The state and the future of socialism
When capital is in crisis, there are always two options—to give in or to move in

Michael A. Lebowitz / April 25, 2023

https://canadiandimension.com/

Wojciech Fangor, “Forging the Scythes” (1954). 

Image courtesy the Museum of Warsaw.

REALLY LONG READ

The following essay by Marxist economist Michael A. Lebowitz was first published in the 2013 edition of Socialist Register. Lebowitz, who passed away on April 19, 2023 at the age of 85, was a giant of the socialist left. Over the years, Canadian Dimension published several of his essays. He taught at Simon Fraser University for decades and was the author of numerous books including Beyond Capital: Marx’s Political Economy of the Working Class and Build It Now: Socialism for the 21st Century. He was Director, Program in Transformative Practice and Human Development, Centro Internacional Miranda, in Caracas, Venezuela, from 2006-11.

We are in the midst of a class war. That’s not unusual. There is always class war in capitalism—although sometimes it is hidden and sometimes there is the interlude of an apparent Carthaginian Peace. But the class war has intensified now because of the crisis in capitalism—a crisis rooted in the over-accumulation of capital. And, in this crisis, capital has intensified the class war against the working class. Austerity, cutbacks, the need to sacrifice—these are the demands of capital as it calls upon workers to bear the burden of capital’s own failures. This is a war conducted by capitalist states against workers to compel them to give up their achievements from past struggles. And, in some places (but, unfortunately, not all), we see that the working class is saying, ‘no.’ In some cases, we see that workers are fighting to defend their past successes within capitalism and that they are fighting against the racism and xenophobia which are the default position when workers are under attack but are not in struggle against capital. Such struggles, as Marx knew, are ‘indispensable’—they are the only means of preventing workers ‘from becoming apathetic, thoughtless, more or less well-fed instruments of production.’ But, who will win this class war?

In his recent book, The Communist Hypothesis, Alain Badiou describes the past defeats of May 1968, the Chinese Cultural Revolution and the Paris Commune as well as those of factory occupations and other such struggles as defeats ‘covered with glory.’ Because they remain in our memory as inspirations, they must be contrasted, he insists, to the ‘defeat without glory’ that social democracy brings. This is certainly true. However, we need to acknowledge that the current struggles against capital’s attempt to make the working class rescue it from yet another of its crises may yet be added to the list of glorious defeats. Of course, it is necessary to try to stop the cutbacks and to communicate to capital how high its costs will be for attempting to shift the burden of its own failures to workers. And, of course, we must celebrate those struggles taking place wherever the working class has not been anesthetized as a result of previous defeats without glory, leaving only what Marx once described as ‘a heart-broken, a weak-minded, a worn-out, unresisting mass.’

But it is not enough to say ‘no.’ There are those who think that an accumulation of loudly screamed no’s can be sufficient—let alone the ‘silent farts’ celebrated by John Holloway. These poets of negation demonstrate thereby that they don’t understand why and how capital reproduces itself. Why is it that after so many defeats so many still cannot see what Marx grasped in the nineteenth century – that capital has the tendency to produce a working class which views the existence of capital as necessary? ‘The advance of capitalist production,’ he stressed, ‘develops a working class which by education, tradition and habit looks upon the requirements of this mode of production as self-evident natural laws.’

Marx understood that capitalism tends to produce the workers it needs, workers who look upon capitalism as common sense. Given the mystification of capital (arising from the sale of labour-power) which makes productivity, profits and progress appear as the result of the capitalist’s contribution, it followed that ‘the organization of the capitalist process of production, once it is fully developed, breaks down all resistance.’

And, Marx added that capital’s generation of a reserve army of the unemployed ‘sets the seal on the domination of the capitalist over the worker’ and that the capitalist can rely upon the worker’s ‘dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them.’ Obviously, for Marx, capital’s walls will never be brought down by loud screams or silent farts.

Even with a certain resistance marked by struggles over wages, working conditions and the defence of past gains, as long as workers look upon the requirements of capital as ‘self-evident natural laws,’ those struggles occur within the bounds of the capitalist relation. In the end, workers’ subordination to the logic of capital means that faced with capitalism’s crises they sooner or later act to ensure the conditions for the expanded reproduction of capital. Nowhere is this clearer than in the defeats without glory of social democracy.

And, defeat when capitalism is in crisis means that capital can emerge from the crisis by restructuring itself—as it did internationally with the Bretton Woods package after the crises of the 1930s and the 1970s. As is often noted, there is a big difference between a crisis in capitalism and a crisis of capitalism. The latter requires conscious actors prepared to put an end to capitalism, prepared to challenge and defeat the logic of capital. But this requires a vision which can appear to workers as an alternative common sense, as their common sense.

Like the ‘worst architect,’ we must build our goal in our minds before we can construct it in reality; only this conscious focus can ensure the ‘purposeful will’ required to complete the defeat of the logic of capital. To struggle against a situation in which workers ‘by education, tradition and habit’ look upon capital’s needs ‘as self-evident natural laws,’ we must struggle for an alternative common sense. But what is the vision of a new society whose requirements workers may look upon as ‘self-evident natural laws’? Clearly, it won’t be found in the results of twentieth century attempts to build socialism, which, to use Marx’s phrase, ended ‘in a miserable fit of the blues.’
The ‘key link’ for twenty-first century socialism

‘We have to reinvent socialism.’ With this statement, Hugo Chavez, President of Venezuela, electrified activists in his closing speech at the January 2005 World Social Forum in Porto Alegre, Brazil. ‘It can’t be the kind of socialism that we saw in the Soviet Union,’ he stressed, ‘but it will emerge as we develop new systems that are built on cooperation, not competition.’ If we are ever going to end the poverty of the majority of the world, capitalism must be transcended, Chavez argued. ‘But we cannot resort to state capitalism, which would be the same perversion of the Soviet Union. We must reclaim socialism as a thesis, a project and a path, but a new type of socialism, a humanist one, which puts humans and not machines or the state ahead of everything.’

There, at its core, is the vision of socialism for the twenty-first century. Rather than expansion of the means of production or direction by the state, human beings must be at the centre of the new socialist society. This marks a return to Marx’s vision—to the contrast he drew in Capital between a society subordinate to the logic of capital (where ‘the worker exists to satisfy the need of the existing values for valorization’) and the logic of a new society, that ‘inverse situation, in which objective wealth is there to satisfy the worker’s own need for development.’ This concept of the worker’s need for development is the culmination of Marx’s consistent stress upon the centrality of the development of human capacity—the ‘development of the rich individuality,’ as the real wealth and explicit goal of the new society. Here was the ‘inverse situation’ which would allow for ‘the all-round development of the individual,’ the ‘complete working out of the human content,’ the ‘development of all human powers as such the end in itself,’ a society of associated producers in which ‘the free development of each is the condition for the free development of all.’

But this is only one side of Marx’s perspective. A focus upon the full development of human potential was characteristic of much socialist thought in the nineteenth century. What Marx added to this emphasis upon human development was his understanding of how that development of human capacities occurs. In his Theses on Feuerbach, he was quite clear that it is not by giving people gifts, not by changing circumstances for them. Rather, we change only through real practice, by changing circumstances ourselves. Marx’s concept of ‘revolutionary practice,’ that concept of ‘the coincidence of the changing of circumstances and of human activity or self-change,’ is the red thread that runs throughout his work. Marx was most consistent on this point when talking about the struggles of workers against capital and how this revolutionary practice transforms ‘circumstances and men,’ expanding their capabilities and making them fit to create a new world.

But this process of changing ourselves is not at all limited to the sphere of political and economic struggle. In the very act of producing, Marx indicated, ‘the producers change, too, in that they bring out new qualities in themselves, develop themselves in production, transform themselves, develop new powers and new ideas, new modes of intercourse, new needs and new language.’ And, certainly, the relations within which workers produce affect the nature of the workers produced. After all, that was Marx’s point about how capitalist productive relations ‘distort the worker into a fragment of a man’ and degrade him and ‘alienate from him the intellectual potentialities of the labour process.’ It is essential to recognize that every human activity has as its result a joint product—both the change in the object of labour and the change in the labourer herself. Unfortunately, that second product is often forgotten.

Marx’s combination of human development and practice constitutes the key link. Taken seriously, it has definite implications for relations within the workplace – rather than capitalism’s joint product (the fragmented, crippled human being whose enjoyment consists in possessing and consuming things), it implies a person who is able to develop all her potential through her activity. Taken seriously, that key link has definite implications for the nature of the state—rather than allowing us every few years to elect those who misrule us as our representatives to a state which stands over and above us, it implies what Marx called the ‘self-government of the producers,’ the ‘reabsorption of the state power by society as its own living forces.’ Taken seriously, that key link has definite implications for the nature of the party—rather than a body that sees itself as superior to social movements and whose members are meant to learn the merits of discipline in following the decisions made by infallible central committees, it implies a party which learns from popular initiative and unleashes the creative energy of masses through their own practice. Taken seriously, that key link has obvious implications for building socialism.

