“It is precisely because the money form of value is its independent and palpable form of appearance that the circulation form M…M’, which starts and finishes with actual money, expresses money-making, the driving motive of capitalist production, most palpably. The production process appears simply as an unavoidable middle term, a necessary evil for the purpose of money-making. (This explains why all nations characterised by the capitalist mode of production are periodically seized by fits of giddiness in which they try to accomplish the money-making without mediation of the production process).” Karl Marx Capital Volume Two
“The return of politics is one more cause for concern” Neil Hume Financial Times in 2010
THE WORLD economy is entering the sixth year of the slump caused by the greatest “fit of giddiness” within the living memory of all but the very oldest. From a boom built on paper to a bust measured in jobs lost, social services swept away, wages cut and poverty entrenched and intensified for millions, the consequences of humanity’s toleration of the capitalist mode of production have seldom seemed so stark.
The capitalist crisis of the 21st century has been rooted precisely in the elements described by Marx and Engels all those years ago – the dialectic of M…M’ , the rush by the “masters of the universe”, to be found above all in London and New York City, to make more (and still more) money from money without troubling to make anything else in between, a process which was left uninterrupted to run its course until the entire world financial system stood on the brink of collapse only to be rescued by decisive, if belated, intervention on the part of the capitalist state, acting as always as the final guarantor of a system which, in the ideology of its most purist champions at any event, should have no need for any such role for governing institutions.
From that crash, which instantly pushed businesses of all kinds towards bankruptcy even as the banks were placed on taxpayer-funded life support (as Wall Street was rescued in mid-2009, US unemployment officially hit 17% and one-third of capital equipment was left idle), the crisis flooded out to inundate states themselves, from Dubai to Ireland, which suddenly found that their public finances would no longer be underwritten by the international money markets, the same people whose casino-style speculations had piled up the mountain of fictitious capital in the first place. In the name of placating the bondholders, a savage regime of austerity has been imposed on the working people of one country after another. Greece, Ireland, Spain, Portugal and Italy have been sanctioned under the authority of the holy trinity of the world bourgeoisie – the International Monetary Fund, the World Bank and the European Union. Elected governments have been swept aside as the paper facades for capitalist class power that they are, with in their stead open dictation by the “troika”. In Britain, the services of the troika have been otiose. The Coalition government cobbled together after the 2010 election has forced a regime of austerity on the country directly, at the bidding of none but its own class interests, through the agency of a Conservative Party bound to the potentates of the City of London and Canary Wharf by a million golden threads.
So now real wages are falling for millions “in the national interest”, the poor are being forced from their homes through the Bedroom Tax and benefit cuts “to ensure economic credibility”, young people above all are being left without jobs, homes or hope “to get the country back on its feet.” And all the siren slogans of the capitalist parties find their echo in the muted mumblings of social democracy in Britain and the rest of Europe alike, in the policies of reformists who have long forgotten how to reform anything at all. It was none other than Gordon Brown, presiding genius of the neo-liberal agenda of the last Labour government as much as Tony Blair was its neo-conservative avatar, who told the gathered gilded magnates of the City in 2007, even as the storm clouds were gathering, that over his time as Chancellor “the City of London has risen by your efforts, ingenuity and creativity to become a new world leader…an era that history will record as the beginning of a new golden age for the City of London. The financial services sector in Britain…shows how we can excel in a world of global competition. Britain needs more of the vigour, ingenuity and aspiration that you already demonstrate.”
History has a habit of taking its revenge on those who lightly invoke its judgement in self-justification, but seldom so swiftly and unequivocally. As to whether Brown or the bankers he was addressing are now held in lower popular esteem is a point of precedence not worth settling, as Samuel Johnson would have it. The best that can be said of Gordon Brown is that he was of his time, a post-reformist social democrat adapted to the political climate of the era when, in the words of a Financial Times writer in 2006 “…the intellectual victory of capitalism...has deprived the political elites of independent power and placed them in the service of the financial markets.” Indeed, Brown and the entire last Labour government in Britain were in the service of financial markets body and soul , both when rescuing the City in 2008 and when politically underwriting its undetectable virtues and achievements a year earlier.
That was then. As noted in the quotation at the head of this article, the Financial Times has been singing a different tune more recently. The article by Neil Hume noted sadly: “Over the past couple of decades political risk has not been something investors have had to really worry about. Markets have been driven by light-touch regulation, laissez-faire economic policies and globalisation rather than by politicians. All that has changed…politicians are already making their presence felt and with mainly negative consequences for markets.”
If politics is indeed flexing its long-atrophied muscles once more, to what end? The great majority of the world’s people would like it to be in the direction of profound social change. A worldwide opinion poll published at the end of 2009 found that 51% of the globe would support what might be broadly called a radical social-democratic response, in line with traditional reformism – “the regulation and reform of free market capitalism, including nationalisation and income distribution,” while 23% would prefer an entirely new system altogether. It is unlikely that the last four years of dismal economic performance will have changed the numbers significantly.
