Here is my review of ‘Radicals’ by Meredith Burgmann and Nadia Wheatley, just published in the Melbourne Labour History Society’s newsletter ‘Recorder’ (July 2021, No 301).
I am republishing this from 1980 as it remains so pertinent.
Barely a week goes by without me receiving a post on facebook from individuals who were once good comrades but who now promote all manner of right-wing conspiratorial theory and who openly take the side of fascist, autocratic and theocratic regimes against the masses who are trying to overthrow them and establish basic democracy, or what Marxists call ‘bourgeois democracy’. The chest-beaters are the worst.
Anyhow, I feel that this analysis, originally from the Red Eureka Movement in Melbourne, explains a lot and offers a rare but exceptionally important, cogent, analysis. (I was not with the REM people back then but rather stayed with the Blue Eureka nationalists – and had stopped thinking quite a few years earlier).
* * * * * * * *
Written: November 1980.
Transcription, Editing and Markup: Paul Saba
Copyright: This work is in the Public Domain under the Creative Commons Common Deed. You can freely copy, distribute and display this work; as well as make derivative and commercial works. Please credit the Encyclopedia of Anti-Revisionism On-Line as your source, include the url to this work, and note any of the transcribers, editors & proofreaders above.
EROL Note: This was a document that was circulated within the Red Eureka Movement in late 1980.
* * *
A major theme in left wing propaganda is opposition to fascism. Quite often relatively moderate opponents of the left are described as “fascists”.
Yet scratch a “Communist” and one quite often finds a fascist underneath.
The regime that began with the October Revolution is now a fascist dictatorship. In China too, since the defeat of the Cultural Revolution many revolutionaries have been executed and the right to speak out freely, hold great debates, put up big character posters and so on has been officially and formally repudiated.
The degeneration of Communist Parties in power is a separate problem calling for a separate analysis. But what about the degeneration of parties holding no power?
THE CPA (ML)
Our experiences with the “Communist Party of Australia (Marxist-Leninist)” were sufficiently frightening to require some deep analysis. Almost any split is accompanied by outraged cries of “unfair” or “undemocratic” from the losing side, so it seemed undesirable to distract attention from the fundamental issues at stake by going into details of who done what to who. But another reason why we never got around to it was probably embarrassment at ever having been involved with such a sick group.
The bankruptcy of Australian nationalism as an ideology for communists is now pretty apparent, while the question of whether China has gone revisionist has been settled by open proclamations from the Chinese leadership themselves. Although Vanguard keeps coming out each week, the people behind it seem pretty discredited and there is little need to discredit them further.
In Adelaide the “Worker Student Alliance for Australian Independence” has disintegrated, along with its newspaper People’s Voice. In Melbourne the entire editorial collective of Independence Voice quit some time ago, there was no “Independence platform” at Mayday, the “Australian Independence Movement” is virtually defunct and supporters of this line have been completely routed in “Community Radio” 3CR. The Australia China Society is unable to defend the new regime in China and little has been heard from the CPA(ML) in the trade union movement either.
As a complete expression of E.F. Hill’s bankruptcy we have the suggestion in “Australian Communist”, that they want unity with us (previously described as “Soviet agents”). Hill has even signed an article proposing reunification with the CPA in “one Communist Party” (presumably because the Chinese revisionists, having recently re-united with their Italian and Yugoslav colleagues, also wish to re-establish relations with the CPA, leaving Hill out in the cold).
The thuggish behaviour of the CPA(ML) supporters in attempting to intimidate their opponents is well known. Both intellectual and physical thuggery, in 3CR and elsewhere, has become so notorious that the only “broad united front” they have been able to create has been that directed against themselves. They have also become notorious for openly preferring to ally themselves with various Nazis and other fascists against the Soviet Union rather than trying to unite the people, and especially the left, against Soviet imperialism on the basis of progressive principles. Their main political theme these days is the united front they claim to have with Malcolm Fraser, who nevertheless remains quite unaware of their existence. As for China, they openly say they would rather not talk about it, even though China was, and is, central to their whole political outlook.
These facts are mentioned, not to kick a dead horse, but to emphasise that the horse really is dead and to confirm that the additional facts about it cited below are genuine observations and not just part of some ongoing sectarian faction fight.
The more or less open fascism of the CPA (ML) has resulted in that group being simply dismissed as “crazies”. But in fact they are only a more extreme expression of problems that exist, less overtly, throughout the left. Indeed it has been noticeable in 3CR for example, that the excuse of “keeping out the crazies”, has been used to justify appallingly manipulative and undemocratic behaviour (e.g. elected listener sponsor representatives voting against explicit directives from a large general meeting of listener sponsors). People who would be shocked and indignant about that in other contexts have made excuses for it when their own friends are doing it. Really how far is it from making excuses to acting in the same way? And how far from there to ending up just like the “crazies” themselves?
Also the fact that China and the Chinese parrots are anti-Soviet (and Reagan, Thatcher, Fraser etc) has become an excuse to actually apologise for Soviet actions that would be called “fascist” if American was doing it. Indeed many quite non-crazy “left liberals” have been prepared to go through the most amazing mental contortions to justify the Vietnamese occupation of Kampuchea or to minimise the significance of Soviet aggression elsewhere. Rather than agree with “right-wingers” (like Churchill), they prefer to apologise for fascists (like Hitler).
Where was the left wing outrage (as distinct from concern) when Polish workers were being denied the elementary right to form free trade unions? Why do “militants” in “left-wing” unions take delight in the same bureaucratic manoeuvres their opponents use to stay in power? Why are splits in left wing groups so common and so nasty?
In Australia many other groups supposedly on the left have exhibited a personal intolerance comparable to the Chinese parrots, and also a comparable willingness to apologise for reactionary regimes in other countries, provided those regimes pay lip service to “anti-imperialist” principles. (Vietnam, Cuba, Iran, Libya… name a country that is suppressing some other country or trying to impose some medieval religion on its people and you will find a “left” group wildly enthusiastic about it.) Scanning overseas “left” newspapers one gets the impression that narrow minded religious bigotry is pretty common, and even where it is not taken to extremes, it is still present. No wonder so many on the “left” thought a fellow zealot like Khomeiny would be progressive for Iran.
The undemocratic tendencies of “Leninists” is a common theme in anti-Communist propaganda – from open representatives of the bourgeoisie, from Social Democrats, from Anarchists, from “Left” or “Council” Communists and what have you. Nevertheless, attacks from our opponents should be taken seriously, and indeed have been taken seriously by the classic exponents of Marxism.
This question was especially taken seriously in China and some of the material from the Chinese Cultural Revolution is very valuable for understanding the emergence of fascist tendencies among alleged “Communists”.
For example Mao Tsetung’s unpublished works, and the material criticizing Lin Piao (the “successor” who turned out to be a fascist). The Cultural Revolution was after all a direct struggle between revolutionaries and counter-revolutionaries who both purported to be part of the “left”. The concept of fighting bourgeois ideas disguised as “left” ideas was crucial to unleashing the 1960s upsurge and will be crucial again. It was necessary to challenge the “peace” ideas that were dominant in the left in the 1960s and it will be necessary to challenge the views that are dominant now – many of which are again crystallised in the eclectic mishmash of the “CPA”.
In the “gang of four’s” Peking University Journal of September 1, 1976 there is an important article on “The Bureaucrat Class and the Dictatorship of the Proletariat”:
…We must further recognise the high concentration of political and economic powers under the dictatorship of the proletariat. If the bureaucrat class succeeded in usurping power and in its restorationist conspiracies throughout the country, then it would continue to flaunt the banner of socialism, take advantage of this high concentration of political and economic powers and turn the democratic centralism of the proletariat into the fascist centralism of the bureaucrat class.
In controlling and manipulating the means of production and the product of Labor, these bureaucrats will be far more powerful than any previous exploiting classes and their political representatives, than the slave owners and feudal rulers who claimed that “all land under the sun is my territory and all people on earth are my subjects”, and than the bureaucrats and financiers in capitalist countries…In a similar vein, the present day new tsars behave much worse than the old tsars… (Translation from Selections from People’s Republic of China Magazines No 895, American Consulate General, Hong Kong. Reprinted in Study Notes No 6, Red Eureka Movement, August 1978)
This article also goes into the question of the transformation of authority into capital and capital into authority, which is relevant to an understanding of imperialism in the West as well as in the Soviet Union and China.
Western bourgeois democratic society is heading towards an acute crisis and upheaval as another Great Depression and a Third World War develop. The outcome can be Communist Revolution or some form of fascism or social-fascism. We could face a new ruling class more powerful than the present one. It largely depends on how clear the left is on what we are fighting for and what we are fighting against and how sharply we can draw the line against perpetuating the old system of exploitation in our own practice. If the left continues to whinge about capitalism, and even oppose it from a reactionary perspective then it cannot hope to inspire people to fight for something fundamentally different.
Indeed, just as one would have to defend the national independence that Western and Third World countries have already achieved, from Soviet “socialist” imperialism, one would also have to defend the achievements already won by the bourgeois democratic revolution from attack by alleged “socialists” who want to go backwards to a more oppressive society.
If the democratic centralism of the proletarian dictatorship can be easily transformed into the fascist centralism of the bureaucrat class in a developing socialist country, then what about democratic centralism in Leninist parties out of power? Is this an argument against democratic centralism and proletarian dictatorship, as anarchists and others insist?
The answer to this argument is that there never can be a guarantee against proletarian dictatorship turning into its opposite, and Communists in power must always be prepared for transition to underground life as Communists in opposition to capitalist roaders in power. Likewise in Communist Parties generally – one must be prepared to rebel and to be expelled for rebelling.
But if there was no democratic centralism and proletarian dictatorship then it would be quite impossible for the revolutionary ideas held only by a minority in capitalist and socialist society to be centralised and dominant and in that case the bourgeoisie holds power anyway. So weakening democratic centralism is not the answer. On the contrary, it needs to be strengthened to keep fascists out, on the same argument that the left cannot afford to be pacifist and must learn the use of arms if it doesn’t want warmongers to hold power.
Proletarian dictatorship means just that. It does not mean dictatorship over the proletariat by some bureaucrats. It means a political system in which the working class can really wield political power – something that can be achieved by workers councils led by a revolutionary party and cannot be achieved by parliamentary institutions or by milling around in confusion.
Democratic centralism also means just that. It does not mean the leadership imposing decisions on a reluctant membership. It means that the abstract “parliamentary” right which almost all organisations give their members to ultimately take decisions, is made real by conscious leadership of the decision making process to make it “from the masses, to the masses” and so make it actually work without manipulation or obstruction.
This article is not a plea for everybody to be more tolerant of everybody else. It is a call for sharper defence of our basic principles and less tolerance of attempts to undermine them. One cannot be a Communist if one is not first a democrat. The democratic revolutionaries of England, France and so on in earlier centuries had no hesitation about chopping off the heads of their aristocratic opponents and neither should we.
Fear of strengthening democratic centralism is really fear of struggle. Such fear is fully understandable in the present situation, and a lot better than blinkered complacency. But it must be overcome.
The quote from Orwell’s “Road to Wigan Pier” in “the Personal is Political” (Discussion Bulletin No 9) rang a few bells and is worth repeating:–
…..“Socialism” is pictured as a state of affairs in which our more vocal Socialists would feel thoroughly at home. This does great harm to the cause. The ordinary man may not flinch from a dictatorship of the proletariat, if you offer it tactfully; offer him a dictatorship of the prigs, and he gets ready to fight.
We should be ready to fight against the dictatorship of the prigs and to do this it is necessary to understand the transformation of Communists into prigs.
