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Unemployment and Revolution (Part 3): What regulates unemployment? (written by Albert Langer in 1981)

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Part 3: What regulates unemployment?

– What Do the Unemployed Actually Do?

– How Unemployment Regulates Wages

– Booms and Busts

– Wages and Class Struggle

– Union Solidarity

– Arbitration and Wage Indexation

– Capital Accumulation

– Technological Change

– Job Creation and Destruction

Somehow, the size of the pool of unemployed itself must regulate the rates of job creation and destruction. Otherwise the number of unemployed would fluctuate wildly all the time. We shall find out later how the regulation works normally, and why it is not working now. But we already know that unemployment must be some sort of regulator. The larger the pool of unemployment, the more jobs must get created and the less must get destroyed. Otherwise we cannot account for the usual balance eventually reached between these two quite independent rates.

Moreover, we know the mechanism usually tends to reach a balance with only a relatively small pool of unemployed. Therefore the mechanism must continue increasing the rate of job creation and/or reducing the rate of job destruction, as long as there is a certain amount of unemployment. It does not usually stop working with half the workforce still unemployed, just because unemployment is not still increasing.

Finally, we know that whatever this mechanism is, it does not always work. Right now, a small pool of unemployment is not balancing the rates of job creation and destruction. We await each month’s statistics with bated breath to find out whether unemployment has risen or fallen, and we usually find that it has risen. We know that periodically capitalism goes through major upheavals called economic crises, in which a large part of the labour force does get left unemployed for a long period. Our explanation of the balancing mechanism must account for that too.

Whatever the mechanism may turn out to be, we know that as long as it still is not working normally, no amount of artificial “job creation” can prevent the continuing mismatch between normal job creation and destruction from quickly recreating a large pool of unemployed. The only effective remedy for unemployment must be one that gets this balancing mechanism to work again. On this point we can agree with conservative economists. But what is the mechanism, why is it not working normally, and how can it be made to work again?

According to conservative economists the mechanism is simply that increased unemployment tends to pull down wages until it is profitable for capitalists to employ more workers. They conclude that the remedy is push down wages and increase profitability until the unemployment is absorbed.

That sounds quite plausible. If it is true, communists have no reason to deny it. We never claimed that capitalism could permanently maintain full employment without periodically pushing down wages to boost profits. Our answer would simply be that we do not feel like pushing down wages and boosting profits, thank you very much. We would prefer to abolish wages and profits and establish communism.

But a mystery remains as to why the mechanism should not be working, and why the remedy does not seem to work either! To resolve that mystery we shall first have to examine how unemployment regulates wages, and then how wages regulate employment and unemployment. We shall find that there is indeed a close connection between unemployment and wages, and between wages and job creation. But it is not as simple as the conservatives make out, it mainly works in one direction, and it does not work all the time. Most important, we shall find that we can not increase employment simply by pushing down wages. First let’s look at what the unemployed actually do to see how unemployment can regulate wages.

What Do the Unemployed Actually Do?

Under normal circumstances most of the unemployed are not just a stagnant “pool” but an active part of the “stream” moving from one job to another. They form a part of the stream that is temporarily banked up looking for outlets. They are an active part of the stream because they spend their time looking for jobs, not just rotting.

Unemployment is normally a period between jobs rather than a permanent status. When there was “full employment”, half the unemployed at any given time got jobs within four weeks. By 1978 more than a quarter had been waiting for over six months and another quarter for over three months. In a sense, one can measure how “normal” unemployment is, by its average duration, more than by the total numbers involved. It really is not a big problem if the economy is so dynamic that large numbers of people are changing their jobs each year, and they are spending a couple of weeks unemployed between each job. But it is very different when there are actually less people changing jobs than usual, but they are spending a longer time looking.

When unemployment increases slightly, it usually means that people moving from one job to another, or from school to work and so on, have to spend a longer time looking. But it does not immediately mean that a larger number of people are outside the labour force altogether.

Of course some unemployed workers do end up outside the labour force altogether, and even become permanently unemployable as a result of demoralisation. The larger the pool of unemployment, the larger the section of it that ends up stagnating instead of flowing back into employment, and the more peoples’ lives are ruined in this way.

Increasingly the unemployment we have got is taking on the features of a stagnant pool, rather than a flowing stream. This is compounded by the sharp reduction in normal labour turnover as people are reluctant to leave their old jobs unless they have new ones lined up. This stagnant unemployment is a different thing altogether from the “normal” unemployment that somehow regulates the rates of job creation and destruction. Nevertheless, we must first understand how “normal” unemployment does regulate these rates, before we can understand why the new unemployment does not.

The important thing about normal unemployment is that a larger part of the labour force is spending more time looking for work, and not that a section of the population has ceased to be part of the labour force. Hence the concept that the unemployed form a “reserve army of labour” that plays an active role in capitalist production, just as reserve armies play a vital role, and are not simply “inactive” in military battles. Some soldiers are in battle, and others are available to be deployed where required. Some workers work, and others are available to work where they are required. Both those in active service and those in reserve are necessary for things to go smoothly.

An important difference is that reserve armies of soldiers are deployed where their officers decide they are needed. With conscious military planning, reserves can be kept to a minimum and troops transferred directly from one front to another as required. Unemployed workers have no officers and are expected to find their own jobs. (Although there is now a fair bit of “manpower planning” and so forth).

The economic function of the unemployed is to look for work. Those that do not are no longer “unemployed”, but are “not in the labour force”. Those that do will normally find a job eventually. Their place in the unemployment pool may then be taken by someone else looking for employment. How long it takes, and what proportion miss out entirely, depends on the level of unemployment. But the unemployed individuals economic function does not change, their basic situation does not depend on the level of unemployment.

It is important to realise this when attempting to organise the unemployed. One reason they are very difficult to organise is that even now, most of them are not permanently unemployed – and the ones with enough initiative to get organised are also likely to get jobs quicker than average. On the other hand those that do become permanently unemployed can end up getting demoralised and dropping out of the labour force so they are no longer “unemployed” either, and are pretty hard to get involved in anything.

Let’s face it, unless things are really desperate, an individual unemployed worker can get more immediate benefit out of looking harder for a job than out of agitating against the government. The harder you look, the more chance you have of eventually getting to the front of the queue leading back into employment.

How Unemployment Regulates Wages

By looking for work, the unemployed play a vital role in the labour market. Their number determines the ease with which employers can recruit labour for expansion or replacement. That recruitment is going on all the time, even when there is a net reduction in the total number of jobs. There are always vacancies as well as people unemployed (and isolated examples of unfilled vacancies are always pointed to even though there are many times as many people looking for work as there are jobs available). The proportion of unemployed workers to job vacancies determines the average speed with which vacancies can be filled, just as it determines the average length of unemployment.

If vacancies cannot be filled fast enough any other way, then employers will bid up the price of labour by competing with each other to fill their vacancies. As in any other commodity market, this will continue until the supply of labour increases to fill the vacancies, or until the demand for labour has fallen (more likely, since the size of the labour force is relatively inflexible). The demand for labour will fall when the price has been bid up high enough, because investments that would have required more labour will cease to be profitable at the higher wage rate. So less jobs will be created and more will be destroyed. This includes of course the accelerated shift to less labour intensive production techniques.

We will examine the details shortly, but the important point to note is that unemployment only regulates wages in one direction. In fact unemployment only regulates wages when there hardly is any! As soon as there is enough unemployment to avoid a “wages explosion”, additional amounts will not significantly increase the ease with which employers can fill their vacancies.

There is no reason to believe that increased unemployment will cause employers to bid less for labour, or will cause unions to accept less. It may be that with really massive unemployment, union solidarity will be broken down. It may also be that the same slack demand for labour that has created unemployment will also make it unprofitable for employers to bid as much for labour as before. But these are both entirely separate questions. All we know for sure about unemployment as a regulator is that lack of unemployment will drive wages up and that will in turn force employment down.

This one-sided regulation is quite sufficient to explain the observed fact of a normal balance between job creation and destruction with very little unemployment. As long as markets are expanding and there is a tendency for the demand for labour to increase, that tendency will be checked by the size of the available labour force, but will permit full employment and real wages rising together with productivity.

This leaves open the question of whether other factors can also push unemployment and wages up or down and whether unemployment can coexist with high and low wages. That is as it should be, since we know that something other than the normal mechanism must account for the abnormal situation of high unemployment.

By way of contrast, the usual explanation that low wages will increase demand for labour, and high unemployment will push wages back down, explains too much. This would imply that any unemployment will correct itself, when it manifestly does not.

The usual explanation also implies that we should never expect to find increasing demand for labour alongside increasing relative wages. Yet that is exactly what has been happening with increased female labour force participation alongside equal pay.

Finally, the mechanism we have described gives no reason to believe that lowering real wages will automatically produce an increased demand for labour. All it says is that excess demand for labour (more than is available), will cause wages to go up. It does not follow that reduced wages would cause demand for labour to go up. That is also as it should be. Despite all predictions from the conservative camp, unemployment has continued rising while real wages have continued falling.

Since our unemployment regulator only explains one side of wages and unemployment, we need to look elsewhere to find what causes the abnormal movements in a crisis.

First, let us look at what happens before a crisis, namely a boom.

Booms and Busts

In a boom, real wages can even increase faster than productivity, so that the share of wages compared to profits will rise and the rate of exploitation will fall. This actually happened in the 1974 “wages explosion”. That was certainly a “boom” even though there was considerable unemployment at the time. Conversely, when demand is slack, unions have little bargaining power and the share of wages, or even the absolute level of real wages, will fall. That is happening right now.

When the economy is booming there is a general tendency for firms to increase their demand for labour power, raw materials and other inputs, in order to meet the demand for their output. This drains the pool of unemployed, reduces warehouse stocks, increases plant capacity utilisation and drives up wages and other prices. The increased demand for inputs and increased consumer spending can itself feed the boom to a certain extent, by further increasing demand.

But when the price of labour and other inputs is rising faster than the price of firms outputs, profit margins are reduced. There is then a general tendency for firms to cut back their investment and expansion, or even undertake contraction. This reduces the demand for labour and other inputs, and eventually recreates a pool of unemployed as well as stockpiles of other commodities and excess production capacities. Prices and wages are then forced back down (relatively).

These movements occur in individual sectors, but also in the economy as a whole. One firm’s inputs are another firm’s outputs and changes in demand act across the board. The balance between production, consumption and investment depends on movements in wages, prices and the rate of profit. This “balance” is always dynamic since it is precisely the imbalances that bring into play the factors for restoring a balance. Hence there is an unending succession of booms and busts in the economy as a whole and in particular sectors of it.

A problem with the above description of booms and busts is that it seems to describe a self-regulating mechanism that would automatically correct for unemployment or labour shortages by moving wage rates, or the capital intensity of investment, in the appropriate direction. So one would expect things to never get all that far out of balance. Indeed capitalism does work like that, a lot of the time, and normal “fluctuations” in the economy can be adapted to quite smoothly. But there must be more to it than that, when we have a “crisis”. Before going into that, we will look at wages, and then look at the normal balancing mechanism in more detail.

Wages and Class Struggle

Conservative economists assume that left to itself, capitalism always works smoothly, and when it does not, they therefore argue that there must be some institutional factor which is preventing prices from clearing market – for example, unions preventing wages from adjusting to the level of unemployment. Hence the calls for “wage restraint” and polemics against the unions.

To some extent this is hypocritical. Conservative economists are generally well aware that the level of wages is determined by the demand for labour, and not vice versa. They could not really believe that wages are greatly influenced by the effect of polemics against unions. They know that the only effective way to bring down wages is through reduced demand for labour, and that means increased unemployment. So it is quite illusory to talk of unemployment and “wage restraint” as alternatives. They go together.