Opinion polls are one thing, of course, but the real imposition of political change is something else. When capitalist oracles fret about “political risk” they are really using the word as a polite euphemism for class struggle, just as “hard working people” stands rhetorical duty in place of the working class, and “free market” substitutes for capitalism, as if calling things by their real names would summon them from the shadows into actual motion.
The almost universally-unacknowledged truth about the contemporary world crisis is that it is an exercise in class power. The global elite which led the world into the economic calamity of 2008 onwards – the same elite which has launched one lawless war after another in the course of this century – might well be anxious about its social position. They have piled up this misery, and now they expect their system to be dug out from under it intact, so that the whole dance of capital accumulation can resume once more. To that end, control of politics is vital, the end to which other temporary interests and sectional concerns must be subordinated (it was the Marxist economist Ben Fine who acutely observed years ago that, in extremis the bourgeois class will temporarily forego profit in order to preserve property, and will even temporarily part with property in order to preserve its power). Austerity has not been introduced, with all its attendant risks, simply in order to make workers poorer – it is because the reassertion of capitalist class power requires nothing less.
This is a tricky business, for sure – take it from Francis Fukuyama, the neo-conservative (yet thoughtful) ideologist who famously proclaimed the end of history (another euphemism for class struggle) as the world socialist system imploded in 1989-91. Surveying the wreckage of the imperialist elite’s two big ideas of the 21st century – the “export of democracy” and “unfettered capitalism” he observed in 2008 that the lasting effect of the crisis might be the “damage that the financial meltdown is doing to America’s ‘brand’”. Two of the other great purveyors of middlebrow mush to the middle class masses struck the same note – Fareed Zakaria (then of Newsweek now of Time) lamented the passing of the days when the world “listened to American policymakers with respect, even awe. Today they wonder if these officials know what they are doing”; while Philip Stephens (Financial Times ) was even more apocalyptic “…for more than two centuries the US and Europe have exercised an effortless economic, political and cultural hegemony. That era is ending.”
In this decay of the neo-liberal norms of governance resides the fear of the “return of politics”. These forebodings of the passing of a golden age were expressed so sharply more than five years ago. Evidently, the bourgeoisie remains in the saddle today, and its class rule has nowhere been seriously threatened, even in those countries bearing the brunt of the bankers’ social aggression. Indeed, the general shift in the political mood, outside the USA to a limited extent, has been to the right. Yet uneasy lies the head. The continued power of the capitalist establishment owes nothing whatsoever to its economic or social achievements, nothing to an optimistic view of the future under its hegemony and little even to its political skill and cunning. Inertia and habit plays a part, as does the generally deleterious effect of prolonged slump on all classes and communities, damaging their cohesion and social confidence. But by far the greatest reason for the continuing power of the capitalist class is the weakness of the world working class, both as a present political actor and as the bearer of the possibility of an alternative future for humanity.
The main hopes of the capitalist class for seeing the crisis through intact therefore rest on maintaining the perception that there is no alternative – no alternative social system possible, and no alternative rulers other than the incumbents. The signal gain of the thirty-year neo-liberal onslaught, the radical diminishing of the power of the labour movement, extending to the drastic erosion of any counterweight to unbridled capitalist power is, if maintained, the guarantee that any return of politics need not be too troubling. That secured, the elite can continue imposing austerity and wage cuts until capital accumulation can speed up again and the champagne corks can openly (they have never really stopped) be popped in the City once more.
The balance sheet in that respect is not unambiguous. Politically, the struggle for the future direction of the labour movement is not yet within sight of a resolution. Ed Miliband has incrementally edged the Labour Party away from the most brazen aspects of his “new Labour” predecessors’ embrace of imperialism and finance capital. With whatever vacillations, his stand against a war of aggression against Syria in summer 2013 was a historic step forward. His announcements that he would cap energy prices for a period, would force the pace on house building, would end the “bedroom tax” and would restore the fifty per cent tax rate on the very richest have been greeted with howls of outrage from the ruling class, as if the fundamentals of human civilisation had been violated. That these measures, which would hardly have registered as social democratic thirty or forty years ago are now regarded as if they were Bolshevism reincarnate merely shows how far the terms of political debate have drifted.
Yet one has to set against even this limited – but highly popular – move towards addressing the people’s concerns the continuing determination of the front bench to stick to the Tories’ austerity programme. Shadow Chancellor Ed Balls remains ideologically enslaved by the City, a man for whom “economic credibility” means not credibility with the people, but with the bond markets. The plan to return the budget to surplus by 2020 may be music to the ears of the denizens of the dealing rooms, but it almost certainly can only be purchased at the price of a continuing war on the poorest. For many in Labour’s leading ranks, the City remains simply too powerful an interest to be challenged. Rather, Labour’s social and economic plans must be adapted to accommodate the imperatives of big capital.