ARE WE DIFFERENT?
If we take Lin Piao for example, there is no doubt that he did make contributions to the Chinese revolution before emerging as an outright fascist. The superstitious Mao cult he built up in opposition to Mao had definite roots in China’s feudal past, but also struck a chord among Western “Maoists”.
Ted Hill now appears to be nothing more than a follower of Liu Shao-chi, then Lin Piao (as a major cult advocate) then Liu Shao-chi again, or whoever may hold power in China at any given moment. But some of his analyses of revisionism, parliamentarism and trade union politics in publications like “Looking Backward; Looking Forward” are still valuable and he once made a point of opposing sacred cows and stereotypes and supporting rebellion.
Things were drastically wrong with the CPA(ML) long before we parted company and people are entitled to ask how we got mixed up with them and why we should be regarded as any different. If we are to be any different then we must analyse the thin dividing line that appears to exist between being a Marxist-Leninist or “Maoist” on the one hand, and being a lunatic or a fascist on the other.
There is little need to “expose” the CPA(ML) leadership now in view of its obvious degeneration. But the roots of current fascist attitudes do need study, so the following facts are placed on the record for our own benefit rather than for the benefit of anyone still taken in by Hill.
1. There never was anything remotely resembling democracy within the CPA(ML). This became obvious when concrete disagreements made it necessary to have a proper discussion and take a decision. But it should have been obvious even when people thought they were in agreement.
2. As soon as a disagreement in principle was announced “through the proper channels” etcetera, the immediate response was to launch vituperative attacks on individuals – at first surreptitiously behind their backs and then openly in Vanguard.
3. The very idea of discussing the differences was repudiated and “security” was abused to tell people that there had been a full democratic discussion, which they just didn’t happen to be part of.
4. As a matter of fact it turned out that no Central Committee actually existed. One member of the Red Eureka Movement discovered that he was supposed to be a CC member after wanting to express his views to the CC. This must be some sort of record in the international communist movement!
5. Other members of the Red Eureka Movement who were both on the Central Committee and knew it, were able to expose the lie that there had been some kind of Central Committee discussion about China and that documents expressing opposition had been circulated to the Central Committee etc.
6. Individual party members had to go outside the “channels” to get any kind of discussion and then discovered that the “channels” didn’t really exist. Now others who accepted this are finding the same situation.
7. It was not a case of discussion being suppressed arbitrarily and decisions usurped, but of there being no provision whatever for seriously discussing and reversing a policy disagreed with.
8. This situation which existed long before it came to a head was put up with by people who would rebel strongly against similar fascist practices in any other social institution.
9. Many people on becoming aware of it, and seeing people branded as Soviet agents etcetera, took a cynical attitude that this was wrong but not a major question of principle requiring them to take a stand.
10. Our initial reaction to all this shit was not to launch a public struggle as in the Cultural Revolution or in accord with our own experiences in the 1960s. Instead we had great hangups about “the party” and organised semi-conspiratorially.
11. Despite being a very small group, since breaking with the CPA(ML) leadership we have not been able to resolve internal disagreements in a civilised, let alone comradely manner, but have had two further splits. While nowhere near as bad as Hill’s, these have also involved strange behaviour that would not be tolerated in most community organisations and should not be tolerated on the left. Moreover they have occurred in a situation where we are not leading any great revolutionary struggle and no pressing life or death decision was at stake.
LIFE WASN’T MEANT TO BE EASY!
We did not fully realise it at the time, but there was little alternative to the apparent extremism of Hill’s stand because there really wasn’t any possibility of a discussion. If he had agreed to a discussion, what could he possibly have said? And if the CPA(ML) did not follow China religiously, what else could it do? We cannot blame Hill for our own naivety.
We only realised how difficult most people find it to rebel and think for themselves once we had broken with Hill and company. “Stalinists without a country” was the contemptuous Trotskyist label, and there is something in it. It really is enormously easier to at least think you know what you’re doing when there is some “socialist motherland” backing you up. (Or a “Fourth International”, a “great leader” or some other crutch).
For non-revolutionaries it’s fairly easy to maintain a political position sustained by one or other of the reformist currents in mainstream bourgeois society. But in a non-revolutionary society and with no back up from a revolutionary society, it requires real effort to develop a revolutionary program. How much easer it would have been if we could have forgotten that we didn’t have such a program by simply pretending to ourselves that China, or Albania or somewhere was revolutionary and that supporting them would somehow produce a revolution here. Or by pretending that if we were all more dedicated, we would figure out where we were going while getting there.
Its interesting to note how even people with no attachment to Russia, China or Albania have managed to persuade themselves that Vietnam is still worth supporting and feel a deep and personal threat to their whole ideology when this is questioned. Or how people leaving REM because it hasn’t been getting anywhere who know perfectly well what’s wrong with the political line of the Revolutionary Communist Party (USA), are nevertheless attracted by the reassuring certainty of that group’s proclamations.
Idealism and metaphysics are the easiest things in the world, because people can talk as much nonsense as they like without basing it on objective reality or having it tested against reality. Materialism and dialectics, on the other hand, need effort. They must be based on and tested by objective reality. Unless one makes the effort, one is liable to slip into idealism and metaphysics. (Mao Tsetung)
PRIESTS AND HORSES
Judging from overseas literature, the temptation of closed minded religious fanaticism is very strong in this situation. It provides a certainty that would otherwise be lacking and puts an end to all confusion, doubt, cynicism, liberalism and so on.
But this way out is the way out of the movement. It means joining the innumerable sects that are much better organised and disciplined than we are, and are able to get more done precisely because they do not have the “burden” of really having to think out a revolutionary line.
We did not hesitate to reject the “security” of blindly following China, Albania or anybody else so we should not regret the consequences.
One consequence is that we are in some respects more vulnerable to confusion, doubt, liberalism, cynicism and so on than other left groups that feel more confident about their (manifestly wrong!) lines. The reason horses are given blinkers is that it keeps them working away steadily without getting distracted by things they might see. Groups that have attached themselves to a foreign state, or that merely reflect a reformist current in mainstream bourgeois ideology, have a secure basis for their activity and can work away at it for years after it has ceased to have any social relevance or has become purely reactionary.
The same can easily be true of “revolutionary” groups that feel secure, or pretend to feel secure in their “correct line”. They can whip up a great frenzy of activity, full of sound and fury, but signifying nothing. Take a look at the Communist Workers Party or the Revolutionary Communist Party (USA). On many points we would be in full agreement. They have a similar analysis of China and Albania to ours and they certainly do make a clear distinction between communist revolution and the bourgeois reformism advocated by most “revolutionaries”.
On international questions of very great significance they appear to have a fundamentally wrong analysis, But even more important, their whole approach to “correct line” politics seems alien. They are certainly not paralysed by liberalism like we are – but so what?
While confusion, doubt, liberalism, cynicism and so on persist we will remain unable to accomplish very much, including theoretical work:
We must have faith in the masses and we must have faith in the Party. These are two cardinal principles. If we doubt these principles, we shall accomplish nothing. (Mao Tsetung)
But the only basis for faith in the Party is confidence in the soundness of its analysis and line. Once we have grounds for such faith we will be able to accomplish something, but not before. (And of course once we do, we will again have the problem of blind faith and the potential for people to continue following a leadership that has proved itself worthy of confidence, long after it has ceased to play a progressive or revolutionary role. But then it would be at a higher stage of the spiral).
Demands that people pull themselves together, combat liberalism or what have you, will not solve the problem of lack of faith. This is an atheistic age and real communists are atheistic people. Our only God is the masses and the only basis for our faith is scientific analysis of reality.
The situation we are in calls urgently for working out where we are and where we are going. Without that, calls to press on more resolutely and with greater vigour will only result in people getting more lost.
CHIN UP, BACK STRAIGHT, EYES SHUT!
It is conservative, not revolutionary to promote “leadership”, “organisation”, “doing things”, “collective life” and so on without a clear perspective for liberating people from oppression. Defenders of the status quo habitually make such appeals and every organisation, revolutionary or not, naturally wants to be as effectively organised as possible (and most sewing circles and amateur theatrical societies are probably a lot better organised than REM). But it is quite wrong to see the organisational reflection of our confusion as the central problem instead of dealing with the confusion itself. (As for any who are not confused, they would have an even greater problem. Take off the blinkers!)
Communism is not the only ideology opposed to liberalism. Fascism opposes liberalism too. It is one thing to want to widen and deepen and ultimately transcend democracy by going beyond such mere forms as majority voting. It is quite another thing to declare that ones policies have proved their own correctness and deliberately exclude others from even a vote, let alone a real say, on the matter. Yet we have repeatedly experienced this kind of behaviour not just from enemies, but from comrades who probably really do want to be revolutionaries.
The fact that people like Lin Piao or Ted Hill could turn out to be fascists and that we could go along with a load of shit for a long time should alert us to the dangers. When people on the left start acting like people on the extreme right they must be pulled up sharply and told “You’re Ill” before the disease becomes incurable and before it spreads.
From ‘Simply Marxism‘, excellent new site:
A Marxist Response to the CEA’s Report “The Opportunity Cost of Socialism”
The Council of Economic Advisers to the President (CEA) in October 2018 issued a report called “The Opportunity Cost of Socialism”. It covers a diverse range of “socialisms”. In this reply I will only be defending socialism in the Marxist sense – a period of revolutionary transition during which capitalism is transformed into communism. I will not be defending “socialism” when it simply means government intervention under the present capitalist system.
The report starts with the “communist” regimes in the Soviet Union and Mao’s China, and zooms in on the famines during the collectivization of agriculture as prime examples of their failings. I suggest that when putting their inadequacies and disasters in perspective, one needs to keep in mind a bit of background. Two things strike me as being particularly important.
First thing, the transition from backwardness to modernity has been, and still is, generally a nasty business. The prime example is western Europe. When it emerged from the Middle Ages and started on the road to capitalism, it managed with the aid of ocean-going sailing ships to devastate every other society on the planet. While this was necessary in order to bring the rest of the world into modern history it was accompanied by a lot of awful behavior such as the slave trade, and the trashing of India and China in ways that brought death and misery to millions. At the same time, on the home front, we saw the expulsion of peasants from the land, and stage one of the Industrial Revolution with its expendable workforce.
Second thing, a successful socialist revolution requires advanced capitalism to prepare the ground. Both the Soviet Union and Mao’s China had to deal with essentially pre-capitalist societies. They were ready for capitalism not for a transition to communism, and once the regimes were taken over by people who had lost interest in revolution, “socialism” had little trouble in becoming nothing more than a hollow shell.
At the end of the day, these countries did quite well compared with similarly backward countries in the capitalist sphere. Furthermore, the Soviet Union’s feverish industrialization during the 1930s gave it the means to defeat fascism in the 1940s, something from which we have all benefited.
Through its development of industry, capitalism prepares the ground for communism by eliminating the necessity of want and toil. Once we no longer need to compete for decent material conditions, our good side can start to shine through. We can begin to think about doing without “market incentives” and doing work for its own sake and the desire to contribute while being happy with a shared prosperity. Economists argue that this would be all in vain because of the “calculation problem” while greens claim we are stuck with want and toil because of “limits to growth”. In this paper I respond to both of these views.
The report endorses the claim of the Venezuelan regime that it is socialist when it is clearly just a very corrupt kleptocracy. The involvement of the zombie regime in Cuba is fully in keeping with this assessment. The people are starving, and are inheriting rundown industrial capacity and lots of foreign debt.