Even though union leaderships might be very willing to go along with “wage restraint”, the employers themselves will bid up the price of labour power if there is not enough unemployment to hold it down. The propaganda for bringing down wages is really propaganda for accepting mass unemployment.

References here and elsewhere to “unemployment” holding down wages are not meant to imply that competition from the unemployed is the restraining factor. While union solidarity remains effective, there is little such competition. It would be more accurate to say “slack demand for labour” holds down wages. But generally (although not always), slack demand for labour is closely associated with unemployment. So the shorthand reference to”unemployment” is near enough.

Illusions about what determines wages are often spread from the labour movement, and especially its left wing, who sometimes picture the level of wages and conditions as primarily determined by the outcome of sharp class struggles on the shop floor.

This is certainly true to a greater extent than for other commodities. Because of the social elements in wages determination, worker militancy can effect wages more than farmer militancy can effect the price of wheat or supermarket rapaciousness can effect the price of groceries. A militant union can secure more for its members than a weak one and a militant workforce can enjoy a higher standard of living than a more servile one in a country with a comparable level of economic development.

There is an element of real bargaining, and extra-economic factors can also influence the outcome – for example fascist governments that suppress unions, or the threat of revolution. Even so, on a world scale it is clear that the level of wages corresponds very directly to the level of economic development in various countries.

Union Solidarity

The main variable in wage determination is the degree of unionisation and solidarity among the workers. If they are solid, they can get the full value of their labour power – its monopoly price. If they are not solid, they can be forced to accept anything below that – right down to minimum physical subsistence level. Unionisation has been and remains enormously important in raising workers above physical subsistence level and securing the value of their labour power. Smashing unions is still a goal for employers to force workers wages below their value and extract surplus profits.

But once unionisation is well established, unions cannot secure any more than the value of labour power. Like any other monopoly, they cannot charge what they feel like, but only “what the traffic will bear”. In this case “the traffic” is what employers will bid to secure extra labour.

In particular, the main effect of the “level of class struggle” is in determining the overall level of labour conditions for the whole nation. It has much less effect on wages in any particular industry or workplace. Even at a national level, class struggle probably has a greater impact on normal working hours and work intensity and on “social conditions” generally, than on actual wage rates.

Since there is free movement of labour between occupations and industries, the level of wages and conditions in any industry is influenced far more by the overall state of the labour market, than by the level of militancy in the particular industry. Workers in low paying industries will look for jobs in high paying ones, producing a labour shortage in the low paid industry which can only be eliminated by offering higher wages.

The bargaining position of a union also depends more on the demand for its members labour than on the dedication of its leadership. We are talking about variations a few percentage points above and below the wage rate determined by “market forces”. Failure to fight could halve wages compared to their “market” rate. But fighting harder could not double them above the market rate, because the market rate is not some arbitrary figure, but the maximum employers can be made to pay before their investment would be diverted elsewhere. Provided a union does fight, it will get more or less the market rate.

There is a parallel with land rent. Landlords can surrender part of their rent, or have it taken from them in taxes. But they cannot compel capitalists to pay a rent that will leave them with less than the average rate of profit on the capital they invest in the land. The capitalists just would not invest in that land.

Real wages have doubled in Australia since World War II, yet it is not a fundamentally different kind of society. They doubled because of economic development, not because of a sudden upsurge in militancy. Indeed the value of labour power has probably not changed very much. The increase in real wages has resulted directly from the relative cheapening of consumer goods, due to increased productivity.

Arbitration and Wage Indexation

The Australian Arbitration system provides elaborate rituals according to which wage rates are supposed to be determined by impartial judges on the basis of principles of equity. Token 24 hour strikes are an important part of those rituals and feed the illusion that wages are determined by some combination of industrial strength and skill in advocacy.

But arbitration is simply an attempt to measure the bargaining strength of the two sides, without them having to actually waste energy to prove that strength by fighting it out each time there may have been some change. The factors investigated in Arbitration Commission hearings, include the “state of the economy”, “productivity”, “capacity to pay”, “cost of living” and especially “work value” and “relativities”. These are precisely the factors that effect the market determined wage rates. The token strikes are a part of that measurement process rather than a form of real class struggle.

The Commission is trying to determine what the market wage rates objectively are. It does not “set” them. When the Commission guesses wrong, it is soon proved wrong by industrial trouble and/or over award payments and/or sectoral labour shortages or unemployment. Adjustments in the “awards” are then required.

The farce of “wage indexation” is a good illustration. When the Commission really did try to “set” wages according to uniform “guidelines”, it failed miserably. Unions and employers, and finally even the government urged it to allow wages to reflect market forces.

There is no reason to believe that the overall level of wages has been kept either artificially high or artificially low by the Arbitration Commission. The Commission itself is well aware that its centrality in the wage fixing process depends critically on how well it estimates actual labour market conditions. It has as much power to “set” wages as the Prices Justification Tribunal had to “set” (or even “justify”) prices, and less power than the Reserve Bank and the Treasury have to “set” interest rates. These institutions can help smooth things out in their respective markets, and they can stuff things up. But they cannot change the overall direction of market movements.

“Rigidities” have allegedly been introduced into the Australian wage structure by the Commission’s fixed “relativities” between occupations and skills. But this has not prevented wages moving in response to changing demands for labour, nor has it prevented labour moving in response to changing demand. It has simply ensured that the wage movements are slowed down and take the form of over award payments rather than awards. Less flexible “relativities” have encouraged more “manpower planning” to cope with shortages and surpluses of particular occupations, instead of the clumsier process of a change in relative wages having to indirectly attract labour from one occupation to another. Likewise, any “rigidity” in overall wage levels could only produce a time-lag in the effect of underlying market movements.

Leaving aside the hypocrisy, conservative economists do believe that bringing down real wages is an essential part of any program for economic recovery. They have masses of quite genuine statistics to prove that wages have increased more than productivity, the share of wages in Gross National Product has increased and so on. They rightly conclude that there is a “real wage overhang” keeping the economy out of balance, even though the purchasing power of wages may be declining.

Therefore, they see unemployment as necessary to bring down real wages, although they prefer not to emphasise that aspect, but just talk about “wage restraint”. But if more unemployment will bring down wages, why hasn’t it? Why is any “program” for economic recovery necessary at all?

The weak point in conservative arguments is that they do not explain what has changed. It is not good enough to just point out that there is a “real wage overhang” since the “wages explosion”. Why is there, and why have “market forces” not corrected it? Before answering that, we need to look at the normal adjustment mechanism in some detail.

Capital Accumulation

Capitalist production is always a process of production for the purpose of accumulating more capital. One part of profits is spent unproductively by capitalists, maintaining themselves and their retainers “in the manner to which they have become accustomed”. That can be fantastically expensive if you look at the lifestyles of Jackie Onassis and the like. But is a very small proportion of total profits, because there are very few really wealthy capitalists.

The more important part of profits is accumulated as new capital. This does not mean it goes into their pockets, or is hoarded into a pile of gold. It is invested in expanding the wealth and power of the individual capitalist, and incidentally developing the productive forces of humanity.

Capital investment means buying more labour power and raw materials to produce more goods, to be sold for more profits (some of which will allow the capitalist to “become accustomed” to an even more lavish lifestyle, and most of which will be invested to expand further). It is a process of continually expanded reproduction. If there was a fixed supply of labour and a fixed technology, this expanded reproduction would become impossible. The new capital would be trying to recruit workers already employed by the old capital, and it would have no market for its products. Only simple reproduction would be possible, with no net investment.

Even if we allow for increasing supplies of labour, a fixed technology would still only permit expanded reproduction at exactly the rate of labour force growth, with no increase in capital or output per worker.

In fact some “models” of the process of capital accumulation are based on assumptions like that. Naturally, they have not been able to explain very much about real economic growth, which always involves new technology with an increasing social division of labour and more capital and more output per worker.

Real capitalism is always expanding. Hence imperialism. Capital can expand intensively or extensively. It can expand extensively by employing more workers, even with the same technology and the same capital per worker. That is important in the third world where there are still reservoirs of peasants who are not employed as wage workers, and it has been important in pulling women out of the household and into wage labour. It also absorbs population increases.

But capitalism also expands intensively, by investing more capital per worker. This implies new technology and a development of the productive forces, and has made capitalism a far more dynamic and progressive social formation than previous ones which went on reproducing themselves without constantly revolutionising the technique of production.

The increasing organic composition of capital implies a falling rate of profit. Here is not the place for a detailed discussion of that, but it is worth mentioning that the difference in internal rates of profit between more developed and less developed countries is equalised by imperialist capital export and import.

A fuller treatment of capital accumulation should examine it internationally. This is very necessary to combat the narrow nationalist outlook so common in the Australian “left”. Suffice it to say that the unemployment we are suffering in Australia is clearly part of a worldwide problem and will require a worldwide solution. Our industries are not just “foreign owned”. They are part of an integrated world capitalist economy. We should think big.

Technological Change

At any given time, there is always a range of known techniques that can be used for production. This range is also always being extended by the discovery of new techniques, which usually involve the use of new intermediate products and hence an increasing social division of labour. But even without new inventions, there is a range of different ways of doing things, some of which will be economic while others are not.

At lower wage rates and a higher average rate of profit, a given labour intensive technique may be cheaper than a capital intensive technique for doing the same job, even though the capital intensive technique is more productive.

For example, third world countries with little capital invested in roads and so on, are forced to use more labour intensive techniques, even though the more advanced methods used in wealthier countries are already known. It can actually be cheaper to use donkeys for transport until capital is available for investment in building roads and truck plants, producing trucks, training drivers and so on. That capital will not be available until the rate of profit on that kind of investment is higher than on alternatives. As more capital is accumulated, the alternatives with higher rates of profit become saturated, the rate of profit goes down, wages go up, and eventually it becomes cheaper to use a truck. It was always more productive to do so.

One day it may be cheaper to use aircraft for regular inter-city transport. We already know how to, but truck drivers’ wages are not high enough, and the rate of profit is not low enough to justify the massive capital investment required.

Increasing returns to scale often dictate a change in technique when a market has reached a certain size. A road will then be replaced by a railway for example. The railway has greater productivity, but the capital investment required is not economic at low volumes of traffic.

Often increasing returns to scale are associated with a greater social division of labour. Special functions are split away from general purpose establishments and achieve a higher productivity while handling the greater volume. A special repair shop will only become economic with a certain level of repairs. Designs will be produced in-house until their volume permits a specialised design firm to do the job more efficiently.

An increase in the scale of operations as more capital is invested and markets expand, may not be regarded as a change in technique. But there will almost always be changes associated with it, like those mentioned above. In most industries the days are long gone when expansion simply meant that more establishments would be set up using essentially the same techniques.

This increasing social division of labour implies more interconnection between different sections of the economy. Each is producing for all, and all for each. It does not imply greater occupational specialisation. On the contrary it requires greater flexibility in the labour force as they change repeatedly from one job to another.

New capital can be invested in the same old techniques to employ more workers using the same old sort of plant to turn the same old raw materials into more of the same old products. But this is only possible if more workers are available. It always creates jobs, provided there is a market for more of the old product. But it creates no new market and assumes that for some reason the market for the old product has increased.

Otherwise new capital can only be invested in more productive techniques that allow fewer workers (usually using more fixed plant and machinery) to turn more raw materials and intermediate products into more products per worker. This destroys some of the old jobs and creates more or less new ones according to whether the output is increased faster or slower than the labour productivity is increased. That depends on how fast the market expands, which depends partly on how much the new techniques cheapen the product (relatively).