Consider the characteristic of socialist production implicit in this key link. What are the circumstances that have as their joint product ‘the totally developed individual, for whom the different social functions are different modes of activity he takes up in turn’? Given the ‘dialectical inversion’ peculiar to capitalist production that cripples the body and mind of the worker and alienates her from ‘the intellectual potentialities of the labour process,’ it is clear that to develop the capacities of people the producers must put an end to what Marx called, in his Critique of the Gotha Programme, ‘the enslaving subordination of the individual to the division of labour, and therewith also the antithesis between mental and physical labour.’

For the development of rich human beings, the worker must be able to call ‘his own muscles into play under the control of his own brain.’ Expanding the capabilities of people requires both mental and manual activity. Not only does the combination of education with productive labour make it possible to increase the efficiency of production; this is also, as Marx pointed out in Capital, ‘the only method of producing fully developed human beings.’ Here, then, is the way to ensure that ‘the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly.’

The activity through which people develop their capacities, however, is not limited to the sphere of production as narrowly defined within capitalism. Every activity with the goal of providing inputs into the development of human beings needs be understood as an aspect of production. And the goals that guide production must be democratically established so that people can transform both their circumstances and themselves and thereby produce themselves as subjects in the new society. The implication is obvious—every aspect of production must be a site for the collective decision-making and variety of activity that develops human capacities and builds solidarity among the particular associated producers.

When workers act in workplaces and communities in conscious cooperation with others, they produce themselves as people conscious of their interdependence and of their own collective power. The joint product of their activity is the development of the capacities of the producers—precisely Marx’s point when he says that ‘when the worker cooperates in a planned way with others, he strips off the fetters of his individuality, and develops the capabilities of his species.’ Creating the conditions in workplaces and communities by which people can develop their capacities is an essential aspect of the concept of socialism for the twenty-first century. But it is only one element. How can the worker’s own need for development be realized if capital owns our social heritage—the products of the social brain and the social hand? And, how can we develop our own potential if we look upon other producers as enemies or as our markets—i.e., if individual material self-interest is our motivation?

Capitalism is an organic system, one which has the tendency to reproduce the conditions of its existence (including a working class which looks upon its requirements as ‘self-evident natural laws’). That is its strength. To counter that and to satisfy ‘the worker’s own need for development,’ the socialist alternative also must be an organic system, a particular combination of production, distribution and consumption, a system of reproduction. What Chavez named in January 2007 as ‘the elementary triangle of socialism’ (social property, social production and satisfaction of social needs) is a step forward toward a conception of such a system.

Consider the logic of this socialist combination, this conception of socialism for the twenty-first century:

1. Social ownership of the means of production is critical within this structure because it is the only way to ensure that our communal, social productivity is directed to the free development of all rather than used to satisfy the private goals of capitalists, groups of producers or state bureaucrats. But, this concerns more than our current activity. Social ownership of our social heritage, the results of past social labour, is an assertion that all living human beings have the right to the full development of their potential—to real wealth, the development of human capacity. It is the recognition that ‘the free development of each is the condition for the free development of all.’

2. Social production organized by workers builds new relations among producers—relations of cooperation and solidarity. It allows workers to end ‘the crippling of body and mind’ and the loss of ‘every atom of freedom, both in bodily and in intellectual activity’ that comes from the separation of head and hand. Organization of production in all spheres by workers, thus, is a condition for the full development of the producers, for the development of their capabilities—a condition for the production of rich human beings.

3. Satisfaction of communal needs and purposes as the goal of productive activity means that, instead of interacting as separate and indifferent individuals, we function as members of a community. Rather than looking upon our own capacity as our property and as a means of securing as much as possible in an exchange, we start from the recognition of our common humanity and, thus, of the importance of conditions in which everyone is able to develop her full potential. When our productive activity is oriented to the needs of others, it both builds solidarity among people and produces socialist human beings.

These three sides of the ‘socialist triangle’ mutually interact to form a structure in which ‘all the elements coexist simultaneously and support one another,’ as Marx put it. ‘This is the case with every organic whole.’ Yet, the very interdependence of the three sides suggests that realization of each element depends upon the existence of the other two. Without production for social needs, no real social property; without social property, no worker decision-making oriented toward society’s needs; without worker decision-making, no transformation of people and their needs.

The state’s place within ‘socialism as an organic system’

Is there a place for the state in socialism as an organic system? In the absence of a mechanism by which this particular combination of production, distribution and consumption can be realized, it remains purely a vision. Thus, implicit in the concept of socialism as an organic system is a set of institutions and practices through which all members of society can share the fruits of social labour and are able to satisfy their ‘own need for development.’ To produce and reproduce ‘rich human beings’ in a society based upon solidarity requires a conscious attempt to ensure that the necessary conditions for full human development infuse all levels of society.

Consider one possible scenario for a process of participatory diagnosis and planning. At the level of an individual neighbourhood, it is possible for neighbours to discuss directly the kind of community they want to live in and what they see as necessary for the development of their capacities and that of those around them. While this process identifies needs, the discussion also allows this community to explore its own ability to satisfy those needs itself; in other words, it identifies the capabilities of the community. Thus, at the level of the community, there is a direct attempt to coordinate the system of needs and the system of labours. In addition to being able to identify its needs and the extent to which those can be satisfied locally through the labour of community members, this process (which occurs under the guidance of elected neighbourhood councils) has a second product. By sharing and attempting to reconcile views of the most urgent needs of members of this community, there is a learning process—one in which protagonism builds and reinforces solidarity—i.e., the process of participatory diagnosis produces particular people, a particular joint product. At the core of this process, thus, is revolutionary practice—the simultaneous changing of circumstances and human activity or self-change.

Of course, the probability of a precise match between capabilities and needs within this community is negligible. The community is likely to have needs it cannot satisfy locally and capacities it does not need. In this situation, autarky supports neither the ability of people to secure the use-values they identify as important for their development nor the satisfaction in meaningful activity that can come from meeting the needs of others outside their immediate neighbourhood. Thus, to satisfy ‘the worker’s own need for development,’ the community needs to go beyond this barrier in order to coordinate with other communities in a larger body.

The commune represents a further step, bringing together the information transmitted by local neighbourhood councils about the needs and capabilities of their communities as well as drawing upon the knowledge of workers within units of production in this geographical area. Do workers have the capacity to satisfy the needs identified by the communities? By exploring this question in their workers councils, workers engage in conscious consideration of production options within their workplaces and focus upon the logic of producing for communal needs; however, to answer this question adequately requires more than responses from individual production units taken separately. By combining their knowledge and capabilities, workers in particular workplaces can achieve results which are greater than the sum of their individual parts taken separately. But, here again, more than a process of producing for communal needs and purposes occurs. Cooperation within and between units of production for this purpose generates solidarity among the combined workers and reinforces their understanding of the goals of production.

Throughout this process, community members and workers can interact through communal meetings and a communal parliament. And, the result of the process is that the commune councils have at their disposal data on (a) needs that can be satisfied from within the commune and (b) the needs which cannot be satisfied locally. Further, there is information on (c) the potential output of workplaces that can be provisionally utilized within the commune, and (d) the potential output of workplaces that is unutilized. Thus, there is both an indication of the level of needs that provisionally can be satisfied locally as well as identification of the excess demand and excess supply within each commune.

To stop here would reproduce the problem of remaining at the level of the individual neighbourhood. To create the conditions for the free development of all, it is necessary to go beyond geographical barriers. Thus, this process is extended to larger areas: the data from communes is transmitted upward to cities (communal cities), to the states or provinces and ultimately to the national level – to bodies composed of delegates from the communes, cities and the states, respectively. At the national level, then, it is possible to identify (a) provisionally satisfied needs, (b) unsatisfied needs, (c) provisionally assigned output and (d) provisionally unassigned output. It is fair to assume that there will not be a balance between needs and capacities at the first iteration.

Accordingly, the process of reconciling the system of needs and the system of labours is an essential requirement of the set of institutions and practices characteristic of socialism as an organic system. If there are excess needs, there are two logical resorts: (1) find a way to increase output (a question for workers councils to explore), and (2) recognize the necessity to reduce satisfaction of some needs. Thus, a critical discussion must occur here—what is to be unsatisfied? Exploration of this question requires a discussion of the relative requirements of different areas and the different types of needs to be given priority. It is only at this level that identification of national and regional inequality occurs as well as a discussion of priorities and choices for the society as a whole. This dialogue needs to take place not only at the national level but at every level down to the neighbourhood. Such a discussion is absolutely essential because, through such a process of participatory planning, people learn about the needs and capacities of others elsewhere in the society. There is no other way to build solidarity than to put faces upon other members of society. Thus, throughout this process, there are two products: development of the plan and the development of the people who participate in its construction.