Labour policy is only one axis of advance along which the progress of the recomposition of the working-class movement needs to be considered. The restoration of the fighting capacity of the trade unions and the broader movement is as significant. Here, again, the recent record has been mixed. The one-day strike against government pension cuts in November 2011 was a landmark step forward, as where the two massive demonstrations against austerity organised by the TUC – far bigger protests than the movement ever organised when trade unions had far larger membership. And some important disputes have been won in the private sector too – at London Buses, in construction and elsewhere.
The Peoples’ Assembly movement has united the main organisations of the working class with wider elements in communities under attack, with the potential to develop a broader fight for social justice. Nevertheless, the overall balance is not particularly favourable – the Grangemouth dispute highlighted the untrammelled power of big business, and the unwillingness of politicians to seriously address it. And despite organising gains in some sectors, which has certainly slowed and possibly arrested the decline in trade union membership, there is as yet no sustained sign of a reversal, and of growing organisation, across the movement as a whole. Socialists remain ideologically disoriented to a significant extent, organisationally fragmented and too often diverted into marginal initiatives estranged from the interests and focus of the mass of working people, although here again the Peoples’ Assemblies can provide a context for overcoming this relative isolation and can take the first steps towards uniting in campaigning an alliance of a broad range of people around the working class.
Trade unions will also need to carefully evaluate the changes introduced into the federal structure of the Labour Party by means of the Collins review, itself the product of ill-judged and near-hysterical attacks on Unite the union’s political activity in July 2013. At time of writing, the passage of these “reforms” seems certain. They have been welcomed by those who wish to see trade union engagement in politics reduced still further, and the control of democratic processes further entrenched in the hands of a small City and Westminster elite, unaccountable and unchallengeable.
However, debate about these changes, important as they are, should not distract from the urgent task of the next year, which is to see the present Coalition government defeated at the General Election, and a Labour government elected as the only feasible alternative. Such a result would give the opportunity for the working-class movement to regroup for advance, to press for policies that can stabilise prospects in working-class communities, and thereby lay the basis for a more far-reaching challenge to the dogmas of neo-liberalism.
Such a victory is within grasp. The government, faced with the bankruptcy of its policies, clutches at straws. Certainly, Osborne and Cameron are celebrating the return of an anaemic rate of economic growth – yet still the British economy is £40 billion a year smaller than it was in 2008. A new housing bubble is being assiduously inflated, exacerbating an already chronic shortage of homes while flirting with a further debt crisis. While taxes have been reduced for the richest, only now, and in the coming months, will the full effects of the cuts in public expenditure be felt at the sharp end. Ministers reserve their energies for resisting any proposal for tougher regulation of the City from international bodies, while remaining mute in the face of, for example, the growing scandal of the systematic sale of adulterated or mislabelled food and drink to the public (mainly the poorest) by the great food monopolies. Cuts in the inspection regime have without doubt allowed this abuse to flourish, just as similar cuts have gutted the bodies responsible for curbing gangmasters’, enforcing the minimum wage, or organising defences against flood.
On a broader canvass, the world economic crisis is not so much ending as migrating – just as it moved from being a banking crisis to a sovereign debt crisis it is now being reborn as an “emerging market” crisis, with instability sweeping Hungary, Brazil, Turkey, Argentina, South Africa and Indonesia. Behind them stand still bigger dominoes – Russia and China, the two major powers left relatively unscathed by the original “credit crunch”. Such markets now account for by far the greatest part of cross-border capital flows, as the endless search for not just profit but super-profit redirects to a smaller number of available arenas. In finality, we can see the fresh impetus given to world capitalism by the victories of the neo-liberal offensive (the collapse of the USSR and the other socialist countries, the opening up of China, the integration of India into the world market etc) exhausting itself at every turn.
That, of course, is far from the end of the story. The present situation is often compared to the 1930s, so it is worth recalling that the worst aspect of the 1930s crisis was not the vast economic slump with all its attendant miseries, nor even the shift by the bourgeoisie towards fascist forms of rule, but the fact that it ended in a second great war, sprung from the interstices of imperialism. Today, as the great powers probe each other in the Pacific and the Far East; as they jockey for advantage over the broken bodies of one Arab state after another; as they jostle for resources across Africa and Central Asia, as leading statesmen openly invoke the spirit of 1914 as being abroad in the world once more; it is clear that the danger of a fresh mighty conflagration and redivision of the world is escalating.
But if this century to date has exposed the unchanging, crisis-raddled, nature of capitalism, and the general unfitness of the bourgeoisie to rule, it has also shown the vast potential of the mass of people to mobilise against war and for social justice. Even the Ministry of Defence admitted, in a report published in The Guardian in January 2014, that public opinion was inhibiting their capacity to engage in foreign wars. Likewise, fear of a public backlash can circumscribe the austerity drive of the Coalition. Events are opening the breach. If the working class can guard, and socialists’ establish, their unity, then the days when overcoming the logic of Moloch the Market, of a society enslaved to M…M’ are surely much closer than the desiccated talking heads of the Westminster bubble can imagine.