Like all “free marketeers”, the CEA attempts to dissociate capitalism from the behavior of its own state. They fail to recognize that “government failure” is endogenous to the system and not some exogenous imposition on an otherwise pristine capitalism.
The report ends with a rather stern assessment of “Medicare for All”. It points to the problems of free government provision and the negative impact of having to raise so much more tax revenue to pay for it.
I make the point that a proletarian government could well make extensive use of user pays and that as health provision increasingly takes on a communist character, care that is both high quality and economical will require less and less material inducement.
As for the increasing need for revenue, a proletarian government would have a range of options that would eliminate or greatly reduce distortions, and would have low collection and compliance costs. With income secure and distribution far more equal, there would not be the present political problems in having a regressive income tax or in employing a poll tax. Then there is Henry George’s land value tax that capitalist countries have failed to make significant use of.
The Council of Economic Advisers to the President (CEA) in October 2018 issued a report called “The Opportunity Cost of Socialism”. (CEA 2018.) The term “opportunity cost” is used by economists and simply means the benefit you forgo by doing one thing rather than the best alternative. If what you choose to do has greater benefit you are ahead. If not then you have made a mistake. It is an odd title but does sound more profound and eye-catching than “The Failure of Socialism.”
The report starts with the “communist” regimes in the Soviet Union and Mao’s China, and zooms in on their collectivization of agriculture as prime examples of their failing. We are then brought right up to the here and now and reminded of the disaster that is Venezuela’s “Socialism of the 21st Century”. This is followed by a discussion of the Economic Freedom of the World (EFW) Index which measures an economy’s freedom from government intervention (ie “socialist policies”) and its positive correlation with economic performance. Next we are shown how the U.S. has fared better than the “socialist” Nordic Countries. Last but not least we come to the U.S. itself where there is a looming threat of socialism in the form of free health care. Here the concern is the excess burden of taxation and the perverse effects of having a third-party payer.
In the CEA report, and in popular discourse generally, the term socialism is used for a grab bag of things. For Marxists it can only mean the period of revolutionary transition that begins with the old capitalist ruling class losing its property, power and influence and then proceeds with the proletariat transforming itself and society. At the core is joint or shared ownership of the means of production which enables the typical individual to thrive for the first time. As a Marxist, it is only in this sense of the word that I am interested in defending socialism. I will not be defending “socialism” that is simply government intervention under capitalism.
Karl Marx’s referred to this transition period on various occasions. The most well-known comes from Critique of the Gotha Program (1875):
“Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other.”
And as a young man, he had this to say in The German Ideology (1846):
“Both for the production on a mass scale of this communist consciousness, and for the success of the cause itself, the alteration of men on a mass scale is, necessary, an alteration which can only take place in a practical movement, a revolution; this revolution is necessary, therefore, not only because the ruling class cannot be overthrown in any other way, but also because the class overthrowing it can only in a revolution succeed in ridding itself of all the muck of ages and become fitted to found society anew.” (Part I, section D)
Socialism in this sense should not be seen as a social system in its own right. It is an unstable transition phase during which both regression and progression are possible. It is a period of struggle between conflicting forces. The more unfavorable the underlying conditions, the more chance of regression, and hence the rocky road travelled in the 20th century. The matters raised in the CEA report will be examined from this perspective.
First in the line-up we have the “communist” regimes in the Soviet Union and Mao’s China. Famines during their early years come in for special scrutiny. The events are used to highlight the question of property rights and economic incentives given that they occurred at the times when the regimes were trying to collectivize peasant agriculture while increasing the food supplies available either for the increasing non-farm population or for exports in return for investment goods such as machinery.
I am unqualified to comment on the contributing factors or the extent of these famines. So I will confine myself to two key points that should be kept in mind before anything else when looking at these events. Firstly, the transition from a backward agricultural society to a modern industrial one has been and still is a nasty business no matter where you look. Secondly, any attempt to go from feudal backwardness to socialism while circumventing capitalism is bound to have its own serious problems. So let us look at these in turn.
Historically, we should look to Western Europe for the worst case of this universally nasty business. Its emergence from the Middle Ages into the bright shiny day of capitalism was a thoroughly messy affair. Peasants were thrown off the land and made to work in factories where they did not need to survive for long because there was no shortage of fresh “hands” to replace them. The power loom that launched the industrial revolution saw the starvation of handloom weavers. This was just the home front. Elsewhere, it was even worse. While ocean going sailing ships and the creation of a world market were just what were needed to get the west on the road to capitalism, the effect on the rest of the world was total devastation. Of course, things had to be that way unless you think that Europe should have stayed in the Middle Ages. Marx saw the whole business as nasty but necessary. It brought the rest of the world into modern history. This meant that capitalism would eventually catch on there and create an international proletariat that would march together towards world communism.
Marx expresses this globalist point of view in The Communist Manifesto (1848) as follows:
The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.
Then in a letter to Frederick Engels of October 8 1858 he expresses the same sentiment:
The proper task of bourgeois society is the creation of the world market, at least in outline, and of the production based on that market. Since the world is round, the colonisation of California and Australia and the opening up of China and Japan would seem to have completed this process.
Here I will just look at some of the more prominent cases of European beastliness.
We have the African slave trade of course. Millions became slaves and millions died during capture and transportation. With that there was also the economic destruction. The young and fit were the target; and kidnapping or the avoidance of kidnapping was the primary activity of virtually an entire continent. The subsequent colonial period was also somewhat less than benevolent. Forced labor, mutilation and murder in the Belgian Congo comes readily to mind. At the moment, Africans are still waiting for the benefits of being dragged into the modern world.
Then there was British rule in India where the most notable horrors were the famines.
British policy did much to contribute to the great famines during the dry years of 1876-79 and 1896-1902. Estimates range from 12 to 30 million deaths. (Davis 2007: 7) Most appalling was the fact that grain was exported to Britain while Indians starved. (Davis 2007: 299) Also, the British created a range of realities that made the country vulnerable to famine. Land was converted from subsistence crops to export crops such as cotton and opium. There was the neglect of rural improvement such as irrigation both by the government and the local elites who were encouraged to be usurers rather than capitalists. (Davis 323ff.)
According to Davis (2007 p.346): “As far back as 1785, Edmund Burke had indicted the East India Company for allowing native irrigation to fall into decay, thereby ensuring higher famine mortality during droughts.” This was still the case a century later.
At the same time the appalling tax and debt burdens on the peasants meant the need for short-term income at the expense of longer-term fertility. And their usurious landlords opposed any improvement work that would reduce peasants’ dependence on them. (Davis 2007: 333)
As for famine relief, the railroad system ensured that grain moved speedily to where it would get the best price, which made things worse for the starving penniless. (Polanyi 2001 : 160.)
While still on India, we should not pass up the opportunity to mention the handloom weavers crushed by competition from the English power loom. In Capital, Marx quotes the Governor General reporting in the 1830s: “The misery hardly finds a parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India”. (Marx 1976 : 557)
Writing for the New York Daily News, Marx explained Britain’s dual role. In “The British Rule in India” (June 25, 1853) he wrote:
England, it is true, in causing a social revolution in Hindostan, was actuated only by the vilest interests, and was stupid in her manner of enforcing them. But that is not the question. The question is, can mankind fulfil its destiny without a fundamental revolution in the social state of Asia? If not, whatever may have been the crimes of England she was the unconscious tool of history in bringing about that revolution.
And in “The Future Results of British Rule in India” (July 22, 1853) he made much the same the same point:
England has to fulfill a double mission in India: one destructive, the other regenerating – the annihilation of old Asiatic society, and the laying of the material foundation of Western society in Asia.
Looking back from the present point in time we can say that the British performed their dual role in a rather lopsided fashion. They were far more efficient at undermining the existing socio-economic system in ways that deepened the misery of the vast mass of people than they were in creating the conditions that would encourage the development of capitalism. As well as discouraging capitalism in agriculture they also discouraged any local industry that would compete with British imports. Capitalist development eventually caught on but even now there is still considerable backwardness with 50 percent of the population employed in agriculture.
When we come to China, we can blame the British once again for death and misery. It all started with the importation of Indian opium that destroyed the lives of multitudes and drained the country of silver. The Qing Dynasty was further weakened economically and politically by its defeat at the hands of the British in the First Opium War of 1841. This laid the ground for the Taiping Rebellion, a civil war from 1850 to 1864 that lead to many millions of deaths through plague, famine and the sword, together with long-term economic damage. The rebellion may have contributed to the necessary unravelling of Old China but was still a very nasty business.
The El Nino weather conditions that struck India in the late 19th century also struck China and caused deadly famines there as well. Prior to its degeneration, the Qing Dynasty had been quite adept at reducing famine and food insecurity. (Davis p. 367) In the 18th century they had budget surpluses, well stocked granaries and the ability to move large stocks of food across long distances. They also had flood control, extensive irrigation, and canal navigation.
When writing about Britain’s role in China, Marx took the same dual nature approach that he did with India. So that in The New York Daily News of June 14 1853 he wrote:
It is almost needless to observe that, in the same measure in which opium has obtained the sovereignty over the Chinese, the Emperor and his staff of pedantic mandarins have become dispossessed of their own sovereignty. It would seem as though history had first to make this whole people drunk before it could rouse them out of their hereditary stupidity. ….
All these dissolving agencies acting together on the finances, the morals, the industry, and political structure of China, received their full development under the English cannon in 1840, which broke down the authority of the Emperor, and forced the Celestial Empire into contact with the terrestrial world. Complete isolation was the prime condition of the preservation of Old China. That isolation having come to a violent end by the medium of England, dissolution must follow as surely as that of any mummy carefully preserved in a hermetically sealed coffin, whenever it is brought into contact with the open air.
In the 20th century, China got a second going-over. This time it was at the hands of the Japanese. Their emergence from feudal seclusion brought a toxic mix of industrial development and militarists who thought stealing resources would be better than buying them. In this case one cannot talk of a dual role. China was already well and truly “opened up”. This was better described as a disemboweling. Total Chinese deaths during the China-Japan War from 1937-1945 have been estimated at between 15 and 20 million. (Ho Ping-ti, 1959, p. 252)
After making a mess everywhere else, the European powers turned in on themselves and committed another major act of depravity, to wit, World War I from 1914 to 1918. This was a war of imperialist rivalries in which 15-19 million died and which some naively believed had been ruled out by the international nature of capitalism. Capitalists instead rallied to the flag, produced lots of guns and made lots of profits. Added to the war toll was the 1918 influenza pandemic made particularly deadly by war conditions. (Gladwell 1997: 55) This saw the death of 50-100 million people worldwide.
One upshot of this awful affair was the 1917 Bolshevik Revolution in Russia. Increasing military defeats and the economic strains of the war were the final straw for the Czarist regime. And the Czar did not help matters by taking command of the armed forces and leaving his wife and Rasputin to run the government. The collapse of the regime was followed by a four year civil war in which the Reds defeated the Whites. The Whites were Russian nationalists with a penchant for massacring Jews. So the alternative to the Reds were not nice democrats; indeed, many exiled Whites subsequently joined fascist organizations.
The Need for Markets
The CEA report uses the failings in Soviet and Chinese agriculture to argue the case for incentives and the need for private property and markets to prompt us to work and to produce the things we want. The Marxist view is that once we achieve an advanced level of economic development this is no longer the case because the possibility of eliminating want and toil changes the rules of the game. It is now possible to contemplate social ownership where the prime motivation is mutual regard and the satisfaction obtained from labor, with material reward being of diminishing importance.
