Paul Auerbach: hopes set on education

What kind of education?

Mike Macnair reviews: Paul Auerbach, 'Socialist optimism: an alternative political economy for the 21st century', Palgrave Macmillan 2016, pp522, £26.99

“Ask me my three main priorities for government, and I tell you: education, education, education” - Tony Blair, speech to Labour Party conference, October 1996

The blurb for this book runs:

Paul Auerbach’s Socialist optimism offers an alternative political economy for the 21st century. Present-day capitalism has generated growing inequality of income and wealth, persistent high levels of unemployment and ever-diminishing prospects for young people. But, in the absence of a positive vision of how society and the economy might develop in the future, the present trajectory of capitalism will never be derailed, no matter how acute the critique of present-day developments.

The detailed blueprint presented here focuses upon the education and upbringing of children in the context of social equality and household security. It yields a well-defined path to human development and liberation, as well as democratic control of working life and public affairs. Socialism as human development gives a unity and direction to progressive policies that are otherwise seen to be a form of pragmatic tinkering in the context of a pervasive capitalist reality.

This blurb is, regrettably, deeply misleading. The book cannot really be said to offer an alternative political economy for the 21st century at all. In the first place it does not offer a ‘political economy’ in any usual sense in which that term is used: it is neither pre-marginalist or anti-marginalist economic theory, nor addressed to the interfaces of economic analysis and politics or state power.

Secondly, the policy it offers is, in substance, late 20th century, and has no real purchase on the evolution of economic and political affairs since the ‘east Asian crisis’ of 1997. The book is, in fact, an enormously expanded elaboration of Auerbach’s 1992 31-page article, ‘On socialist optimism’, in New Left Review.1 The strategic orientation it offers is essentially the same: that both socialist ethical choices and the imperatives of capitalist competition with rising east Asia make education the central issue for socialist policy. Education policy is thus for Auerbach both the defining end-goal of socialism, and its immediate means. Hence my use of Tony Blair’s famous 1996 tag as an epigraph for this review.

Thirdly, the book offers neither “a positive vision of how society and the economy might develop in the future” nor a “detailed blueprint” for this change, nor a “well-defined path to human development and liberation”. Rather, what it offers is three elements. Part one (chapters 1-5) is an extended (rather than systematic) critique of the idea of centralised economic planning. Part 2 (chapters 6-10) is an argument for ‘human development’ as fundamental to economic development (this being conceived, broadly, in orthodox ‘development theory’ terms). Part 3 (chapters 11-12) consists of some positive policy prescriptions. These are a mix of standard arguments for a social democratic ‘mixed economy’, with some usual prescriptions of the 1960s-70s ‘new left’ - workers’ self-management and student-led learning. But as is already the case with the arguments of parts 1 and 2, these proposals are characterised by so many caveats and concessions to potential liberal critics that there is not any clear blueprint or line of march offered.

I leave aside here the complete absence in Socialist optimism of thought about political implementation of the book’s policy ideas: at the most basic level, what mass party or movement might be likely to adopt Auerbach’s proposed approach and push it through legislation and budgetary decisions. Or, in other words, how his approach relates to the world of declining trade unions and social democratic parties, which has been with us since the early 2000s.

I do not make these points because I disagree with the substance of Auerbach’s policy orientation. In fact, the part 1 critique of planning raises real issues, though at the end of the day it deals with them badly. The part 2 case for ‘human development’ as a core of ‘development’ (ie, of the rise of capitalism) is worth consideration, though the historical issues this poses are much more complicated than Auerbach’s treatment of the topic (even with all its qualifications and its use of conventional economics literature) can handle. And Auerbach is almost certainly right in part 3 that the idea of socialism is in essence one of a society which aims to maximise human potential - in contrast to the order of capitalism, which aims to maximise money profitability. But his arguments here are deeply unrigorous, and simultaneously internalise the contradictory aim of maximising GDP.


My objections, then, are indeed partly to the substance of the book’s policy proposals. But I could disagree profoundly with the policy proposals and yet find a book seriously illuminating. Here, on the contrary, I am in partial agreement with some aspects of the general policy orientation, and yet find the book deeply unpersuasive.

