Letters

Oil strike

Thank you for last week’s article regarding the Iranian oil workers’ strike (‘Workers unite in huge protest’, July 1). The following comments made by comrades in Tehran will hopefully be useful to your readers.

It should be noted that the strike organisers have used the social media application, Telegram, to coordinate the strike. This can be downloaded on most mobile phones and is cheaper to use than similar apps. Of course, the extensive use of social media has its advantages, but the workers are well aware of the state’s ability to close down the internet and of the risk of using such devices, allowing the state to access information about the users.

The strike has some outstanding characteristics, some of which are listed below:

(a) It is the first time in recent years that strikers are making non-defensive demands (calling for a pay rise and an end to contract employment, as opposed to, for instance, the payment of unpaid wages).

(b) It is posing political demands against repression, as well as economic demands.

(c) It is important to note that the start date was June 19 - immediately after the presidential elections, but before the results were announced - to indicate they don’t care who the next president will be.

(d) It demands democratic decision-making using Telegram, allowing workers to spread the strike nationwide quickly, with no bureaucratic interference. However, we should note the absence of working class political organisation.

(e) On the negative side, this young generation of workers has little or no connection with the oil strikers of 1979.

(f) The government attempt to divide and rule, separating permanent workers from contract workers, has succeeded to a certain extent.

(g) The division between white-collar and blue-collar oil workers presents a challenge. While in 1979 that division was overcome, this time it hasn’t yet.

(h) Strike committees can evolve into workers’ councils, as the movement progresses.

(i) This is the first time in recent years that the regime is particularly concerned about a strike. Representatives of the state have met with military and security leaders to discuss how to deal with it, whereas in the past it was left to local and regional authorities.

Finally the comrades in Iran envisage three possible scenarios (although they emphasise that the first two are unlikely):

(1) The government caves in and accepts the workers’ demands, although it knows that would encourage other workers to strike.

(2) It rejects all negotiations and uses the army and Revolutionary Guards to suppress the strike, despite the likely political price it would have to pay at a time when the regime is aware just how unpopular it is.

(3) We will see a combination of compromise and the targeting of strike leaders. This seems the most likely.

Keyvan Bina
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Lost a rudder

Michael Roberts’ analysis is all over the place, as he tries to defend his Sismondist/catastrophist argument, proffered perennially over the last decade, that the next recession is at hand (‘Threat of a new slump’, July 1). He’s like a ship caught in a storm, which is blown in one direction then another, having lost its rudder.

Last year, he argued on his blog and in the Weekly Worker that we would face a “post-Covid slump”. The reason, we were told, was that the lockouts and lockdowns - which Roberts was all in favour of, as he swallowed all of the catastrophist claims about deaths rising exponentially and so on - would result in a collapse in profits, and, because he argues economic growth depends upon profits as the driver of capital accumulation, capital accumulation would collapse, leading to a slump. From a Marxist perspective, there are several things wrong with this argument.

Firstly, as Marx describes in Capital Vol 3, chapter 27, capital does not rely solely upon profits as the foundation of capital accumulation. It developed credit for that purpose. Secondly, with a high rate of turnover, capital, once mobilised on the basis of such credit, quickly generates both the use-values required for accumulation and the surplus value/profits required as their monetary/value equivalent. The limitation here is whether capital is so incentivised, in the given conditions, to engage in such accumulation. For example, in chapter 30, Marx discusses how, following a crisis of overproduction when workers have been laid off, capital has been depreciated, so the rate of profit is high and capital accumulation is low – because there is no basis in demand for a large rise in output. Firms introduce new labour-saving machines to produce existing levels of output more cheaply, rather than seeking to expand output significantly. Roberts’ argument, that profits are the determinant, is the argument of Ricardo, not Marx - as Marx sets out in chapter 39:

“The demand increases constantly and, in anticipation of this, new capital is continually invested in new land, although this varies with the circumstances for different agricultural products. It is the formation of new capitals which in itself brings this about. But, so far as the individual capitalist is concerned, he measures the volume of his production by that of his available capital, to the extent that he can still control it himself. His aim is to capture as big a portion as possible of the market. Should there be any overproduction, he will not take the blame upon himself, but places it upon his competitors.”

In other words, contrary to the Ricardo and Roberts argument that additional accumulation depends upon rising profits, Marx says that it is an assumption of rising demand that leads to accumulation, which in turn creates the basis for that rising demand. The driver is competition, which forces each capital to seek to grab market share.

Roberts fetishises the rate of profit, because he has nailed his colours to the mast of the law of the tendency for the rate of profit to fall, as the basis of crises of overproduction, even though Marx himself never made any such claim, and rather describes crises of overproduction of capital as arising due to an overaccumulation of capital relative to the social working day, as set out in Capital Vol 3, chapter 15, as resulting from changes in the value composition of capital, not the technical composition. Technological revolutions introduced to deal with such crises change the technological composition, the basis of changes in the organic composition, and thereby the basis of the law of the tendency for the rate of profit to fall - not as the cause of crises, but the consequence of them, in so far as the law exists at all. For example, in Theories of surplus value, chapter 23, Marx writes, that this fall is “a decline, incidentally, which is far smaller than it is said to be”. And, in setting out why even this small fall, apparent only over very long periods, is offset by falls in the value of fixed capital, and rises in the rate of surplus value, he notes: “The cheapening of raw materials, and of auxiliary materials, etc, checks but does not cancel the growth in the value of this part of capital. It checks it to the degree that it brings about a fall in profit.”