The result of this scenario is a process of production for communal needs and communal purposes in which protagonism within the workplace and community ensures that this is social production organized by the producers. Obviously, too, the third side of the socialist triangle, social ownership, is present in that there is neither production for capital nor production for any particular group, i.e. a process of group ownership. In each workplace, workers are conscious that their productive activity is for society. In short, begin with communality, and the product of our activity is ‘a communal, general product from the outset.’

How, though, could the concept of socialism as an organic system be made real in the absence of institutions and practices such as these? This combination and articulation of councils and delegates at different levels of society is necessary to ensure the reproduction of a society in which the ‘free development of each is the condition for the free development of all.’ And, it is a state—a particular type of state, a state from below, a state of the commune-type. This state does not wither away—rather, it is an integral part of socialism as an organic system.

Of course, some people may not wish to call this set of institutions a state because these are society’s ‘own living forces’—i.e., not ‘an organ standing above society’ but ‘one completely subordinate to it.’ How would designation of this as a state be compatible with the view that, by definition, as Holloway puts it, ‘the state is the assassin of hope’? Like those who conceive of labour as inherently a burden (and thus can think of nothing better than to reduce it to zero), those who reject these institutions as a state demonstrate that they are trapped in the categories of old societies.

Old habits die slowly, though. And, taxonomy should not trump content. So, if some people prefer to call these articulated councils a non-state or the ‘Unstate,’ this should not present a problem—as long as they agree that socialism as an organic system requires these institutions and practices in order to be real.


Michael A. Lebowitz. Photo from Flickr.


Subordinating the old society: Contested reproduction

However, an organic system does not drop from the sky. In socialism as an organic system (to paraphrase Marx’s description of capitalism as an organic system), ‘every economic relation presupposes every other in its [socialist] economic form, and everything posited is thus also a presupposition, this is the case with every organic system.’ Yet, a new system never produces its own premises at the outset. Rather, when a new system emerges, it necessarily inherits premises from the old. Its premises and presuppositions are ‘historic’ ones, premises which are produced outside the system and which thus do not arise upon its own foundations.

In short, every new system as it emerges is inevitably defective: it is ‘in every respect, economically, morally and intellectually, still stamped with the birth marks of the old society.’ Accordingly, the development of an organic system is a process of becoming. ‘Its development to its totality,’ Marx indicated, ‘consists precisely in subordinating all elements of society to itself, or in creating out of it the organs which it still lacks. This is historically how it becomes a totality.’

In the 1920s, the Soviet economist Evgeny Preobrazhensky made this very point about how a new system develops. ‘Not a single economic formation,’ he argued, ‘can develop in a pure form, on the basis merely of the immanent laws which are inherent to the particular formation. This would be in contradiction to the very idea of development. The development of any economic form means its ousting of other economic forms, the subordination of these forms to the new form, and their gradual elimination.’ So, what is to be subordinated? If socialism is to develop into an organic system, social ownership of the means of production must supplant private ownership; worker management must replace despotism in the workplace; and productive activity based upon solidarity and community must subordinate individual self-interest. And, of course, the old state must be transcended, replaced by the new organs which foster the simultaneous changing of circumstances and self-change.

Obviously, this cannot happen overnight. It also, however, is something that cannot take place in stages. The idea of putting off some questions until a later stage is prepared is alien to a concept of an organic system. The continued presence of elements of capitalism does not simply mean that socialism is at yet incomplete because a few parts are missing. After all, what kinds of people are produced within the old relations? In fact, every moment that people act within old relations is a process of reproducing old ideas and attitudes. Working within a hierarchy, functioning without the ability to make decisions in the workplace and society, focusing upon self-interest rather than upon solidarity—these activities produce people on a daily basis; it is the reproduction of the conservatism of everyday life—indeed, the reproduction of elements of capitalism.

The concept of socialism for the twenty-first century as an organic system theoretically posits what the experience of the twentieth century has demonstrated – the need to build all sides of the socialist triangle. One war, three fronts. In the absence of a struggle to subordinate all the elements of the old society, the new society is inevitably infected by the old society. And, the matter is worse if we choose homeopathic medicine to cure the infection. In short, rather than build upon defects (such as the orientation toward material self-interest that Marx warned about in his Critique of the Gotha Programme), the point is to subordinate them.

Just as capitalism, though, required the development of a specifically capitalist mode of production to be an organic system, socialism also cannot subordinate all elements of society to itself until it develops a specifically socialist mode of production. Consider capitalism before it developed to the point where it produced its own premises in their capitalist form—i.e., when it was still in the process of becoming. That process of becoming necessarily involved the contracted reproduction of the existing relations—relations Marx described as ones in which the producer ‘as owner of his own conditions of labour, employs that labour to enrich himself instead of the capitalist.’ The separation of producers from those means of production and the compulsion to sell their labour-power marked the beginning of capitalist relations. Wherever possible, however, workers attempted to extract themselves and to become independent producers rather than to sell their ‘birth-right for a mess of pottage.’ This possibility was always present as wages increased with the accumulation of capital in the absence of the specifically capitalist mode of production. ‘Two diametrically opposed economic systems’ were present—and not only in the colonies where the problem of non-reproduction of wage-labourers was most marked.

The struggle over the subordination of the elements of production, thus, did not end with the original (or primitive) development of capitalist relations of production. Reproduction of those new relations was not secure until the development of the specifically capitalist mode of production that ensures reproduction of the premises of the system. ‘As soon as capitalist production stands on its own feet,’ Marx noted, ‘it not only maintains this separation [between workers and the means of production] but reproduces it on a constantly extending scale.’ Until capital developed upon its own foundations, however, differing relations and differing logics existed simultaneously.

So, what happens when differing relations coexist? Rather than peaceful coexistence, there is contested reproduction—with each system attempting to expand at the expense of the other. Considering the Soviet Union in the 1920s, Preobrazhensky argued that the state economy was in ‘an uninterrupted economic war with the tendencies of capitalist development, with the tendencies of capitalist restoration.’ This, he proposed, was a ‘struggle between two mutually hostile systems,’ a war between two regulating principles—one, the result of the spontaneous effects of commodity—capitalist relations (‘the law of value’); and the other, based upon the conscious decisions of the regulatory organs of the state (which he called ‘the law of primitive socialist accumulation’). And, Preobrazhensky argued that each of these regulating principles was ‘fighting for the type of regulation which is organically characteristic of the particular system of production-relations, taken in its pure form.’ However, the result of their interaction was that the Soviet economy was regulated by neither in its pure form. There was not a simple combination or addition of the productive relations and their associated regulating principles; rather, they interpenetrated—coexisting, limiting and (significantly) deforming each other.

Preobrazhensky’s insight, in short, was that in the process of becoming of a new system, two systems and two logics do not simply exist side-by-side. They interact. They interpenetrate. And, they deform each other. Rather than the combination permitting the best of both worlds, the effect can be the worst of the two worlds. Precisely because there is contested reproduction between differing sets of productive relations, the interaction of the systems can generate crises, inefficiencies and irrationality that wouldn’t be found in either system in its purity. Accordingly, as is well known, Preobrazhensky argued that rather than search for balance between the two, it was essential that what he called primitive socialist accumulation subordinate and replace the law of value.

But consider capitalism in its process of becoming. How, in the absence of the specifically capitalist mode of production, were capitalist relations of production reproduced? After all, the interaction between what Marx had called ‘two diametrically opposed economic systems’ was definitely producing problems that would not occur outside that combination. This was exactly what was occurring when the labour-intensive accumulation of capital produced a tendency for the non-reproduction of wage-labour as the result of rising wages. Marx was quite clear on what capital’s answer was—i.e., how capital ensured the reproduction of capitalist relations of production under these conditions. He detailed the measures undertaken with the emergence of capitalism—‘the bloody discipline,’ the ‘police methods,’ ‘the state compulsion to confine the struggle between capital and labour within limits convenient for capital.’ In direct contrast to the conditions for the reproduction of capitalist relations once the specifically capitalist mode of production has been developed, he argued that ‘the rising bourgeoisie needs the power of the state, and uses it to “regulate” wages.’

In short, until capital produced its own premises with the development of the specifically capitalist mode of production, it needed what I have called a ‘capitalist mode of regulation’—a mode of regulation which could ensure the compatibility of the behaviour of workers with the requirements of capital. In the absence of what Marx called ‘the sheer force of economic relations,’ that specific mode of regulation relied upon the coercive power of the state to prevent wages from rising and to compel workers (through ‘grotesquely terroristic laws’) ‘into accepting the discipline necessary for the system of wage-labour.’