Why this should be so perhaps comes back to the book’s origins. The 1992 NLR article was an interesting think-piece - perhaps ‘timely’ in the immediate wake of the fall of the USSR. As NLR articles commonly (though not invariably) are, it was ‘popular’ rather than rigorously argued or documented, and ‘supported’ in footnotes by casual references to more or less fashionable academic literature, rather than critically engaging this literature in depth.

I do not at all mean by this to criticise the writing and publication of such articles: many of the longer pieces in this paper, including my own writing, have the same character. This paper is engaged not in ‘theory production’, but in journalistic political interventions in the left; NLR originated as an analogous project, but has evolved into a journal which mainly ‘showcases’ work which can be found published in a more rigorously argued form elsewhere.

The problem with Socialist optimism is largely that it retains the same superficial character, but now spread over 522 pages. It is neither rigorous abstract theory nor a serious empirical argument. Quite a lot of the discussion is ‘historical’ in character. But this history completely lacks chronological control of the causal arguments, so that (for a single example of a commoner feature of the argument) intellectual developments of the 1880s-90s are explained by evidence of business developments from the 1930s-50s.

Part of this character reflects the extent to which the book is neither abstract theory nor independent empirical investigation, but a wander through a wide range of academic literature related to various points. But this literature is not really reviewed critically. (It would, it must be admitted, be difficult to review critically such a wide range of literature in 520 pages; all the more so where the author does not develop either his own clear abstract theoretical standpoint or his own empirical work.)

As a substitute for critical engagement with literature which speaks against the point he starts out making, he half-concedes the objection and leaves the issue in effect undecided. He does so not in an explicit Pyrrhonian, or Humean, sceptical-philosophy way, but simply by leaving issues in effect up in the air without assessing the relative weight of arguments.

He assumes throughout that we want a society which is, in some sense, egalitarian. This is fair enough for an article in NLR or a journal like this one, which addresses a leftwing readership. But for a book-length argument, which relies in part on Austrian-school economics arguments against planning (Hayek and von Mises), there is a need to actually argue why equality (even in the sense of ‘equality of opportunity’)should trump ‘liberty’; and Auerbach simply does not make such an argument.

I was repeatedly tempted to stop reading. But I kept coming back to the book in the hope that part 2 would escape from these methodological problems apparent in part 1, and then, after part 2 turned out to be similar, that part 3 would actually give us some clear ideas. But no. It reminded me of a sketch from Monty Python:

Assistant: ... Rhonda?

Rhonda: (in the voice of a dungeon jailer) Yes?

Assistant: Untie Mr Paslow.

Rhonda: But he has told us nothing.2

Given these methodological problems with the book, it has not seemed to me to be particularly useful to engage here with the detail of Auerbach’s indeterminate discussions. Instead, I will deal with the issue of the role of ‘human development’ in capitalist ‘development’ and ‘competitiveness’ discussed in part 2, and then the idea of maximising human potential as the fundamental goal of socialist or communist society, overlapping between parts 2 and 3, and the critique of economic planning in part 1.

This will be a two-part article, with this instalment concentrating mainly on education issues and the next mainly on the critique of planning.

I said the problem is largely that the book is like a very long NLR article. I add that in spite of the extensive citation of more recent literature the argument is terribly ‘dated’ to the orthodoxies of the early 1990s without real reference to what has happened since - the mutation of the Russian economy into domination by primary extractive industries; the ‘lost decade’ in Japan; the level of student loan defaults both in the US and the UK3; and so on. This point will resurface in relation to the idea of education as an immediate strategic policy, as distinct from maximising human potential as an alternative goal of social order, and in relation to the critique of planning.

Education, ‘development’, competition

The issue about the role of ‘education’ in ‘development’ is an example of two problems with modern academic, social-scientific analysis of the past. The first is the extremely limited utility of economics-methodology or quantitative social-science ‘comparisons’ in relation to historical problems - as if late 19th to 21st century ‘developing countries’ can read off lessons from late medieval Italy and the early modern Netherlands and England, in spite of the radically different technologies in play (and hence military production requirements, military gradients between different states and so on). The second, immediately related to the first, is the severe disadvantages of the sub-Weberian academic practice of flattening all pre-modern societies into a single category, whether called ‘traditional’ or ‘pre-modern’, ‘patrimonial’ or ‘tributary’.