New capital intensive investment is always expanding the market, since it does relatively cheapen the product (or the old technique would continue in use), and since it creates a demand for the additional new plant and intermediate products required by the new technique. If there was no technological progress, capitalism would in fact reach the state of stagnation implied by most economic models, since there would be no expanding market for expanded reproduction.

If output is expanding slower than productivity, the result of capital intensive investment will be less workers employed in that sector of industry. If that is happening overall, the result will be an increasing pool of unemployment since more jobs are being destroyed than created. If output is expanding faster than productivity, then labour intensive investments must be expanding employment.

Job Creation and Destruction

Now we can see how a small pool of unemployment normally maintains a balance between job creation and destruction. As profits are continually being invested to become new capital, old jobs are continually being destroyed and new jobs are continually being created. The balance depends on the relative profitability of capital intensive and labour intensive production techniques in new investment.

As long as wages keep increasing at exactly the right rate to keep on gradually tipping the balance towards capital intensive techniques, investment can continue, with increasing capital per worker, even though the labour force is not growing as fast as capital is being invested (provided there is a market for the products).

Otherwise, if wages fail to grow fast enough, the existing techniques would continue being used by new investments, and this will absorb the pool of unemployed until competition for labour drives up wages and restores a balance.

If wages grow too fast, due to labour shortages, there will be a tendency to switch more rapidly to capital intensive techniques which reduce the demand for labour. Slack demand may then force wages down, but even if it does not, there will be no renewed upward pressure until the labour market has again been tightened by further accumulation.

The point is that in “normal” balance, the demand for labour is directly regulating wages so that demand equals supply. It follows that there can be no such thing as “too many workers” or “too few jobs”. The number of jobs will adapt to the number of available workers as capital accumulates. Likewise, wages will not be “too high” or “too low”. They are determined by the demand for labour. It seems then that “everything is for the best, in the best of all possible worlds”. Mass unemployment is impossible as the textbooks insist.

But this process of adaptation only applies to new capital investments. The existing capital investments can only adapt to labour shortages and surpluses, or changes in wage rates and the rate of profit, within fairly narrow limits. A steel mill cannot employ very much more or less labour according to wages rates. Its design is more or less fixed. Changes can only effect the design of new steel mills, or extensions to plant capacity, and the decision to expand steel production at all.

Lower wages will not encourage existing steel mills to hire more workers. It will only encourage designers of future steel mills to continue using more obsolete, labour intensive techniques. That will only create more jobs when, and if, an increased demand for steel causes more investment in expansion of steel mills.

Thus if there is some disturbance to the normal relationships, unemployment can increase, regardless of wage rates. Contrary to the conventional wisdom of economists, there is no automatic mechanism that would quickly restore a balance. The automatic mechanism can quickly cope with labour shortages, by choking off new labour intensive investment. But it cannot quickly cope with labour surpluses. The unemployment will be absorbed when, and only when, new investment has created new jobs, and that may take some time.

(Next instalment: Technological unemployment)

Unemployment and revolution. Part 2: What ‘normally’ causes unemployment?

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What “normally” causes unemployment? (continuation of research paper prepared by Albert Langer in 1981).

– The Labour Market

– The Unemployment Pool

– Changes in the Level of Unemployment

2. WHAT “NORMALLY” CAUSES UNEMPLOYMENT?

We shall argue that conservative economists are correct to stress that unemployment plays an essential regulatory role in a market economy. This contrasts with the usual “left” calls for government action to “create jobs”. But we will go on to show that “wage restraint” will not solve the problem either.

Such “restraint” would be unnecessary to keep “normal” unemployment within limits, because the unemployment itself would regulate wages. Something must have changed so that unemployment and wages are not regulated in the way they used to be.

A common way to look at unemployment is that there is a certain fixed number of jobs and a certain fixed number of people available to fill them, and some sort of mismatch has occurred. The suggestion here is that the unemployed are simply those workers who cannot be fitted into the jobs available for them. This idea leads to “commonsense” proposals to reduce the number of workers, or provide a better match between specific workers and specific jobs.

Solutions aimed at restricting the number of job applicants have historically had a powerful appeal. Discrimination against women, migrants, blacks and so on, can be in the immediate interests of men, native born, or whites, in the competition for a place at the front of the jobs queue.

Obviously such “solutions” cannot reduce unemployment, but they can determine who gets the jobs, and for the individual on the dole, that can be just as important. Efforts are already being made to promote these objective divisions of interest within the working class. Those efforts are serious and should be fought seriously. They can succeed.

There are always vacancies as well as people unemployed, so “solutions” which emphasise re-training and so forth are still popular. So is the idea that there are really plenty of jobs available, but “dole bludgers” are just refusing to fit into them because they want something better.

School leavers do have access to advice about how to be well groomed for a job interview and so on, although only cretins could imagine that if all the unemployed were better groomed, any more of them would get jobs quicker! This simply confirms that who gets the jobs is pretty important for the school leaver. Advice about how to find a job can be somewhat helpful in evening out the duration of unemployment and reducing the numbers who miss out on jobs altogether. But quite obviously it cannot reduce unemployment.

A lot of energy in left wing propaganda and agitation is spent trying to combat the above ideas but without attacking the underlying concept that there is a fixed number of jobs and workers. The “left-wing” and “right-wing” analyses are therefore just two sides of the same coin, sharing the same basic assumptions.

So we should not be surprised that the left makes no progress against the dominant right wing ideology.
What is the difference between saying there are too many workers or not enough jobs? These really amount to exactly the same thing. Yet that is all the left does say. The “not enough jobs” line is sterile, boring, and will get nowhere because it is just not true.

These ideas are wrong because neither the number of workers nor the number of jobs is at all rigid.

Under normal circumstances, the number of jobs adapts flexibly to the number of workers available to do them. In fact there is always plenty more work that needs doing, than the labour available to do it.
As capital is accumulated and society develops its productive forces, jobs that were previously left undone get attended to. The limitation is always the social labour time available to do things, rather than the number of “jobs”.

When the number of jobs fails to adapt to the number of available workers, this must mean that something has changed in the adaptive mechanism itself, and we must find out what. Just trying to “create jobs” would still leave us with an adaptive mechanism that was not working and that could recreate a new pool of unemployed.

This more sophisticated understanding of job creation in a market economy, lies at the heart of conservative arguments for wage restraint. Those arguments have never been satisfactorily answered from the labour movement, and are gradually being accepted by the trade union bureaucracy. There is thus an urgent need for them to be answered. Let us first consider how the adaptive mechanism is supposed to work.

The Labour Market

The workforce in modern industrial countries is extremely mobile. It is the product of centuries of capitalist development in which the technique and structure of production have changed so rapidly that people expect to change jobs many times during their working lives.

Nowadays many firms are so large that a good deal of movement between jobs takes place within the same firm. Some even have regular career services with a defined system for recruitment, promotion and transfer. There is also a certain amount of transfer between firms, directly from one job to another. But a great deal of movement between jobs still takes place via the pool of unemployment.

“Labour Turnover” includes workers changing jobs while searching for a better situation. It also includes the replacement of workers who have died or retired or otherwise left the labour force, by new workers entering the labour force for the first time.

These movements have no net effect on unemployment although many workers will pass through unemployment on their way between jobs, or on their way into the labour force. In addition to this however, there is a continuous process of new jobs being created and old jobs being destroyed. This does have a net effect on employment, and therefore on unemployment, although the effect can be in either direction.

In existing establishments, expansion or contraction of demand will create new vacancies or produce redundancies. Changes in demand may also result in new establishments being set up as an industry expands, or old ones being closed down as it contracts.

New techniques will be introduced with expansion, or when it is time for old plant and equipment to be replaced. Old techniques will be phased out with contraction, or when they have become so obsolete that it is more profitable to introduce the new technique immediately.

Investment in new production techniques requires a reorganisation of the labour process. Vacancies will be created for new positions that previously did not exist. Old staff positions no longer required will be abolished. Some workers will be transferred from old positions to new ones. Others will be retrenched, or not replaced when they leave. New workers, perhaps with different skills, will be recruited. New raw materials and components will replace those previously used. Work previously done “in house” when the volume was lower and the need for specialisation was less, will either be farmed out to new outside contractors or subsidiary establishments set up for the purpose.

Generally the new technique is introduced to increase productivity. The new team of workers will be able to turn more of their “inputs” into “outputs” at a lower cost and using less labour. There may be an increased demand for new inputs used by the new process, with a decrease in demand for the old inputs used by the old process. This may produce some net effect on total employment in the suppliers (and in their suppliers…)

If the output is relatively cheapened as productivity increases, then there may be a further increase in demand, which will again increase the demand for the products of the firms or departments that supply the inputs.

Expansion of markets is generally a consequence of relative cheapening through increased productivity, and at the same time a condition for new techniques to be introduced. “The division of labour is determined by the extent of the market”. Often within the same establishment, there will simultaneously be expanding demand which increases employment, and reorganisation that decreases it. The total staff size may either grow or shrink as a result.

This sort of thing is happening all the time, and may not even be noticed as “labour saving technological change”. Especially if the change only increases output with the same size workforce, instead of leading to redundancies.

However labour productivity and the real gross national product per worker are able to grow each year only because of these changes. Growth rates have been very high in the whole post-war period, because these changes have been taking place very rapidly.

The long term tendency has been for the total labour force to grow more rapidly than the population. Labour saving technological change has meant more output per worker together with more employment overall. However this simply implies the overall rate of economic growth has been faster than the rate of productivity increase. Any particular change may result in either more or less total employment, and there is no guarantee that changes in employment taking place simultaneously throughout the economy will automatically balance each other in any way.

Both changes in demand and changes in technique can produce a net change in total employment. If there was no unemployment pool, there would be no leeway for changes in total employment to occur as a result of job creation and destruction. There must be leeway, so there must be an unemployment pool.But its size is another question.

The Unemployment Pool

As well as the normal labour turnover, there is a continuous stream pouring into the pool of unemployment as a result of positions that have become redundant (whether their previous occupants were sacked, or the position was just not filled when they left).. There is also a continuous stream emptying the pool of unemployment as a result of new vacancies that have been created.

In fact there are a number of interconnected pools and streams for different occupations, industries and localities. And these are also interconnected with the pools of people in the education system or otherwise not in the labour force as well as with the flows of migrants to and from other countries.

The effect of changing demand on the numbers of jobs available for people of various skills and occupations in various localities, is reflected in the filling and emptying of their unemployment pools. People who cannot find a job in one pool are forced to transfer to another by doing things such as changing their usual occupation or residence, acquiring new skills that are more in demand, and so on.

The pools of people “not in the labour force” can also be forms of “hidden” or “latent” unemployment. Women for example, are drawn into wage labour more extensively during periods of peak labour shortage, and pushed back into “home duties” when unemployment is growing. Likewise people may stay on at school longer, or retire earlier, as a result of unemployment.

On a world-wide scale, the movement of people off the land and away from petty production into industrial wage labour jobs is accelerated by labour shortages.

This movement is retarded or even reversed during a depression. Thus countries like Australia which normally absorb immigrants from agricultural areas like southern Europe, will put up barriers to immigration when there is unemployment at home. People left marginally employed, on or off the land in the agricultural areas are also part of the unemployment problem.

The modern capitalist economy is very flexible and has a number of mechanisms for adapting to changes in the level of economic activity and consequent changes in the demand for labour. Thse include adjustments in overtime hours worked, part-time and casual employment, wage rates, labour turnover, work intensity, production techniques and so so.

