After huge hype – advanced publicity, huge billboard and bus adverts, gushing acquaintances of Margaret Thatcher on breakfast TV, a Jeremy Vine phone-in, Thatcher’s face haunting us everywhere again and Meryl Streep being canvassed for another Oscar basically for just taking on the role – The iron lady is crushingly disappointing. Politics has only a walk-on part in the film. As Streep herself has said, “It’s an imagined story of who she might be – probably not accurate” (Women’s hour January 6). Got it in one. In fact that could be a one-line review of the film.

Thatcher is an all too real character, but she is located in an entirely fictional world. The writer has taken the character and imagined what it must be like for Thatcher in ill health, with dementia; imagined how her memories might haunt her, how her past plays out in her mind.

This fictional reconstruction of her life starts with an old women in a mac – a traditional working class housewife, headscarf on her head – having popped out for some milk to the corner shop, ignored and unrecognised. As well she might be, for this is meant to be Margaret Thatcher. Then we see flashbacks to a lower middle class shop-owner’s daughter, hard at work delving out measures of sugar and lard in a working class community. Her dad, though the Tory leader of Grantham town council, has a distinct working class accent and talks homely home truths of thrift and enterprise.

This is in stark contrast to her adoption of aristocratic diction and haughty mannerisms at Oxford University, though the makers do not explain it. Here we see a bright, young, attractive thing, flirting and dancing, fussing with her make-up. Is any of that real? One suspects little of it relates to anything other than the writer’s attempt to invent a ‘rags to riches’, ‘I’ve come from the streets’ narrative. Indeed the film has Thatcher telling her Oxbridge colleagues in the cabinet how she came from the bottom and understands the masses because she has been one of them! Even if that were true – and it isn’t – can anyone imagine Thatcher claiming that heritage after aspiring so hard to bump the queen from the throne and take her place? I recall the comment of HRH as to why she felt uncomfortable in Maggie’s presence: “I never know which of us is supposed to curtsey,” she is said to have responded.

The upper class followers of Thatcher who have made much of her “unique fashion sense” and “style” do not see this simply as the uniform of the rich Tory women faithful – the only “unique” thing about it is that it at once identifies the lady with would-be aristocrats and petty royalty: all neatly styled hair, pearls and conservative twin sets.

Having set out her ‘struggle to the top’, the makers hope to have won the audience to the side of Thatcher when it comes to her political trajectories. Director Phyllida Lloyd admits: “The whole story is told from her point of view” – and justified accordingly. Although, to be more accurate, it is probably what she imagines her point of view might be – this film makes no claims of actual biography, and especially none of political analysis. Jeremy Vine was at pains to convince us that, while we might not like Thatcher, we ‘have to admire her principles’ and the fact she was ideologically driven – it didn’t wash and the phone-in was swamped with callers expressing their outright hatred of her and her political legacy.

The film’s attempts at humour involve, strong put-downs of ‘the men’, whether the long suffering Denis (who is much stronger and independently willed in this film that in reality), her cabinet colleagues or the US ambassador. The portrayal of her assertiveness and dry wit drew irritating laughter from a small section of the Newcastle preview audience who watched The iron lady with me. I wanted to go over and slap them for being too stupid to realise that such dialogue is totally invented. While she did in reality get her gob round some memorable phrases – “the enemy within” and “U-turn if you want to: the lady is not for turning” – these remarks were not among them. A scriptwriter wrote them and put them into the fictional mouth of the character.

So, other than this being a hard-working girl from the lower classes who makes it to the top through her own effort, what is the other conclusion the film is urging us to draw? The view is very strongly pushed that Thatcher is a feminist. Streep in her Women’s hour interview expresses the view that no other advocate of her politics attracts anything like the hatred she does, and this can only be because it was a women advancing them, not a man. It takes the female presenter to remind her that Thatcher was an anti-feminist.

All of Thatcher’s rhetoric regarding women was connected to their role as mothers, housekeepers and shoppers, not as economists, politicians or activists, and the effect of her policies has been fiercely anti-women – especially anti the aspirations of working class women and girls. Yet still the film persists in trying to paint that picture. We are shown the Thatcher-eye view of her entering parliament as a lone woman in an exclusive male club – as if a number of strong women, especially working class Labour women, had not been there before her, or were not still slogging it out in those chambers. One expects that this whole caricature is aimed at the US audience, who will not know this is sheer invention.

When it comes to the actual political aspects of the film, we might be surprised to find she has the leadership of the Tory Party thrust upon her unwilling self! Not the fierce and relentless faction fight she in fact waged against Ted Heath – a fight to replace him and his ‘one nation Toryism’ with herself and naked class war. We are reliably informed that neither she nor Keith Joseph voted in the ‘Who rules Britain?’ election because they wanted to bring Heath down.

In the portrayal of the mass working class opposition, I can find no fault. It is clearly presented that her policies were being violently rammed down our throats and that they were characterised by injustice and inequality. I do not know if this part of the film was made by different folk from those who made the first part, but it certainly feels like it – the whole thing ends up as a kind of ‘push me, pull me’ weld of two conflicting measures of the woman and her policies.

The chronology of events is strangely chopped and changed, much in the style that the BBC famously cut and reversed footage of the Orgreave picket and police clashes. In that piece of historic reconstruction, a fierce police and cavalry charge into placid pickets, who then retaliate with missiles (lumps of clay actually, though they looked like half-bricks on the TV news), is reversed to show the hapless police officers coming under attack by brick-throwing pickets and forced to retaliate. In the film, we have the miners’ strike of 1984-85 taking place before the 1982 Falklands war. Why? Because otherwise we would have the Falklands ‘achievement’ and the crest of the nationalist wave first, followed by the tyranny of the state’s response to the miners, and then the mass poll tax movement and riot. This would have suggested a brief period of popularity, followed by decline, mounting opposition and state repression. It would have made the counter-image of Thatcher as a stubborn fanatic too strong. So we have the episodes jumbled up: first the miners’ strike, then the Falklands victory, then the poll tax.

Even then we would still have got a strongly repellent portrayal of a rightwing zealot if the whole film had not been dominated by all that fictional, sentimental pap. The first two-thirds of the film are meant to nail this image in our heads so deeply that it cannot be dislodged by her manic egotism. This ploy does not actually succeed – although grandees of the Tory establishment have wet themselves with glee to see Maggie’s face everywhere: this film is the greatest propaganda coup for the Conservative Party they could ever dream of. And The iron lady is supposed to cement her reputation as some super-visionary politician etched into the national character, to be honoured with a state funeral.

Margaret Thatcher’s actual legacy is not shown in this rewrite of history. That legacy can be seen in the desolation, poverty and hopelessness of working class Britain. In the end of productive manufacturing, of trade union strength, of solidarity and of visions of a fairer, socialist alternative to greed and ‘dog eat dog’. In the rise of money capital, in finance speculation and in the gradual replacement of industrial bricks and mortar with a house of cards. Those abandoned, traditional, working class communities – the north, the valleys, Scotland and the inner cities – would make a suitable final scene for this film, rather than the long dead ghost of Denis walking out on Thatcher, leaving her finally totally alone.

Depressingly tedious, The iron lady is a missed opportunity, which hopefully someone more inspired will revisit in the not too distant future.

In 2008 the banks crashed. States round the world bailed them out by borrowing money. Inevitably, this did not get rid of the crisis but rather gradually transmuted it into a crisis of the creditworthiness of individual states: today the crisis of Eurozone state creditworthiness threatens a new bank melt-down (which may already have happened by the time of this weekend school).

The ‘solution’ demanded by governments and the media is austerity. Creditors – ‘savers’ -  must not be made to accept the losses: the working class, both in and out of paid work, must do so. Predictably, the result is an economic downward spiral – as seen in Greece, but coming now to the rest of Europe.

The ‘Occupy’ movement has represented a cry of rage but not put forward a clear alternative. The broad left, including the far left, has committed itself to Keynesian ideas – that states should borrow more and spend more and hope by doing so to grow ‘their way out’ of the crisis.