Capitalism appeared first in Europe. Then the 19th and early 20th centuries saw some ‘backward’ countries undergo rapid transitions to capitalist great-power status; while others were colonised (India from the late 18th and early 19th century, besides many others) or made into battlegrounds for competing great powers (China among others).

There are parts of the world where the technical gradient between European settlers and the native inhabitants was such that genocidal settler-colonies were created (north and south America and Australasia). There are others where the Europeans were able to impose themselves as colonisers, at least for a time. In yet others, either the strength of the prior economy and state order or the conflicts among the Europeans permitted state independence to be retained.

The question of how to explain these transitions, and the divergent fates involved, is the major issue which Marxist ‘historical materialism’ and academic ‘modernisation theories’, ‘development theories’ and ‘historical sociologies’ attempt to explain. It is, thus, a huge question.

Theories that the decisive role in ‘development’ is played by education, or by ‘human development’ more generally, attempt to isolate one aspect of this complex and debatable process of change and quantify its significance by ‘comparative’ treatment. But then, in order to create a sufficient range of ‘comparators’ for economic or social-scientific quantitative analysis, tribal societies, and long-standing empires with substantial urbanisation and densely developed (if not yet capitalist) societies like 19th-century Japan, are treated as all ‘pre-modern’. Weber’s critique of Marx’s supposed ‘teleology’ serves as a methodological support. The resulting data is, however carefully analysed, completely useless: it is not possible to fully isolate one cause from another.

It should be clear enough that both widespread basic literacy among the population and reasonably diffused handicraft skills (metalworkers, building workers, etc) facilitate ‘industrialisation’ and are, in the terms of historical materialism, part of the ‘forces of production’. But there are two big ‘buts’ here.

The first is the very remarkable speed with which illiteracy and ‘uncultured’ peasant background can be effectively overcome in a single generation in the process of constitution of a new proletariat by the recruitment of unskilled labour from the countryside. Late 19th and 20th century Russia is by no means the only example. This, then, makes it hard to suppose that the prior ‘human development’ of the population is decisive to the development outcome: a radical adaptation to the new machines is needed, but the importation of the machines can perfectly well come first.

The second is that certain sorts of formal education are not for this purpose ‘forces of production’. The existence of numerous Catholic seminaries (pre-19th century France, Italy, Spain, etc) or schools of Buddhism (pre-1867 Japan) or Confucianism or Taoism (pre-revolutionary China) or Salafist madrasas more recently do not merely not assist the development of capitalist industry, but are positive obstacles to this development.

One of the ways in which ‘education’ or ‘human development’ works to promote ‘development’ is by technology transfer. But its ability to do so involves its combination with political state independence, allowing new-industry protectionism and the violation of foreign ‘intellectual property rights’ and similar monopoly devices. These features were characteristic both of England between the 1650s and 1840s, and the US between the 1860s and the very recent past.

In this context, to explain how the US came to surpass the UK by reference to the greater development of education in the US in the later 19th and early 20th century is to leave wholly out of account, first, the 1861-65 civil war as enabling US protectionism; second, the massive British war expenditure of 1914-18 forcing the disposal of British industrial assets in the US and Latin America to the US; and, third, the British recognition in 1940 with the fall of France that the British empire’s global strategic position had become untenable and Britain would be dependent on the US to fight the war and would have to accept global subordination to the US afterwards.4

On a smaller scale, Neil Davidson’s work shows that superior literacy and formal education in Scotland, as compared to 17th-century England, did not lead the Scots to outpace England in economic development; rather, the English forcing the Scots into the union of 1707 and thereby giving them access to the developing British overseas empire, and the results of the ‘Forty-Five’ and ‘clearances’ destroying the old feudal social order, enabled rapid economic development in Scotland.5


The popularity in the late 20th century of theories that made education and ‘human development’ fundamental to economic growth was, perhaps, the product of two, or perhaps even three, political agendas.