Only when the other adjustment mechanisms have already been stretched considerably, do substantial unemployment or labour shortages appear directly. Both unemployment and labour shortages are therefore signs of some relatively severe disproportion which must be stretching things. Since each firm hires and fires independently and plans its investment program independently, there is no reason why at any given time the total numbers pouring into the pool of unemployed should be equal to the numbers drained out of it. Some other mechanism must therefore maintain the balance.

After all, why should the number of jobs created in the tertiary sector, just happen to balance the number of jobs lost in manufacturing, plus the additional numbers of women entering the labour force, and so on? Nevertheless, these independent statistics did balance for many years, and we must find out why they did, before we can find out why they now do not.

As will be explained later, the expansion and contraction of unemployment is itself part of the mechanism that regulates the price of labour power, the rate of profit and the balance between production, consumption and investment.

There just is not any government authority that can regulate the number of new jobs being created, or the number of old jobs being destroyed each year – and there cannot be such regulation in a market economy.

Therefore there is not any way that the government can directly determine the number of unemployed.

Changes in the Level of Unemployment

It is difficult to separate job creation and destruction from other labour turnover, and difficult to separate the effects of new technology from expansion and contraction of demand. But labour turnover is very high, and some of it is the result of jobs being created and destroyed.

If people change their jobs an average of once every four years, then the number of job changes each year is equal to a quarter of the entire workforce. If the average duration of unemployment is six months, then twice as many people pass through unemployment each year on their way to a job (or on their way out of the labour force due to discouragement), as the number of unemployed at any given time. Only a small proportion of labour turnover needs to be due to job creation and destruction, for any imbalance between the two to have a rapid effect on net employment and unemployment.

One would naturally tend to think that if all those who happen to be out of work at the moment were to go abroad, or had jobs specially created for them, then there would be no unemployment. But the above analysis suggests that only a slight mismatch between the numbers of jobs being created and destroyed, would very quickly recreate a large pool of unemployed. Just to keep the number of unemployed static, whether at twenty thousand or two million, there would have to be perfect equality between the large number of jobs being destroyed each year, and the large number being created.

It follows that one should not just think in terms of a match between the numbers of jobs and workers, but also a match between the rates of job creation and destruction. In fact, when there is no dramatic continuing change in the level of unemployment, there must be just such a nearly perfect match between job creation and destruction.

How is it brought about? Why does not the number of unemployed fluctuate wildly, all the time? Only if we know how unemployment is normally regulated can we find out why that regulation is not working the same way now.

(Next instalment: What regulates unemployment?)

Unemployment and Revolution (Part 1) – by Albert Langer, written in 1981

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Unemployment and Revolution

First published in August 1981 as an Australian Political Economy Movement conference paper by Albert Langer (Adelaide 8-9 August.1981). It was republished subsequently by the Red Eureka Movement. (REM).

It holds up very well, given that it was written more than 30 years ago.

Brief Synopsis

Conservative economists and politicians generally argue that unemployment and inflation in Australia are the result of changes in the international economy, and that Australia has to adapt to those changes or things will get even worse. They say government economic policies must promote more rapid economic growth by stimulating profits and investment at the expense of real wages and social welfare.

Labour movement opponents of the current Liberal government have proposed a series of sometimes contradictory arguments in opposition to this line. Explicitly or by implication they suggest that unemployment is at least made worse by the present government’s economic policy, and could be improved if different policies were followed. Various proposals are advanced – such as:

for shorter working hours

redistribution of wealth from the rich

protection of Australian industry

limitations on technological change

nationalisation

government job creation schemes

improvements in the lot of the unemployed

measures to stimulate economic growth without attacking living standards

and so on.

These proposals have had little impact on public opinion. Given the manifest failure of its economic policies, there has been nothing like the mobilisation against the government that might be expected.

The reason is that these proposals do not make sense. They ignore fundamental facts about how capitalism works, and about recent economic and political history.

The capitalist system is not capable of restoring full employment in any of the ways suggested from the labour movement, and it is silly to pretend that it can. The only alternative to conservative policies will be communist revolution. That alternative must be made realistic.

Introduction

Before deciding what could – and what could not – reduce unemployment, we first need to look at what causes unemployment. I am not very clear on that myself, but I still feel confident enough to reject various commonly accepted views on the subject. I will state my own provisional understanding rather baldly. Others can then point out its inadequacies, and we can go on from there.

This paper is thus a preliminary attempt, necessarily half-baked, and partly written for the purpose of self-clarification. It examines an issue that really needs to be considered in close connection with many other economic and social questions. It would have been better to have provided more facts and figures, examples and other evidence for the assertions below, as well as more explicit reference to other views. But we have to start somewhere.

Hopefully feedback will result in refinements and modifications of the arguments. Please do send comments.

Part 1. Emphasises that unemployment is specifically a problem connected with market economies. Then it gets slightly distracted to talk about science fiction and jellyfish.

Parts 2., and 3. Analyse the economic mechanisms that regulate “normal” unemployment, in order to explain the conservative arguments for “wage restraint” and why such arguments are wrong.

Part 4. Examines “technological” unemployment and shows that the increased unemployment now is not “technological”.

Part 5. Attempts an explanation of “overproduction” and “cyclical” unemployment (without great success).

Part 6.Considers various “solutions” from the labour movements, in the light of the earlier analysis, and rejects them all, but cheerfully, in view of part 7.

Part 7. Tries to give some concrete content to the idea that “the only solution is revolution”.

1. WHAT IS “UNEMPLOYMENT”

First, let us be clear about what unemployment actually means. Unemployment and employment are two sides of the same coin. Capitalism is based on wage labour. Workers sell their labour power to employers for money wages. They are “employed”, that is “used”, or “exploited”, to produce profits. They do not work for themselves, but are “employed” by others. Inherent in this is the possibility that some workers will be unable to find a buyer who is willing to purchase their labour power when it is offered for sale.

In fact unemployment is not only possible, but inevitable, in a capitalist or market economy. The labour market, like the other commodity and financial markets, is an essential mechanism regulating production and consumption by balancing supply and demand through price movements. Even at the height of prosperity there has to be some pool of unemployed for employers expanding their operations to recruit from. Otherwise they could only recruit from other employers by offering higher wages.

“Full employment” actually means “very little unemployment” – say 1% or 2% – just enough to stop a “wages explosion”. Any less unemployment than that is not “full employment” but a “labour shortage”.

The very term “market economy” implies an economy in which commodities, including labour power, may be offered for sale with no buyer. If there was a guaranteed buyer, then the transfer would be some sort of allocation, rather than a free market exchange.

So in a market economy, goods and services may be left unsold, capacities for production may be under-utilised, and workers may be unemployed. It all depends on the market – ie on whether somebody is willing to pay money for them.

For additional workers to be employed, an employer has to be able to make a profit out of employing them, by selling what they produce on the market at a price higher than their wages. If this is possible, then some employer, whether government or private, will do it. But on the other hand, if no profit can be made from employing additional workers, directly or indirectly, then they cannot be employed.

The government can pay them unemployment benefits, and it can call these benefits “wages”, but if the work done does not pay for itself on the market, it is not “employment”, and will require a continuing subsidy from revenue obtained by taxing real employment.

If there were any commodities with guaranteed buyers in a free market, then those commodities would be in short supply and their price would go up until there were no longer guaranteed buyers. That is actually what happens to wages when unemployment falls below a certain minimum. This is perfectly normal and completely unavoidable.

Most proposals for reducing unemployment lose sight of this essential fact. If it was possible to reduce unemployment by some simple measure to increase the number of jobs immediately available, then it would theoretically be possible to eliminate unemployment entirely by pursuing the same measures more vigorously.

However the basic nature of a market economy does not permit that. In fact it regenerates unemployment as part of its normal functioning. “Job creating” measures might work in some other kind of society, where work is done because a job needs doing, rather than because someone is willing to pay for it. But in a market economy, jobs are “created” by the market, and only by the market. Somebody has to pay.

In order to confirm that unemployment really is just the other side of employment and only occurs where work takes the form of wage labour, we can examine some societies which do not have a market economy.

Employment is so “normal” in our society that one tends to take it for granted and to look elsewhere for the explanation of unemployment. So it is worth reminding ourselves that employment and unemployment are characteristic features of only one kind of society – the capitalist or market economy.

Other Societies

Primitive Communism

Savage society was characterised by a primitive form of communism in which people worked together as a tribe. There were no employers and there was no question of finding or losing a job. You could starve to death, or get eaten, but you could not become unemployed. The fact that it’s quite common to hear modern society compared unfavourably with primitive society says something about how disgruntled people are with capitalism. In reality however the life of the “noble savage” (including the Australian Aboriginals) was, as Hobbes famously said, “nasty, brutish and short”. Nevertheless there was absolutely no reason why everybody in the tribe could not work at once. Unemployment was just not a possibility for people living in these societies.

Slave and feudal societies

Slave society marked a considerable improvement, for civilisation, culture and so forth. This was so even for slaves since captives were no longer killed and eaten. There was still no unemployment. Even as recently as feudal society, for most of the population there was no such thing as employment and unemployment. A peasant or serf did not have to find a job. They simply worked the land and engaged in household industry. They could suffer from wars and famines, but not from unemployment. An artisan might have difficulty selling goods, but could not become unemployed. Again, reactionary romantics, including many supposed to be “left”, often look back on the cramped, narrow lifestyle of those times, as though it was some sort of “golden age” compared with modern society.

Modern society based on wage labour has opened up much wider horizons than anything that existed before it. But unemployment is part of the deal. Nevertheless it is a good deal compared with tribalism, or slavery, or being tied to the land.

Freedom to sell one’s labour power on an open market is an enormous advance over previous social systems in which people were born into their jobs and were therefore stuck with them for life. This freedom is the basis for all other freedoms.

However the deal is no longer good enough. We want more freedom and we will have to move beyond a market economy to get it. The current concern about unemployment is just one sign that the social system we have now is no longer good enough.

Future society

In future communist society people will not work for wages, but for social needs, as was the case in primitive communist society. They will not buy their requirements in exchange for money received as wages or profits, but will be given an allocation in accordance with their needs. Again, as in primitive communist society.

Unlike primitive communist society, people will not be ruled by “necessity” but will use their knowledge of natural laws to attain freedom from the blind working of “nature” or “fate”. Work as an obligation, and consumption as a right will not need to be enforced through commodity exchange, any more than they will need to be enforced through tribal sanctions.

Distribution will be “from each according to their ability, to each according to their needs”. The state as an apparatus of coercion will wither away since the government of people will give way to the administration of things. The free development of each will be the condition of the free development of all, and the long dark ages of the pre-history of humanity will have ended.

Science Fiction

It is worth reminding ourselves that this is what the progressive movement is ultimately all about – something that often gets forgotten in the midst of day to day struggles.

Even some science fiction stories take it for granted that humanity is headed towards a sort of communistic society. Sci fi characters tend not to be looking for jobs, receiving wages, or buying things with money. In these stories people do various jobs and obtain supplies of accommodation, food, and other things they need, without buying and selling. Although social relations specific to capitalism are often imposed on sci-fi societies quite inappropriately, there is still no “private enterprise” in many of these visions of future society. Likewise “nations” often seem to disappear.

Needless to say, in such a future society there would be no question of unemployment, since there would be no labour market. Despite this there could be plenty of other problems – just check out the sci-fi literature for examples.

Further along, or for alien life-forms, the very concept of “society” gives way to a single organic whole, where there is no question of distribution “from” or “to” any separate individuals. This reminds us of the way in which single celled creatures first gathered into colonies and then evolved into jellyfish -like creatures and eventually some went on to develop into highly complex organisms.