The necessity of a socialist mode of regulation

Can the associated producers, in their turn, use such a state to support socialist productive relations before the development of socialism as an organic system? Consider the situation described in the Communist Manifesto where the ‘battle of democracy’ has been won (through a revolutionary rupture or a longer process) with the result that a government representing workers exists. At every step in the process of the becoming of socialism, the elements of capitalism and socialism (‘two diametrically opposed economic systems’) will interact and produce systemic incoherence and crisis. For example, when capitalist elements dominate, attempts to subordinate or make ‘despotic inroads’ upon them will tend to generate a capital strike and an economic crisis. If a government is prepared to break with the logic of capital, it will understand (as the Manifesto indicates) that it is ‘compelled to go always further’ and to make ‘further inroads upon the old social order’ and thus to ‘wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State.’ In contrast, the sorry history of social democracy has been that, sooner or later, it yields to the logic of capital and reinforces its rule.

A socialist mode of regulation must achieve consciously what a specifically socialist mode of production will tend to do spontaneously—ensure the reproduction of socialist relations of production. The building and reproduction of those relations (represented by the sides of the socialist triangle) ‘consists precisely in subordinating all elements of society to itself, or in creating out of it the organs which it still lacks.’ Thus, the socialist mode of regulation must subordinate consciously every element which supports the old society—both the institutions and the common sense that supports those old relations. Further, it must create new socialist elements which can become the premises and foundation for the new society.

The socialist mode of regulation, accordingly, must embrace the Battle of Ideas—the ideological struggle oriented toward human development. It must stress how the logic of capital is contrary to the development of our potential, and it must use every example of capital’s response to measures supportive of human development as yet another demonstration of the perversion of capitalism. Further, the acceptance of the logic of capital as ‘self-evident natural laws’ must be challenged by development of a coherent alternative which stresses the importance of democratic, participatory and protagonistic practice in workplaces and communities and emphasizes a new social rationality based upon cooperation and solidarity. Of course, an ideological struggle cannot succeed by itself. Without the creation of institutions like workers councils and neighbourhood councils, which provide the necessary space for human development through practice, the battle of ideas lacks a real basis for the development (‘both individual and collective’) of new socialist subjects. Indeed, this mode of regulation requires a state that supports this struggle ideologically, economically and militarily and thus serves as the midwife for the birth of the new society.

But, what do we mean by the state? Do we mean the old state or the emerging new state based upon workers councils and neighbourhood councils as its cells? How could the old infected state whose very institutions involve a ‘systematic and hierarchic division of labour’—a state which has the character of a public force organized for social enslavement, of an engine of class despotism—possibly be part of the socialist mode of regulation?

Marx and Engels grasped that the working class ‘cannot simply lay hold of the ready-made state machinery, and use it for its own purpose.’ At last, Marx proclaimed, following what he saw as the spontaneous discovery by workers in the Paris Commune of an alternative form of state—a new democratic and decentralized state where the legitimate functions of the state were to be ‘wrested from an authority usurping pre-eminence over society itself, and restored to the responsible agents of society.’ At last, the necessary form of the workers’ state has been discovered: the Commune (which combined legislative and executive functions) was ‘the political form at last discovered under which to work out the economical emancipation of Labour.’ Here was the state which would ‘serve as a lever for uprooting the economical foundations upon which rests the existence of classes, and therefore of class-rule.’

The commune form represented the destruction of centralized state power insofar as that state stands above society. Marx called it ‘the reabsorption of the state power by society as its own living forces instead of as forces controlling and subduing it, by the popular masses themselves, forming their own force instead of the organised force of their suppression—the political form of their social emancipation.’ With the conversion of the state ‘from an organ superimposed upon society into one completely subordinate to it,’ self-governing producers thus wield the state for their own purposes, continuously changing both circumstances and themselves.

This new type of state, based upon direct protagonistic democracy in workplace and community, is indeed essential for the development of socialism as an organic system. Not only does it permit the unleashing of tacit knowledge and popular energy to link the capacities of people to communal needs and purposes but it has as its joint product new social subjects with new capacities, pride and dignity. With the transparency that is necessary for any control from below, those councils in workplaces and communities can police waste, sabotage and other attempts to reverse the process effectively; and, this too, reinforces the sense that the process belongs to the people and is not alien to and above them.

Yet, that new state does not drop from the sky. For one, given the effects of the ‘education, tradition and habit’ of those formed within the old society, we should not be surprised at the power of the old ideas to undermine efforts to build the new state from below. Although people transform themselves through their practice in workers and communal councils, they do so in small units and the spontaneous focus of these cells of the new state inevitably will be one of localism and self-interest (both individual and collective). The development of solidarity and a concept of community that goes beyond the local to other communities and workplaces (and beyond the self-interest that is manifested as consumerism) will tend to emerge only through practice.

These cells, of course, need to be connected if they are to emerge as the new state. They need to develop horizontal and vertical links with other workplaces and communities (as well as with bodies which consolidate these). But the creation of such links through the delegation of spokespersons on their behalf is not the same as the development of solidarity that transcends local self-interest. It takes time before the concept of the whole develops organically in these units and is internalized. In short, although the course of development of socialism as an organic system requires the creation of links based upon solidarity from below and the acceptance of collective democracy that transcends the particular, that process cannot be instantaneous. Accordingly, the new state is not capable initially of making essential decisions that require concentration and coordination of forces.

In contrast, the old state is more likely to be able to see the overall picture at the outset. With the presence of revolutionary actors in the government of the old state, it is possible to confront not only individual capitals but the power of capital as a whole. This is essential because the process of subordinating capital requires the working class to take the power of the existing state away from capital (and thereby to remove its access to the military forces of the state). This is the strength of the old state; it is well situated to identify critical bottlenecks and places for initiatives that require a concentration of forces (including actions to defend the process militarily against internal and external enemies determined to reverse every inroad). Can we imagine building a new society without taking the existing power away from those who possess it in the old society? In contrast to modern fantasists, Marx understood that ‘the transfer of the organized forces of society, viz., the state power, from capitalists and landlords to the producers themselves’ is necessary; he understood that you cannot change the world without taking power.

However, as might be expected from this ‘engine of despotism,’ with its ‘systematic and hierarchic division of labour’ and ‘ready-made state machinery,’ the old state has the tendency to act from above to change circumstances for people rather than to foster revolutionary practice. That state remains above society; it divides society into two parts, one part of which is superior to society and which would bestow socialism as a gift to an underlying population. How could the old hierarchical state—even if made more democratic—foster the key link of human development and practice? Inherent in the logic of representative democracy is the separation of governing from the governed. Thus, rather than the necessary involvement of people which ‘ensures their complete development, both individual and collective,’ the spontaneous tendency of such a state is to reproduce ‘the delusion as if administration and political governing were mysteries, transcendent functions only to be trusted to the hands of a trained caste.’ The faces may change in the legislative branch, but the face of the old state to those below is that of the functionary, ‘an authority usurping pre-eminence over society itself.’ That is precisely why the Commune’s combination of legislative and executive bodies is so central to the development of a state which is society’s ‘own living forces instead of… forces controlling and subduing it.’

During the interregnum when the old state cannot yet die and the new state is not yet able to stand upon its own feet, a great many morbid symptoms appear. Both states are necessary at the outset for the subordination of the old society and the nurturing of the new. However, the inherent tension between the top-down orientation from within the old state and the bottom-up emphasis of the worker and community councils is obvious. In their interaction over a period of indeterminate length, each state will tend to deform the other.

Thus, the desire on the part of revolutionaries in the old state to enact national policies according to a predetermined timetable, for example, tends toward the creation of uniform rules which ignore differences in the history and practices of the cells of the emerging state from below. Both in those cases where organic development is lagging and those where it is more advanced, the effect of demands placed by the old state upon the new shoots will tend to deform their development, as the impatience of functionaries of the old state will either turn the cells of the new into instruments of the old state, or impose a uniformity that tends to reverse unique advances and thereby to discourage initiative and enthusiasm.

Nor, viewed from the other angle, can the old state easily achieve goals of coherent planning, balance and equality when worker and communal councils assert their right to self-determination. As long as these local units insist upon their unique character and the right to pursue their own collective self-interest without interference, the tendency will be to foster relations of exchange (the quid pro quo), inequality and a lack of solidarity. Here, again, the combination of the two states produces incoherence rather than the best of both worlds.

In the context of growing tension and crises produced by the interaction of two diametrically opposed systems, there will be those in the old state who see the solution as the enforcement of power from above. Similarly, there will be those in the new cells who will see the solution as the removal of any authority above the individual unit in order to permit the unfettered pursuit of their particular collective interest. Both those tendencies must be struggled against because each leads to a different deformation of the socialist triangle of social production organized by workers, using socially owned means of production for the purpose of satisfying social needs.