The most obvious of these was ‘declinism’. The later 1960s to 1970s saw a very visible relative decline of the marketability of the output of British and American industry by comparison with that of German industry at the upper end of the scale, and that of Japanese industry in mass markets. Already this narrative was one of the motivators of James Callaghan’s 1976 Ruskin speech, which set the agenda in the UK for ‘education reform’ as the endlessly insoluble political ‘problem’ which it remains today. Businessmen (sic) complained to Callaghan about inability to get capable staff, arguing that the output of British schools was failing to meet their needs in British competition with overseas rivals.6

This argument was in substance self-deceptive. The 1975 Ryder report on British Leyland7 revealed in relation to one major firm what was a much more widespread reality: that British industrial capitalists had systematically underinvested in fixed capital, preferring to distribute apparent profits, and in consequence had fallen technically behind their competitors.

In reality, behind this lay the fact that distributing apparent profits rather than replacing depreciated capital was a rational choice for British industrial management: because high land values and dominance of the financial sector meant that the rate of return on financial and property speculation was above any likely rate of return on real industrial investment, so that for industry to compete with asset speculation for investment funds required artificially inflating apparent industrial returns.

Behind this in turn is a dynamic already experienced by Venice and Genoa in the 16th-17th centuries and by the Netherlands in the 18th, and merely repeated in Britain in the late 19th-20th. Initial industrial dominance leads to financial dominance, and to rising land values in the hegemonic country. Rising land values increase the overhead costs of investment at home and wages costs, quite irrespective of the existence of trade unions, etc, since accommodation is a necessity. These increases in costs push industrial investment overseas, leading to relative industrial decline, and further promoting the dominance of finance in the hegemonic country’s economy - until the result is that it is pushed off its perch in warfare, which exposes the relative weakness of industrial production. The repetition of this pattern on several occasions since the beginnings of capitalism makes the argument that it is attributable to policy failings in public education deeply implausible.

The second political agenda was perhaps a more realistic employers’ agenda. This was to externalise both training costs and, incidentally, the risks of these training costs. Under the old regime public education covered in the main generalised skills (literacy, elementary maths, informal critical thinking taught through humanities, etc) with ‘dips in’ to more specialised skills: thus many schools in the 1960s-70s offered carpentry or metalwork for boys, ‘domestic science’ for girls - not only to ‘non-academic’ students, but also as subsidiary subjects for ‘academic’ students. But serious training in practical work skills was primarily on-the-job training.

Problems were already identified with this regime in the 1960s, and the Alec Douglas-Home Conservative government just before its fall in 1964 introduced statutory schemes for sectoral ‘Industrial Training Boards’ to prevent employers who did not provide training themselves parasitising on that provided by other employers in the same sector. Ted Heath in 1970 responded to employers’ lobbying by weakening ITBs; Wilson-Callaghan in 1974-79 did not restore the position; and Thatcher after 1979 abolished them.8 The business lobbying which Callaghan responded to was, thus, on this front, part of the employers’ offensive aimed at reducing their training costs by externalising them onto the state.

The costs saving to employers is here obvious. The risk transfer is in principle equally important, and attention has recently been drawn to it (together with other issues in the market reorientation of education) by Jean-François Bissonnette and Christian Laval in an April 2017 paper.9 Where training is on the job, the employee-trainee is paid for their work, and the employer takes the larger part of the risk that the cost of the training may be wasted due to new technical developments. Where ‘credentialism’ promotes tertiary education courses, which are in substance attempts at specialist training, this risk is imposed on the state - and, where students are made to pay fees for them, on the student. Even where students are not obliged to pay fees, they take the risk of two or three years’ study (or more), not remunerated at any wage rate, which may in the end not pay off.

It seems reasonably clear that the employers’ end goal in this long-term lobbying project is in any case illusory and an endlessly unsatisfiable aspiration - like the hope for ending traffic congestion by building more roads (which attract more traffic). It is a point made by some of the literature discussed by Auerbach (in chapter 8) that quite a lot of what has to be learned for any successful practice is embedded in the practice itself. (Richard Sennett makes the same point in a different way in The craftsman10). Hence even the most slavish descent into designing education to comply with employers’ demands will not, in fact, radically reduce the need for on-the-job training. The business lobbying and more general ‘education reform’ of this sort therefore merely imposes substantial negative externalities on the state and students.