Understanding the unfolding crisis and proposing real alternatives requires us to grasp Karl Marx’s critique of political economy. But while education in the basics of Marx’s ideas was commonplace on the far left in the 1970s, today it has withered away: there are academics and theorists who ‘do’ political economy, while left activists and groups ‘do’ only campaigns.

Our school aims in a small way to contribute to beginning to overcome this gap in the education of the left. We are therefore seeking to address fundamentals rather than to tackle the analysis of the crisis directly.

Fundamentals of Political Economy, January 21-22, 11am-5pm. Room 2b, University of London Union, Malet Street, London. Cost: £10 waged, £5 concessions. Email office@cpgb.org.uk to reserve your place.

Topics and speakers:

Moshé Machover

1. The Labour theory of value – Moshé Machover

The labour theory of value and how it should be understood is the fundamental centre of Marx’s critique of political economy: the basis on which all else is built.

Academic and long-standing militant Moshé Machover coauthored with Emmanuel Farjoun Laws of Chaos: a probabilistic approach to political economy (1985), pioneering an approach which has been used by some Marxist theorists and criticised by others. He gave a paper explaining the approach to the Historical Materialism Conference this year, which is recommended reading.

2. Money and finance capital – Hillel Ticktin

Hillel Ticktin

The financial system is at the centre of the present crisis. But what is the underlying basis on which the luxuriant overgrowth of financial institutions and instruments has grown up?

Hillel Ticktin is the editor of Critique journal. He has written numerous articles on finance capital and the ‘financial turn’ of the 1980s and its consequences and on the shape of the present crisis.

Werner Bonefeld

3. Political economy and the state – Werner Bonefeld

Keynesian and nationalist ‘solutions’ to the present crisis rest in the last analysis on the illusion that the nation-state stands above classes and can ‘manage’ the monetary and financial system so as to overcome the crisis. How does the state relate to the capitalist economy?

Werner Bonefeld is one of the founders of the ‘Open Marxism’ school of Marxist theory. His work on the state and political economy has been published in Critique, Capital and Class and elsewhere.

Mike Macnair

4. Against Keynesianism – Mike Macnair

John Maynard Keynes’ General Theory of Employment, Interest and Money (1936) was a muddled partial critique of the ‘orthodox’ economics of his day while remaining within the fundamental ‘orthodox’ ideas of marginal utility and equilibrium – though full of striking phrases. Its assumptions are deeply nationalist. Keynesianism is popular among opponents of the policy of austerity because it seems to have ‘worked’ in the 1950s and 60s. It seemed to do so, in reality, because of the results of World War II.

Mike Macnair is a regular writer for the Weekly Worker, among other issues on the present crisis and its implications.

Worshipping the market

The depression – called some years ago the ‘third great depression’ following on the long depression at the end of the 19th century and the great depression of 1929 onwards – is now official, as it were. Martin Wolf ’s recent article in the Financial Times produced a series of statistics showing that the present downturn has already lasted longer than previous downturns in the last century. His arguments are, of course, statistical and bound within orthodox economics, even if he leans to a moderate Keynesian analysis.^[1]

Engels had predicted that downturns would become worse at the end of the 19th century, but he was proved wrong because of the turn to imperialism on the part of the great powers. However, it is clear that his observation of the underlying tendency was basically correct. In turn, the various depression-era economists of different persuasions now look more credible. The Keynesians, however, may have had their day, given the refusal of governments and a section of the ruling class to move in their direction.

The earlier interventionist policies in 2008-09 have now been replaced by stringency and austerity. It is not that the insights of the Keynesians have not been recognised, but their policies are regarded as too dangerous to follow. Hyman Minsky has had his moment. Perhaps the greatest triumph of the Keynesians since the adoption of the Bretton-Woods agreements has been the recognition that their policies would work, but are so dangerous to capitalism itself that they have to be avoided at all costs.

It is paradoxical that the situation is so dangerous that the rich have to pretend that their wealth is playing no role in capitalism. We not only have the absurdity of trillions of dollars being held privately in various banks, but we now have one bank, the Bank of New York Mellon, charging for the trillions it holds, knowing it cannot be invested anywhere.^[2] “It is the world’s largest custodian serving the world’s largest investors.”^[3]

The problem the Keynesians attempted to solve lay in the difficulty of selling due to low incomes. Today, the rich are not even spending their money on yachts or luxury cars or castles, but saving it, and the amounts are so great that governments cannot compensate for their lack of investment without taxing the rich, who are financing political movements against taxation. Finance capital itself has been so concentrated that in the USA six investment/commercial banks – Bank of America, Citigroup, Morgan Stanley, Goldman-Sachs, JP Morgan Chase and Wells Fargo – hold assets worth 60% of US GDP, and “dominate the financial industry”.^[4] At the same time, the government is implementing austerity measures directed against the majority of the population. The rich have got richer and the government is making the poor poorer. In the USA, at least, it is abundantly clear that the government could solve its fiscal problem through a rise in taxation on the wealthy.

The riots in Britain – preceded as they were by student protests and semi-riots – were rationalised away by the Conservative government, loyally supported by a rightwing press. No level of state repression, under the British prime minister’s name of ‘tough love’, against a recalcitrant population will alter the growing, though inchoate, demand for ‘regime change’ under conditions of growing inequality. The question is not whether there will be a powerful movement for the replacement of the market by a society rationally planned in the interests of the ordinary population, but how much longer it will take to develop. Marx’s spectre of communism is very much the ghostly presence feared by the wealthy and powerful, even if they do not understand what shape it will take.

No doubt the crisis will continue to take on a series of forms, from the initial financial implosion to the present-day threat of sovereign default and continued low growth. The present euro crisis is insoluble because it is a microcosm of the general crisis, which itself has no solution. However, its forms are specific. We have the expression of German nationalism, representing the first time that the German bourgeoisie feels it can shake off the heritage of the last world war and Nazism, and express its interests directly and clearly. The clash between France and Germany, Sarkozy and Merkel, has been relatively low-key, but it is there nonetheless. However, the Germans have found that it is not easy. The less prosperous countries of the euro zone are not prepared to accept German dictation of the economic terms of survival.

There is no obvious reason, in any case, why the terms of trade between Germany and any particular country in the European Union should be what they are. Why are agricultural goods relatively cheap, compared with machinery or automobiles? Only believers in the market accept market prices as fair, just or somehow correct. The commentators effectively argue that those countries whose industry is less developed should adopt a tight fiscal policy, given their need to import industrial goods from Germany. Such a policy cannot work under any circumstances. The only result, to be welcomed, will be the establishment of a uniform policy of economic repression sufficient to proletarianise the ‘middle class’ and drive the working class across the euro zone to forms of direct action.

The persistent failure of the euro zone to adopt a credible policy is indicative both of its divisions and of the real lack of a solution.^[5] However, the German bourgeoisie really has no choice, unless it wants to lose the common market, stable economic relations with its neighbours and a relatively low-value currency. The proposed expulsion of Greece with its subsequent default would impoverish the population even further and create havoc among European banks, and is therefore a crazy solution. Even if the banks are saved before that event, and the default cauterised as a result, the knock-on effect on the bonds of the other countries – by now including practically all the Mediterranean members, plus Ireland – will be enough to make Germany avoid that way out. Apart from anything else, it will force the formation of a French zone, as opposed to a German one. As the country which will lose most, apart from Greece, the German bourgeoisie cannot take that line.

In reality, because a default or an exit from the euro zone will be globally destabilising, Greece is in a strong position and its government could have taken a much stronger line. Its government, however, is pusillanimous, reflecting the nature of its bourgeoisie, which has sent its money out of the country. Indeed, the way the bourgeoisie uses tax havens to shelter its money or to avoid tax or both plays a big role in the destabilisation of much of the world economy.