The socialist mode of regulation requires a combination of revolutionary actors within both the old state and the new. Within the old state, it is essential that the policies pursued focus upon both the changing of circumstances and the changing of human beings; this calls for the rejection of capitalist measures of accounting and efficiency and their replacement by a concept of socialist accounting which explicitly recognizes the joint product which emerges from the key link of human development and practice. Within the cells of the new socialist state, on the other hand, the struggle must be against the defects associated with the self-orientation inherited from the old society. In both workplaces and communities, it is essential to find ways to build solidarity with other communities and society as a whole and to develop the understanding that the free development of each has as its condition the free development of all.

In short, the socialist mode of regulation involves a combination of the nurturing of the new state and the withering away of the old. In this process, there is a natural alliance within both the old and the new, not with the goal of achieving a balance between the two states, but unified in the commitment toward building a new socialism oriented explicitly toward human development and defined by the socialist triangle.

The state and the struggle for socialism

This combination of old and new states, however, is not only essential for ensuring the reproduction of socialist relations. A struggle against one-sidedness must be at the core of a strategy to end capitalism and to build socialism. Some people, however, focus only upon the new state (or, if you will, the ‘Unstate’) and reject the idea of using the old state. ‘The very notion that society can be changed through the winning of state power,’ Holloway argues, is the source of all our sense of betrayal; we need to understand, he announces, that ‘to struggle through the state is to become involved in the active process of defeating yourself.’ Why? Because ‘once the logic of power is adopted, the struggle against power is already lost.’ And, why even try? After all, the existing state cannot ‘be made to function in the interests of the working class’ because as a capitalist state ‘its own continued existence is tied to the reproduction of capitalist social relations as a whole.’ The state is ‘just one node in a web of social relations’ and, indeed, is ‘not the locus of power that it appears to be.’

From this perspective, the need to use the state (the armed ‘node’) to rip apart that web of social relations is just so old fashioned—so nineteenth and twentieth century. Forget the military, police, judicial and legislative apparatus now at the disposal of capital. The alternative to capital’s power is already there: ‘ubiquitous power implies ubiquitous resistance. Ubiquitous yes implies ubiquitous no.’ With the Hegelian magic by which things can be miraculously transformed into their opposites (as long as we don’t watch too closely), we come to understand that electoral abstention is victory, lack of leadership is leadership, and the ‘Many’ (the multiplicity of negative struggles against capitalism) is by definition ‘One.’ Negating the existing state through the mind means that it continues in the hands of capital in reality.

The other form of one-sidedness focuses exclusively upon the capture of the old state. Whether choosing the electoral road or invoking glorious victories of the past to support a direct assault upon state power, from this perspective the process of building the institutions and practices characteristic of the new state must be subordinated to the principal task. Social movements essential for the organic development of a new socialist consciousness based upon practice are viewed instrumentally—as fodder for election committees or as the source of cadres for the party. Subordinate, subordinate—that is holy Moses and the prophets! Thus, whether due to the imperatives of electoral rhythm or to the perceived need to rehearse military discipline, the tendency of parties fixated upon the old state is to draw the lifeblood from the incipient elements of the new state and to suppress within their own ranks those who would argue otherwise.

According to Marta Harnecker, this lack of respect for the autonomous development of popular movements was characteristic of elements of the political left in Latin America and brought with it a ‘verticalism, which cancels out people’s initiative’ and a ‘traditional narrow conception of politics’ which ‘tends to reduce politics to the struggle that has to do with political-legal institutions and to exaggerate the role of the state.’ And, the tendency for ‘hierarchization’ is the kernel of truth, too, in Holloway’s argument that the party, ‘whether vanguardist or parliamentary,’ subordinates ‘the myriad forms of class struggle to the overriding aim of gaining control of the state.’

However, rather than inherent in a party as such, this ‘hegemonist’ characteristic is precisely the result of a one-sidedness focused upon the old state. A different left is possible. As Harnecker argues, to build the left essential for socialism for the twenty-first century, we have to change the traditional vision of politics and overcome the narrow definition of power. The new political instrument must grasp the importance of practice for developing consciousness and capacities, needs to learn to listen to popular movements and to respect and nourish them. But it also has a special role—it should not ‘try to gather to its bosom all the legitimate representatives of struggles for emancipation but should strive to coordinate their practices into a single political project’—i.e., to create the spaces where they can learn from each other.

There is an organic link between state and party, and a party which recognizes the necessity for the articulation of old and new state in the process of building socialism differs substantially from one which focuses solely upon the capture of the old state. It is necessarily ‘a political organization which, as it advances a national programme which enables broad sectors of society to rally round the same battle standard, also helps these sectors to transform themselves into the active subjects building the new society for which the battle is being waged.’ In short, the party that is needed is one that learns to walk on two legs.

Two sides, two struggles: a party determined to defeat capital and to build the new state from below must always be consciousness of the danger of one-sidedness. Thus, if crises within capitalism propel a political organization into government, it must not only use that opportunity to defeat the logic of capital and to reduce capital’s power over the old state but also to use the power it has to foster the accelerated development of the sprouts of the new state. And, if conditions are not such as to permit a party to grasp the reins of power in the old state, then it must work to create those conditions by encouraging the autonomous development of social movements through which people can develop their powers and capacities and by building unity among them based upon recognition of difference.

Thus, just as a socialist mode of regulation requires the articulation of old and new state in the process of building socialism as an organic system, so also must we walk on two legs in order to defeat capital and to build collective power. And, at no time is it more possible to demonstrate clearly the gap between the logic of capital and the logic of human development than in the intensified class war when capital is in crisis and the nature of capital comes to the surface. It provides the opportunity to shatter the idea that accepting the demands of capital is common sense. But to show there is an alternative we need the vision of a society in which the free development of each is understood as the condition for the free development of all. And we need to reinforce that vision with more than rhetoric. Unless we are creating through our struggles the spaces which prefigure the new society, we face more glorious defeats.

When capital is in crisis, there are always two options—to give in or to move in. If masses are armed with a clear conception of the socialist alternative, they can turn a crisis in capitalism into the crisis of capitalism. Of course, it is possible that, as the result of our ideological disarmament, the current struggles against the capitalist offensive ultimately may lead to a glorious defeat. It is possible but we must take that chance.

Michael A. Lebowitz (1937-2023) taught Marxian Economics and Comparative Economic Systems at Simon Fraser University in British Columbia since 1965. He was directing the programme in Transformative Practice and Human Development at Centro Internacional Miranda (CIM). His latest book is Between Capitalism and Community (New York: Monthly Review Press 2021). His publications can be found at michaelalebowitz.com.

The Sense of an Ending

Mar 10, 2023

JAMES LIVINGSTON

Three recent books combine theoretical sophistication and historical method in ways that enable us to rethink majority rule and thus re-imagine the future of democracy. And the most searching of the three calls into question whether that future is compatible with capitalism as we have come to know it.
Martin Wolf, The Crisis of Democratic Capitalism (Penguin Press, 2023)
Francis Fukuyama, Liberalism and Its Discontents (Farrar, Straus and Giroux, 2022)
Pranab Bardhan, A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries (Harvard University Press, 2022)

NEW YORK – The great bourgeois revolutionaries who invented modernity, from John Milton to James Madison to Abraham Lincoln, didn’t know they were laying the foundations of capitalism. To be sure, they understood that a money economy – a social system animated by the impending commodification of everything, even labor power – was laying waste to inherited, mostly parochial hierarchies, redefining liberty and making the idea of equality a live option. But they would be appalled by a global civilization in which the market is the measure of all things, where everyone finally has a price and each must buy the right not to die. No one would be more horrified than Adam Smith, the philosopher-king of the Scottish Enlightenment and the first court poet of bourgeois society.


The leading intellectuals of our time, by contrast, know that capitalism as most of us have experienced it is now in its death throes, and that what comes after strongly resembles the mode of production most people call socialism. They know such things because Karl Marx – like Hegel an admirer of Smith – taught them how to understand modernity as that stage of civilization in which commerce would make constant change, transition itself, an everyday fact of life: “All that is solid melts into air,” as the Communist Manifesto put it. Just as capitalism superseded feudalism, so capitalism would somehow, some day, give way to something else, because neither its spirit nor its social content reflected fixed properties of human nature.1

Meanwhile, because the avowed Marxists, at least firebrands like Lenin and Mao, have taught today’s leading intellectuals that the transition from capitalism to socialism would require a revolution, they have learned to fear what seems, especially now, to be an impending if not inevitable future. Their consequent silence on the subject explains why it’s easier for the rest of us to imagine the end of the world than to plan on, and prepare for, the end of capitalism.

But Marx himself wasn’t so sure that capitalism would end with the overthrow of the state, the dictatorship of the proletariat, or even armed struggle. As he saw it, “the abolition of capitalist property from within the bounds of capitalist production itself” was the obvious result of corporate capitalism, founded on the twin pillars of joint-stock companies and modern credit, both of which separated ownership and control of private property. A new “socialized mode of production” was already nascent.