The third agenda is one which could almost not be openly said, except by the Tory right and its equivalents among the US ‘conservatives’. The education system of the 1940s-60s, with all its very serious faults, clearly did allow a lot of people who grew up in this period to be able to think for themselves beyond the limits of the political agendas set by the mass media.

I make this point deliberately ambiguous as to politics. The generations who came to adulthood in the 60s and 70s in the US and UK produced not only radicalised leftwingers (now, largely, demoralised), but also radicalised right-libertarians who came up with innovative far-out arguments, which formed foundations for the neoliberal ‘consensus’ of the late 20th century. The left radicals were the obvious problem in the wake of the US defeat in Vietnam; but the right wing among the youth were also beyond the usual mechanisms of establishment management.

Moreover, the issue was absolutely not only (as the rightwing media tend to claim) a matter of privileged students from elite backgrounds radicalising, but went all the way into the secondary schools and the technical colleges, into industrial apprentices and young conscript soldiers.

In this context it could be a positive political purpose to degrade education through the use of the employers’ lobby campaign and persuading parents that the old-style education system was not helping their children get jobs (under conditions of rising unemployment). By using these as a political lever, the aim could be to push education into ‘Gradgrindism’ and the teaching of conformity.

This agenda too has an ‘endlessly unsatisfied aspiration’ quality to it. The underlying aspiration is to a nostalgic image of a past of forelock-tugging peasants; but in reality the ‘peasants’ were as likely to be ‘revolting’.11 The nostalgia arises from the circumstance that the propertied classes are bound to incline to (their own) economic liberty and conversely to illiberalism towards subordinate classes’ ‘taking liberties’; this is a feature of class society in general shared by capitalism.

Moreover, class society necessarily generates aspirations in the lower orders to live like the class elite; this is, in fact, a large part of the dynamic which drives economic development. Pre-modern societies display substantial elements of the social mobility on which capitalism prides itself, while capitalism displays more inheritance of class position than its ideologues imagine.12

Hence alongside any ‘Gradgrindised’ system of minimum-schooling for the masses, there will be elite-level schooling, which seeks to train its students as decision-makers.13 These elite schools and universities, etc, will necessarily define the nature of the aspirations both of parents for social mobility for their children, and of teachers for job satisfaction - thus endlessly undermining Tory Gradgrind aims on the ground. Hence, maintaining the aims will require endless intensification of Ofsted inspections, league tables, supervision and so on. The share of resource to be applied to bureaucratic supervision and compliance activities will therefore tend to increase, with the result of diminishing returns for extra resources supplied to education.

The result of these combined agendas is, both in schools and in further and higher education, regimes of ‘league tables’, inspections and ‘student feedback’, which promote teachers gaming the system to produce positive results on paper - leading to grade inflation (improvements in paper grades), which does not reflect real improvements in student competences.

More generally, bureaucratic central control of the curriculum (and, in fact, also pressure for uniformity in forms of content delivery and assessment modes, plus the ‘lowest common denominator’ pressures of market-testing) leads to the result that more students in total (on the one hand) learn a more limited range of information and competences (on the other). The phenomenon is strongly visible in contrasting groups of those who went through the school system before the appearance of the ‘national curriculum’ and those after. Those educated before it came in have diverse knowledges and competences, which they can share among themselves for a better collective product. Those educated since will have more uniform knowledges and competences, but any group as a group will have more limited collective knowledges and competences.

Socialist strategy

I make this last point because it brings this discussion of the agendas round late 20th ‘education reform’ back to the point of Auerbach’s endeavour to make the alleged relationship between ‘human development’ and ‘development’ allow education to be both central to the idea of socialism, and the immediate strategic central issue for socialist policy.

The gist of Auerbach’s argument is, as I have already said, that the Soviet regime - and western social democratic nationalisation and planning policies - failed because centralised planning failed to produce ‘efficiency’ or ‘development’. In contrast, education and, more generally, ‘human development’, can improve competitiveness and produce ‘development’. Since human development is a central goal of socialism, Auerbach can claim that a real focus on education policy would be far more radical than nationalisation and planning schemes.