India and China

There is little that is politically more absurd than the constant reference to the importance of China and its role as the next big power. The similar reference to India is equal nonsense. It is argued that China and India or perhaps one or the other can save the world from its crisis. If it was not so commonly held, one could ignore it.

As regards India, we hear that “per head energy and protein intake has been falling for the last two decades, as the majority of the population is unable to afford enough food”.^[6] Pankaj Mishra argues that the propaganda about India is closer to the myths produced by another country (presumably the USSR), “where statistics were shamelessly manipulated and a tiny, privileged elite dominating both political and economic life lorded it over the rest”.^[7] The fact is that levels of productivity in China or India are a fraction of that in the USA, and they have no chance of catching up with the west, under capitalism.

In the case of China, it seems that it cannot now play the role that it did in 2008-09, when it expanded the money supply in order to avoid a contraction and so played an important role in avoiding a deeper downturn. Its growth rate is predicted to halve. “Finance is not the only area in which Beijing’s ability to launch a counter-cyclical economic stimulus has ebbed. The ability of local governments, if asked again by Beijing, to boost investments is questionable.”^[8]

Divisions

On the one hand, the capitalist class thinks that it has dispensed with a communist/socialist alternative with the end of Stalinism. On the other hand, it also knows that the despair of the white- and blue-collar workers can and will turn to action in order to overthrow a social system which has outlived its time, in order to replace it with one controlled from below. The ruling class prefers to believe that such a society will be worse than capitalism, though there have always been some who are realistic enough to realise that the current inequality of wealth in the midst of massive poverty is insupportable.

In other words, the ruling class is divided, but all sections are concerned with the need to defend the system. At the same time, as in any time of global change, parts of the ruling class or its employees have begun to question their positions. In the UK, Marx has been quoted and some of his words supported by a series of establishment figures. None of them have become Marxist, and all would perhaps find reasons why Marx was wrong to want socialism, and indeed, no doubt, is still fundamentally wrong. Charles Moore,^[9] biographer of Lady Thatcher and former editor of the rightwing Daily Telegraph, George Magnus of UBS, ^[10] former advocate of the new right in the 80s, John Gray,^[11] philosopher and leading light in the founding of a new private university in London, and Sam Brittan,^[12] long-time leading commentator at the Financial Times, are some of the figures reported in the press commenting on Marx or the left. Lord Skidelsky, biographer of Keynes, wrote: “as more and more people find themselves with enough, one might expect the spirit of gain to lose its social approbation. Capitalism would have done its work, and the profit motive would resume its place in the rogues’ gallery.”^[13]

When the present crisis was in its earlier phase, we previously quoted an advice from JPMorgan,^[14] to the effect that Marx might have had a point. The News International newspaper, The Times, wrote a sneering editorial in October 2008 in which it said that the world moves in mysterious ways and the fact that Marx’s Das Kapital had become a bestseller in Germany was particularly mysterious. It referred to the fact that Sarkozy, president of France, was photographed reading that work and that Pope Benedict had praised Marx’s analytical skills. The then German finance minister, Peer Steinbrück, as befits a social democrat, was apparently less taken with Marx, but was prepared to concede that some of his thinking was “not that bad”.^[15] However, it was implied that this was little more than a fashion which was bound to pass. Three years later, it seems that Marx has come to the fore yet again and News International is suffering its own crisis.

The fact that they are looking at Marx shows, in the first instance, a collapse of confidence, first displayed in 2007-08. This, in turn, can have three possible meanings. The first is that Marx is simply a convenient icon to express their fear of the long-term damage done to the system. It does not necessarily indicate anything about their support for the market. The second is that they recognise that the market has had its day, though they do not necessarily see an alternative. The third possibility is latent in the other two. It is that they have begun to shift politically towards the left, without supporting any party, but it is yet to show itself. Here the problem is the absence of any significant Marxist party, to speed up the process.

Murdoch scandal

The ruling class has lost confidence in areas of life beyond the economy, however basic that is. The whole ‘Murdoch scandal’ is much more than a question of the illegal hacking of phones.

One of the prime movers in the British parliament, Labour MP Tom Watson, had this to say in an interview on the question: “When I was first elected I was a completely naive and gauche politician. You look at the pillars of the state: politics, the media, police, lawyers – they’ve all got their formal role, and then nestling above that is that power elite who are networked in through soft, social links, that are actually running the show.”^[16] This could have come from Bernard Shaw’s play Major Barbara and the sentiment is very much at the heart of any Marxist political understanding of modern society, which now stands vindicated through a direct investigation of one of the threads the ruling class uses to rule. The involvement of the police, civil servants, members of parliament and journalists, all apparently connected to the Murdoch family, simply confirms a picture long held by Marxists, and often regarded with contempt by liberals.

It is clear that both bourgeois ideology and the parliamentary political system are in trouble. In one country after another, scandals of various kinds are rocking the system. One has only to look back at Marx’s description of Europe in 1848, France in particular, to realise that the eruption of so-called scandals today is part of a more general discontent in society, which is leading to increasing division in the ruling class and an increasing loss of confidence.

In this situation, the UK leads the pack, though demonstrations and organised forms of protest may be more frequent and more powerful in other countries. The nature of the student demonstrations and the English riots over the summer of 2011, whatever their immediate background, are unprecedented in English history. As the former global imperial power and junior partner to its successor, the United States, the British ruling class has propagated an ideology based on the view that it has been the founder of modern democracy, taking it over, as it were, from the ancient Greeks (by contrast, the ruling class ideology in the United States rests more on the so-called ‘American dream’, of meritocracy winning out, even though there is much made of democracy). Hence the recent scandals of members of parliament enriching themselves through claims for expenses, and the clear connections between politicians, policemen, journalists, private detectives and the Murdoch empire have struck at the heart of that ideology.

Under increasingly harsh economic conditions, with the media constantly talking about reckless and consequently illiquid and insolvent banks, whose executives, unbelievably still earn millions in annual salaries, the ruling class and government have to find arguments to support the existing socio-economic system. Yet every day seems to provide reasons for changing it. The immediate implications of the ongoing Murdoch scandal lead to a demand for a more open and democratic political system, the control of companies and indeed the press by those who do the ordinary work, rather than a dictatorship of a single individual, like Murdoch, or the CEO of a bank or industrial firm. This is not socialism and it is not viable, or likely to happen, under capitalism, but it is the kind of question that arises and blows open the ruling ideology, in however inchoate a way.

Terminal?

It is almost as if the ruling class has decided to commit suicide. It is going for an economic policy which is at best utopian and at worst catastrophic. Austerity for the vast majority and increasing riches for the ruling class is only a viable policy under conditions where there is absolutely no challenge to the system, and ordinary workers are so weak, both healthwise and in terms of organisation, that they pose no threat.

There really is no alternative to the replacement of the capitalist system by a genuine socialist system, which in the end is the only rationally ordered or planned system, in which decisions are made and controlled from below, not decided from above, however benign the ruler. Twist and turn as the beneficiaries of the system might, they have run out of strategies to delay change. As we have argued before, the ruling class has used finance capital/imperialism, world wars, cold war-welfare state and finance capital again as modes of survival. Finance capital has now imploded, while the colonies are now politically if not economically independent, the cold war is over and world war is no longer possible. The return to the welfare state without the cold war and Stalinism would only be the first step to loss of control, as became evident in the 70s of the last century.

Furthermore, it is clear that the global reach of the American empire is shrinking. The imperial power of the United States is in decline – and the decline of the leading capitalist power, without a successor in sight, can only herald the more rapid decline of the social system.

One might have predicted that there would have been a successor. There has been one such eventuality, after all, with the USA replacing the UK. However, Europe is engulfed in its own crisis, which is only expressing on a national scale the kind of inequality which exists in the society as a whole. There is no prospect of another country conquering the world, whether by force of arms or through finance capital, even if it had the industrial and military might of the United States without its debts. China, the country usually cited in this connection, is not in that position, and it does not even have the same drives or the same intensity of those drives, as modern capitalism.