In the United States nowadays, Republicans seem to agree: “woke” corporations and “traitorous” Democrats are imposing socialism – a “radical left” agenda – on the real America, which doesn’t cotton to welfare, public health and education, abortion, gay rights and same-sex marriage, gender pluralism, environmental protection, immigrants, or gun control. All of these policies are of, by, and for the snotty coastal elites and native-born people of color in the cities.

So, as the end of capitalism and the prospect of socialism have obtruded on normal, everyday political discourse, our very own transition question has become more or less unavoidable. Leading intellectuals have responded accordingly, by explaining – or trying to – where the transition might lead and what both the disintegrating past and the impending future have to teach us.
OLD REPUBLICANS

The situation confronting today’s intellectuals is, then, comparable to that which Madison faced in the spring of 1786, when he was reckoning with both the surprising success and probable demise of the American Revolution. Since 1774, when the Continental Congress instructed the colonies to start writing constitutions, the revolution had been animated by local assemblies, town meetings, state militias, and a torrent of constitutional drafts that produced radical experiments like Pennsylvania’s unicameral legislature, a body elected by mere taxpayers (white males only, of course) rather than property-owning freeholders.

The Articles of Confederation were a diplomatic compact of sovereign states so conceived, not a blueprint for a modern nation-state, because there was no central authority that could demand compliance with its policies (the Continental Congress had no monopoly on the force of arms) or overrule laws enacted under the new constitutions. Nor had anyone conjured an identity for “Americans,” a body politic which transcended local boundaries. The States were not yet United.

By the mid-1780s, this dispersal of power among the states had devolved into what Thomas Jefferson called an “elective despotism,” or what Madison perceived, from a more distant intellectual remove, as a dearth of republican legitimacy, that is, a lack of justification for majority rule. His question had become: what, exactly, is the point of insisting on the sovereignty of the people, as against the state or the government (whether embodied in a benevolent monarch, a scrupulous minister, or a duly elected parliament), if the laws they enacted were as destructive of natural right as any tyrant’s arbitrary command?

The two great innovations of the revolution thus far were this unprecedented insistence on the locus of legitimate power “out of doors” and the correlative notion that liberty was impossible in the absence of equality. But what if equality permitted, or even promoted, the tyranny of majorities?

Madison knew that the traditional resources of the statesman – prudence, custom, and reason – offered no answers, so he ransacked the thin, scattered history of republican governments, to see if earlier experiments composed a usable past. To his astonishment, they did not. Every previous republic had tried and failed to escape the corrosive social effects of historical time embodied, literally and metaphorically, in “commerce,” which typically manifested as class divisions and conflict.

At that point, the rights of persons and the rights of property, what Madison called “the two Cardinal objects of Government,” had become the terms of an either/or choice, and the outcome was invariably decided in favor of property by property owners. In every case, “the poor were sacrificed to the rich,” Madison lamented, putting an end to popular government.

How could a republic avoid this fate? Madison’s solution was to enlist historical time – “commerce,” development, and class division and conflict – in the creation and stabilization of republican government, by “extending the sphere” of the polity to take in more diverse populations and interests, and by devising a constitutional structure that made the rights of persons and the rights of property the terms of an undecidable choice. He modified the sovereignty of the people – he divided them against themselves – in order to postpone or prolong the formation of majorities, not to thwart them.

In doing so, Madison made equality the fundamental condition of liberty. It was a radical departure from received wisdom, and it made for the kind of change that was so revolutionary that Americans still doubt and debate it more than two centuries later, almost always by invoking “the founders,” whether reverently or ruefully.

OUR MADISONIAN MOMENT

Martin Wolf, Francis Fukuyama, and Pranab Bardhan have put themselves in Madison’s place, by publishing manifestos that combine theoretical sophistication and historical method in ways that enable us to rethink majority rule and thus reimagine the future of democracy. All three acknowledge that the parasite called neoliberalism has just about killed off its capitalist host by spawning authoritarian alternatives with global appeal. And all three adopt the unfinished American experiment as the template for the new thinking they propose. Each quotes Lincoln to define democracy, and two actually cite Madison to address the possibility of “civic” rather than ethnic nationalism in managing the diversity that inevitably follows from economic globalization.

But Wolf goes much further than Fukuyama and Bardhan, not so much auditioning for Madison’s role as reprising it. His book offers both a brilliant summary of the received wisdom concerning the troubled relationship between democratic politics and free markets – a difficult marriage, as he puts it – and a radical departure that combines unfettered imagination and extraordinary erudition to summon a different, less contentious kind of partnership

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Fukuyama, who identifies as a right-wing Marxist in the tradition of the Russian-born French philosopher Alexandre Kojève, has written the least ambitious of the manifestos. He aims merely to restate and clarify the claims of “classical” liberalism, then test them against recent criticisms from the left and the right. The result is a “fair and balanced” treatment of the doctrinal triangulation, but one which leaves the reader wondering for most of the book where the author stands.

Indeed, it is only in the book’s last two chapters that the “need to restore liberalism’s normative framework, including its approach to rationality and cognition” is announced as the real agenda. The key word here is “restore.” Fukuyama seems to think that, when compared as theories of governance, the alternatives residing in the various critiques of liberalism just don’t measure up: they’re intellectually inferior as well as practically unworkable – and obviously so. But he acknowledges that the right-wing, ethno-nationalist, religiously inspired alternatives have actual or potential majorities waiting on their enactment.

By this accounting, the right learned its new know-nothing parochialism from the radical left’s critique of liberalism’s “primordial individualism,” from its valorization of particular group experience as against Enlightenment universalism, and from its mistrust of the scientific method that both forms and reflects modern liberal rationality. The middle ground, where classical liberalism survives – barely – as paleo-conservatism, has been hollowed out by intellectual incursions from the left and the right. And even here, only the “traditionalist” variant of conservatism, represented by the likes of Adrian Vermeule of Harvard Law School, the self-exiled (to Hungary) conservative polemicist Rod Dreher, and Patrick Deneen of Notre Dame, seems to be intellectually alive. Fukuyama won’t let us mistake classical liberalism for modern democracy, but he insists that by enabling free markets, it authorizes autonomous individuals and thus the possibility of a politics informed by equality and the consent of the governed.

Fukuyama’s invocation of Lincoln tellingly concludes his discussion of these “traditionalists,” Vermeule, Dreher, and Deneen, in keeping with the suspicion he shares with them of majority rule as the measure of legitimate governance, and the doubts he shares with them about the strictly utilitarian logic of neoliberalism. Lincoln rejected Stephen A. Douglas’s program of “popular sovereignty,” which allowed the majority of settlers in the federal territories to decide whether slavery would be lawful there, for two reasons. First, it excluded most of the heirs to that frontier legacy of free land, a vast population composed of generations to come. Second, it violated what Fukuyama would call the normative, regulative principle at the heart of the liberal American experiment, expressed in the imperative phrase from the Declaration of Independence: “all men are created equal.”

Lincoln insisted that the South did not have the right to do what is wrong – to enslave human beings by making property of them – regardless of the majorities it could muster in the electorate, the Senate, or the Supreme Court. Fukuyama likewise insists that neither the utopian neoliberals nor the right-wing populists, the true believers in the church of capitalism, have the right to do what is wrong – to suspend the individualism, egalitarianism, universalism, and rationalism inherent in the liberal tradition – even if they represent solid majorities.

A VIEW FROM BELOW

Bardhan is less certain of that legacy, partly because he studies those parts of the world, particularly South Asia, where liberalism was never a birthright because it arrived as a foreign import, a dimension of colonial rule. He is also much more attuned than Fukuyama to the possibility that the centrifugal social logic of classical liberalism fueled the nihilism common to neoliberalism and authoritarian populism. An economist by training and occupation, Bardhan is more interested than Fukuyama the political theorist in the politics of the impending transition from capitalism to social democracy, and more cognizant than Wolf the economic journalist of how inequality registers in populist revolts as cultural resentment.

The great virtue of Bardhan’s approach is that this transition appears as an untidy, ongoing, even measurable process, rather than a distant prospect to be outlined, for now, as a theoretical model. Half of the book is devoted to close scrutiny of the social-democratic possibilities and policies that already reside in and flow from existing practices, in both rich and poor countries (Bardhan, a professor emeritus at the University of California, Berkeley, was chief editor of the Journal of Development Economics and is an esteemed authority on the political economy of India). In this sense, it usefully complements Fukuyama’s skeletal intellectual anatomy of liberalism; for it proposes that liberalism’s ethical principles – its normative claims – are still as palpable today in our present historical circumstances, in the political ruins we call neoliberalism and populism, as they were at their origin in the seventeenth century.