But returning to the present millennium – communism will still not be a good enough deal once we have it! People will then be ready to demand something along the lines of “From each according to their inclination, to each according to their wildest dreams” – and other more radical proposals.

There will still be struggles and the need for revolutions. We cannot predict what new problems will arise as humanity continues transforming itself and eventually changes into, or gives way to something quite different from the present species.

But unemployment will certainly be a problem over and done with, once employment is over and done with. It is not a permanent problem and one day we will not have to worry about it, just as today in most advanced countries we do not have to worry about starvation.

Coming right back now to the present day, communism is long overdue and we still have unemployment – and it is growing. However in recent times we have actually seen examples of modern societies where unemployment was not a problem. These were societies that had consciously set out on the road towards a communist society and had begun abolishing the market economy. They had no difficulty controlling and then eliminating unemployment. This was despite the fact that they had started with extremely backward economies and first had to deal with even bigger problems such as starvation. There was not any unemployment in the Soviet Union when it was socialist, even at the height of the 1930’s Great Depression.

However today there is unemployment in some sectors of the Soviet economy and labour shortages in others (apparently with an overall labour shortage as existed in most western capitalist economies in the 1960’s.) Since Soviet economists admit there are labour shortages, there must be a labour market, and that implies the shortages will later be followed by surpluses, just as in the West.

In China the connection between a market economy and unemployment is more dramatically obvious. There was no unemployment at all in China from the 1950’s until recently. There may be arguments about how efficiently people were employed, but nobody seriously suggests there was actual unemployment.

Within a few years of the restoration and expansion of market relations (ie since 1977), mass unemployment exceeding 20 million people has become a major social problem. Previously investment was planned and regulated by a socialist state, with each enterprise responsible to the state plan and having no independent right to hire and fire. Now enterprises are “free” to take their own independent investment decisions and to hire and fire while at the same time, workers are “free” to be unemployed.

All this suggests that we must examine every proposal for reducing unemployment, according to its implications for a market economy. Unemployment is a problem specific to capitalism and it is no use looking at solutions that ignore the specific features of market economies. We need to figure out how the labour market actually works in a capitalist economy.

(Next instalment: WHAT “NORMALLY” CAUSES UNEMPLOYMENT?)

Breaking the Climate Deadlock with R&D

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Thanks to David McMullen for this post…

You do not need to be all that alarmist about the climate impact of increasing CO2 emissions to want to see energy go carbon free or at least greatly reduced. The idea of doubling and then tripling annual CO2 emissions in the second half of this century would make just about anyone a bit queasy.

* * * *

It is beginning to sink in that there is not going to be a major transition away from fossil fuels until the alternatives become a lot cheaper and this requires a much greater research and development effort. The alternatives are still too expensive for widespread deployment. There is considerable reluctance to bare the extra costs particularly in the developing countries where CO2 emissions are growing the most such as China and India. Indeed most increased energy production by far in recent years has been from fossil fuel.

The American Energy Innovation Council headed up by various capitalist big shots including Bill Gates is leading the charge, calling for a tripling of US federal funding of energy related research and development (R&D) or more precisely research, development, demonstration and initial deployment (RDD&D). They remind us that private firms usually under-fund this sort of activity. They cannot capture the benefits, there is too much uncertainty and the results are too long term. Furthermore energy is a pure commodity with no room for businesses to develop a differentiated product for which they can charge a premium. It is not like an iPhone. Another outfit called the Breakthrough Institute is telling a similar story.

You do not need to be all that alarmist about the climate impact of increasing CO2 emissions to want to see energy go carbon free or at least greatly reduced. The idea of doubling and then tripling annual CO2 emissions in the second half of this century would make just about anyone a bit queasy. Besides coal is rather unhealthy stuff and oil and gas may well get more expensive as they require increasing extraction effort. So there is hope that the call for increased energy R&D can attract bipartisan support.

A whole range of technologies require a lot of work and it is not just the renewables. Even if your preference is for wind and solar, it would be unwise to rely on them entirely. Solar thermal electricity only works when the sky is cloud free and the sun virtually overhead. PV solar gives far more power in a sunny climate than a cloudy one. And of course there is no solar power at night and some places have very long nights during winter. This is an even bigger problem when you take into account that most electricity demand is in the evening. Wind varies greatly from place to place and moment to moment. Most energy demand will be in large dense cities which are likely to be some distance from the large available land areas required for wind and solar. You would need considerable over-build of capacity and some major advances in energy storage and long distance electricity transmission. For biomass to fill the breach, you would need to ensure it does not compete with food or environmental needs, and is truly carbon neutral after taking into account harvesting and transport.

Two other big options are enhanced geothermal and nuclear power. Enhanced geothermal relies on fracturing hot underground rock. It is a massive resource, however it has failed to get going even in quite favorable regions in Australia after $1 billion in government and private funding. More research and learning by doing is needed.

A range of various next generation nuclear reactors are at the conceptual stage. These would use the spent fuel of current reactors, have passive safety systems, be mass produced cheaply and have low running costs. However, to ensure that we have at least one good option ready for widespread deployment 15 to 20 years from now will require an extensive ramping up of R&D.

Another area for increased R&D is in carbon capture and storage (CCS). A trial facility has already opened in Canada and a few others are under construction, but costs need to come down a lot. It is important to keep in mind here that much of the world’s fleet of coal and gas power plants is still relatively new and many more are in the pipeline. You can imagine governments particularly in poorer countries resisting the closure of such facilities when they still had years of life ahead of them. In these cases retrofitting CCS has to be the solution. There are also a number of industrial processes such as concrete and steel production where it is the only option.

Once alternatives are a lot cheaper than they are at present, a carbon price might be worth reconsidering. It would not have to be at a crippling level to induce a change in technology.

_ _ _ _ _ _

Freedom, Privacy AND Transparency

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I wish to thank ‘Tom-b’ for the following post. It is timely because Transparency International has just released a report revealing that almost 80 per cent of the world’s largest multinationals do not adequately report their finances.

* * * *

Transparency is important for freedom. If you don’t know what is going on then you can’t comment on it and definitely can’t make decisions. Transparency allows people to be informed and make informed choices. Today in advanced capitalist countries choices are made based on what the media says or who advertises most.

The president of the USA is decided by who raises the most money. The congressional elections are similar. The recent congress elections were won by the Republicans who until recently had been outspent by the Democrats but this year business was behind the Republicans and gave them in excess of 60% of their donations to the political parties.

It is unfortunate that advertising can move people to vote in a certain way. A proposition in California to monitor insurance price increases was defeated because the insurance companies spent $60 million opposing it. People believe what they read in papers or see on the TV, be it advertisements or opinion pieces.

We can’t be too critical of this occurrence, however, as there is no easy way for people to find out the facts. Everything is hidden in secrecy so you have to assume journalists get it right or politicians are telling the truth. We know neither is true.

We can’t expect people to take responsibility and get involved in decision making if they are excluded from the facts.

Transparency should include everything eventually but needs a starting point. Some people are scared of transparency as they see it as an encroachment on their privacy and freedom. This is a myth created by rich people. If you are not rich you have nothing to hide so should not be so precious about your minimal earnings and wealth. With transparency this fact becomes obvious.

The rich don’t want anyone to know how rich they are and where their money is, let alone the fact that they pay minimal tax, how much money they spend on political parties, etc. Criminals, of course, would not want any transparency.

Income transparency already exists in some countries such as Norway and has for many years. This would be a start. Total transparency of local government could be done now. This would increase efficiency and deter corruption and there is no reason why everyone should not know everything local government does. Government departments, such as health, education, transport, etc, could also be opened up now.

The only people who fear transparency are those who have something to hide!! Unfortunately there are too many people with nothing to hide who think they do have something.

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It’s official! Climate alarmists are now even more alarmed…

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My initial attraction to the Left 45 years ago was precisely because they were the ones talking about progress – or rather Progress (with a capital P). I would tag along with my father on Saturday mornings in the mid-1960s to visit the International Bookshop run by the Communist Party in Melbourne. He would meet a few of his like-minded workmates (from the factory in which he worked) there, and together we would marvel at the Soviet and Chinese propaganda magazines. What did we marvel at? Simple: all the pictorial examples of Progress – huge dams being built, new nuclear power stations, vast areas of land being cleared for food production or residential development. Just about everything that the Greens oppose.

* * * *

The release of the IPCC’s synthesis report on climate change has resulted in predictable headlines in the mainstream media about how the planet is running out of time. The leader of the Australian Greens has asserted that the world has in fact run out of time. Coal is bad, and only ‘sustainable’ growth can be justified.

Attributing a moral quality to coal highlights the quasi-religious thinking underpinning much of the opposition to fossil fuels.

As for ‘sustainable development’ has there ever been a finer oxymoron? How does development happen without change to that condition which preceded it? That which once was, ceases to be. Which is why I support Development.

This is not for one moment to suggest that humanity should not seek to move on from fossil fuels. After all, we moved on from wind power centuries ago and have not looked back as a species. Those today who wish to go back to wind power are quite literally reactionaries.

Three questions interest me.

First, does the actual summary report of the recent IPCC synthesis justify such alarm on its own terms?

Secondly, is the IPCC so credible that all that is needed is appeal to its authority to win an argument?

Thirdly, what does any of the alarmism – the hype and the media spin – have to do with a progressive left-wing outlook? (Spoiler: absolutely nothing, but please read on).

1. I have read all the summaries of the past IPCC reports. The ‘summaries for policy makers’ are what the politicians and their advisers, and the media people, are supposed to read. The latest summary has been compiled by about 50 IPCC contributors. There is little in it to justify alarmism. For instance, despite the iconic use of tidal waves and sinking islands in media coverage of climate change, the IPCC synthesis summary points out that “Over the period 1901 to 2010, global mean sea level rose by 0.19 metre”. Sea levels are rising by a couple of millimetres – note, millimetres not centimetres – per year. It is not possible to reconcile this with Al Gore’s tidal waves swamping Manhattan or the ABC’s Science Show host claiming that hundred metre tidal waves are possible as a result of the warming.

The IPCC summary also finds that “Many terrestrial, freshwater, and marine species have shifted their geographic ranges, seasonal activities, migration patterns, abundances, and species interactions in response to ongoing climate change”. Again, is that cause for alarm? Haven’t human beings been adapting to such changes for centuries? Things are never static. We can adapt as a species to such change.

I could provide other examples from the summary but the point is that the IPCC forecasts are based on the time-frame to 2100. Everything in it needs to be considered in that context, namely: we have 85 years in which to adapt to even the worst changes. The planet has NOT run out of time, contrary to what the Greens and sensationalist media want us to believe.

2. The IPCC represents a form of consensus science and, of course, science has never been consensual. It has always advanced knowledge through a process of debate and argument, the testing of hypotheses, observation and theory. Dissident scientists have often been proven correct over time against the wisdom and authority of the scientific establishment at a given point in history.

Personally, I am not a climate scientist and so I can accept that the consensus represented by the IPCC might be right, despite worrying criticisms that claim a flawed IPCC process. It may be that global warming is primarily driven by human industrial activity, by CO2 emissions. Beyond that, the consensus breaks down, but this does not stop the alarmists from using the IPCC consensus to justify every manner of exaggeration and hyperbole going way outside what the IPCC actually says. This is why I view with great caution people who insist that ‘The Science is Settled’ It certainly runs counter to my Marxist instincts based on old Karl’s personal motto: “De omnibus dubitandum” – question everything!

So, the appeal to authority is not good enough for me in itself. The principal flaw of the IPCC methodology that concerns me is its emphasis on computer modelling. How have the models stood up against observed changes? Not very well, it would seem.