So are we now witnessing the last days of the greatest empire the world has seen, the last days of a system which brought the world to a level of productivity so great that it made abundance for all a real possibility? The system was overthrown in Russia in 1917, and the world has been waiting for the potential replacement to show itself in a form other than Stalinism ever since. Delay is as good as a temporary defeat. In the end, Stalinism has been crucial to the preservation of capitalism, but it is no more and cannot be resuscitated. It is true that it is playing a negative role in Greece at this time and in a number of other countries, including China. It is less true of western Europe, however.

Subjective

As we approach the socialist future, the subjective plays an increasing role, as one might expect. In socialism, society is increasingly transparent and planning decisions are made by the population. The economy ceases to stand above mankind, and turns into the administration of things. Although we still live under capitalism, in spite of itself the ruling class has to rule and not leave the economy and society to an apparently impersonal market. However it is done – through governmental administration, through the parliamentary system, through the bureaucracy of the firm or through partially hidden ruling class institutions – the system is increasingly controlled.

In other words, before it comes to an end, there has to be a social-political form which stands in opposition to current political-economic forms. That does require a socialist party with intimate links to the working class. It has to be part of the majority of the society. It has to be trusted and it has to be internally democratic. There has to be a shift in consciousness towards socialism, in which the various doubts and slanders are discussed and dealt with.

As this shift has not occurred, capitalism is not directly threatened at this time. It is clear that there are threads leading to such a movement, but they are as yet only weak and easily broken. In the 1930s Trotsky spoke of a crisis of leadership. In a sense that is what is needed today, but the leadership has to be based on the will of the majority and that is yet to show itself. In the 30s, socialism had more support, making Trotsky’s analysis more understandable, but he was only right in so far as one could say that there was no socialist party to lead. He had underestimated the power of Stalinism.

Where are we?

If there is no direct challenge to capital, that does not mean that it is not in systemic trouble. One cannot read a commentary on present political economy which does not speak of ‘lack of confidence’. This use of the word ‘confidence’ is understood to mean that capitalists do not see how to make money by investing in the economy, as opposed to keeping their money in the bank or under a mattress. Above we discussed the question of confidence in another context – that of the system itself – and I will look at the two meanings and their relation.

Today, cash is king, even though inflation is reducing its value. This is not the usual situation in a depression, when deflation increases the value of the money held, even if no interest is paid. There appears to be no short-term or long-term solution. After all, money could be invested in a long-term project, expecting a return in 15-20 years, if the rich had confidence in the system. Whereas the short term concerns immediate issues, most of which will be resolved one way or another within a finite time, the long term concerns the health of the system, whether it survives or not. In the post-war years there have been relatively long periods when the stock market was depressed, but then revived, as occurred under Thatcher.

The result is that the usual advice given by stockbrokers to middle class, as opposed to rich, clients is to work on a 20-year perspective, which is pretty useless to many of their customers, who are often over 60. There is confidence in the capitalist system, on the one hand, and confidence in the possibility of making money by investing in the economy, on the other.

However, some sections of the capitalist class – small- to medium-size businessmen – do not invest and attribute their market problems to trade unions, government regulation and particular monopolies strangling the market. They see the solution in a long-term clean-out of workers’ organisations, a reduction in the role of the government and the protection of the national market. The financiers of the Tea Party seem to be of this ilk. Their intellectual allies are often fanatical supporters of the capitalist system, which they see as being damaged by its enemies. To a degree their lack of confidence is exaggerated by their ideologically based belief in the market and the threat supposedly posed by others.

The more serious section of the capitalist class, which controls finance and industry, recognises the lack of opportunity and the limits to demand at a time of mass unemployment and the increasing proletarianisation of the middle class. Its problem is that its investments are longer-term and require a limited reflation, but this section is worried that such reflation would become more general and could not be controlled. In other words, it continues to uphold its strategy of the last 30 years, in which it turned to finance capital, and so low growth and anti-welfare state measures. Finance capital, however, has imploded and hence the strategy is no longer viable. This section has been talking, therefore, of investing in industry, but it is worried that this could increase the confidence of the working class, and hence is holding back.

Today, more than ever, business confidence, so-called, is dependent on confidence in the capitalist system itself, even though the individual investor may not think like that. There is no strategy available to the capitalist class which has any kind of realistic chance of success, other than going for the growth of productive industry, but the bourgeoisie is afraid that this will produce a return to the 70s, with a powerful working class demanding concessions, and ultimately the supersession of the system.

As a result, the capitalist class is not only divided, but at sixes and sevens, with no real solution in sight. No leadership is possible because there is nowhere to lead other than to failure, disaster and possible catastrophe for the capitalist class itself. The most successful leader at this time will be the one who is able to understand the dilemma before him or her and takes the longest road to that result.

Conditions mature

The logical outcome of the present impasse is that the rightwing parties in government will lose their majorities. In a relatively short time we may expect that so-called centre-left parties will be in government in Italy, Germany and France. The Greek and Spanish ‘socialist’ parties’ willingness to accept the instructions to go for austerity sets the pattern for all such parties. Their discrediting, en masse as it were, will deepen the general dissatisfaction with the parliamentary-style democratic process, given that existing alternative parties will have cut the standard of living, supported by the media. There are already a number of countries with substantial far-right parties and no doubt there will be more.

Unfortunately, the left has not been able to establish itself anywhere, thus far. In Portugal, where it made a substantial breakthrough in previous elections, its vote halved in the middle of 2011, during the general elections. The attempt by the Revolutionary Communist League (LCR) in France and also the United Secretariat to dissolve itself as a Trotskyist formation and form an anti-capitalist left has failed in France and Portugal. They have, no doubt, learned their lesson.

It is clear that the ruling class has no strategy for the maintenance of the capitalist system. It is not able to rule in the old way. The first condition for revolution, as enunciated by Lenin, is in place.

Notes

1. M Wolf, ‘Britain must escape its longest depression’ Financial Times, September 1.

2. BNY Mellon, according to its own website has $1.3 trillion under management and $26.3 trillion under custody or administration: www.bnymellon.com/about/companyprofile.html.

3. Ibid.

4. J Cassidy How markets fail London 2010, p354.

5. Wolfgang Munchau argues that the optimum solution is a fiscal union, but that it may not happen or happen in time. Instead he argues that there could be a minimal political solution, but it would be monstrous (‘A euro zone quick fix will create a political monster’ Financial Times October 10).

6. Quoted in P Mishra, ‘India’s Tommy Hilfiger utopia is a bluff that will soon be called across the globe’ The Guardian September 10.

7. Ibid.

8. J Kynge, ‘The cracks in Beijing’s edifice’ Financial Times September 10.

9. C Moore, ‘I’m starting to think that the left might actually be right’ The Daily Telegraph July 22.

10. G Magnus, ‘Financial bust has bequeathed a crisis of capitalism’ Financial Times September 13.

11. J Gray, ‘A point of view: the revolution of capitalism’ BBC News Magazine September 4.

12. S Brittan, ‘Mistaken Marxist moments’ Financial Times August 25. Although Brittan takes a critical line on Marx, he appears to appreciate his depth.

13. R Skidelsky, ‘Life after capitalism’ Project Syndicate 2011: www.project-syndicate.org/commentary/skidelsky37/English.

14. M Cembalest and H Olsen, ‘Eye on the market’, item 6 – a commentary written for JPMorgan clients, October 7.

15. The Times October 20 2008.

16. Interview in The Guardian G2, August 3.

The Labour Party Marxists group are hosting a meeting entitled ‘Marx’s Capital – a book for our times?‘ in Northampton on Thursday December 1st. Their speaker will be Mike Macnair, a leading member of the CPGB and author of Revolutionary strategy. He will discuss what we can learn from Marx, in particular volume one of his seminal work Capital. The meeting is on Thursday 1 December, starting at 7.30pm in Room 17, Sunley Conference Centre, Park Campus, University of Northampton, NN2 7AL. You can download a flyer from the LPM website: http://www.labourpartymarxists.org.uk/?page_id=12. We’re promised plenty of time for debate and discussion. Hope to see you there.