Bardhan’s most intriguing chapter, “The Slippery Slope of Majoritarianism,” is also the shortest: at only eight pages, it could pass for a footnote. But it’s here that he makes the two claims that announce the book’s originality. On one hand, he suggests that the origins of democracy lie in a welter of competition, either between elites and subaltern social strata or among elites themselves. Both prototypes play out as ideological struggle over civil rights, as per Madison’s “Cardinal objects of Government,” because each party to the resulting social contract had enough leverage to threaten the others’ standing. On the other hand, he fleshes out the idea that such competition has been, and can continue to be, ethnic and/or religious, that is, cultural, both at its source and in its expressions, whether in rich or poor countries. This idea can be read as a corrective or a supplement to Wolf’s emphasis on the broadly economic causes of subaltern resentment and revolt, which have led us to the brink of democracy’s global extinction by majoritarian means.
PERSONS AND PROPERTY

The Crisis of Democratic Capitalism is the most searching of the three books – or any other study of our current condition – because it is the most pointed in asking a contemporary version of Madison’s question, and the most ecumenical in canvassing possible responses that are consistent with the freedoms specific to modern market societies. Wolf’s version of the question could be paraphrased as follows: If markets (“commerce”) are essential to both liberty and equality as we have come to understand them since the advent of capitalism, and if neoliberalism has reduced liberty to an individual’s license to profit from the exploitation of anything, thus blocking the once-broad avenues to equality, what kind of markets would reconcile the rights of property and the rights of persons, and, in so doing, serve the cause of democracy?

The assumption here is of course that majorities are not the sole measure of democracy. As Madison and Lincoln often insisted, only the consent of the governed – their willingness to abide by the laws they have participated in making, directly or by virtue of their citizenship – can ensure the legitimacy required by the modern republican standard of equality before the law. Otherwise, the states that imposed the terrorist yet constitutional and majoritarian Jim Crow regime on Black people in the post-bellum South could be defined as democratic polities.

The age of democratic capitalism, according to Wolf, commenced about 1870 and ended around 1980. By his accounting, then, capitalism has continued to develop since Ronald Reagan and Margaret Thatcher dismantled the postwar Keynesian consensus in the West and Mikhail Gorbachev dismantled communism in the East, but democracy has stalled. In fact, capitalism in the West has by now devolved to a baroque, rentier stage (Wolf abjures the label of neoliberalism) recalling the grotesque caricatures of the late nineteenth century, when bloated monopolists were rendered as vampires or cephalopods, all teeth or tentacles. Meanwhile, the growth of democracy has been stunted by the rise of state/authoritarian capitalism in Eastern Europe and Asia (particularly in China), and of angry, ethno-nationalist populism in Britain and the US.

As with Bardhan’s book, the bulk of The Crisis of Democratic Capitalism is devoted to a programmatic outline of ways to reinvent the system, not to “restore” some lost golden age, or to reinstate the first principles of free enterprise, or otherwise to treat the past as prologue to an acceptable, inhabitable future. Wolf is more ambitious than that, and, in view of the actually existing crises he charts so relentlessly and meticulously, from climate change to the con game we know as the banking system, he has no choice. But he cloaks his radical ideas in the persona and language of a centrist, buttoned-down journalist out to save capitalism from its excesses, not to promote revolutionary change.

No one should be fooled by the sheep’s clothing. Like Mervyn King, the former governor of the Bank of England, and Willem Buiter, a former chief economist at Citigroup and currently one of the world’s leading authorities on central banking, Wolf thinks that private control of bank assets is an absurdity. Magnified by “elite malfeasance” in every other sector of the globalized economy, this is warrant enough to complete the socialization of private property foretold in the formation of joint-stock companies that separated ownership and control of corporate capital. In effect, he implores us to act on Marx’s insight into the revolutionary possibilities of corporate capitalism – that is, into the “socialized mode of production” it made possible, and now necessary, as the solution to a worldwide crisis of democracy.

This conclusion will no doubt seem ridiculous to most readers of The Financial Times, where Wolf has presided as an associate editor for three decades, sometimes sounding like the cheerleader-in-chief for globalization. But consider his summary of our situation:

“The insecurity that laissez-faire capitalism generates for the great majority who own few assets and are unable to insure or protect themselves against such obvious misfortunes as the unexpected loss of a job or incapacitating illness, is ultimately incompatible with democracy. That is what Western countries had learned by the early to mid-twentieth century. It is what they have learned again over the last four decades. Only autocracy, plutocracy, or some combination of the two is likely to thrive in an economy that generates such insecurity and a polity that shows such indifference.”

Moreover, The Crisis of Democratic Capitalism offers a vision of the future that is radical because it gives priority to democracy (the rights of persons) over capitalism (the rights of property). And yet it is also practical, because it enlists markets in the recreation of citizenship. Wolf’s notion of citizenship carries echoes of the classical republican (Aristotelian) kind, because it entails a “positive” definition of freedom: liberty consists not merely in the absence of external constraint, as per modern liberal (utilitarian) ideals of “negative” freedom, but in access to the resources necessary for a “fulfilled life.” Accordingly, he posits “an economy that allows citizens to flourish in this way” as the condition of equality, and thus democracy.

Wolf refuses to call what comes of this vision socialism, because, like Bardhan and presumably Fukuyama, he still equates socialism with Soviet-style central planning and statist command of all resources. No matter. Call it peas and carrots: it still rhymes with hope rooted in the knowledge that the social, economic, and intellectual changes we desperately need to solve the crisis that now besets us are already underway, already within our grasp. This book is a record of them. The Crisis of Democratic Capitalism never says that the choice before us is either socialism or barbarism. But it comes close enough to suggest that the moderate Martin Wolf has become just the radical we need to address our own transition question.

Neglect the insights of women, particularly in economics, and society suffers. At PS’s next virtual event, What Economics Is Missing, Minouche Shafik, Dani Rodrik, Vera Songwe, and others will debate how to create the conditions for achieving genuine inclusivity in economics.




JAMES LIVINGSTON
James Livingston, Professor of History at Rutgers University, is the author of six books, including Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (Cornell University Press, 1986), and the forthcoming The Intellectual Earthquake: How Pragmatism Changed the World, 1898-2008 (University of Chicago Press).

On the Historical Specificity of the Marxist Theory of Imperialism

Nikolai Bukharin

Grigorii Zinoviev

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If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism. Such a definition would include what is most important, for, on the one hand, finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists; and, on the other hand, the division of the world is the transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist possession of the territory of the world, which has been completely divided up.

— Vladimir Lenin, Imperialism, the Highest Stage of Capitalist Development, from Lenin: Collected Works, Volume 22, pg. 266 (1915)

Modern imperialism is the social-economic policy of finance capital tending toward the creation of the most comprehensive economic territorial entities and world empires possible. It is characterized by the tendency to supplant free trade decisively with the system of protective tariffs and to subordinate economic life completely to the great monopolistic combines, such as the trusts, cartels, banking consortia, etc. Imperialism signifies the highest stage in the development of capitalism, in which not only commodity exports but capital exports as well occupy a place of quintessential importance. It characterizes an epoch in which the world is partitioned among a few great capitalist powers and in which the struggle proceeds along the lines of repartitioning it and partitioning the remaining areas.

— Grigorii Zinoviev, “What is Imperialism?” (1916)

The historian or economist who places under one denominator the structure of modern capitalism, i.e., modern production relations, and the numerous types of production relations that formerly led to wars of conquest, will understand nothing in the development of modern world economy.  One must single out the specific elements which characterise our time, and analyse them.  This was Marx’s method, and this is how a Marxist must approach the analysis of imperialism.  We now understand that it is impossible to confine oneself to the analysis of the forms, in which a policy manifests itself; for instance, one cannot be satisfied with defining a policy as that of “conquest,” “expansion,” “violence,” etc.  One must analyse the basis on which it rises and which it serves to widen.  We have defined imperialism as the policy of finance capital.  Therewith we uncovered the functional significance of that policy.  It upholds the structure of finance capital; it subjugates the world to the domination of finance capital; in place of the old pre-capitalist, or the old capitalist, production relations, it put the production relations of finance capital.  Just as finance capitalism (which must not be confused with money capital, for finance capital is characterised by being simultaneously banking and industrial capital) is an historically limited epoch, confined only to the last few decades, so imperialism, as the policy of finance capital, is a specific historic category.

