative Chancellor of the Exchequer in the UK, 2010-16, argues for concessions to such left as exists in and around the Democratic Party in the USA in one of his regular articles in the Financial Times. He points out that such as call themselves ‘socialist’ in the USA are not radicals but only demanding things such as free provision of health care and welfare benefits, things already existing in Western Europe. ‘Fiscal transfers, universal healthcare, powerful trade unions: not only do these things not add up to socialism — Denmark is no command economy — a true stickler for that creed would actively oppose them as efforts to buy off the revolution.’2 While the last few words might betray his lack of knowledge, his overall plea is to the powers-that-be to grasp the handle of the potential weapon in order the better to wield it themselves. Advisors to the ruling class, whether directly or through the media, are indicating that concessions are necessary.

The logic of a Trump success is too horrific to contemplate, but only the ill-educated or vindictive do not recognise the increasing level of discontent following the decline in incomes and opportunities for the majority in the last decade. A prudent ruler knows how to retreat. Of course there may be no risk free way to retreat. In the last Critique Notes I outlined the possibility that the ruling class was preparing to take a repressive line. Some governments in Eastern Europe and the new Brazilian regime, together with the vicious attitudes taken to immigrants or non-indigenous inhabitants of a country are examples. However, in the end, the overall line will be strongly influenced by the situation in the USA and Western Europe.

The above lines were written before an ‘historic article’ appeared in the Financial Times Big Read3 towards the end of April 2019. It outlined the view of crucial members of the United States ruling class in dealing with the discontent of the population. The CEO of JPMorgan Chase, Jamie Dimon made noises not too different in 2008, though mainly to his shareholders. Now, however, there appears to be some kind of more benevolent mood. Jamie Dimon is quoted critically since he supported a reduction in corporate taxes made by Trump and contrasted with Mr Pearl, the former head of BlackRock, the largest Asset Managerial Group in the world. ‘Mr Pearl chairs Patriotic Millionaires, a group of self-professed “traitors to their class” who have been lobbying since 2010 for higher taxes on the rich.’4 Various other rich people are cited standing for concessions. The article points to the rise of socialism as a viewpoint within the Democratic Party and outside it, as a worry for the modern wealthy business people. It argues that it is the spread of socialist ideas to the point where opinion polls are showing that a majority of those polled support socialism, which is causing this political shift among the very rich.

While it is unlikely that this will automatically lead to real change, it does indicate the immediate battle lines within the ruling class itself. The far-right led by Bannon with Trump as the front man can only succeed if the Central Ruling Class, as they may be named, goes along with them. That never seemed very likely but it now appears that ways will be found to alter direction. There are a number of possibilities of course from a mild far right, as it were, to substantial concessions. That is clearly the immediate agenda for the ruling class. If they have any sense, not seen since Roosevelt, they would go for substantial but limited concessions to the working class as a whole. The issue is acute in Europe, of course, where there are a number of far right governments.

The ruling class is faced with a strategic problem, not just a tactical question of how to make a limited concession to the majority of the population. The reversal of its post-war strategy at the end of the seventies with the return to privatisation and mass unemployment has reached an end. It is immediately obvious in the UK in the failure of a number of firms involved in privatising, in the demand to nationalise rail and the utilities etc. and the relative success of the Labour Party. France and Italy face fundamentally the same questions. If the ruling class in the USA decides to go for concessions, it will have to reverse its policy of the last 40 years, not just cut taxes on the poor, and make health free. They will have to go towards genuine full employment unlike the contemporary sham.


The withdrawal of the UK from the EU is now being generally described as a farce. The prime minister has been described as one of the worst ever5: ‘David Cameron was the worst prime minister in British history. But Theresa May risks becoming a rival for this status.’ Similar comments have been made by other commentators. Few people have had so many devastating pejorative epithets applied to them by their former supporters. Matthew Parris,6 a Conservative party member and former member of the House of Commons for that party has almost given himself a new and separate profession in describing her failure both in the ‘Times’ of London and in broadcasts. The Conservative Party itself is split into several fragments. The Labour Party has been split on the issue for some time but it also has a left/right split in which the left holds the leadership, quite apart from Brexit. More correctly the left itself has been divided for half a century over the EU issue.