Assemble: 12 noon outside MK Council’s Civic Offices, Silbury Blvd, CMK on November 30th. Bring placards, banners, and something to make a noise.

We will also be visiting workers on their picket lines in the morning of November 30th. If you want to come along too then please get in touch.

You can also download leaflets and a poster for the rally to give to friends, family and workmates.

The International Monetary Fund meeting in Washington at the weekend is widely reported to have come up with a larger sticking plaster for the euro zone debt crisis. The package is said to involve a 50% write-down of the value of Greek government debt (ie, a partial default); the quadrupling of the European Financial Stability Fund ‘fire-power’ – ie, its ability to lend to countries in trouble, mainly by technical means; and the recapitalisation of the euro zone banks, presumably by governments putting money into them (private investors are not likely to).

The result of this ‘official leak’ is that European bank shares rose sharply on Monday and Tuesday, pulling stock market averages with them, before falling back on Wednesday. We have seen over the past months a series of short rallies in the stock markets as ‘solutions’ are offered, which rapidly peter out, and this looks like the latest.

If the new plan is actually agreed, which is questionable, and if it succeeds, which is even more doubtful, its practical effect would be a very limited ‘haircut’ for creditors, but a large hit for north European middle class and working class taxpayers and public service employees and users.

The ‘haircut’ is limited because this is not a general write-down of debts, but only of the Greek government’s, which are actually rather small-scale by comparison with those of governments elsewhere (or the massive private debts which still burden UK and other housing markets).

The hit for the north Europeans comes from the nature of the scheme. An orderly general write-down of debts would at the end of the day penalise savers, pensioners, rentiers and rentier institutions (churches, endowed charities and so on). A ‘disorderly default’ meltdown would have extreme and unpredictable effects. This scheme, in contrast, would make the Greek partial default ‘orderly’ and erect a ‘firewall’ against ‘contagion’ affecting Italy, and so on, by committing large amounts of north European government funds. If the funds were merely borrowed or printed, the effect would be the ‘contagion’ in the financial markets the plan seeks to avoid. So the working class and the working middle classes (as distinct from the present recipients of private pensions) will be expected to take the hit in the form of yet more ‘austerity’ measures.

So more ‘austerity’ is coming. In this situation, the Coalition of Resistance has launched an excellent initiative: this weekend’s Europe Against Austerity conference. Since it is perfectly obvious that the capitalist regimes are (with some difficulty) endeavouring to coordinate their responses to the crisis on a European scale, it is not merely desirable, but essential, that the workers’ movement should try to coordinate our response on the same scale. Otherwise we are likely to be ‘defeated in detail’.

What should come out of this conference immediately is an agitation for a Europe-wide day of action of the same sort as the proposed November 30 common strike day, but on a European scale. This is a small step. A big European day of action would symbolise unity of the European working class against the austerity agenda. It would improve the confidence of our class in every country and serve notice on the capitalist governments that we are not willing to play their beggar-my-neighbour game of blaming ‘lazy Greeks’ or whatever.

Budget alternatives

But then the further question is posed: what policy should the workers’ movement put forward on a European level to deal with this crisis? What is the working class alternative?

The question is posed because the austerity-mongers are only likely to be defeated by a very broad movement of solidarity. The austerity-mongers do not wait quietly for such a movement to appear. On the contrary, they intervene actively to promote division. From one angle, they blame the crisis on ‘profligate governments’. From another, they attempt to set the ‘indigenous’ population against migrants.

From a third, they appeal to the domestic financial management of the petty bourgeoisie, employed middle class and skilled workers (who have some ability to save) as a model for the financial management of the state; and against the ‘spongers’ receiving welfare benefits.

From a fourth angle, they attempt to separate workers in the private sector (who have already suffered substantial wage, job and pension cuts in the first round of the crisis) from workers in the public sector who are to be the immediate target of austerity. Of course, they do not mention to the private sector workers the probable consequences in unavailable services, queues and the increased costs they will pay for privatised health, education, etc.

To build broad solidarity it is necessary to offer an alternative to these austerity-monger arguments, not merely to deny them. Hence, it is necessary not only to build broad solidarity and effective resistance, but also to promote an alternative vision in response to the financial crisis.

Much of what the left has written has been simple reporting of the attacks and resistance – last week’s Socialist Worker centre-spread provides an example (September 22). To the extent that it has gone beyond this, by and large the left has proposed a policy of ‘returning’ to a nostalgic version of the economic order of the 1950s-70s. This has several aspects. The simpler is the demand to tax the rich more heavily to pay for keeping the welfare state intact – a recurring line of the SWP since around 2000, if not before. The more complex is the demand for a return to Keynesian demand management and allowing the state financial deficit to continue to rise in order to stimulate the economy.

Both ideas are shared by some capitalists as well as by the Labour leadership – even if in less full-blooded form than they appear in, for example, Solidarity (September 22, September 28). Warren Buffett, as well as a group of French capitalists, have notoriously argued that they should pay more taxes. Keynesian or semi-Keynesian arguments against the austerity policy routinely appear in the pages of the Financial Times and similar publications.

These ideas therefore have the attraction of being a ‘line of least resistance’. They are ‘respectable’ and ‘realistic’ in a way that advocating the revolutionary overthrow of the state regime and rapid transformation of the economy towards some form of socialism is definitely not.

The problem is they are less realistic than they appear. In reality, to actually implement either policy would involve an overthrow of the current international state system. The capitalists may overthrow this system themselves if its problems get much worse: the big losers if they do will be the US, UK and their populations. The process of doing so will probably involve for everyone a drive towards war.

Surely, you may well say, this must be untrue. After all, in the ‘golden age’ of 1950-70 capitalism not only survived, but did far better than it has been doing recently, with regimes of Keynesianism and welfarism, higher taxation, a higher wage share, and more extensive regulation. And the transition from the welfarist-Keynesian ‘consensus’ of the 1950s-70s to the financialism of the 1980s and after did not involve the overthrow of any of the central imperialist states (many other countries did experience the overthrow of their nationalist or Stalinist regimes).

The reason is that the instruments of financialism were already present in the international state system created in the 1940s and entrenched in the constitutional orders of the central states, the United Nations and the first General Agreement on Tariffs and Trade (Gatt). What changed with the rise of financialism in the 1980s was thus not a change in the constitutional orders of the central imperialist states and the global state system as such. It was merely that non-constitutional, economic concessions to the European workers’ movement and to the ‘third world’ nationalists, which had been made because of the ‘threat’ of the Soviet bloc, began to be withdrawn.

Tax the rich?

The simpler case is the demand to ‘tax the rich’. Back in 2009 the SWP responded to the budget with the proposal to “Take all the cash from the super-rich”: “Britain’s 1,000 most super-rich individuals are still swilling around in £258 billion … All their money should be taken off them. This, along with stopping military spending, could be used to fund our jobs and services, and ensure that ordinary people do not bear the brunt of the recession.”[1] I made the point in response that £258 billion is only slightly more than half the annual state tax take of £496 billion which was projected in the 2009 budget – small beer which would at most address the problem for a year or two.[2]

The more serious problem with ‘Tax the rich’ is reflected in a series of news items. The scale of the Greek government deficit is to a considerable extent due to the scale of tax avoidance and outright evasion, through the Greek wealthy (and upper middle classes) keeping assets ‘offshore’.

At the beginning of this year Nicholas Shaxson’s Treasure islands: tax havens and the men who stole the world was published in Britain. It is a striking journalistic exposé of the tax haven phenomenon and its scope. Meanwhile, this week’s Financial Times is running a series on ‘tax wars’: the tax loopholes created by double taxation treaties, and so on. Buffett complained that he pays a lower rate of tax than his secretary: not because the law is drafted that way, but because Buffett can afford to pay high-grade tax avoidance advisers.