The problem with Russia and China is that communists took over in countries that were still extremely backward. Their revolutions were very much historical accidents occurring before their due time. Under these conditions any movement down the communist road was bound to be very limited; and indeed in these cases the obstacles made it unsustainable. The same could be said about the rest of the “socialist camp” that emerged after World War II.
After dragging their countries out of extreme backwardness, the regimes in these countries lost interest in radical change and became quite reactionary. Socialism became equated with economic development plus the “communist” party in charge. The workers became ciphers rather than actors in their own right.
Notwithstanding this dead-end for the revolution, the efforts to overcome backwardness are nothing to be sneezed at. They fared better than comparable regions that remained under capitalist suzerainty. And in the case of the Soviet Union, feverish efforts in the 1930s meant that it was industrially prepared for the task of defeating fascism, an event best described as the greatest achievement of the 20th century. They are now relatively advanced capitalist societies in the “upper middle income” category, and comparable in terms of GNI per capita to countries such as Turkey, Mexico and Brazil that did not suffer “the scourge of communism”.
The modernizing efforts of the Mao years in China created the conditions the bourgeoisie needed once they took over after his death. Previously they had been confined to sabotaging socialism. Now they were in charge and had free rein to do it their way. They have really gone to town; and we also have India following up the rear. Both these mega-regions are undergoing considerable industrialization and have a shrinking peasantry and growing proletariat. From a Marxist perspective this augurs well for the future.
At the moment, only part of the world has achieved a level of development where the elimination of the necessity of want and toil is within reach. It comprises about 20 percent of the world’s population and primarily includes the United States, Europe and Japan. While some regions are not far out of reach, others still have quite a way to go. So, unfortunately a large section of the world’s population, mainly in Sub-Saharan Africa and South Asia, will take a few generations to get on top of their backwardness.
With increasing productivity under capitalism, a stage is reached where an equal share of the social product ceases to be shared poverty. Under less developed conditions, the prospect of shared hunger and distress impels those who are in a position to do so to exploit others through plunder, slavery, serfdom or the ownership of the means of production. However, as the average share begins to promise an increasing degree of prosperity, the imperative to fare better than others diminishes.
Mechanization and automation, under developed capitalism have done much to reduce the odious or toilsome nature of work. Pick and shovel work and carrying heavy loads are things of the past and much of the remaining menial and routine work in the manufacturing and service sectors will be automated in the next generation. The work we are left with will be primarily intellectual in nature and potentially interesting and challenging. It begins to be something one could imagine doing for its own sake.
We can expect improved ability to perform complex work in a future communist society as many of the conditions that cause stunted development are eliminated. These include lack of family support, peer pressure to underperform and an inadequate education system. Social ownership will end the isolation of education from production and other activities, so uniting learning and doing. Workers will help each other to learn. We will also benefit from an increasing understanding of human development and what causes learning difficulties.
Under these new conditions where we no longer need to compete for a decent material existence, it now becomes possible to base a society on mutual regard and social ownership of the means of production. We can discard the dog-eat-dog world of capitalism where sociopaths are often the biggest winners.
Mutual regard is enlightened self-interest. You only thrive when others thrive. You do the right thing by others because you know that an increasing majority are doing the same. You know you are contributing to a “pool” of well-being that everybody shares.
This will transform work. It will end what Marxists call alienation. We will do what we can to make the work of others productive and rewarding. These relations with our fellows are what make it possible for work to become something performed for its own sake rather than simply a necessary means to an income. At the same time, we are happy with your equal share knowing that others on the whole are doing their best.
The thriving of others is critical in all areas of life. You cannot thrive if those who impact on your life are disturbed, frustrated and poorly functioning.
Mutual regard will not just be a case of caring more. It will have to also mean being willing and able to confront bad behavior directed against ourselves or others. This will require us to cast off passive, submissive and weak-spirited habits engendered by our subordination under capitalism, and acquire a strength of character that gives us the confidence and moral courage to deal with bullies, schemers and people with a whole gamut of behavioral issues. We will not let the worst people set the tone. Top of the list are those who want to lord it over us and become a new ruling class.
Critical to the process is the emergence of a large and increasing number of people who see the revolutionary transformation of the conditions around them as an important mission in life.
Most economists would argue that this is all in vain. They tell us that an economy based on social ownership has an inherent economic calculation problem: in the absence of market transactions between enterprises it could not have a properly functioning price system.
While we do not know how economic decisions will be made in the future under communism, we can say that there is nothing about the non-market transfers of custody between economic units that would prevent decentralized decision-making based on prices.
We can also counter the claim that any price system under social ownership would be inferior to a market based one because it would not reflect the discovery process that emerges from competition between market participants. It is true that in the presence of uncertainty, there needs to be multiple participants trying out their own approaches to problems on the basis of their own opinions, guesses and hunches. Those that come up with the best and most highly valued products using the cheapest methods win out in this competitive contest. However, social ownership does not throw up any inherent obstacles to a diversity of approaches.
It would still be very common for an individual enterprise or facility to be just one of many producing the same good or close substitutes and each of them could be free to try out different production methods and product designs. Some will be new entrants who are either existing enterprises moving into a new area with synergies or starts ups established by enthusiasts with ideas the incumbents are not open to or capable of developing. This diversity could be greatly assisted by having a number of independent agencies (‘banks’) disbursing funds in any given industry on the basis of their own assessment of what are good investments. Indeed, diversity could be planned if there is not enough of it emerging of its own accord.
At the same time, it is possible to imagine enterprises being free to choose their suppliers on the basis of cost and quality and having to outbid other users of a resource or intermediate good.
Economists have also spilt much ink on the impossibility of effective central economic planning. However, their view now seem out of date. Quantities for highly disaggregated product codes can be fed into an input-output table in real time with modern computer networks, and numbers crunched using modern computers and appropriate algorithms.
Collective ownership could do a great job of producing what people want. This is despite the widely held view that it would require some central body to arbitrarily decide on final output. Individuals could receive vouchers that they could spend on what they choose, with prices responding to changes in supply and demand. Consumer surveys could play a role. There could be democratic decisions on what collective goods to produce and the rate of investment, and these could be funded through taxation. And there would be nothing to stop the use of interest rates to guide investment decisions.
Initially people’s income will mainly be a wage that is a market price for their labor power but even when we get a fair way down the communist path, and income becomes pretty much separated from work performed, you could still have shadow prices for labor power where enterprises put in bids for the various kinds of workers they require.
Not only will an economy based on social ownership work fine. It will do a better job than capitalism. Capitalism may be streets ahead of stagnant pre-capitalist societies, however, the gap between what is possible and what capitalism delivers is wide and getting wider. It is an increasing fetter on the economy’s productive forces that social ownership can remove. The revolutionary transformation of the economy and society will take off the brakes by eliminating economic crises, by vastly increasing the science and innovation effort, and by unleashing the initiative and enthusiasm of workers that capitalism cannot tap.
The Green Problem
While the economists are telling us that eliminating the necessity of want and toil cannot be the basis for communism, the green movement is telling us that want and toil are unavoidable. They say there are limits to growth and we are already exceeding the planet’s carrying capacity. However, I would suggest that prosperity for all is not difficult to imagine with scientific and technological advances. Where land is a constraint, we can build higher into the sky and tunnel deeper into the ground. Precision farming, biotechnology and other innovations will provide far more food while using less land and water, an already established trend that is gathering pace in spite of opposition from greens. There will be limitless supplies of clean energy from a range of resources. We can already be sure that future generations of nuclear power technology would be able to rely on virtually inexhaustible fuel resources. Then there are future technologies we can presently only guess at. For example, biotechnology may open up new ways of harnessing the sun. The mineral resources we rely on are more than sufficient, even without considering future access to extraterrestrial resources and our ability to devise ways to substitute one resource for another. We will protect the biosphere with more advanced and better funded waste and conservation management. Indeed, in many respects we have seen capitalist countries get cleaner as they get richer.
The report provides Venezuela as a present-day example of a country with highly socialist policies. The regime calls itself ‘socialist’ and so do its supporters and opponents. However, it is, of course, just an oppressive kleptocracy and hated by the vast majority. Like all kleptocracies it places as much of the economy as possible under state control in order to suck it dry. It is a country with 4,000 generals all on the take. Anyone who calls this ‘socialism’ is just being disingenuous, whether they are supporters or opponents of the regime.
Of course, the fact that the regime describes itself as socialist is no great surprise. You could not really have expected Chavez to call his regime “Kleptocracy of the 21st Century”. His socialist rhetoric fitted well with his anti-American demagoguery. Everyone who opposes the regime is an imperialist agent and any problem the regime was having was due to imperialist sabotage.
Kleptocracy was accompanied by the buying of votes from the poorest section of society. However, these bribes did not represent a redistribution away from the rich. Just like the billions stolen by the “boliburguesía”, these benefits were at the expense of future consumption. They were funded by oil revenue that should have gone into maintaining and increasing production capacity and by foreign loans. They have been eating their seed corn.
All Chavez did was create hopes that he then shattered. His education and healthcare schemes are now a burnt-out wreck. There was never any “from below”. Chavez dispensed the cash, and policies were his thought bubbles pronounced from on high.
There are Chavez fans who try to retrieve something by claiming that the present Maduro regime has strayed from Chavismo. In fact, it has simply taken it to the next level.
Then there is the regime’s sinister relationship with Cuba where it receives police state support in return for oil. Cuba has a zombie regime on which Marxism long ago past judgement. It is very much a Soviet clone on the lines of the old eastern Europe. Its socialism is state ownership with their “communist” party in charge. Society is not undergoing a socialist transformation and the best thing the government can do is assist the transition to a more normal bourgeois society by holding free elections, a bit like those that occurred in eastern Europe 30 years ago.
The fact that much of the “left” has some sympathy for the regimes in Caracas and Havana is one of a number of signs that it is part of the problem rather than the solution.
The report refers to studies that show a strong positive association between “economic freedom” and economic performance. The former is measured using the Economic Freedom of the World (EFW) Index which measures an economy’s freedom from government intervention (ie socialist policies). (Fraser Institute 2018)
“The indicators are aggregated to five main categories, which are then given equal weight in the overall index. The first category is the size of the government in terms of spending, taxation, and the size of government-controlled enterprises. The second is the legal system and property rights in terms of the protection of persons having such rights. The third category is referred to as “sound money,” and measures policies related to inflation. The fourth is free international trade, which means that citizens are free to trade with other countries. The fifth is limited regulation, which addresses the freedom to exchange and trade domestically.” (CEA 2018: 24)
They are talking here about government intervention in a capitalist economy. Of course, Marxists do not have a dog in this fight because they are not interested in tinkering with capitalism only eliminating it. But that being said, free market or “neoliberal” economics has an extensive literature critiquing such tinkering that is fairly sound and represents a real contribution to economic thought. However, it falls short by ignoring the fact that this government failure is a form of market failure. These problems are seen as some sort of exogenous imposition on what would otherwise be a pure pristine capitalism. In fact, they are very much endogenous to the system.
A lot of government interference in the free market serves the vested interests of the capitalists and workers in the favored industries, and the bureaucrats and politicians who make a career out of it. It enhances the value of their property rights – their capital or their job and career prospects – at the expense of society as whole. Vested interest is just another name for bourgeois private property which in turn is just another name for capitalism.
Welfare programs have become great opportunities for bureaucratic empire building, but historically the primary motivator was a desire to save capitalism from itself. There was a concern that if they did not introduce a range of social welfare reforms workers would be seduced by communism. It was an attempt by the system to inoculate itself from that dreaded infection.
The Nordic Countries
The report wants to disabuse American socialists and left liberals of their love affair with the Nordic countries.