— Nikolai Bukharin, Imperialism and World Economy, pg. 114 (1917)

Modern imperialism is not the prelude to the expansion of capital, as in Bauer’s model; on the contrary, it is only the last chapter of its historical process of expansion: it is the period of universally sharpened world competition between the capitalist states for the last remaining non-capitalist areas on earth. In this final phase, economic and political catastrophe is just as much the intrinsic, normal mode of existence for capital as it was in the ‘primitive accumulation’ of its development phase. The discovery of America and the sea route to India were not just Promethean achievements of the human mind and civilization but also, and inseparably, a series of mass murders of primitive peoples in the New World and large-scale slave trading with the peoples of Africa and Asia. Similarly, the economic expansion of capital in its imperialist final phase is inseparable from the series of colonial conquests and World Wars which we are now experiencing. What distinguishes imperialism as the last struggle for capitalist world domination is not simply the remarkable energy and universality of expansion but — and this is the specific sign that the circle of development is beginning to close — the return of the decisive struggle for expansion from those areas which are being fought over back to its home countries. In this way, imperialism brings catastrophe as a mode of existence back from the periphery of capitalist development to its point of departure. The expansion of capital, which for four centuries had given the existence and civilization of all non-capitalist peoples in Asia, Africa, America and Australia over to ceaseless convulsions and general and complete decline, is now plunging the civilized peoples of Europe itself into a series of catastrophes whose final result can only be the decline of civilization or the transition to the socialist mode of production. Seen in this light, the position of the proletariat with regard to imperialism leads to a general confrontation with the rule of capital. The specific rules of its conduct are given by that historical alternative.

According to official ‘expert’ Marxism, the rules are quite different. The belief in the possibility of accumulation in an ‘isolated capitalist society’, the belief that capitalism is conceivable even without expansion, is the theoretical formula of a quite distinct tactical tendency. The logical conclusion of this idea is to look on the phase of imperialism not as a historical necessity, as the decisive conflict for socialism, but as the wicked invention of a small group of people who profit from it. This leads to convincing the bourgeoisie that, even from the point of view of their capitalist interests, imperialism and militarism are harmful, thus isolating the alleged small group of beneficiaries of this imperialism and forming a bloc of the proletariat with broad sections of the bourgeoisie in order to ‘moderate’ imperialism, starve it out by ‘partial disarmament’ and ‘draw its claws’! Just as liberalism in the period of its decline appeals for a well-informed as against an ill-informed monarchy, the ‘Marxist center’ appeals for the bourgeoisie it will educate as against the ill-advised one, for international disarmament treaties as against the disaster course of imperialism, for the peaceful federation of democratic nation-states as against the struggle of the great powers for armed world domination. The final confrontation between proletariat and capital to settle their world-historical contradiction is converted into the utopia of a historical compromise between proletariat and bourgeoisie to ‘moderate’ the imperialist contradictions between capitalist states.

— Rosa Luxemburg, Anti-Critique (1915)

My reason for citing the above excerpts is that I feel that the Marxist theory of imperialism — as developed by Rudolf Hilferding, Rosa Luxemburg, Vladimir Lenin, Grigorii Zinoviev, and Nikolai Bukharin — has been widely abused in recent decades in analyzing the intervention of advanced capitalist states (the U.S. or members of the European Union) into less developed countries.  While there can be no doubt that there exist some parallels and continuities between the kind of self-interested exploitation of Third World countries, typically ex-colonies, that takes place today and the imperialism of old, these theorists understood it as a specific outgrowth of monopoly or finance capitalism.  If I might be permitted to grant this phase of capitalism a periodicity, I would probably place it between 1880-1929.  Since this time, capitalism has undergone not one but two drastic reconfigurations (Fordism and neoliberalism).  For this reason, I think that the term should not be so loosely thrown around in describing current affairs, as many of these categories need to be reworked to fit the present day.

There are many fundamental differences between the phenomenon Lenin et al. described as “imperialism” and what has more recently been dubbed “imperialism” (or, perhaps more fittingly, “neo-imperialism”).

Lenin understood imperialism to entail a certain underlying logic, the bloody competition between great capitalist powers to carve up the earth according to zones of influence and direct colonial administration in pursuit of new markets, raw materials, and cheap labor.  Moreover, he believed that this competition between the great capitalist powers of the world, which were at the time mostly European but also included Japan and the United States, would escalate to the point where an inter-imperialist war, by definition a world war, was inevitable.  This was a multipolar world, in which no one great power could be said to predominate completely, and in which large-scale alliances were formed in anticipation of major conflict that everyone knew was on the horizon.  Also, imperialism constituted the logical outgrowth of the shift from liberal capitalism, where the prevailing Manchester School ideology of “free markets” dominated and liberalism (quite contrary to its historical aspirations) held the reigns of state power, from 1848-1873, to monopoly or finance capitalism, where smaller competitors were gradually pushed out as major trusts swallowed up their rivals and cut deals with the governments in order to corner the market in the aftermath of the “long crisis” of 1873.

What leftists generally understand imperialism to mean today is the more or less cooperative domination of either the single world superpower, the US, or in tandem with its various allies in NATO (another Cold War holdover) or the UN.  While military occupations clearly last over years of bloody conflict, the point is not direct colonial administration but the indirect establishment of quasi-independent regimes that will be “friendly” to US or European interests.  No one really believes that these various military interventions around the world are actually going to lead to an armed conflict between, say, the European Union and the US, or between Russia and the US, or even China and the US.  After the collapse of the Soviet Union, there has been a decidedly unipolar order.  In terms of concurrent transformations in the organic composition of capital and the corresponding historical periodicities of capitalism, we seem to have reverted to a “neoliberal” valorization of free markets and the deregulation of capital flows.  There is some debate as to whether neoliberalism is merely an ideological pretext that masks deep complicity with state powers, or whether it is a socioeconomic reality, but clearly the form of capitalism that Lenin felt specifically motivated imperialism in his time does not exist today.May

06

A Study of the Marxist (and Non-Marxist) Theory of Imperialism

The Death of Global Imperialism (1920s-1930s)

As part of my study of the spatial dialectics of capitalism, I have been reading not only the more recent Marxist literature by Henri Lefebvre on The Production of Space or David Harvey’s excellent Spaces of Capital, but also some of the more classic works on the subject.

Marx’s own account of the spatiality of capitalism can be found in the Manifesto of the Communist Party, his Grundrisse of the early 1860s, and his posthumously published Capital, Volume II.  In the Manifesto, he talks at length in the first section of the globality of capitalism, of the formation of the world-market as part of the historical mission of the bourgeoisie.  In the latter two works I mentioned, the spatial dimension of capital is raised in connection with the ever-improving means of transport and communication, in facilitating the circulation of commodities.  Marx explains the dynamic in capitalism by which it breaks through every spatial barrier that it comes across, such that it seems to embody a sort of terrestrial infinity realizing itself through time.

But I am interested in some of the later work that was done on the Marxist theory of imperialism, both before and immediately after the 1917 Revolution.  This would have an obvious bearing on the spatial extension of capitalism throughout the world.  In this connection, I have drawn up a brief reading list:

1. John Atkinson Hobson.  Imperialism: A Study (1902).  Though a pacifist and political liberal, Lenin considered his study of imperialism vastly superior to Kautsky’s, which had by then joined forces with the bourgeois apologists.
2. Rudolf Hilferding.   Finance Capital: A Study of the Latest Phase of Capitalist Development (1910).  This book was extremely influential in its time, and established a number of concepts regarding monopoly capitalism and finance capital that Lenin would later rely upon.  The two chapters on “The Export of Capital” and “The Proletariat and Imperialism” are relevant to any study on imperialism.
3. Rosa Luxemburg.  The Accumulation of Capital (1913).  This is Luxemburg’s greatest contribution to the economic theory of Marxism.  Though she and Lenin disagreed over some of its premises and conclusion, the book remains extremely important for the analysis of imperialism.  The chapter on “Foreign Loans” addresses this directly.
4. Vladimir Lenin.  Imperialism, the Highest Stage of Capitalist Development (1915-1916).  This work scarcely needs any introduction.  The entire book is a study of imperialism as a stage in capitalist development.
5. Nikolai Bukharin.  Imperialism and World Economy (1917).  This book, which includes a favorable introduction from Lenin, seems to me to perhaps be the most pertinent to my own studies, since it places the “world economy” as  a centerpiece for its analysis.

I am hoping perhaps a few of my Marxist friends will join me in reading some selections of these books.  In my understanding of the subject, the imperialism described by Hilferding, Luxemburg, Lenin, and Bukharin were very specific to the time in which they were living.  According to their theories, it involved vast capitalist trusts and cartels, gigantic monopolies, along with huge amounts of finance capital backing them through the banks.  I think that Lenin’s theory of imperialism is all too often invoked in describing present-day imperialist ventures.  It continues to be a force within the greater complex of capitalist globalization, which has been taking place ever since the social formation first emerged.  But historical conditions have changed since Lenin’s time, and in light of the neo-liberalist recalibration of capitalism, I think some of the fundamental categories we retain from Lenin’s analysis of imperialism might have to be rethought or slightly modified to accommodate present-day realities.

I personally am interested in the historical imperialism that Lenin et al. were studying, i.e. the form of imperialism that existed between 1880 and 1939.  Are there any other suggestions for reading on this subject? Ren, I’m looking to you.  But others are welcome to make suggestions as well.

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