The IPCC’s 2013 Assessment report admitted that the “historical simulations do not reproduce the observed recent warming hiatus”. The hiatus – or absence of the expected significant increase in warming due to record levels of CO2 emissions – runs counter to the computer modelling. John Christy, a climatologist at the University of Alabama, and a former Lead Author for the IPCC, tested the outputs of 73 IPCC climate models against the facts observed through satellite and weather-balloon data from 1979 and 2013 and found that all the IPCC models ran hotter than the actual observed climate. Similar studies and findings can be accessed here.

3. The mainstream media portrays the oppositional views about climate change alarmism in terms of a conflict between the Right and the Left. Apparently it is left-wing to take an alarmist view and to see coal as evil. What utter nonsense!

My initial attraction to the Left 45 years ago was precisely because they were the ones talking about progress – or rather Progress (with a capital P). I would tag along with my father on Saturday mornings in the mid-1960s to visit the International Bookshop run by the Communist Party in Melbourne. He would meet a few of his like-minded workmates (from the factory in which he worked) there, and together we would marvel at the Soviet and Chinese propaganda magazines. What did we marvel at? Simple: all the pictorial examples of Progress – huge dams being built, new nuclear power stations, vast areas of land being cleared for food production or residential development. Just about everything that the Greens oppose.

Some readers will say that I was naive to fall for this propaganda. But the point is that that is what attracted me, and many others, to the ‘red left’ back then. It was not a value system based on ultra-conservative notions like ‘Sustainability’ but a belief that capitalism’s profit motive and concentrated private ownership of means of production held back progress and that socialism was the way to unleash human creativity and productivity. I still believe that is the case, that we humans “ain’t seen nothin’ yet!”.

I smirk to myself when I hear the current Australian Prime Minister, Tony Abbott, speak of plans to develop the north of Australia into a ‘food bowl’. I first heard of that dream back in the 1960s from old veteran communists. They held it up as an example of what would happen under socialism – the centre of Australia would flourish through irrigation, they told me. Again, these were not ‘green’ values but truly progressive ones. The old blokes also assured me that such great development of the north of Australia would not happen any time soon under capitalism because there was no short-term profit to be made from it. I was maybe 16 when they told me that – I am now heading for 64. They were right.

Conclusion

For all the alarmism, greater alarmism and even greater alarmism, our two billion brothers and sisters who are hungry and do not have access to clean water will not do what some in the ‘first world’ would tell them and opt for less efficient and more costly forms of energy. In the industrialising and modernising countries of Africa, for instance, people will be lifted from extreme poverty – as the rest of us were – thanks mainly to fossil fuels. The only way to stop this process is by developing energy sources that are cheaper and more efficient than coal. But people are hungry right now. And coal is cheap, and efficient.

Another value that attracted me to the left in my youth was the sense of confidence in humanity – and that meant, and means, confidence in the future. Without that confidence, why bother?

The lack of confidence in the future on the part of what I regard as the pseudo-left is found in the oft-repeated assertion that the planet has reached its natural limits. ‘We have gone too far with our so-called progress – the planet cannot sustain it any longer’. I can think of no idea that is more reactionary than this one. It could have been said at any point in history, by any set of princes and popes.

Once upon a time, coal was used merely for ornamental purposes. In Roman times, had you suggested that that black chunk on the end of the local beauty’s necklace would power a revolution in industry and production, and in social relations, that would overthrow a future system known as feudalism and lead to secular democracy and capitalism, you would have been regarded as insane. Who knows what the next energy source will be? How dare the reactionaries tell us that the planet’s resources are finite!

Those who think that way cannot see beyond solar panels and windmills, let alone begin to consider nuclear fusion or appreciate how northern and central Australia could one day flourish.

And then there are the planets and the stars. Awaiting us.

_ _ _ _ _

COMMUNISM and INDIVIDUALISM – A TROUBLED RELATIONSHIP

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Concluding Tom’s notes…

A) Lenin On the Question of Dialectics

The relationship between the universal and the individual is just that, a relationship. When taken alone – abstracted – the universal is untrue. It is untrue because it is removed from its relationship with the individual, (its opposite) which alone is concrete. It is the relationship between each that gives each its truthfulness, its lived, actual reality.

I am reminded of Hegel’s “If something is abstract it must be untrue…” and how the communist movement has been alot more comfortable dealing or focusing on the universal – the group, class, people, nation than on the concrete – the individual. We have a problem with the individual; but if dialectics has meaning this must indicate that we also have a problem with the universal.

B) Marshall Berman

Berman’s procrustean role description also applies to the Industrial Revolution and to early periods of capitalism generally. Peasants/small farmers and land holders, rural, labourers and artisans were sucked into the factories of the Industrial Revolution and exploited mercilessly. In Dickens ‘Hard Times’ he describes these modern pegs as ‘hands’, an accurate description of that part of the body the bosses valued. Precious little space for the individual to unfold here. That’s the down side and there are clear parallels between this and pre capitalist peg fitting. The up side was seen over generations and caused by the dynamism of capitalism and the space it created for workers to organise, struggle and develop.

Two points re this:

a) the failure of most of the left to see the emergent role of the individual as a good thing; its tendency to praise in a one sided way collectivism and to associate individualism, again one sidedly, with bourgeois ideology.

b) the working class itself has made it clear through its actions and choices that it values individual growth and development and the economic development which facilitates this.

The question for communists is: do we?

Where the traditions and customs of others determine character and conduct of the individual “one of the principal ingredients of happiness” is wanting.

Marx: “liberal economy and politics generate a contradiction between the individuality of each proletarian and the condition of life forced upon him … labour.” And because the capitalist state (liberal or otherwise) reinforced and legitimised that condition, it had to go – be overthrown.

It seems to me that the conflating of that aspect of ‘liberal’ which speaks of freedom in a general political and personal sense with liberal economics (freedom of capital, of property rights and the rights of exploitation) is indicative of a major theoretical weakness and an opportunistic slide toward an authoritarian suppression of individuality. Marx and Engels were revolutionary democrats and communists. They were in the minority all their lives and much of their polemics were aimed not only at the wacky left ideas but at authoritarian ones.

xviii
The defeat of the revolutions of ‘48 generated alot of despair and from this time to the end of the 1950’s, in nearly all arguments between radicals and their opponents, both parties identified the capitalist economy and the liberal state with ‘individualism’ and equated radical aims with “a collectivism that negated individuality.”

I think he is onto something, especially “a collectivism that negated individuality”. The separation, or negation is metaphysical, one sided. Collectivism thus understood will never get anywhere in advanced capitalist societies as it attempts to negate our ‘new fangledness’. It also conflates as per para above.
The group and personal discipline necessary in a party is thus seen as coerced, a top down crushing of individuality rather than a free act from below, of authentic action undertaken by the individuals concerned, in limiting individuality, where this individuality comes into conflict with the cause or the group’s purpose. One can also identify precisely the same dynamic – and duality – in any group endeavour.

The Marxist Archive entry for collectivism is a case in point. It speaks of collectivism transcending or sublating individualism (a collectivism which does not suppress the individualism of bourgeois society). This seems confused. They get collectivism and individuality right historically and in their definition, but the socialist bit clearly gives primacy to collectivism (without individuality being suppressed) and the transcendent, or dialectical leap, only relates to collectivism. Individualism, which remains ‘bourgeois’, or consistent with the individuality that emerged under capitalism, remains unsuppressed but also untransformed. It is as though dialectics has had a senior’s moment and forgotten that individuality too, must transcend its bourgeois limits.

This ambivalence has been characteristic of ostensibly Marxist theory although not of Marx himself. The bods at the Archive clearly understand that individuality is important but are unable to understand it as dynamic.

“Liberation from the standpoint of the bourgeoisie, i.e. competition, was, of course, for the eighteenth century the only possible way of offering the individuals a new career for freer development.” Marx (SW McLellan p186)

The free development of the bourgeoisie destroyed rural communities, threw millions off the land, thereby depriving them of their livelihoods, and forced them into the hands of the bourgeoisie itself. There was nothing pretty or humane about it. Yet, as Christopher Hill shows, it was not entirely, or even principally, negative. It led, among other things, to much greater economic and productive efficiencies, less expensive and more readily available food and better clothing. It also led to the IR, the consequences of which, as O’Flinn positively observed, we are still getting used to twelve generations later.
“…private property can be abolished only on condition of an all round development of individuals, because the existing character of intercourse and productive forces is an all round one, and only individuals that are developing in an all round fashion can appropriate them, i.e. can turn them into free manifestations of their lives.” Ibid p 191

As with spirituality, we have left the field of individuality and authenticity to the right – which is why we find some of their libertarian ideas attractive (presumably this must also apply to the Spiked crew).

This 50+ year old quote from Barry Goldwater is a case in point: “Every man, both for his own individual good and for the good of society, is responsible for his own development. The choices that govern his life are choices he must make: They cannot be made by any other human being, or by a collectivity of human beings.” (The Conscience of a Conservative, 1960). It’s like Nietzsche with a southern twang.

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THE WINDS OF CHANGE – CULTURAL REVOLUTION IN EUROPE AND THE INDIVIDUAL

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Continuing with Tom’s notes…

Gramsci describes as a cultural revolution the period ushered in by the Renaissance and the Reformation. I’d not previously thought of these events, or movements, as cultural revolutions before, but he was right. They sounded the death knell of medievalism and it is worth remembering that the war was protracted, often bloody and characterised by what we have come to realise as historical transformations with their obligatory twists and turns. (This latter point should serve to reassure.)

It was from this cultural revolution that the modern individual arose.

There was a Cultural Revolution (CR) in Europe and it was accompanied by political struggle, war and revolution. It ushered in the modern era. Because of poor historical and theoretical understandings we are content to think that a CR is something that is launched – as it was by Mao in China. Communists in power will indeed launch GPCRs – its surely part of the job description, part of the deal in waging revolution. It is a conscious attempt to push things forward. Prior to this CRs were not prescribed or consciously directed and were more like a dogs breakfast (could do with a better description). They moved forward in fits and starts, often suffering defeats and being impossible to distinguish from the political and social turmoil that spewed it up. A slow moving but unstoppable tsunami, creeping forward here, being held back there, leaving untouched some remnants and swallowing up others. One way of reading Christopher Hill’s histories is through a cultural lens.

From the times of the English Revolution the big bourgeoisie in Britain only recognised a political personality, an individual, if they had property. This itself was clearly reflected in the franchise which, at the time of the revolution, was given to only about 3% of the population, a situation that changed only very slowly due to a franchise version of ‘bracket creep’ rather than reform. Gramsci makes this point regarding recognition in relation to the Catholic Church (no doubt he was right) but my thinking took me to the English Revolution and the rise of the capitalist class in Europe generally. The point is that a person is not worthy in their own sake, but only insofar as one is accompanied by wealth and the power implicit in wealth. The masses (and many pejorative terms exist to describe them) are the counterpoint to the valued, wealthy man of property and they arouse disdain and a strange mixture of indifference and fear. So long as they have no power and are accepting of this, it is the former; when they cease to accept their proscribed role and seek redress, it is the latter.

The primitivist appeal to the state of nature made during the revolution’s century saw man as a rational but isolated, atomized individual, set free from society. The appeal to the individual conscience, the religion of the heart, was ultimately an appeal to changing social norms. (Hill, Change and Continuity in 17th C England p 116). This too is the appeal of Locke’s tabula rasa.

Reactions to the French Revolution and their implications for individuality.

1. “… Semblance, I assert, must actually not divorce itself from Reality. If semblance do – why then, there must be men found to rebel against Semblance, for it has become a lie.” Carlyle, “The French Revolution.”