They point out that the Nordic countries have abandoned many of their much admired “socialist policies” as measured by their much improved EPW Index. Besides, their higher levels of government spending do not look quite so socialist when you take into account that it is middle income earners rather than the rich who bare the tax burden.
We are also reminded that these countries are poorer economic performers with lower GDP per capita than the US. While not wanting to spend any time defending an “alternative” form of capitalism, it is difficult not to at least suggest that any comparison should also look at how people at the bottom of the heap fare.
The report also claims that the value of their free education is less than the US when measured by earning differential between graduates and non-graduates. They see this as an example of how free provision leads to lower quality. The logic is that there would be a tendency to underfund the institutions and students would be less concerned about the standard of their degree. Determining whether this is the case would require knowing a lot more about tertiary education in Nordic countries and other tuition-free countries. This is a task I am quite unwilling to take on. Furthermore, nothing hinges on it. Any problems of free provision in the Nordic or other capitalist countries tells you nothing about free provision in a society undergoing a proletarian revolutionary transition. And I must add there is nothing preventing such a society from having tuition fees.
Medicare for All
The CEA report criticizes proposals for a universal single payer health system supported by the likes of Bernie Sanders and usually dubbed “Medicare for All” (Sanders 2017). Such a system would replace all existing private health insurance and would leave the patient with no out of pocket expenses, no copayments or deductibles. The report points to a range of problems with free government provision and to the negative impact of having to raise so much more tax revenue to pay for it.
They describe this as patients and bureaucrats spending other people’s money. Patients would have an incentive to overuse services such as doctor’s visits much like a prepaid all you can eat buffet. The healthier would crowd out the less healthy and there would be no incentive to seek out the cheapest options. At the same time bureaucrats will not have the incentive to economize or make the best purchases.
A government medical insurance monopoly as proposed would be less efficient than having many competing companies. In particular, the government healthcare bureaucracy has shown itself to be very poor at detecting fraud. Efforts to rein in government spending are bound to affect the health budget leading to waiting lists and quotas for particular treatments.
Then there is the fiscal burden of such a program. A free universal healthcare system would require a huge increase in income tax collection unless other government spending was cut drastically. This is not just the same as taking in tax what people would otherwise have spent on their own healthcare because of the so-called excess burden or deadweight loss of taxes in excess of the revenues.
“Earning additional income requires sacrifices (a loss of free time, relocating to an area with better-paying jobs, training, taking an inconvenient schedule, etc.), and people evaluate whether the net income earned is enough to justify the sacrifices. Socialism’s high tax rates fundamentally tilt that trade-off in favor of less income.” (CEA page 12)
What could a socialist state do?
I will leave it to “socialists” of the Bernie Sanders variety to put the case for public provision of healthcare under the present capitalist system. My only concern is whether the CEA’s critique has any relevance for a society undergoing a proletarian revolution.
Not necessarily all free
While a proletarian state could have free provision of healthcare, there would be nothing to rule out significant levels of user pays.
You could have individuals paying for insurance that covers unlikely and unpredictable but high cost health events. There could be a single insurer or mutual insurance schemes owned by their members (friendly societies). At the same time, more routine or predictable health spending could be out of pocket, assisted by health saving and loan schemes. In the case of drugs, you may have patients paying the production cost while research costs are paid for out of taxation.
To the extent that people are financially secure and receiving an adequate wage, training allowance or pension we can move away from healthcare being part of the welfare system. Of course, special provisions will have to be made for people with unusually serious medical needs.
What about government revenue under socialism? A proletarian state could, for the following reasons, have high levels of taxation without the present distortions.
To begin with income tax would not have to be progressive. Tax could be a constant percentage of income or you could even have marginal rates that decline or even go to zero. To the extent that wage differences continue, they will be for good economic reasons that should not to be undone by progressive income taxation.
Scope for reducing marginal rates is limited at the moment where the tax system is seen as a means of redistribution in a world where there are some people on extremely low and insecure income and others on extremely high income such as capitalists with the dividends and senior executives pulling in economic rents.
As communism takes root and work is primarily undertaken for its own sake and from a desire to contribute, the incentive effect of income tax would be reduced even further. Also, a proletarian state could make greater use of taxes that do not distort wages or prices and have far lower collection costs.
Firstly, there are poll or head taxes. These are an equal amount paid by everyone on a regular basis regardless of their income. These are unacceptable under capitalism where income for some people is low and insecure. Indeed, it caused riots when Margaret Thatcher tried to introduce one to cover the cost of local government. In the context of medical insurance, it is worth noting that premiums in a compulsory scheme would effectively be an hypothecated poll tax. Collection and compliance costs would be low because the individual simply has to provide their bank account details and authorize regular payments just like a utility bill.
The other non-distorting tax is one imposed on land values. People would pay a tax for the natural and built amenities around where they live. If all land is deemed to be publicly owned one could describe this as a land rent. (Whether people own their residence is a separate matter.) This tax is famously associated with the 19th century economist Henry George.
The tax would be set so as to “ration” a location to those who place the highest value on living there. At the same time, improving the amenity of an area would ensure a tax revenue stream to pay for it. This would include building hospitals and other health facilities.
Collection costs would be low because you cannot conceal or move land and there are well established methods for calculating the tax. The amount that can be collected from this tax will, however, be reduced by other taxes that people have to pay. Anything that reduces their effective income will reduce what they are willing to pay in land rent. Unsurprisingly land value taxes under capitalism are opposed by wealthy landowners.
Healthcare under socialism
Under a proletarian regime, healthcare, like all sectors of the economy, will undergo a stage by stage transformation. Larger capitalist enterprises would have to come fairly quickly under state control. Smaller businesses in many cases would remain under individual or “cooperative” ownership for somewhat longer.
As with all the other sectors of the revolutionary transitional economy, healthcare will display its greater efficiency and effectiveness as it takes on more communist characteristics. Contributing to the best outcomes will become the overriding motivation of medical workers. This will include overcoming all of the authoritarian nastiness found here as everywhere else. There will be no deferring to incompetent or corrupt superiors nor a passive “I just work here” attitude. Everyone will be a “whistle blower” if necessary, except they will be fixing the problems themselves.
By setting out the full range of confusion on the subject of socialism, the CEA report has provided a good opportunity to both explain and defend the Marxist view on the matter.
When Marxists use the term socialism, they mean the revolutionary transition period when capitalism is transformed into communism. Attempts at this transition to date have been defeated by unfavorable conditions and balance of forces, particularly those arising from economic and social backwardness. These defeats have been achieved by means of socialist regimes losing their revolutionary nature and being “socialist” only because the people running the show continued to call themselves communists.
Key to the success of proletarian revolution is full capitalist development. This will eliminate the necessity of want and toil that historically has set all against all. When it comes to “economic calculation” there is nothing that capitalism can do that socialism cannot do better.
A proletarian government would be in a better position to freely provide healthcare and other goods and services particularly as conditions become more communist. However, there is nothing about socialism that rules out extensive user pays.
Most of the CEA report is taken up with government intervention under capitalism. The report calls this socialism, as do a lot of people. However, this is not socialism by the reckoning of Marxists and its success or failure is not their concern.
Cottrell, W. Paul and Allin Cockshott 1993. Towards a New Socialism
Council of Economic Advisers to the President (CEA). ”The Opportunity Cost of Socialism”, October 2018
Davis, Mike 2007. Late Victorian Holocausts: El Niño famines and the making of the Third World. Verso. London
Fraser Institute 2018. The Human Freedom Index 2018
Gladwell, M. (29 September 1997). “The Dead Zone”. New Yorker. (Cited in “Spanish Flu” Wikipedia.)
Ho Ping-ti. 1959. Studies on the Population of China, 1368–1953. Cambridge: Harvard University Press. (Cited in “World War II casualties” Wikipedia.)
Lavoie, Don 1985. Rivalry and Central Planning: The Socialist Calculation Debate Reconsidered, Cambridge University Press,
Marx, Karl 1853. “The British Rule in India” Marx-Engels Collected Works Volume 12
———.1853. “Revolution in China and Europe.” Collected Works of Marx and Engels, Volume 12. Lawrence & Wishart. London. pp. 93-100.
———.1858. “Marx to Engels 8 October 1858” Collected Works of Marx and Engels, Volume 40. Lawrence & Wishart. London. pp. 345-7
———.1859. “The Future Results of British Rule in India” Collected Works of Marx and Engels, Volume 12. Lawrence & Wishart. London. pp. 217-222.
———. 1875. Critique of the Gotha Programme. Online edition.
———. 1976 , Capital, volume 1 (Penguin).
Marx, Karl and Frederick Engels.1846. The German Ideology, Part 1, Section D
———. 1848. The Communist Manifesto. Online edition.
McMullen, David (2019) “The Forgotten Message of Marxism”, Simply Marxism
Polanyi, Karl (2001 ). The Great Transformation, The Political and Economic Origins of Our Time.
Beacon Press. Boston.
Sanders, B. 2017. “Options to Finance Medicare for All.”
 The only industrialized exceptions were East Germany and the Czech part of Czechoslovakia. The regimes were the product of the Soviet Red Army rather than any homegrown proletarian revolution and had no independent existence.
 Lavoie (1985) best sums up this argument. There is also plenty of material at mises.org.
 See Cottrell and Cockshott (1993).
 The CEA report, does not discuss the possibility of reducing the work incentive problem by the federal government introducing a value added tax (VAT) on goods and services. This is very common in other countries. On the other side of the ledger, they do not mention the incentive to free ride by working less when the government pays for what you would otherwise have to pay for. You have a reduced need for income.
 They are paid more than their “opportunity cost” which is what they would be paid if they did an ordinary paying job. Stockholders feel they have to bid for the “best” and also reward them in ways that encourage them to act in their interest.
Where there is repression, there is resistance – Mao.
‘Qiu disappeared April 29.
‘State security agents seized him that day from Beijing’s outskirts, his classmates say. Qiu’s offense? He was the leader of the Marxist student association at the elite Peking University, a communist of conscience who defied the Communist Party of China.
‘Over the past eight months, China’s ruling party has gone to extraordinary lengths to shut down the small club of students at the country’s top university. Peking University’s young Marxists drew the government’s ire after they campaigned for workers’ rights and openly criticized social inequality and corruption in China.
‘That alone was provocative. In recent years, China’s leaders have been highly sensitive to rumblings of labor unrest as the sputtering economy lays bare the divides between rich and poor — fissures that were formed, and mostly overlooked, during decades of white-hot growth’.
* * * *
June 4th marks the 30th anniversary of the day on which troops entered Tiananmen Square and opened fire upon protestors. It was an outcome of the restoration of capitalism in China, the victory of the ‘capitalist roaders’ within the Communist Party that Mao had warned against and led struggle against.
The idea that things can turn into their opposite is a very challenging one, but it is true.
The violent repression at Tiananmen Square is proof that the Communist Party was no longer revolutionary, no longer socialist but a case of ‘capitalism without democracy’.
The Chinese parliament currently has about a hundred billionaires among its delegates, most are nominally ‘communists’. https://www.cnbc.com/2017/03/02/chinas-parliament-has-about-100-billionaires-according-to-data-from-the-hurun-report.html
Maoists and other pro-democracy dissidents are imprisoned and now ‘disappear’ at the hands of state authorities. https://monthlyreview.org/commentary/on-december-24-2004-maoists-in-china-get-three-year-prison-sentences-for-leafleting/
The people, however, understand revolutionary change and their own socialist revolution is within living memory.
Where there is repression, there is resistance.