Brexit is discussed in the media as the most important issue facing the UK for half a century. That is a major exaggeration. While the issue is critical for many individuals who are immigrants to the UK and the EU and has important consequences for the economy, the left/right direction of UK political economy is now the critical question for the country, with Brexit a diversion. This is obviously true for the whole world but the UK has reached a crossroad somewhat earlier than others.

Brexit, in itself is not a left-right issue. Corbyn and the one-time Bennite Labour left were for Brexit from the seventies onwards, the Labour right in general has followed the bourgeoisie in wanting to be in the EU. Others on the left have taken a neutral position. It is clear, as pointed out in an earlier Critique Notes that most of the medium and big bourgeoisie want to remain in the EU, while small business wants to be out of it, presumably to obtain a modicum of protection from its national state. Recently the latter appeared to waver. From the point of view of those who want socialism, abstention is the obvious choice.

It is also clear, however, that the UK economy is now deeply embedded in the EU and its industry is relatively diminished from what it was in 1973 when Edward Heath took the UK into what became the EU. The actual UK government proposed deal, as agreed with the EU, is not that radical in that it would be close to the single market, while the issue of Customs remains open.

On the other hand, the Conservative Party right want to shift the UK politically and economically closer to the United States. This is a paradox as it has long been US ruling class policy that the UK should be part of the what became the EU. They saw Britain as pro-capital and a pro-American agent within the heart of the EU. It is a curious inversion that Trump and his right wing allies should see Britain as needing to be absorbed into a new closer alliance. It is not clear whether they feel that the UK is in danger of moving left or they want to weaken the EU. Clearly, there is no danger from socialist infection within the EU, where the East European countries are increasingly part of the far-right, and Italy and Austria seem to be moving that way. However, it is hard to believe that the present leadership of the Labour Party is regarded as a major danger, unless one is to believe that the right itself is very weak or they have suddenly developed a long-term global perspective. There does, however, appear to be some kind of more detailed and developed policy held by the far-right.

As argued in previous Critique Notes as well as above, the British ruling class does not want to leave the EU, but it is prepared to accept a rupture which is more formal than real. From this point of view, we have to conclude that there is a clear conflict between the centre-right and the far-right which involves, inter alia, a return to the nation-state and nationalism. Although Brexit in itself cuts across the left-right division, it still appears to be a forum for the expression of that division in however obscure and complex a form.

The fact is that the nation-state is no longer viable in economic terms. The global economy has been celebrated, as such, in many forums for some time. The British Empire was its first form, replaced by the United States after the First World War. Today, it is taking the form of a deeper internationalisation of Finance Capital, as well as an intensifying of progress towards a globalisation of industry. The fact that the USA holds the major cards in this play is obvious. The dollar is the global currency and the World Bank, International Monetary Fund and Bank for International Settlements are largely in the hands of the USA, either through the nationality of the personnel or through the appointment process itself. China and the EU countries have tried to overcome the barrier posed by the dollar as the global currency but the process is still in its infancy. In fact, crucial Asian countries are developing their industries. Short of global warfare the US cannot prevent its own relative decline in the face of the EU and China developing further.

It is clear from the latter process, therefore, that US hegemony will be limited in scope and in time. One has to assume that the Steve Bannon/Trump coalition is now acting before they see the writing on the wall itself. In principle they would absorb the UK and place mercantilist controls over EU-UK trade. The heavy-handed introduction of tariffs against the trading partners of the US has obviously changed their socio-political relationship as well as the economic one.