Germany and Britain have entered into utterly unprincipled deals with Switzerland: the Swiss pay blackmail money to the British and German governments, but get to keep the anonymous bank accounts which are used not only for tax avoidance and evasion, but also to launder the bribes paid to ‘third world’ kleptocrats and the funds they have stolen from their own states.

Some Tory MPs are arguing for an early repeal of the 50p tax bracket introduced in the 2009 budget. They claim it will make Britain less attractive to high earners, and bring in little revenue because of increased avoidance and evasion. The Lib Dems reject this proposal, but on symbolic grounds – that reducing tax on the rich at a time of austerity would look bad. Their alternative, not part of the coalition agreement, is a ‘mansion tax’ on high-value houses. The chief merit of such a tax is that it would be a lot harder to avoid/evade than income tax (let alone capital gains tax and inheritance tax, which are close to being voluntary for the rich). The point is that, under the existing global legal order, the arguments for repeal actually have validity.

So how do we ‘tax the rich’ effectively? How do we even eliminate the loopholes? The answer is that to do so requires actually shutting down ‘offshore’: that is, the systematic violation of the sovereignty of a series of states guaranteed by UN treaties – and, in reality, by US backing. To do so would be seriously unhelpful to the UK budget, because the City of London’s financial operations are, in fact, part of ‘offshore’; and income tax on City incomes is a substantial component of the UK tax take.

At the level of the ‘real economy’ Britain imports vast quantities of food, since its agriculture cannot feed the population. The balance of ‘visible trade’ is in structural deficit, as it has been for decades – 95% of the fruit and 50% of the vegetables consumed in the UK are imported.[3] In 2005 the UK imported £6.6 billion of agricultural products and £18.5 billion worth of processed foods. It exported £1.16 billion in agricultural output and £8 billion in processed foods. Since food is – in relative terms – low-value, we are not talking about a small difference here. There is thus a yawning gap in the UK’s domestic food supply, which is made up by imports.

In total, with other products, UK material imports totalled £270 billion, while material exports amounted to £210 billion. The deficit of £60 billion is at least partly made up by the UK’s financial income from the City of London and from remitted profits: that is, from the UK’s role in the world imperialist system.[4] The food imports are therefore – at the end of the day – paid for by the ‘invisible earnings’ of the City, through income tax on City earnings redistributed to civil servants, NHS workers, local government workers through block grants, and in various forms of subsidy to other capitals.

The question posed is, therefore: is it worth British workers accepting being made very substantially worse off, and at the same time preparing for war with the United States, for the sake of a demand that the rich should pay higher taxation? The problem is not that the rich should not pay higher taxation; it is that the slogan comes up against entrenched institutions – the tax havens, double taxation treaties, and so on – created by US power in the post-war settlement, and still backed by the US and UK (a good many tax havens are actually UK colonies).

More immediately, it comes up domestically against the constitutional doctrine in IRC (Inland Revenue Commissioners) v Duke of Westminster that individuals are entitled to arrange their affairs to minimise tax and that taxing statutes must be construed in the way most unfavourable to the IRC. This doctrine could in theory be overturned. But not by merely legislating to change it: in this field, as in some others, the judges are like Humpty Dumpty: “When I use a word … it means just what I choose it to mean.” The doctrine is, moreover, given a semi-spurious constitutional foundation in article four of the Bill of Rights 1689, “That levying money for or to the use of the crown by pretence of prerogative, without grant of parliament, for longer time, or in other manner than the same is or shall be granted, is illegal.” To overthrow the doctrine would therefore require coercion of the judiciary and probably also of a large part of the broader legal profession.

It is not that we should not consider as an element of socialist strategy the need to create political legitimacy for coercing the judges and the lawyers, or to create military power which can stand against US blockade (‘sanctions’ and so on). Rather, there are two issues. The first is that it is clear that no single country could stand off US displeasure without receiving the sanctions treatment which crippled the Zimbabwean and Iraqi economies and is in the process of crippling the Iranian economy – and this is, if anything, clearer of Britain than of ‘third world’ countries, which have economies less immediately dependent on imports.

The second is that going up against the US for the sake of a radical overturn of social relations and building a new society would be worthwhile. But going up against the US (and sacrificing Britain’s status as US sidekick and licensed offshore centre) for the sake of the rich paying a bit more in tax? The game isn’t worth the candle.

Back to Keynes?

A return to Keynesian demand stimulus poses the same problems in a more immediate sense. The immediate response to the 2008 crash was, precisely, a temporary return of Keynesianism to respectability, with governments taking on massive debts and pouring liquidity into the financial system in the hope that it would feed through into the ‘real economy’.

To some extent these stimulus packages actually worked. Continued very low central bank interest rates and ‘quantitative easing’ – ie, printing money – in the US and Britain did avert meltdown and allow a partial recovery. Massive government infrastructure spending in China kept its economy growing substantially, and with it the economies of China’s suppliers.

Nonetheless, this policy met with political opposition and a reaction in financial markets. Regular Weekly Worker correspondent Arthur Bough argues on his blog that the political opposition is simply an ideological error on the part of the Tories and the Republican right (and presumably also the German Christian Democrats and other north European ‘hardliners’, though he does not mention these), reflecting dysfunctional political institutions and perhaps the ideology of the petty bourgeoisie; and that the financial markets are merely responding to the uncertainty caused by this failure of leadership.[5]

This argument is at least partially dependent on comrade Bough’s prior argument that we are in the middle of a ‘Kondratiev long-wave upswing’, with the result that there is not in any real sense a ‘crisis’, but merely a ‘slowdown’ in Europe and the US, reflecting a need for restructuring in the light of the rise of Asian capitalism.[6] As I have said before, I think Trotsky’s original objections to the idea of the Kondratiev long cycle were sound; in my view the destruction of the strategic autonomy of the British empire in 1940 and the explicit agreements made during that summer to hand over British overseas assets and debt claims to the US and to act in future as a subordinate of the US were the key to the ‘golden age’ long boom in the 1950s and 60s, together with the massive destruction of fixed capital in World War II and the very extensive state defaults afterwards.

The central question, however, is why there should be the ‘crisis of bourgeois leadership’ in relation to the economy. It seems to me that the answer is at root the same as that in relation to tax. That is, the post-war settlement under US leadership created entrenched institutions – essentially offshore and international money markets – through which US ‘superimperialism’ (Michael Hudson’s expression) operated.[7] These mechanisms were mitigated by the geopolitics of the cold war, but, as the forms of mitigation proved both to make the working class too powerful in the late 1960s-70s and to weaken the US relative to other capitalist states, they began to be abandoned.

But the institutions of offshore and international money markets take on a life of their own. (The phenomenon is perhaps analogous to al Qa’eda, originally a CIA-sponsored formation for the purposes of the war in Afghanistan.) To get rid of them or return them to a fuller subordination would require coercion and the overthrow of the treaty regimes created in the late 1940s.

Now consider the crash of 2008 and the response: that is, to replace unpayable bank debts with sovereign debt. After this response it is entirely rational for money market speculators to suppose that some sovereigns will prove unable to pay their debts, and hence to bet against the value of these debts. Given the scale of global financial market operations, which has for years been totally out of proportion to productive economic activity and on a scale comparable with the state financial operations of the larger states, the result is inevitably high volatility in these markets. It is not irrational in this context to imagine, as the Tories did, that there could be a run on the British gilt markets if austerity were not adopted. It may have been wrong, but it is not stupid.

It is also quite clear that British capital in its majority (by wealth) preferred a Tory government, complete with the austerity policy, to the possibility of a Labour government. This was reflected in party political donations in the run-up to the 2010 general election and in the extraordinary press campaign to denigrate Gordon Brown as an individual and to blame Labour for ‘fiscal irresponsibility’ (a very marked about-turn from 2008). Murdoch and co are only partially autonomous actors (as we saw in the collapse of the News of the World when advertising was withdrawn). The ideology of the petty bourgeoisie was exploited for this purpose, but it is unlikely that it was the real driving factor.