* * * *
Photo of statue at York University, Canada, commemorating the resistance of students and workers in Tiananmen Square.
Aneurin (‘Nye’) Bevan (1897-1960) is best known for his achievement of bringing in the National Health Service (NHS) as Minister for Health in the United Kingdom’s Attlee Labour Government (1945-1951).
Bevan was an avowed socialist, though not a communist or Marxist. He saw the NHS as a socialist measure, of providing health services for everyone regardless of wealth and funded by everyone via the democratic state.
When I was growing up in Melbourne, his name – always ‘Nye Bevan’ – was often referred to reverentially by my working class father who had lived and worked in London after World War 2 and supported the Attlee Government that, to the great shock and surprise of most commentators, had defeated Churchill’s Conservatives. My dad told me more than once that, having put their lives on the line to fight fascism, ex-servicemen like him expected a much better world and social system after the War. They hadn’t fought to keep things the same. (He demobbed in 1953, as the Royal Air Force, which he had joined in his native Malta in 1940, provided secure employment and opportunity for advancement). In Australia, when I was young, he would sometimes say: “Australia needs a Nye Bevan!” or “The Labor Party needs a leader like Bevan!”
Bevan was the real deal in the sense of being a working class man through and through. Born in a town in the southern coalfields of Wales, he went to work in a colliery at the age of thirteen. He hoped that socialism could be achieved through the ballot box, which made sense given that adult men had finally won the vote, without qualification, in the UK in 1918 when Bevan was twenty-one.
For women, the universal franchise came later – 1928 – and I love the way Bevan states early in his memoir, In place of fear (Simon & Schuster, New York ,1952) that he was elected to Britain’s first democratic parliament. The General Election of 1929 was the first based on universal adult suffrage.
* * * * *
I thought I’d revisit Bevan’s memoir after recently hearing John Hewson on ABC-TV. Hewson said that we might be heading for a big economic crisis. Hewson was leader of the Opposition in the early 1990s and had been an economics adviser to two Liberal Treasurers.
I’m not good at economics but I can see how ‘the big one’ might be coming. Of course, I’d heard this many times before, mostly from old communists. Every periodic crisis in the boom and bust cycle was seen as the beginning of the end of capitalism. But now, things do seem different, and everyday people feel it, as the rate of profit has steadily declined over the decades, with wages recently more or less stagnant, the standard of living in decline and government increasingly reliant on debt to fund services.
But I hadn’t heard it from a prominent conservative before.
What leapt out at me from Bevan’s memoir wasn’t the reassertion of socialism as a good thing, an extension of democracy into the social and economic realms, so much as the depressing reality that in the C21st the left in the advanced capitalist countries (ie, those requiring state funding to keep the system going) still faces the same dilemma as it did in 1919, when the UK seemed to be approaching a revolutionary moment. There was even unrest in the Army, and massive discontent and strike action – some of it violently suppressed – among the working class. The Russian revolution of 1917 had also put the fear of God into the British ruling class.
Bevan recalls (pp. 21-22) how the leader of the miners’ union, Robert Smillie, described to him a meeting at that time by the leaders of the ‘most formidable combination of industrial workers in the history of Great Britain’ – the miners, the transport workers and the railway workers whose industrial action had brought the government of the day – headed by Liberal Lloyd George – to its knees.
Here is the full quote, and the lesson learned:
“Lloyd George sent for the Labour leaders, and they went, so Robert (Smillie) told me, ‘truculently determined they would not be talked over by the seductive and eloquent Welshman (Lloyd George, the Prime Minister)’. At this, Bob’s eyes twinkled in his grave, strong face. ‘He was quite frank with us from the outset’, Bob went on.
“He said to us: ‘Gentlemen, you have fashioned, in the Triple Alliance of the unions represented by you, a most powerful instrument. I feel bound to tell you that in our opinion we are at your mercy. The Army is disaffected and cannot be relied upon. Trouble has occurred already in a number of camps. We have just emerged from a great war and the people are eager for the reward of their sacrifices, and we are in no position to satisfy them. In these circumstances, if you carry out your threat and strike, then you will defeat us.
“‘But if you do so’, went on Mr Lloyd George, ‘have you weighed in the consequences? The strike will be in defiance of the Government of the country and by its very success will precipitate a constitutional crisis of the first importance. For, if a force arises in the State which is stronger than the State itself, then it must be ready to take on the functions of the State, or withdraw and accept the authority of the State.
“‘Gentlemen’, asked the Prime Minister quietly, ‘have you considered, and if you have, are you ready?‘
“‘From that moment on’, said Robert Smillie, ‘we were beaten and we knew we were'”.
I was six years of age when ‘Sputnik’ became the first artificial earth satellite. It was sent into orbit by the Soviet Union on 4 October 1957. I have a vague memory of my parents taking me into the street that night and, with curious neighbours, peering into the dark star-lit skies over West Brunswick, Melbourne. I’m fairly sure someone said they could see it, and maybe I saw it, or something, among the stars too.
I also recall my father, Loreto, remarking on how the success of Sputnik highlighted ‘the superiority of socialism’. Of course, I didn’t understand what that meant. What was socialism? And what was it meant to be superior to? He was a Labor voter, but very much to the left, and it wasn’t uncommon for Labor men and women to talk favourably about socialism in those days.
About a decade later, when I was 16, my dad and I would sometimes take the number 19 tram from Brunswick to the City on Saturday mornings and visit the International Bookshop in Excelsior House, 17 Elizabeth Street. An antiquated rickety old lift would take us up to the second floor where we’d be greeted by the Communist Party shopkeeper, Jack Morrison.
Sometimes a couple of dad’s young workmates from the factory where he worked would meet us there. We’d browse through copies of glossy propaganda magazines like ‘Soviet Pictorial’ and ‘China Pictorial’, marvelling at the photographic evidence of bumper harvests and advanced technology. I was a reader of science fiction and the images of gigantic tractors and huge pumpkins enthused and fascinated me.
By this stage of my life I had an understanding of socialism and identified with it in a gut kind of way. It was about progress, about eradication of poverty, about imagining a better future based on scientific discovery and technological innovation – and about the working class who produced society’s wealth taking control of the means of producing it.
At a time when censorship laws in Australia and the west were ridiculous, it was also about greater freedom. The International Bookshop flaunted censorship laws by stocking some of the books that had been banned by the government for political or sexual content. (D H Lawrence’s ‘Lady Chatterley’s Lover’ was in the latter category).
An example of political censorship was a ban on a pamphlet that exposed US war crimes in Vietnam. I forget its title now but remember obtaining copies from the Eureka Youth League in 1968 and distributing them, surreptitiously, at my high school. The pamphlet was banned under the Obscene Publications Act, from memory.
* * * *
My father had served in the Second World War, volunteering in 1940 for the Royal Air Force in his homeland, Malta, when the Italian Fascists started bombarding the main island of the Mediterranean archipelago. He remembered the priests opposing British imperialism from the pulpit in the lead up to the War and assuring their congregations that Malta’s future was best served by accepting Mussolini’s Italia Irredenta.
By any measure, British imperialism’s crimes at that time were far worse than those of Italian imperialism, but on the other hand, British bourgeois democracy was much preferable to Italian/German fascism.
During the War, my father served in Africa, the Middle East, Palestine, and France, before being stationed in London after the War.
The War changed his world, everyone’s world, and in mixing with other RAF men, his eyes were opened to new ways of seeing and thinking. He remembered Jewish and Scottish airmen telling him about Stalin, the Soviet Union (“where the workers ruled”) and communism. (Note, they are called ‘airmen’ but they served on the ground, in regiments, and never flew).
The troops knew that Stalin’s Red Army were routing the Nazis in Europe and my dad’s comrades told him the story about the early British appeasement of Hitler and the west’s refusal to heed Stalin’s calls for collective security against fascism as early as 1933.
After the War, in London, still in uniform, my father thrived in the cosmopolitan environment of one of the world’s biggest cities. Servicemen in uniform were given free tickets to the West End theatres and to lectures given by the likes of George Bernard Shaw and Hewlett Johnson, the ‘Red Dean of Canterbury’. My dad took advantage of such opportunities.
He started buying the ‘Daily Worker’ regularly, the organ of the Communist Party of Great Britain, and found that while there were strong pockets of anti-communism, in general Londoners were tolerant of it and there was sympathy for Stalin and the Red Army.
My dad told me about an occasion when he went to work at his job in the Air Ministry in London after the War, having purchased the Daily Worker that morning. Walking through the main office, one of the heads of the ministry – a ‘Lord’ no less – noticed him and asked, ‘What’s that paper you’re carrying?’ My dad saluted and replied, ‘Sir! It’s the Daily Worker, the newspaper of the Communist Party’. Lord-so-and-so responded: ‘Oh, I thought it was. May I borrow it after you’ve finished with it? I forgot to buy mine this morning’.
It’s easy to forget that communism was popular after the War and that the Cold War arose in part because of communism’s popularity in Europe, west and east. If it’s true that reactionaries tremble at the mere rustle of leaves, then you can imagine how they responded to elections in places like France and Italy where between a quarter and third of the people voted Communist.
* * * *
I want to celebrate the centenary of the Russian revolution because it was an attempt to build socialism after the old feudal order had been overthrown by the people, led by the communist Bolsheviks. That it was led by communists was a rather flukish situation. The overthrow of the feudal order required a bourgeois democratic revolution that would develop capitalism. As David McMullen says in Rescuing the Message of the Communist Manifesto:
‘There is a thoroughly entrenched view that the experience of revolutions during the 20th century shows that communism has failed. It is true. There was a failure. However, it was not of communism, but rather of an attempt to sustain a path towards it when its preconditions were absent. Russia in 1917 and virtually all the “communist” regimes established mid-century were essentially backward pre-capitalist societies. Most people were peasants rather than proletarians, and they were more interested in land for the tiller than social ownership. There was little modern industry and thinking was more medieval than modern. They had not passed through the capitalist stage, which is necessary for a successful communist revolution’.
The Russian revolution also shows how the old order never just gives in. Civil war followed the revolutionary overthrow of the ruling class, with the old order backed by military forces of more than a dozen foreign governments.
Then there came the rise of fascism in Europe and the active pro-fascist fifth columns in various countries, especially the Soviet Union. Hitler hated communism, which he called Judeo-Bolshevism. In the Soviet Union, the fifth columnists engaged in sabotage and collaboration – as they did in some western countries too. In the west, the fascist sympathisers promoted isolationism in foreign policy. It’s “over there”, not our problem, we’ll only make things worse, blah blah blah. Such is the mentality that thinks in terms of ethnic identity and nationality rather than humanity.
As if things couldn’t become more difficult, there came the Second World War which, initially, the Soviet Union tried to keep out of; though Stalin had sought collective security agreements with Britain and other powers in the early 1930s when Hitler’s Nazis took power. Britain declined and instead entered into the Anglo-German Naval Agreement in 1934. Poland agreed to a non-aggression pact with Hitler, rather than collective security to thwart him, also in 1934.
The Nazi German invasion of the Soviet Union, and Soviet resistance, resulted in 25 million mainly Russian deaths. The Soviet Union instigated the greatest military action in world history known as Operation Bagration, codename for the 1944 Soviet Belorussian Strategic Offensive Operation, which secured the defeat of the Nazis. Women were mobilised along with men and the Red Army’s women’s sniper force became legendary in the Soviet Union. Lyudmila Pavlichenko shot 309 Nazi soldiers as a Ukrainian Red Army Soviet sniper during the war. (Woody Guthrie wrote a song for her in 1942).