The increasingly integrated nature of the global economy

The integration of the global economy has grown quite sharply in the last 30 years, both in terms of countries and industries. After stopping during the crisis of 2008, it has slowed down somewhat in the period since 2008-9, reflecting the continuing influence of the global crisis, but the growth continues and the integration continues. The recent Trump protectionist policy and its influence has also slowed the impact. Nonetheless, it is irreversible both in what exists and its extension. Consider the following summary: ‘global gross output of foreign affiliates grew from 7 to trillion USD’ in the period 2000–2014.7 Multi-National enterprises production now occupy one-third of global output and GDP.8

Exploration of this theme involves both the theory of monopoly and of the nature of growth in capitalism. Until two or three years ago, the economic orthodoxy on these subjects lay with the Chicago school which had captured leadership in the subject in the seventies. The concept of monopoly was redefined and declared of little importance, reversing the orthodoxy after 1945. Some leading Marxists or left economists, like Anwar Shaik9 of the New School and others associated with him, have fallen in with this line. By and large orthodox Marxists still tend to follow Lenin's analysis in his work, Imperialism, in which he adopted much of the analysis of Rudolf Hilferding. The issue of modern monopoly has been discussed by myself in Critiques 16–17.10 It might appear to be a mystery as to why anyone would assert the irrelevance or absence of monopoly.

The BBC broadcast a programme at 5pm on 14th April which brought out the origins of the downplaying of the role of monopoly in the seventies and asserted the importance of legislation to deal with it today.11 In the USA Elizabeth Warren is raising the issue in the 2020 US series of Congressional elections.12 Project Syndicate has brought this out in its columns, written by an establishment economist. In short, the 40-year-old orthodoxy initiated by Milton Friedman etc. of monetarist economics is finally, more than 10 years since the crisis broke out leaving an uninterrupted depression, started to give way. One of the outliers has been the less orthodox economist, Joseph Stiglitz in an article suitably entitled: ‘America has a Monopoly Problem and it is huge.’13

There are now a series of schools of thought on the subject. The revival of interest in the problem of monopoly or the nature of competition and control within and around Capital only began about 3 years ago. The dominant section of orthodox economists continues to view monopoly as purely a question of control over pricing.14 Marx's description of competition is somewhat different. It is more in terms of a large number of firms competing over the introduction of new technology, which changes several of the parameters of competition, including pricing, resulting in an increased profit for the winning firms. That, in turn, allows them to further improve their technology etc.

The fundamental point, however, is that there is a continuing process of the increasing global concentration of industry and centralisation of the economy, particularly applicable to older developed countries. Brexit has necessarily to fall foul of this process. The claim of the right wing Brexiteers that they will establish British Empire 2 is the opposite of what is likely. It is far more likely that much of UK industry, where it exists, will fall foul of larger firms or go under. The automobile industry is already in dire straits while Rolls Royce and the aircraft industry is in trouble. The obvious reality is that between governmental controls and major industry players there is only a limited space for substantial enterprises or firms. The United States, Germany and China have the enterprises, and the UK and France are in the third rank, though not in finance, a position they could now lose.

Martin Wolf has argued that quite simply that: ‘It is not too late to halt an act of such folly. The UK will not gain control in any important respect by leaving the EU. On the contrary, it is more likely to lose it.’15 He based himself on the simple proposition that the UK is not that important in the global economy today. In fact, it is not quite as unimportant as he has argued in that it remains one of the few finance capitalist powers, as opposed to industrial powers, in the world, but of much less relative importance than it was a century or even half a century ago. Gideon Rachman, on the other hand, has raised the nature of the political struggle within the UK and put it in a more general context.16

He draws attention to the absence of a far left role in the UK, but argues that it is assumed by the left of the Labour Party. He is undoubtedly right that there is a political struggle taking place in Europe and the USA in which the far right are more visible than the far left, and the liberal forces are losing out. In fact, the far left remains small everywhere. It is the far right that is making the running, while the liberals are losing out on all fronts. Nothing else could happen under conditions when the right is wedded to a policy of permanent austerity. It is almost as if the bourgeoisie or their politicians have put their brains into the refrigerators. When salaries remain well down, prices keep rising, and real unemployment is high and jobs exist but are more illusory than real, there will be a reaction.

A ruling class in decline

In order to govern, a ruling class has to train and incorporate some of its members to function outside its, and their immediate economic roles. This is not an easy thing to do when the class itself is coming into being and, to some extent, even in its mature phase. In those periods their economic and socio-political functions dovetailed with their everyday activities. The capitalist landowner had to manage a large number of men and women in earlier times. He becomes the natural leader and delegate to an assembly to represent their interests. The head of an industrial enterprise in a competitive market also had to be able to shape all aspects of the firm in that market and so society.