Auerbach formulates the point in terms that

With a focus on its individualistic aspects linked to self-realisation, socialism is here perceived as a form of social organisation that gives to all individuals an opportunity for self-realisation and development of personal capacities. Such an approach implies an access to upbringing and education from the earliest stages of life that is not contingent on, and compensates for, limitations in household circumstances, a mitigation of the forms of deprivation and insecurities to which households are subject, and opportunities for employment that involve full exercise and realisation of capacities (pp341-42).

Set altogether aside the fact that this concept of ‘socialism’ assumes the continuation forever of the wages system. It should be apparent that its overt individualism actually drives towards ‘national curriculum’-style, bureaucratically managed education. Its ‘equality of opportunity’ individualism implies the absence of any attempt to deal with the ‘collective action problem’, which would be posed if we accept - as the pre-national curriculum system did - that different students will learn different things for reasons of teacher and school choice, and need to act collectively as adults to pool knowledge and competences. The ‘collective action problem’ affecting adults then poses the question of social decision-making affecting the allocation of resources - which is, in fact, the problem called ‘planning’, if it is not to be called ‘markets’.

This issue, moreover, poses at a further level the question of political order. I said at the outset that it is a problem with the book that it makes no attempt to imagine a party or movement which could implement its policies. It does so because it imagines a socialism which could ‘sneak in’ by way of the idea that strengthening education would improve UK or US competiveness within capitalism. But then since 1976 we have seen the meaning of endeavours to improve UK or US capitalist competitiveness by way of ‘strengthening’ education, as long as business lobbyists(in search of cost-cutting, etc) and the propertied classes more generally (in search of ‘Gradgrindism’ for the restoration of ‘deference’) control the policy agenda.

It is not possible to sneak into socialism by way of the agenda of education as improving competitiveness as a sort of imaginary common ground. We do, therefore, need to pose explicitly problems of social decision-making without market disciplines, and hence to address the ‘problem of planning’.



1. New Left Review 1st series, No192, March-April 1992, pp5-35.

2. ‘World War I soldier/Stuck record’: www.montypython.net/scripts/ww1soldier.php.

3. US: ‘Student loan defaults jumped by nearly 20% last year’ Associated Press March 14 2017: http://uk.businessinsider.com/student-loan-defaults-jumped-by-nearly-20-last-year-2017-3; UK: ‘Two-thirds of UK students “will never pay off debt”’ Financial Times July 4 2016.

4. J Darwin The empire project Cambridge 2009, chapter 11. More detail on the discussions of 1940 in N Moss Nineteen weeks: America, Britain and the fateful summer of 1940 London 2015.

5. Discovering the Scottish revolution London 2003.

6. www.educationengland.org.uk/documents/speeches/1976ruskin.html.

7. http://filestore.nationalarchives.gov.uk/pdfs/small/cab-129-183-c-75-53-3.pdf.

8. UKCES, Understanding training levies, Evidence Report 47, July 2012, at 14-16.

9. ‘Gambling with “human capital”: on the speculative logic of the “knowledge economy”’ World Social and Economic Review of Contemporary Policy Issues No8, pp6-17 (2017).

10. R Sennett The craftsman London 2009.

11. For the late middle ages, see, for example, EB Fryde Peasants and landlords in later medieval England Sutton 1996; for the 18th to early 19th centuries, CJ Griffin, Protest, politics and work in rural England 1700-1850 London 2013.

12. G Clark The son also rises: surnames and the history of social mobility Princeton 2015.

13. Auerbach discusses the different character of elite education, but for some reason he is under the delusion that private schools go in for “progressive education” and “student-centred learning”, when quite a lot of what they do is very traditionally formal and rests on fairly heavy use of straight memory exercises between ages seven and 11, which then pay off in more varied or, in a limited sense, “student” work between ages 12 and 17. Private schools are able to take this approach because low student-teacher ratios and additional resources for discipline mean that teachers can both have higher qualifications and be less required to occupy time with entertaining children than teachers in state schools.