It was understood at that time that the Soviet Union, despite what it had been through – a revolution followed by a civil war caused by the military intervention of forces backed by a dozen foreign governments, the subversive activities and sabotage of a pro-fascist fifth column, and an invasion by the German Nazis and their Finnish and Romanian allies that killed 25 million Soviet citizens – had achieved plenty through its socialist system.
Industrialisation, massive dam construction and electrification of the countryside had lifted millions from the acute poverty experienced under Tsardom. Stalin wanted to create “a second America” in terms of industrial progress. For the first time, the socialist republics of the USSR developed their own motor, aircraft, tank, tractor, machine tool, electrical and chemical industries – with the assistance of European and American experts.
The dam built on the Dnieper River from 1927 was the biggest hydro-electric station in Europe and was consistent with Lenin’s slogan: ‘Communism is soviet power plus electrification’.
New cities were built, most notably Magnitogorsk, which was based on iron ore mining and steel production. Hundreds of experts were brought in as advisers, including Americans, as the city was to be based on US steel-cities, Gary (Indiana) and Pittsburgh (Pennsylvania).
Roads, railways, canals also helped move Russia and the Soviet Union further from the feudal era of the ox-drawn plough. The Volga-Don Canal and the White Sea-Baltic Sea Canal were achievements of a system in which need and progress motivate planning and production. And, in 1954, the Soviet Union became the first country in the world to harness nuclear power for peaceful use, with the operation of the APS-1 nuclear power plant at Obninsk, the ‘Science City’.
This material progress, the application of human ingenuity in the creative-destructive transformation of Nature through labour, is a key reason as to why so many working class people in the west were attracted to socialism.
If the unleashing of the productive forces in a backward economy like Russia in the early C20th could produce such results via social ownership, then what could be achieved under socialism in the advanced industrial west where progress was held back by concentrated private ownership of the means of production and the pursuit of maximum profit for those private owners as the goal of production?
Despite the restoration of capitalism in the Soviet Union in the 1950s and 1960s, these questions remain. They just need to be put back on the agenda of public discourse. Instead, we can expect the same old ritualistic denunciations based on the false premise that ‘the History is settled’.
“Only when socialism means the period of revolutionary transition between capitalism and communism is it anything worth supporting”.
(Julie Borowski’s website is here)
This is a presentation by socialist economist David McMullen at a Melbourne Argument debate at the Royal Oak Hotel, North Fitzroy, Melbourne, on February 8, 2017. His opponent was Ted Lapkin, a former adviser in the Abbott government.
Private Property Rights are Essential not only to Economic Prosperity but to Political Liberty – The No Case
February 12, 2017 via Different Wavelength
* * * *
When looking at economic prosperity and political liberty, the private property rights we are concerned about are the ownership rights of the capitalist class over the means of production or productive assets. We are not arguing about private property rights over items of consumption. So I acknowledge everyone’s right to their own toothbrush.
What I want to contend is that in the future we will get by very nicely without private ownership of the means of production. We will do this by creating a class free society where the means of production are socially rather than privately owned. This will free the economy of the many shackles placed on it by capitalism and at the same time create a society that requires the fullest political freedom for its proper functioning.This future system is generally referred to as communism.
OK why do I take this singularly unpopular position which everyone knows has been totally discredited? Well, I subscribe to the Marxist view that capitalism creates the conditions for this new more advanced system.In a nutshell, capitalism eliminates the need for the profit motive and hence the need for its own existence. It does this through the creation of modern industry and technology which open up the prospect of universal prosperity, and of robots and computers doing all the work that we really don’t want to do. Under these new conditions we can begin to imagine people working because they like what they are doing and they want to contribute, while at the same time being happy with an equal share of an increasing level of prosperity. In other words we can see social ownership having a totally different and better form of motivation than the profit motive that is associated with private ownership.
This means that what was previously impossible becomes possible.Past history already tells us that sharing poverty and laborious work is impossible. You cannot create equality under those conditions. It is a utopian dream. For example, as the Middle Ages illustrate it only requires a small band of thugs who would prefer to live off everybody else’s hard work and you end up with a very nasty class society. Also when assessing the experience of the Soviet Union, and the various regimes derived from it, it is important to keep in mind their backward economic conditions as a factor in determining how things turned out there.
Now, favorable economic conditions presently only exist in the rich countries where less than 20 per cent of the world’s people reside. What about the rest of the world? It looks like it is going to take a number of generations for them to develop. It is hard to be any more definite than that. However, I would suggest that the prospects are best if there is a healthy global economy and a willingness to provide well directed economic aid and also to offer diplomatic and military assistance to those resisting the forces of tyranny and corruption.
Anyway, why do I consider that social ownership will bring greater economic prosperity and progress? There are five reasons that strike me as being particularly important.
- Firstly capitalist firms cannot match the work performance that would be achieved where workers unprompted want to do the job to the best of their ability.Capitalist firms have to apply various rewards and penalties to get their employees to do their bidding. However, if a job is in any way complex it becomes difficult to correctly assess how well people are doing their job. And jobs are becoming increasingly complex so this is becoming more and more of a problem.
- Secondly once we get rid of private ownership and private debt we will also get rid of economic crises, stock market crashes, bank collapses and extended periods of depressions or recessions that lead to unemployment and reduced production.
- Thirdly we will get rid of the waste of human labor that Marx called pauperization where a large number of people are thrown on the scrap heap and survive on welfare. They are not equipped to develop work skills or they are psychologically maimed from living in this society.
- Fourthly, we will not have capitalism’s sluggishness in terms of what are arguably the main drivers of economic progress, namely,science, research and development, and technological innovation. There are a number of reasons for capitalism’s lack of vigor in this area. If I can beg your indulgence I will list six that I am aware of. Firstly, capitalists are not interested in major technological breakthroughs that will make their present investments less valuable or even obsolete. They just want incremental improvements that increase their value. Secondly, benefits from spending on R&D are long term but capitalists tend to have a short term perspective. Thirdly because of the public good nature of new knowledge, firms cannot capture all the benefits and so underspend on it. Fourthly, where intellectual property right laws are applied, access to knowledge is restricted. Fifthly, government funding for R&D is the first thing to go when there are government budget cuts. And also there is huge wastage as researchers game the funding system and personal prestige and career take precedence over outcomes. And sixthly, capitalism generates an anti-technology and anti-science attitude among the alienated masses. People see the modern industry created by capitalism as the problem rather than capitalism itself. We have people whose livelihood is threatened by new technologies. And there are the greenies who have a romantic view of the pre-industrial past.
- Now the last but by no means least on my list of capitalism’s economic problems that will be overcome under communism is what economists like to call government failure.Capitalism tolerates a lot of bureaucracy and regulation.Much of it is devoted to catering to the needs of vested interests in ways that harm the economy. Vested interest is just another term for private property. And as well as this there is of course empire building by career minded bureaucrats.
OK those are my arguments for why I think that private ownership of the means of production is a fetter on the economy. Now I want to address what I think are the two main arguments against what I’ve been saying. Firstly, we are told that social ownership would require excessive centralization and secondly that you can’t change human nature.
Economists argue that all this well-intentioned motivation would come to very little because an economy based on social ownership has an inherent economic calculation problem: in the absence of market transactions between enterprises it could not have a properly functioning price system. And as a consequence social ownership would require clumsy centralized resource allocation of the kind that existed in the Soviet Union. I am not going to speculate on how economic decisions will be made in the future under communism. However, we can say that there is nothing about the non-market transfers of custody over components from producer to user enterprises that would prevent them from making decentralized decisions based on prices. Furthermore, we could hardly do a worse job of allocating investment funds than do highly fluctuating interest rates and exchange rates produced by capitalist finance. Indeed, there are good reasons for thinking that economic decision-making would be far superior to that under capitalism. To begin with, because of the absence of ownership barriers, there would be far more scope for coordination, and less scope for secrecy and deception.
Human nature and mutual regard
Now what about human nature? A society based on social ownership requires far more than simply state ownership, although that is a prerequisite. There need to fundamental changes in people’s behavior and abilities.
The behavior change can be best summed up in the expression ‘mutual regard’.You do the right thing because you want to contribute and you know that your efforts are not futile because a large and increasing section of society is doing likewise. As well as being the basis of morality and what is considered honorable it is also enlightened self-interest. By everybody serving others we are all served. This altruism is not the self-denial that Ayn Rand made it out to be.
Many would doubt the ability of rank and file workers to do the complex kinds of work required in the future. However, I would suggest that people have greatly untapped potential. There are many ways that they are presently held back or find themselves unchallenged.
The kinds of changes we are talking about here will not happen overnight. There will have to be a transition period that will take a generation or more and is generally referred to as socialism. It will take time to totally eliminate private ownership, starting with the big fish, and it will take time to move completely away from the old capitalist work incentives. And it won’t be smooth sailing. Good behavior will only win out once the good majority gain the confidence and moral courage to stand up to those who behave badly. And there will be lots of old management types trying to run things in the old way and convincing workers that the new ways are futile. So it will be touch and go for a while and we may need more than one stab at it.
Now let’s look at political liberty
With the emergence of capitalism we have seen for the first time a degree of political liberty. We have constitutions limiting the power of government, we have elections, the separation of powers, habeas corpus. These would have been unimaginable in the Middle Ages or in any other pre-capitalist society.
The main problem however is that the capitalist system tends to abandon political liberty in times of crisis. Also a big test of political freedom is our freedom to confiscate the means of production from the capitalists and convert them into social property. In the face of a serious revolutionary movement one would expect to see states of emergency, unofficial death squads, and well-resourced propaganda campaigns spreading fascism and xenophobia.
What conclusions should we draw about the lack of democracy in the so-called communist bloc countries? The Soviet Union etc? The first thing to note is that we dealing with an historical accident. By virtue of some rather specific or contingent circumstances,communists found themselves in charge in countries that with few exceptions were economically and socially backward, and totally unsuited to undertaking a communist revolution. Also, the regimes did not arise as a result of popular support for communism. In the revolutions in the Soviet Union and China the primary concern of the peasant masses was nothing more than land reform. In Eastern Europe the regimes were due to the arrival of the Soviet Red Army at the end of WWII rather than popular revolutions. So I think it is safe to say that these regimes would not have survived if they had been democratic.
However, it is important to keep in mind the alternative in most cases was right-wing tyranny rather than democracy. And of course these regimes eventually lost the minimal revolutionary content they may have originally had.So their authoritarian nature could no longer be blamed on communists. Instead we just had phonies like Vladimir Putin who pretended to be communists until the collapse of the Soviet Union and we presently have people like Xi Jinping in China who still pretend to be communists. The take-home message here is that the conditions were very different from what we would expect in the future when revolutionary regimes come to power in highly developed societies on the back of widespread support for their political program.
Freedom of speech
Now, the economist Milton Friedman famously argued that freedom of speech and the emergence of diverse political groups require the decentralization of resource ownership that only capitalism can deliver.He argued that under capitalism you have the possibility of finding a rich patron. Marx and Frederick Engels and the Bolsheviks received money from anonymous benefactors as well as from robbing banks. Under social ownership, however, resources would be centralized in the hands of the very authorities that you may want to criticize. However, I would argue that with everyone having very high disposable incomes and access to the Internet you would not have to rely on central authorities providing resources. Also I do not see any insurmountable obstacles to ensuring open access for various resources needed for a vibrant political life.
I do not want to paint too rosy a picture.A revolutionary government during its initial phase may have to declare a state of emergency if there is a rebellion by supporters of the old order. Their rebellion could take the form of civil war, terrorism and sabotage, and dealing with it will not be easy. At the same time, for success, we will need the freedom to criticize those in positions of authority when they display incompetence or lack of revolutionary politics. Bottom up supervision will be a critical part of the system. Indeed, a social system that relies on people taking the initiative without external prompting, could not function if people are not able to say what they think is wrong and what they think should be done about it.