Marshall Berman’s page on this raises the matter stated by Marx that the dominant ideas of any epoch are those of the ruling class ->
xxxi Burke saw in 1790, before the revolution’s direction was clear, that the Enlightenment – the multitude of “ sophisters, economists and calculators”, had seized the initiative and “extinguished forever” “the glory of Europe”.

“All the pleasing illusions which made power gentle and obedience liberal, which harmonised the different shades of life, and which, by a bland assimilation, incorporated into politics all the sentiments that beautify and soften private society, are to be dissolved by the new conquering empire of light and reason. All decent drapery of life is to be torn off …”

Beautifully written tripe and an admission that the ”whole social system of Europe was essentially a system of lies.” The artifices of ruling class life and the ideological justifications of it were laid bare. Once again the emperor had no clothes – but this time they had been torn off. Semblance had not only become a lie, it had been seen to become so.

This masquerade, as Berman calls it, may well have been subtle for its beneficiaries (here straight jacketing the self expression of those within it) but it was hardly subtle for the peasants or the emerging proletarians. In Britain it was brutal (the Industrial Revolution) although Burke’s prose applies equally to the draperies employed by the capitalist ruling class in Britain as it did for the decadent feudal ones of Europe.

THE EMERGING INDIVIDUAL

a) in England – the role of Puritanism

Hill makes the point that the transition from tribal to village society involved a shift from kinship (blood bond) to neighbourhood – ie, tribalism to feudalism; and that the transition from parish to sect was a shift from local community to voluntary organisation.

Voluntary organisation cannot occur to any significant degree without the existence of self motivated individuals. Today this is everywhere around us. If we exclude work from our reckoning (it is a necessity and as such limits the ground in which voluntary organisation can operate) we see a plethora of activities, clubs, associations and the like which people engage in freely. It covers all classes, ages and tastes and could not occur without freely choosing individuals, all taking responsibility for fulfilling certain of their needs.

The communist movement has struggled with this aspect, that is, the ‘free’ aspect of the individual. A difficulty I see is that the free individual, as he/she emerged from the medieval quagmire, has been associated with the development of capitalism. In other words the free individual has more than likely been one of the ‘industrious sort’ so central and instrumental in the development of capitalism, in England especially (Tawney’s depiction makes this connection a defining characteristic). Bourgeois individualism has ‘form’ and communist movements have rightly identified these social elements (and the economic relations which generate them) as self serving and willing (and needing, more to the point) to exploit others.

This aspect of the individual’s development, while true, is also one sided. And it’s with the other side that we have had trouble understanding, coming to terms with and more importantly, relating to. Berman, in ‘The Politics of Authenticity’ and ‘All That is Solid…’ has, I think, attempted to correct this by focusing on the other side, that which deals with the emergence of the individual due to the development of modernity.
From a different discipline so too has the English Marxist historian Christopher Hill. One of Hill’s great contributions has been his determination to track and expose the development of both sides or aspects of the individual’s development in England from the 16th to the 18th centuries. That is, the individuals connection to bourgeois economic and social development, the aspect that has ‘form’, and the individuals development caused by modernity (although I cannot recall him using that term).

The Levellers wanted to extend voting rights to all adult men with a proprietary stake in the realm. While limited re today’s understanding, this demand was radical and aimed against their class enemy. The bourgeoisie, for its part, successfully sought to deny the common people this right. What is significant about this struggle is that it indicates that two streams of individuality/individualism had emerged – one was that of the bourgeoisie proper and the other that of the common people, the latter being led at this historical stage by the Levellers. (Paine’s ‘Rights of Man’ represent the logical development of the Levellers position.) This latter represents the historical tradition that we need to identify with. Its development took, what we could call, petty bourgeois and proletarian directions; Paine on the one side, Marx on the other. Figures like Goethe and Shelley sit somewhere in between, but much closer to Marx, I think.

Capitalism and modernity are not the same. Each has developed together and each has, within itself, contained the possibility of the other. This is best seen and summed up in the “all that is solid melts into air’” aspect, the dynamism, that is common to both.

By the early 19th C it was becoming possible to clearly distinguish between the two and to see that the development of one frustrated, distorted and held up the development of the other. Marx’s writings were very much concerned with this distinction; indeed he and Engels were key figures in making it. In effect they were saying: I like this part, the dynamism, the restlessness, the urge to develop, which in turn enables the individual to develop; but not this part, the tying of labour in perpetuity to market relations and the exploitation and alienation that goes with this. Marx and Engels spent most of their lives demonstrating that capitalist economic and social development will materially create the conditions where it can be superseded. Where, iow, (in other words) modernity can be fully transformed and shed itself of its capitalist aspect.

b) The 18th C Enlightenment

xiv
‘To be authentic, authentically “oneself”, is to see critically through the forces that twist and constrict our being and to strive to overcome them” In this sense we see Burke as not authentic, just true to his class (see comments on Burke’s take on the French Rev).

We are affected ourselves by the twistings and constrictions as we do this. We may move toward authenticity through willingly taking on (or perhaps even maintaining) other twistings as we identify and seek to overcome or overthrow the main source of that which twists and constricts us. (This needs some thinking through).

p41
The notion of virtue draws a sharp line between the self and society: the self is virtuous only when it surrenders its freedom and submits to the laws of the society that imposes them. Yep; and clearly an important reason for women in particular to not be virtuous. When Berman wrote that sentence – the second is mine – he could not have imagined how prescient it would turn out to be for Muslim women in the late 20th and early 21st centuries.

p16
In the Persian Letters Montesquieu tries to show that no social system can provide human happiness unless it posits – and its Government guarantees, a basic human right: the right of every person to be oneself.
My Comment:
a) this seems self evident as one needs a ‘self’ to get this.
b) the link between this idea and the American Rev, and its emphasis, well developed by the Revolution and crystal clear by the 19th C, on individualism.
c) The floods of migration from Europe to the Americas and a little later to Australia and other areas of the new world indicate a strong drive for economic betterment for family and for self. This often took the form of a sacrifice for one’s children, for the next generation, and it bore fruit. This drive has been overwhelmingly positive and progressive.
d) The self, oneself, is not a static entity. The self evolves, develops according to the constraints and possibilities of the level of social development in a given society. This applies between social systems and within them. This is especially so with capitalism
e) If communists don’t ‘get’ this, respond to it, work with it (not against it) we will be relegated to the margins of history, a curio blip, like a number of historically redundant beliefs and trends.

p22
“The basic question, now, is how much freedom do the members of any state or society have to be the individuals they are – how far, in other words, is human authenticity allowed to unfold?”
Comment: This is historically and socially mediated, constructed even. As ‘they are’, the degree of unfoldingness, is developmental. This also applies within a historical epoch, to movements.
It applies to us on two levels:
1. The general, the historical.
2. The demands, impacts on oneself of the movement, group, whatever.

p31
A repressive society – and this covers all pre capitalist societies and non democratic capitalist societies – creates a radical gap between people’s social identities (the roles they are forced into) and their real selves/identities. Personal identities must therefore be achieved. People cannot be themselves within the system but must strive to become themselves in spite of the system. This can take private, even mystical forms (see above) where the contradiction is maintained and where, therefore, authenticity cannot be achieved; or against the system. Here people cannot be themselves within the system and strive to become themselves against the system. Thus, Berman argues, revolt is the only mode of authenticity a repressive society allows (a variant of where there is oppression there will be resistance to that oppression, where our true nature is oppressed, revolt is inevitable).

The theory of revolution grows out of, and develops alongside, the idea of authenticity. This is consistent with our revolutionary history going back to the English Revolution. The question is: how well have proletarian parties, especially the successful ones – Bolsheviks, CCP being foremost – fulfilled this – or sought to fulfil – within the boundaries of what was historically and socially achievable? Within the west I think we’ve been mainly bench warmers and not players. Revolutions in the undeveloped economies led by communist parties present a more complex picture. With 80/90% of the population in China, for example, being peasant and where feudal practises, ideas and habits predominated, the communists had to work with the raw materials at hand and an emphasis on a collectivism that downplayed individuality was probably inevitable and necessary. (This did not mean that individuality did not develop – it did, in leaps and bounds – but that this aspect was not overtly promoted.) What I find disappointing is the lack (or maybe it’s an apparent lack?) of theoretical material from either the CCP or the Bolsheviks that laid the realities on the table in such a way that indicated that they knew the growth of the individual was an important goal, and a Marxist one to boot, but that circumstances did not allow them to focus on this. This distinction, the rationale, does not strike me as complex or beyond the ability of most people to ‘get’. That there does not appear to have been much written about this indicates that it was not seen as a problem. This reinforces my hunch that there is a deep ambivalence about the individual/individuality in revolutionary movements generally that has been dealt with through avoidance and a one-sided focus on notions of collectivism.

p36
A comment on the romantic yearnings for an idealised, Arcadian past. What is yearned for is an equality of a simple, static, face to face agrarian economy based on scarcity and frugality.
And this is what makes it a reactionary yearning – it looks to the past, an idealised and non-existent one at that – and posits it as the future. Its most modern form can be seen amongst extremist greens and Islamic fundamentalists like the Taliban. It certainly had a presence in the English Revolution and re-emerged as a current of the Romantic movement which coincided with and responded to the Industrial Revolution.
We, however, envision, as Berman states, equality (and authenticity) within an urban, dynamic economy based on growth and abundance. And Amen to that!

p85
Montaigne: (16th C) Nothing within the range of human experience was alien to him – anticipating Marx in the 19th who was no doubt paying tribute when he said it.

Rousseau’s alienation:
was self alienation. This was new. Rousseau: “they transform themselves into totally different men” (Confessions); in other words, the source of this alienation was men themselves. Philosophers had hitherto enjoined people to “know thyself”. Rousseau deepened this – not just to know, but to be oneself. His Confessions were aimed to bring his authentic self into being. The injunction to know oneself assumes a core self, an inner reality that, while masked, shrouded, hidden beneath layers of socially prescribed falsities (hypocrisies, two facedness) existed and was ready for development. The idea of a true self/false self dualism fits into this. Rousseau’s idea was much more radical. He posited that the inner self itself was a problem – that the self was only potentiality, something yet to be attained.

While stripping away the layers of the false self was a valid ‘work in progress’, the more important task was the actual creation of the self – a ‘work in progress’ from go to woe.