Let us therefore suppose a Labour government introduces a fully Keynesian turn based on expanded deficit finance or printing money – the policy of leftwing advocates of ‘back to Keynes’. It is quite ridiculous to suppose that this turn would not be met by a run on the gilts market and a large-scale flight of capital. This, in turn, bring us immediately up against the need to proceed to exchange controls, systematic violations of Gatt II, expropriations and a short-term move to directive planning – all this after the left has spread the idea that a Keynesian turn would not involve a revolutionary crisis, and by doing so has disarmed the workers’ movement when crisis does, in fact, appear.

The real reformists – as opposed to leftists pretending to be reformists for the sake of an imagined ‘united front’ – are aware of these issues, even if their arguments would not be those I have used. They would simply say that ‘the markets’ represent real absolute limits on what can be done. See, for example, Ed Balls’ speech to the Labour conference. The fake-reformist line remains unpersuasive beyond the far left, its immediate periphery and the former periphery of the old ‘official’ Communist Party, for whom the wish is the father to the thought.

Socialist alternative

The European workers’ movement is presented with the austerity drive and ‘crisis of bourgeois leadership’ at a moment when it is weaker than it has been at any time in the last 130 years. Union membership density is low. The mass parties have been hollowed out at the base and their leaderships to a large extent turned into apostles of a ‘kinder, gentler’ financialised regime, together with nationalism and bureaucratic control. The idea of socialism remains in the shadow of Stalinism, not only in the memories of the older generations, but in the experience of the younger generations of the functioning of the organised left groups and their inability – thanks to their bureaucratic centralism – to unite.

To say this is to say that the euro zone crisis and the austerity drive does not prima facie pose the question of the working class in the near future taking political power and ushering in socialism. The workers’ movement is simply too weak, irrespective of whether theorists like comrade Bough or Bill Jeffries of Permanent Revolution, who claim that this is a pure financial crisis under global long-boom conditions, or those who see a deeper structural crisis are right.

If the ‘crisis of bourgeois leadership’ tips over into generalised meltdown matters will be different: the question of power will be posed, whether the workers’ movement is ready for it or not. The most likely outcome would then be the creation of authoritarian nationalist regimes, but the one chance of avoiding that outcome would be for the weak workers’ movement to pose a radical reconstruction of society as an alternative.

The immediate future is therefore one of a combination of defensive struggles, with efforts to rebuild the workers’ movement. Nonetheless, it remains necessary to pose the question of an alternative social order and how to get there in order to rebuild the movement. The weakness of the movement results at the end of the day precisely from the fact that its dominant ideas of alternatives (nationalist, class-collaborationist and bureaucratic) have so spectacularly failed – but the advocates of these ideas remain in leadership positions and the ideas themselves have spread to such an extent that they dominate the far left which once opposed them.

Posing the alternative of a socialist reconstruction of society is therefore not an alternative to the immediate tasks of defensive struggles around individual ‘austerity’ issues and against governmental ‘austerity’ programmes. Nor is it an alternative to the equally fundamental task of efforts to strengthen collective self-help against the effects of the austerity measures: to build up the trade unions at the base, to organise the unemployed, and to develop cooperatives and mutuals. In the period of welfarist ‘affluence’ these elementary tasks of workers’ organisation have been allowed to wither away or – like the unions and the Co-op – reduced to bureaucratically controlled institutions.

Arthur Bough makes this aspect of the rebuilding of the workers’ movement the be-all and end-all. He draws arguments from Marx’s writing at the time of the First International, when – until the 1871 London conference – Marx was attempting to hold together an alliance with the Proudhonists, who were arguing precisely this line: workers’ self-help through cooperatives, as opposed to political action.

The problem is not that socialists should ignore or oppose cooperatives. Firstly, it is that the initial wave of cooperatives came at a time when land values were tending to decline (which they did between, roughly, the repeal of the Corn Laws in 1847 and the introduction of planning laws, agricultural subsidy and mortgage interest relief during and after World War II). Since then access to land has been very much more tightly rationed by the ruling class; by the 1980s the cost of keeping even trades and labour clubs in existence was leading to their being sold off to property developers.

Secondly, the problem is that the capitalist class and its state do not consistently recognise property rights and the state certainly does not refrain from interference in the economy in the interests of major capitalist bribe-payers. Comrade Bough’s own 2010 review of Nicole Roberts’ history of the cooperative movement in Britain makes the point: the state intervened against the cooperative movement and – by regulatory legislation – continues to intervene in favour of bureaucratic managerialism in cooperatives.[8] However difficult to achieve anything by political action it may seem, political action is the necessary accompaniment of both defensive struggles and cooperative self-help.

Nor is posing a socialist reconstruction of society an alternative to posing defensive demands like the restoration of trade union freedom; or, in the sphere of the budget, an end to overseas imperialist adventurism and cuts in military expenditure.[9] Rather, it is a necessary accompaniment to defensive struggles, cooperative self-help and defensive demands.

Europe

Another society is possible: one in which, instead of being driven to competitive ‘growth’ ending in cyclical crises, we aim for the fullest possible development of every human being: communism. The transition to such a society involves the rule of the working class: that is, the subordination of the private producers to the wage-earners, tending towards a society in which nobody gets anything other than a living wage and open access to public resources like the internet, education, health, housing, etc.

We collectively have written more about this aim in our Draft programme. I have written about immediate steps in this direction as a response to the financial crisis in previous articles.[10] Europe and united working class action in Europe is central to this possibility.

The reason why that is so is the reverse side of the points I have made above against ‘tax the rich’ and a return to Keynesianism as strategies. Karl Kautsky argued in The class struggle (1892) that the nation-state was a sufficient scale on which the working class could reorganise society as a cooperative commonwealth. The idea descended into ‘socialism in a single country’. Kautsky was already wrong, and the experience of the 20th century has proved the idea wrong. All countries are integrated in the world trade and financial system to a point at which ‘sanctions’ can cripple their economies.

In reality, the capitalist class does not rule through independent nation-states, but through a global hierarchical system of states. Before 1914 this system of states was centred on the UK; after the prolonged death agony of the British empire since 1945, it has been centred on the US. National solutions run up against the institutions of this world hierarchy, as I have shown in relation to ‘tax the rich’ and ‘return to Keynes’.

If the working class can develop common action on the scale of Europe, that is a whole different ball-game. A European ‘cooperative commonwealth’ would not be immune from US-led attack or blockade; but, unlike the former tsarist empire which became the USSR, it would start from high levels of productive capacity and of proletarianisation. A socialist Europe could be a real beacon for the world.

The Europe Against Austerity conference could begin to set this as a goal. Not an immediate goal; but a goal which could begin to re-inspire the workers’ movement with the sense that an alternative is really possible, not just a dream. Maybe it will not. Maybe it will cling to the blind-alley lines of least resistance round nationalism and Keynesianism. But what an advance it would be if the movement really began to act on a European scale and to pose the question of a socialist Europe as an alternative to the Europe of austerity.

This article was first published in the Weekly Worker.

1. Socialist Worker May 2 2009.

2. ‘Budget: spinning, not turning’ Weekly Worker April 30 2009.

3. www.bbc.co.uk/food/food_matters/foodmiles.shtml.

4. Figures from www.uktradeinfo.com/index.cfm?task=eubackcast.

5. The long series, ‘The economy of analysis’, is still running: http://boffyblog.blogspot.com.

6. Present, with references to earlier posts, in the argument cited in note 5 above.

7. M Hudson Super imperialism: the economic strategy of American empire (New York 1972); N Bukharin Imperialism and world economy (1915).

8. http://londonbookclub.co.uk/?p=847.

9. See my ‘Crisis and defensive demands’ Weekly Worker January 8 2009.

10. ‘Responding to the crisis’ Weekly Worker October 16 2008; ‘There is an alternative’ Weekly Worker March 24 2011.