In a declining mode of production, innovation continues to develop further the nature of the machinery as well as the product, even if less quickly than might be possible, but the social form is far more complex than in earlier times. While attendance at elite schools, for the sons and some daughters of the ruling class, might provide the skill necessary to advance within the firm, they are very different from the qualities needed to shape or command societies, nations, continents. In principle, they need to have courses beyond public speaking, in a history of discontent and how it was managed, in class relations and in a real political economy. Crucially they have to learn to project a false empathy that is absent in themselves. It is the last quality that is critical. It is crucial to have the facility to pretend to be fully understanding of the everyday concerns of the majority. That is only possible if they are known and the inequality and long-term suffering understood. After the Second World War, both the goals and the real horror of war did provide a cohort of right-wing leaders who possessed these properties and some who probably accepted the ultimate demise of capitalism.

In the latest period, after the end of the Soviet Union, the gap between parties of the ruling class and their leaders on the one side and the working class on the other is widening. That gap is now being partially filled by the far right. Its chosen leaders connect with the immediate sources of discontent and a history of dealing with poverty. It is no accident that Salvini, the deputy Prime Minister, and leader of the far right party, the Northern League, in Italy, comes from the former Communist Party of Italy. Unsurprisingly, central members of the ruling class, particularly in Finance Capital are concerned. I referred in an earlier Critique Notes to the report that some in Silicon Valley have prepared for an uprising by organising a retreat in New Zealand. That no longer looks viable.

At the same time, quite evidently the ruling bourgeois parties have begun to change and fracture. Optimistically, we may expect that these political developments will help propel the formation of a genuine socialist party.

Notes on contributor

Hillel Ticktin is Emeritus Professor of Marxist Studies at the University of Glasgow. He is the author or works on the USSR, South Africa, Trotsky, socialism, crisis, and finance capital.


1. Janan Ganesh, ‘Ardent US Capitalists Should Embrace “Socialism”’, Financial Times, 13 March 2019,

2. Ibid.

3. Andrew Edgecliffe-Johnson in New York APRIL 22, 2019, Why American CEOs are Worried about Capitalism, Financial Times:

4. Ibid.

5. Martin Wolf, ‘Theresa May is Taking a Hideous Brexit Gamble’, Financial Times, 21 March 2019, p. 11.

6. Matthew Parris, ‘Theresa May is the Death Star of British politics’, 22 February 2019, 5:00pm, The Times, London ‘She is the theory of anti-matter made flesh’.

7. Charles Cadestin, Coen De Backer, Isabelle Desnoyers-James, Sebastian Miroudot, Ming Ye, Davide Rigo, ‘Multinational Enterprises and Global Value Chains: New Insights in the Global Investment Nexus, Executive Summary’, p. 4. OECD Science, Technology and Industry Working Papers, 2018/05.

8. Op. cit.

9. Anwar Shaik, Capitalism: Competition, Conflict, Crises (Oxford: Oxford University Press, 2016).

10. Hillel Ticktin, ‘The Transitional Epoch, Finance Capital and Britain’, Critique 16 (1983), pp. 23–42; Hillel Ticktin, ‘Towards a Theory of Finance Capital’, Critique 17, pp. 1–16.

11. Sunday 14 April 2019, BBC Radio 4. Will Hutton, Goliath: ‘How Monopolies came to be’,

12. Kenneth Rogoff, ‘Big tech has too much Monopoly Power – it's Right to Take it on’,; Kenneth Rogoff, ‘Project Syndicate’, 1 April 2019,

13. Joseph Stiglitz, ‘America has a Monopoly Problem and it is Huge’,

14. Rana Foroohar, ‘Lunch with the FT’; Lina Khan, ‘This isn't just about Antitrust. Its About Value’, FTWeekend, 30/31 March 2019.

15. Martin Wolf, ‘The Brexit Delusion of Taking Back Control’, Financial Times, 26 March 2019,

16. Gideon Rachman, ‘Brexit is Part of a Wider European Struggle’, Financial Times, 26 March 2019,

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