I will now make two points to briefly sum up.
Firstly, capitalism creates the very economic conditions required for a more advanced classless society that will be based on social ownership of the means of production.
Secondly, a primary task for the present period is ensuring economic and political progress in the more backward regions of the world. For this we need a liberal global economic order, well directed economic aid, and diplomatic and military support in fighting the battle for democracy. And critical to this is beating back the nationalist anti-globalist wind that is blowing at the moment.
“In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all” – Karl Marx
* * * *
This is the text of a talk given by David McMullen at the Monthly Argument on Wednesday October 19, at The Royal Oak Hotel, Fitzroy. David is the author of Bright Future.
Is capitalism the best system on offer?
As you are well aware we presently live under the capitalist system where the means of production are owned primarily by a small ruling class. Now is this system the best on offer? My answer to the question is no. However, the journey to the better alternative is going to be a tortuous process. This alternative is the very opposite of capitalism. It is a classless society where the means of production are socially owned, and it has usually been called communism.
Now how does this alternative claim to be better? It claims to be better than capitalism on the grounds that it would allow the individual to fully develop and thrive under conditions of mutual regard rather than the dog eat dog world of capitalism.
However, for such a society two things are required. These are (1) a very high level of economic development and (2) the successful completion of a rocky period of revolutionary transition during which we fundamentally transform ourselves and our relations with each other.
The first of these – a very high level of economic development – allows us to eliminate poverty and toil, and this is absolutely critical if we are going to dispense with the profit motive. This is because it opens up the possibility of people working because they like what they are doing and they want to contribute, while at the same time being happy with an equal share of an increasing prosperity. While it is possible to imagine people sharing prosperity and enjoyable work, it is not possible to imagine people sharing poverty and toil. The Middle Ages shows us that it only requires a small band of thugs who would prefer to have a lot more than everybody else and you have a very nasty class society. Also the experience of the Soviet Union, and the various regimes derived from it, shows what happens when you try and go beyond capitalism under backward economic conditions.
In the rich countries we have reached an economic level where it is possible to imagine everyone enjoying something approaching toil free prosperity. However, what about the rest of the world where most people live? What are the prospects there? The middle income countries such as China and India should start approaching fair levels of development in a generation or so if they maintain a reasonable growth rate. On the other hand the poorest countries where most people live will need to begin, and sustain, a growth takeoff similar to India and China in order to get to out of their present poverty later this century.
Many raise doubts about the possibility of achieving global economic prosperity. They either say that everyone having high and increasing living standards is impossible because of resource limits to growth or because capitalism’s disregard for the environment will lead to ecological collapse and a very bleak future.
The limits to growth view is based on a number of notions: (1) that minerals become too difficult to extract as we have to dig deeper or rely on lower grades of mineral ore. As a result capital becomes increasingly devoted to extraction and this leaves less and less for the rest of the economy. (2) Economic growth necessarily creates an increasing waste stream that the natural environment can no longer cope with. (3) Increasing food production will ultimately deplete the soil. I think there is ample evidence technological advances can solve those sort of problems. I dealt with this issue at length at the debate in June. It is available online as is this talk.
Now is capitalism going to completely trash the environment because of its shortsighted search for profits? I think we can expect quite a lot of trashing of forests and pollution of air and water as the poorer countries develop. However, countering that is the fact that newer technologies tend to be cleaner and as countries get richer there is increasing political pressure to reduce environmental damage and remedy past damage.
As for CO2 emissions. They are very unlikely to be brought down to the levels that people are talking about. We are pretending to do something while achieving very little. The Europeans have made a lot of noise but are reneging on all their promises. India and China are continuing to build coal power plants at a cracking pace. China is also building quite a few in other countries. Germany and Japan are building more coal power plants because of their stupid decision to get out of nuclear power.
There are two strategies for significantly reducing CO2. The first would involve a massive total switch to renewable and nuclear power in coming decades. However, because these technologies are far more expensive than fossil fuels it is not going to happen. Keep in mind that it would require massive subsidies to the less developed countries who have made it clear that they are not going to abandon much cheaper fossil fuels unless compensated. These countries are already consuming more than half the world’s energy and the percentage will soon be a lot higher.
The second strategy is to to implement a massive research and development program aimed at providing energy options that greatly close the cost gap with fossil fuels. This would be far cheaper than the first strategy. And it is a strategy that Bill Gates is promoting with only modest success. And it is the strategy I support.
For the moment I am noncommittal on the level of threat to the environment that is posed by capitalism’s failure to act on CO2 emissions. Views on the subject range from little impact to a runaway greenhouse effect that would put the human race in a very sticky position.
Now on that rather uncertain note, let’s move on to the second requirement if we are to achieve a classless, collectively owned society. As said at the beginning, we have to complete a very rocky period of revolutionary transition during which we fundamentally transform ourselves and our relations with each other.
While getting rid of the capitalists and installing a revolutionary government will be a protracted and tortuous business, it will not be enough. We also require an entire historical period of struggle to make the transition from a society based on profit to one based on mutual regard. This will have many ups and downs and may possibly include major defeats.
The central thing here is a struggle with a new bourgeoisie that is bound to emerge after the revolution because you can’t immediately eliminate the old division of labor. For some time society will still have a lot of hierarchy, and all levels of government including the very top will be full of phonies pretending to be revolutionaries and also revolutionaries who become corrupted by power. This new group proved irresistible in the Soviet Union and its derivative regimes. To counter this it will be critical to have a revolutionary mass movement that can push back against it.
There is also a struggle with people at all levels of society who are slow to adopt the behavior and thinking of mutual regard. This will require people to have the moral courage, self-confidence and social skills to stand up to problematic behavior. At the moment we tend to knuckle under or run away from a problem. The principle of mutual regard can be summed up as – I will go out of my way for others and others do likewise, and we all share in the better outcome that results. It is enlightened self-interest because our welfare depends on the welfare of others. And we mustn’t forget the direct satisfaction that we get from helping others and contributing to the general good.
I rather like this paragraph from the Communist Manifesto dealing with this subject:
In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all.
Finally, a very important point to make is that the less that capitalism has modernized societies the harder the task of transition will be. Pre-capitalist societies are really awful and people’s heads are full of even more crap than modern people. In these societies the average person is ignorant and uneducated. They are servile and accepting of the idea that some people are superior to others, and have a right to push everyone else around. There is no conception of democracy or individual liberty. The individual is tied down by obligations and loyalties to groups such as extended family, clan and tribe. And women are completely subordinate to men. It is virtually impossible to imagine creating a classless society on the basis of this kind of culture.
So to sum up.
Firstly, a society more advanced than capitalism requires a high level of economic development, what is sometimes called post-scarcity.
Secondly, this new society requires more than simply installing a revolutionary government and dispossessing the capitalists. There is an entire historical period when ordinary people will have to push back against the opponents of the revolution and thoroughly internalize the new morality of mutual regard.
And thirdly, on a more mundane note, there needs to be a massive increase in research and development spending in order to develop the new energy technologies that economic growth requires.
My father, Loreto, would have turned 98 today. Sadly, he died in 2009 – but lived a healthy life for 90 years (save for his months of decline).
He was born in Malta in 1918, joined the Royal Air Force there during the Second World War, and ended up in London with the RAF after the War, where he met and married my mother, a Londoner ‘born within the sound of Bow-Bell’ named Olive Turner.
I was born there in 1951 and was three when my parents migrated to Melbourne, Australia.
Apart from a brief stint as a mail sorter in the GPO, my father worked in factories all his working life in Melbourne. Radicalised by the experience of the anti-fascist war, especially by communist and socialist English and Scottish airmen he met while on service in the Middle East and Africa, he followed both the British Labour Party and the Communist Party while in uniform in London. (He was demobbed in 1953).
In Australia, he was shop steward in a couple of factories where he worked in the cosmetics industry and he eventually joined the Australian Labor Party. Back then, the ALP was the mainstream socialist party. (Hard to believe, I know).
A charismatic person who was self-taught (he had only four years of formal education in Malta) and who graduated with distinction from the ‘University of Poverty, War and Struggle’, he spoke several languages and this made him a huge asset to the Bruswick branch of the Labor Party.
As a family we had settled in Brunswick in 1954 and, after a couple of years in several different boarding houses, purchased our own place in Shamrock Street, West Brunswick, in 1956. I was there for nearly 30 years – my parents for about 40.
My father became active in local government politics in the 1960s and was elected to the Brunswick Council. Unlike the other Labor Councillors, he could speak Italian, Maltese, Arabic, some Greek and German and smatterings of other languages that were common in the significant migrant city.
In 1972, he became Mayor of the City of Brunswick – the first Maltese Mayor of an Australian city and the first ‘non-Anglo’ ‘non-Celtic’ Mayor of multicultural Brunswick. I should point out, too, that back then, being Mayor was not a paid position. There was a small allowance to cover costs but my dad had to continue working five days a week in the factory.
As he explains in the excerpt from a lengthy oral history interview I recorded with him in 1989/1990, he was involved in the Vietnam protest demonstrations and regarded himself as ‘progressive’. He felt strongly about Aboriginal issues and supported equal opportunity for all Australians. I have a childhood recollection of him exclaiming after watching a television documentary about Albert Namatjira: “They call this a democracy!” And: “How can there be poverty in a land with such vast natural resources?!”
In Melbourne back then, Pastor Doug Nicholls was the ‘face’ of Aboriginal Australia in the media. (That’s how I remember it, at any rate). He used to come to my school, Northcote High, and speak to us students at morning assemblies. He was quiet, understated, smartly dressed and very eloquent and persuasive. Above all, he was a man of enormous dignity, with no suggestion of victimhood.
The Brunswick Mayoral Ball of 1973
My parents admired him, as did most people, and when in 1973 my dad had to organise the traditional Mayoral Ball, he decided it would be a good opportunity to make a gesture in support of the Aboriginal cause and against racism. He arranged for a group of Indigenous dancers to perform – and he invited Pastor Doug to be special guest of honour, leading the official party into the hall.
As far as we knew at that time, no other Council had invited Aboriginal dancers to such a function. His decision to have Pastor Doug lead the official guests into the Brunswick Town Hall ballroom meant that he had to override the objections of the Town Clerk who, rightly, pointed out that it would breach Protocol (which stipulated that the order of entry into the ballroom by the official guests had to be led by the Governor (if attending), then Parliamentarians, then the RSL (of which my dad was a member), Councillors, etc.)
In the oral history excerpt, my dad is restrained in his description of how he insisted that Pastor Doug lead the official party. He told me at the time, and many times later, how he responded to the Town Clerk’s insistence that Protocol could not be broken, by saying: “I’m the f*&#ing Mayor and if I f*&#ing want Pastor Doug to lead the official f*&#ing party then it will f*&#ing happen!” (I’m told that the ‘f’ word was commonly used by members of the Royal Air Force during the War, and that is no doubt where he learned it). My dad had a theatrical side to his character, and relished re-enacting his response to the Town Clerk, even decades later when in his 80s. (His story-telling often took the form of highly animated re-enactment).
My dad had a big impact on me in terms of awareness of the world, passionate opposition to injustice, interest in ideas, sympathies for socialism and communism and, above all, in terms of his spirit of irreverence and rebelliousness.
I hope you enjoy the oral history excerpt, commemorating, as it does, two of history’s good guys.