What is going to replace the Press Complaints Commission?

Talk about a hostage to fortune – as soon as this writer detects a “momentary let-up” in the phone-hacking saga,^[1] we get a new crop of developments.

Another senior News International figure, former News of the World managing editor Stuart Kuttner, has now been taken into police custody. Meanwhile, even with parliament in recess, Ed Miliband continues to needle at the government for full disclosure of its meetings with News International big-wigs, having offered such disclosure on the part of the Labour Party. The political calculation is clear – Murdoch and co will have spent a lot more time over the past couple of years with Cameron and his allies than Labour figures. (Starry-eyed hacks used to suggest Blair had a kind of ‘political alchemy’ – but you cannot get more alchemical than turning the humiliation of media ostracism into a political advantage.)

And after the carnage in Scotland Yard a couple of weeks ago, it is now the turn of another dubious institution to see heads roll. Baroness Buscombe, the odious Tory peer who heads up the Press Complaints Commission, has been pressured into announcing that she will not seek to extend her contract, and in all probability will leave her post in the autumn. The PCC’s role in the phone-hacking affair has been frankly embarrassing: it even went so far as to chide The Guardian for its irresponsible victimisation of the NotW. Let us say that subsequent events have not shown this stance in a very positive light.

A crisis of the PCC is an inevitable result – that it has not already been comprehensively tampered with, or even abolished in favour of statutory regulation, has in part to do with the more spectacular events (the decapitation of the Metropolitan Police, the Murdochs facing cross-examination by parliament) and the Westminster summer holiday. Buscombe may well be the last establishment mediocrity to chair this craven creature of the media barons.

Its obsolescence is highlighted on another front by the vindication in court of Christopher Jefferies, the idiosyncratic landlord repackaged by the gutter press as the psychopathic murderer of architect Joanna Yeates. The press routinely gets away with doing such numbers on the perpetrators of high-profile crimes. The problem in this case was that, er, he did not actually do it. Jefferies has just won libel damages from practically the entire tabloid press – including the Mail and Express. On top of that, The Sun and Daily Mirror were found guilty of contempt of court, and levied (rather pathetic) fines.

There is much to say about this remarkable case – if ever libel law did not act just as a means for the powerful to silence opposition, it was surely here – but, for present purposes, what is of note is that it was the criminal and civil law that stood up to the Fleet Street lynch-mob, and certainly not the PCC. Given that it is controlled by the people who make money out of such stories, how could it? In a sense, poor old Peta Buscombe is to be pitied; she has only administered her institution in the manner in which it has operated since its creation. Alas for her, this cosy arrangement has been shot to pieces by events.

The bottom line of all this chaos is that it has put a question on everyone’s lips: what is the future of press regulation? Numerous answers are proposed – David Cameron and other politicians have called, at one end of the scale, for statutory regulation, by Ofcom or some new body; others propose a new, more muscular model of self-regulation, which would entail a new PCC-type body with the ability to levy fines and otherwise discipline its members. Popular among news organisations is the ‘lope on more or less as before’ strategy, on the basis that it is the least unpalatable of all the choices.

In fact, there are fundamental problems with all the so-called ‘options’ on offer here. Statutory regulation simply hands a great swathe of powers gift-wrapped to the state. The implications are pretty ominous; we need only cast our minds back to the BBC’s battle with Blair over the death of David Kelly, which led to the corporation’s humiliation and exacerbated its tendencies towards cosiness with the establishment. Given all that we have learned about the close personal links between the media barons and the political elite, meanwhile, it is naive to imagine that this will put an end to the power of the former.

The National Union of Journalists leadership seems to favour the second option: a “self-regulatory body [which] should provide for serious penalties for media organisations which broke the code … as well as offering a reliable mechanism to deal with complaints from the public.”^[2] NUJ president Donnacha DeLong has expressed admiration for the ‘Irish model’, which broadly conforms to this idea. The union is also keen to push its own members’ code of conduct as the basis for beefed-up ‘self-regulation’.

In reality, this is a miserable compromise. We should not forget that the PCC itself was the result of a previous attempt to give self-regulation of the press some bite; the Irish Press Council itself is a somewhat more nightmarish version, with equal representation given to various establishment notables – former ambassadors, political bureaucrats, lawyers and the like – and the industry itself (with one poxy seat for the unions). If the PCC had had equivalent power in the last five years, remember, it would not have punished Murdoch, but the investigators into phone-hacking!

That leaves the favoured option of the barons – ‘keep calm and carry on’. In fact, ironically enough, this is truly the least worst of the possibilities – no further power is accrued to the state. Seeing as the PCC is obviously little more than a mechanism for the press money-men to, as the vernacular puts it, cover their asses, it is in fact preferable that it should not have any real power to discipline dissenting journalism – which, as The Guardian investigation has shown, is the closest the press gets to self-regulation anyway.

Yet the status quo ante is utterly discredited for good reason. On the left, we should not be satisfied with a ‘return to normalcy’ in any form, which would mean the return to the cosy lash-up between the political, bureaucratic and media elites that has subverted what passes for democracy for generations.

The reason these answers fall short is that they are answers to the wrong question. When the bourgeois establishment asks what to do about press regulation, it is in reality asking how it can manage this crisis in a way that does not threaten – or, ideally, strengthens – the ruling class’s ideological hegemony. By adopting the given form of the debate, the NUJ – and, implicitly, those organised left forces in the NUJ which have manifestly failed to challenge that form – is in fact absorbed into a fundamentally bourgeois discourse, which is rigged in favour of bourgeois outcomes.

Our question is the inverse of the bourgeois one – how can we make sure that the ruling class does end up the weaker for all this? What is the working class approach towards the press? Clearly, the NUJ – despite its political naivety – has a role to play here. While its argument that a strong NUJ chapel in Wapping might have prevented the disastrous abuses of the Wade-Coulson era is quite overblown, there is nonetheless the potential for a conscious collective life among journalists that could set the terms of the trade in its professional form. That the union has at least ‘seized the day’ and made itself a real presence in the phone-hacking affair is an encouraging start.

Yet to truly weaken the hold of the bourgeoisie on the press and media more generally, it is necessary both to attack politically that hold at its root and to build up the political presence of our own side. The former means breaking up the media oligopolies and destroying the advertising cartels that prop them up; the latter means having our own media and journalistic practice completely separate from that of the bourgeoisie.

Posed by both tasks is the party question – we need a political organisation that can fight for fundamental change in the state and economy in order to challenge the Murdochs of this world in a fundamental way. We also need an organised political division of labour in order to develop our own press into something of a genuinely mass scale and readership. The labour movement in this country once had the Daily Herald – European social democracy in its highest phase published in almost every language to many millions of readers. The Herald was the largest-circulation paper in the world at its peak. In the dissemination of ideas, and the development of a distinct cultural life, the organised working class has potential power without equal.

Codes of conduct of the NUJ-style 10 commandments variety are ultimately of limited use here. We communists have no problem with hacking David Cameron’s phone – provided that something politically useful results from this ‘crime’, rather than cheap tittle-tattle. Trotsky put it best in Their morals and ours – the ends justify the means, as long as the ends are themselves justified. Let the masses judge whether their press fulfils this maxim – not judges, bureaucrats or the flunkies of bourgeois press barons.

Put another way, there is no ahistorical code of ‘press ethics’ which can come out of this farrago – but there is a communist ethic, of unflinching and ruthless war on exploitation and oppression, which has quite as many applications in the newsroom as on the barricades. We are not out to restore the honour of the press, or faith in parliament, but to transform both institutions beyond recognition.

james.turley@weeklyworker.org.uk

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Please enable JavaScript to contact me.Notes

1. ‘Politics of press freedom’ Weekly Worker July 28.
2. www.nujppr.org.uk/site/page.php?category=news&id=5125&msg=NEWS&finds=0