“It is no longer necessary for the self to go back into the past to search for its source. Its source is here and now, in the present moment”. This is a radical idea and one picked up within the psychotherapy field in the last century. Its truth, its value needs to be counter-posed to the observation made by Marx: “we suffer not only from the development of capitalist production, but also from the incompleteness of that development. Alongside modern evils, a whole series of inherited evils oppress us, arising from the passive survival of antiquated modes of production, with their inevitable train of social and political anachronisms. We suffer not only from the living but from the dead.” Capital 1 13. Together these views form a dialectical whole.

p88
“…Rousseau showed how all the modes of personal identity – both traditional and modern – were actually modes of depersonalization, stumbling blocks which kept the individual self from coming into its own.” Marx would not have a problem with this.
“Servitude is so unnatural to man” writes Rousseau in Julie, “that it could not exist without some discontent”. He is grappling with a truth (let’s leave aside the unnatural bit as this is both true and untrue) that Mao was able to articulate in full force 200 years later – it is right to rebel against reactionaries.
p102
Rousseau comments on his experience of servitude when, as a young man he was employed by the Countess de Vercellis. “She judged me less by what I was than by what she had made me; and since she saw in me nothing but a lackey, she prevented me appearing to her in any other light.” “But” continues Berman, “he himself had collaborated in the falsification, by acting as if her image were true.”
This objectification, and creation of a demeaned other in the process, continues today in all areas of life. What is different is that the individual has assumed centre stage and demands expression in ways unimaginable 250 years ago. How the individual exists or is portrayed in media etc – their central role in soaps, for example, are indicators of this development. While the ‘making’ aspect still applies it is now done much more consciously (because there is no other solution). This needs more teasing out………
p103
That the Countess could have this effect underscored to Rousseau that he needed recognition – that he could be himself only to the degree that his self identity was confirmed by others. That which they did not recognise he could not assert. To Rousseau this suggested that others could mould people into whatever shape one wanted, and in a traditional hierarchy this power was held by the hereditary ruling classes – those at the bottom were forced to define themselves according to the terms dictated from above.
While this seems obvious, Rousseau’s conclusions came from a very personal experience via an examination of self. His conclusions indicate that he already had a well established self capable of self reflection and autonomous action. His ability to be self analytical and to resist sprang from that well.
It also indicates that resistance to ruling class pressure that distorts identity a la Rousseau’s experience begins in the individual (there must be formed individuals of which modern societies generate by the truck load) and then taken to a mass arena.
Another take on this: OK, so one can be moulded by the ruling class; this is old news. The interesting bit is the resistance. This was based upon the existence of an autonomous self, who drew the lessons and grew in strength. Today we are a much harder bunch to mould. The autonomous individual is churned out by the truck load. But this means that ‘we’ or, rather, ‘they’ will resist being moulded by us too. If we pigeon-hole whole bunches of people along simplistic class lines without recognising and respecting their individuality, we will be making a rod for our own individual and collective back.
Another aspect here springs from our social nature. We define ourselves in relation to the other. Developmentally the self is created through the interplay of the infant/child and external ‘objects’/subjects. Without recognition there is no self and therefore no individual. The question is not whether recognition is needed, but from whom/what and with what aim.
p114
Traditional societies pigeon hole people; their identities are ascribed and fixed within very narrow limits
Modern societies enable identities to be achieved and transcended. Limits, roles are transcended regularly and to such a degree we barely notice. Your average Joe at work transcends himself out of work – is he a junior sports coach, team manager, assistant this or that, the secretary of a club, an amateur whatever, a blogger etc. How about a revolutionary? Now, that’s a novel idea!
Modern society has made it possible for the first time in our history for people to be themselves, to define and create their lives as they see fit, to create lives authentically their own. And modern capitalist society both enables and prevents this.

p129
Cultural authoritarianism of the 18th C – Berman mentions the political Newtonian physics, used to promote ideas of clockwork perfection in science, everything in its place etc and neo-Classicism in the arts – was aimed at accustoming people to submit to fixed, eternal rules, externally imposed, closed to scrutiny… It’s an interesting idea – a defacto, partial, ideological united front between a decaying French feudalism and an ascendant British capitalism. The point of unity was the need for social stability. The British ruling class was largely successful in this quest because they had had a revolution; their French counterparts were not because they hadn’t. It’s also a consequence of the ER being forcibly stopped where it was. As social/economic developments continued to gather pace, the ruling class was attracted to and also had a need, to dust off ideas of stability and of permanently fixed social roles that they had challenged so successfully when the feudalists held sway.
This following quote has relevance for today:
By teaching to order and evaluate their experience according to received conventions, culture was depriving them of their strongest weapon against political oppression and social exploitation: their sense of self.
This was made regarding Rousseau’s evaluation of pre revolutionary France, albeit a Paris in the early throws of modernity. But the comment regarding culture stands alone. Culture that draws its authority from a closed and oppressive past cannot prepare or aid its members to negotiate the permanently turbulent waters that modernity throws up. For such cultures, the future has already happened and all it does is prepare people for another round of the same.

p131
Rousseau saw modernity as possessing a paradoxical character: “as both the nadir of man’s self alienation and, simultaneously, the medium for his full self-liberation.” Yep, got it in one – well, almost. Seeing it as a paradox denies its dialectical nature although it is unfair to be critical of Rousseau here as he precedes Hegel. He deserves our gratitude for seeing both aspects of this ‘paradox’ which, as an 18th C thinker puts him one up on most the left thinkers of the following two, for, with notable exceptions, only one aspect or the other has been focused upon and only very rarely has their dialectical nature been understood. The left has been particularly guilty of this as it is they who have claimed the mantle of Marx’s critique. This includes the revolutionary left as well as the reformist.

pp158-9
Some interesting ideas here:
To overcome self alienation Rousseau understood that this (modern) social system (although I don’t think he understood it as capitalist), in the course of its own development, had created a mode of consciousness that was capable of transcending it. (He gets a cigar for this very profound insight). Re this, Rousseau drew upon his view that modern men inherently strove to transform their thoughts into practise (another cigar) and that, therefore, their alienation could be overcome via their consciousness being transformed into self consciousness (half a cigar because of the link to individuality and autonomy). In this way they may be able to solve their personal and social problems through reforms from within (no cigar). He hoped “to draw from the evil itself the remedy that can cure it.” (A dialectical view, but not a sophisticated one – a few puffs on somebody else’s cigar for this one).
It seems to me that Rousseau is swinging between idealist and materialist frameworks, anticipating, in some ways, Hegel. His dialectical thinking comes close, but there is no cigar because he is unable (by nearly a century) to link his observations and analysis of modernity to the economic relations driving it. Without this the slide into idealist solutions becomes seductive.

(to be continued)…

Development of the Individual, and the individual in pre-modern society

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Continuing Tom’s notes on the individual in communist thought…

“As a man is, so is his philosophy” – Fichte.

The characteristics of individuals are products of social relations. An individual’s character is a factor in social development only where, when, and to the extent that social relations permit it to be.

Self Alienation in Traditional Society

People derived their feelings of personal identity from ascribed roles – assigned without reference to individual differences or abilities – predicted and trained for from the moment of birth. Charles 2nd was pointedly informed that Oliver sought people on the basis of merit and not status, a reflection of two very different world outlooks.

“The domination of the land as an alien power over men is already inherent in feudal landed property. The serf is an adjunct of the land. In the same way the lord of an entailed estate, the first born son, belongs to the land. It inherits him.” – Marx, ‘Rent of Land’ in Economic and Philosophical Manuscripts, 1844.

Advantages: conducive to social stability and shields the undeveloped self from expectations (and disappointments) beyond its station.

Disadvantages: stifles energy and initiative of individuals slotted into ascribed roles.

Individually the scope for disappointment is narrow as expectations are limited to the role one is born into – an emotional security blanket and an emotional and intellectual straight jacket. Now the scope is much wider because there are no limits placed on expectations.

Rousseau lived at a time when feudal ascribed identities had reached unbearable limits for a large number of people. He understood the psychic costs and urged that feudal traditions in habits and manners, for example, be abandoned.

“Individual thought or feeling, insight or initiative, could only be destructive to these traditions and routines. Marshall Berman, ‘The Politics of Authenticity: Radical Individualism and the Emergence of Modern Society’, p100 [Berman had spent the last couple of pages describing how the dead hand of the past weighted down on the aristocracy and the peasants – differently to be sure and advantageous to the aristocracy,- “it was easy to see why the upper classes were willing to make the sacrifice of self which their social roles demanded” he adds next page – but equally limiting in their own way] Hence it was essential for traditional society to keep individuality from developing, at the bottom as well as at the top.” (p101)

”Every man was reduced to a function of the rank which he acquired at birth – or, perhaps more accurately, to paraphrase Marx, the rank which acquired him.” It is perhaps more accurate to say “limited” as reduced implies a ‘from what’ which did not exist.

Marx’s Grundrisse
pp83-4

Pre-capitalist periods see the individual as an accessory to definite and limited human conglomerates. That is, limited, stunted, unable to develop.

The individual of our epoch is a historical result. The individual arises historically and is not posited by nature.

The individual of Smith and Ricardo – the result of the dissolution of feudalism on the one hand and the new forces of production developed since the 16th C on the other. This individual appears as an ideal whose existence they project into the past – not as the result of historical development, but posited by nature, the so-called “natural man”. This “natural man” was appropriate to their notion of human nature. It persists and remains a dominant view.

The more we go back “in history the more the individual is dependent, as belonging to a greater whole”. The epoch that produces this idea of the isolated individual is that which is most developed viz social relations. This is not a paradox as the human individual can only individuate in the midst of society – ie, the more complex the society the greater is the scope for individuation and complex individuals. This process is ongoing.

The Individual in Pre-Modern Society

Authenticity (and hence individualism) is not a problem or even on the radar in closed, static societies governed by fixed norms and traditions. Here, people are satisfied with the roles given, experiencing themselves as pegs, aspiring “only to fit the holes that fit them best.” A static equilibrium. (Berman p xxvii)

This aspect is foundational in Plato’s Republic and why Platonic idealism is reactionary (because so out of step).

Once a man is fitted into the niche he was born for, the loose ends in his nature fall away, “each part of his nature is exercising its proper function” and he takes on that perfect balance Plato calls justice. This niche fitting gives a person their identity (butcher, baker, tailor etc. That these and a host of other occupational descriptions survive today as surnames speak, historically, of prescribed generational roles…)

“Violent class struggles may go on: but they concern only the allocation of particular holes to particular pegs. The board itself, the closely knit but rigidly stratified system of the Greek polis, which defines men precisely by their functions, remains unquestioned and intact.”

And Kautsky thought of Plato as a prototype socialist?? The fact that he did and the fact that he was seen as the leading theoretician of the Second International indicates the depth of the problem for the left around the individual. This idea needs developing.

Pre capitalist societies (and less developed capitalist ones) fit individuals into Procrustean roles and acts as if human individuality didn’t exist – at least not for the masses.

The Stoics rebelled against the procrustean nature of the polis but did so mystically. They didn’t oppose particular orderings of the world, but the world itself. People were alienated from the world and self was to be found beyond the world, transcendentally. They therefore complied with Plato’s polis in their external relations, but not internally and cut their internal world off from an engagement with the external. And a fat lot of good that did!

“Thus the search for authenticity began with a negative interpretation of the world “ [with no positive attempt to change it] – thus was born disengaged conformity/internal ‘liberation’ which, Berman says, has since passed into mainstream western culture.

Human Nature?

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This is the first part of some notes prepared a while ago by ‘Tom’ on the topic of ‘The Individual in communist thought’.

Human nature is not purely biological, nor an abstraction; it unfolds, develops. As we make our history, so we make ourselves.

“Human nature is not a machine to be built like a model, and set to exactly the work proscribed to it, but a tree, which requires to grow and develop itself on all sides, according to the tendency of inward forces that make it a living thing.” J.S.Mill ‘On Liberty’

Human nature is the result of the meeting place between biology and historical processes. It is therefore capable of change.

“We cannot wait for favours from Nature, our task is to wrest them from her” Ivan Michurin, Soviet scientist

The idea to “give history a push”, cited by Christopher Hill ‘God’s Englishman’ (p 218) referring to 19th C Russian conspirator Zhelyabov.

This idea captures a dilemma of proletarian parties which led successful revolutions in backward societies. These revolutions were obviously on the side of historical development but the ‘push’ was not solely directed at proletarian revolution. There was first the not so small problem of the bourgeois revolution to complete – and in vast areas in both Russia and China – to actually get it started.

This both facilitated the opportunity for transforming the revolution from a bourgeois to a proletarian one and also frustrated and undermined it.

It is inherent in our nature to make all things new – including ourselves. (Marshall Berman, ‘The Politics of Authenticity: Radical Individualism and the Emergence of Modern Society’, p165)

(Next instalment: ‘The development of the individual’).