In other words, the law depended on the growth in the technical composition of capital, which increased the volume of processed material by more than the fall in its unit value; but even then, Marx says, this increase is offset by the fall in the value of fixed capital and of labour-power and the rise in the rate of surplus value. In economies today, where 80% of new value and surplus value production comes from service industry, not from manufacturing and processing of raw material, that mechanism no longer applies, and the law is thereby an historical relic. It explains the allocation of capital across industries and economies, as it searches for the highest rate of profit, so it is the basis of prices of production, and nothing more.

Roberts’ argument last year was that the cratering of profits due to the lockdowns would then necessarily lead to a post-pandemic slump. That argument was blown out of the water in short order, as economies began to expand at a frantic rate, as soon as consumers were once again allowed to spend. Marx’s argument came into its own, as this sharp rise in demand led to the inevitable competition to grab a share of this rapidly growing market.

Businesses had essentially mothballed fixed capital - where they had actually been forced to shut down during the lockouts - and so only needed credit for working capital to restart. With capital turning over at rapid rates - in some spheres several times a day - and with workers paid in arrears, capital was quickly able to accumulate to meet the rising demand. The constraints it faced were not those that Roberts had identified, resulting from falling profits, but those of supply bottlenecks, and rising input prices, as all of the liquidity put into circulation by central banks fed into sharply rising inflation. Again, Roberts’ theory of inflation also has nothing in common with Marx’s analysis of the phenomenon.

In my blog posts I have examined Roberts’ previous Weekly Worker articles, in which he seemed to have accepted the reality that, contrary to his prediction of a post-pandemic slump, the world was experiencing very rapid economic expansion. Now he has reverted to type, and argues that rising wages and interest rates will squeeze profits, and so bring about his long predicted next recession. Of course, a squeeze on profits due to rising wages and interest rates has nothing to do with the law of the tendency for the rate of profit to fall, but he seems to be willing to use any cause of falling profits as the basis of the law, despite Marx being quite explicit in rejecting those other causes as contributory factors. Roberts’ inclusion of interest rates as a factor in determining the rate of profit is contrary to Marx’s analysis, in which he clearly deducts interest only after the calculation of the rate of profit.

Roberts’ arguments here are equally all at sea. He begins by recognising that the surge in economic activity is really what has caused labour shortages, which in turn caused wages to be driven up. But he then agues that rising wages as a result of inflation are a money illusion, leaving workers worse off, as prices rise faster. The last statement is undoubtedly true, but does not follow from the first observation. If wages rise due to a relative shortage of labour-power, this has nothing to do with inflation per se, any more than if the price of ice cream on a hot day rises, because supply is failing to meet demand. If wages rise because of inflation, but real wages fall because prices rise faster, then it simply puts things back to where they were, but now at higher nominal prices for commodities, including labour-power. The inadequate supply of labour-power relative to demand would remain, causing wages to rise further. In other words, it’s not inflation causing wages to rise, but the imbalance of supply and demand for labour-power, which would exist whether there was inflation or not. Roberts’ argument here is essentially Keynesian, failing to separate different causes of rising wages, prices, etc.

Later he argues that rising wages act to squeeze profits, but that could only be true if real wages rise. He then wants to argue that this squeeze on profits would be the cause of a crisis. Indeed, at a certain point it would, though again, this has nothing to do with the law of the tendency for the rate of profit to fall. But it’s clear that a fall in the rate of profit resulting from such a squeeze does not necessarily mean a fall in the mass of profit itself. Rather the increase in economic activity, resulting from increased demand for wage goods, as both more workers are employed and wages rise, means that a greater volume of capital is employed and, even with a lower rate of profit, this increased mass of capital generates an increased mass of profit. As Marx described above, it is competition that drives capitals to continue to invest, even where the rate of profit is falling, as they try to grab market share and to increase the mass of profit they appropriate.

So in the last year not only has the rate of profit fallen, but in some cases profits have disappeared entirely. Contrary to Roberts’ theory, however, once the economy was opened again, businesses, seeing rampant demand, rushed to accumulate additional capital to grab a piece of the action. In the 1950s and 1960s, wages and living standards also rose - by the 60s wage share was rising at the expense of profits. But, far from resulting in a diminution of investment, capital continued to expand, driven by competition to grab market share. Indeed, the more profits were squeezed, but continued to be pressed to expand to grab that market share, the more they had to rely on borrowing to do so, which also then pushed up interest rates, further squeezing the profit of enterprise. But it was not that which led to crisis: it was rather a continued accumulation of capital, despite the squeezed profits, and falling rate of profit, until capital was overproduced relative to the social working day and, instead of large masses of profits based upon tiny profit margins on huge volumes, it turned into large losses.

At some point we will reach that stage again, but not yet. Wages are not rising to where they threaten the mass of profits. And, to take another point, many workers have survived despite low wages, by relying on credit. The usurious interest they pay on that debt goes to the money-lenders, not to industrial capital. Higher wages, which remove the need for such high-cost debt, means that workers can spend what they would have paid in interest on actual consumption, the money going to industrial capital, not interest-bearing capital. Higher interest rates, crashing the asset price bubbles, will slash the cost of shelter and of pension provision for workers, reducing the value of labour-power and raising the rate of surplus value, even as living standards are raised by the same process. A collapse in property prices would slash rents, for example, which would also slash the £30 billion a year housing benefit budget, which is a direct drain on the surplus value produced by industrial capital.

But Roberts’ argument in relation to rising interest costs for the big corporates makes no sense. They borrow via the issuance of commercial bonds - as well as by issuing shares and having lines of credit with banks - and those bonds have fixed coupons - in other words, a fixed rate of interest. If inflation rises, the fixed rate of interest means that the debt burden faced by the company falls. Suppose it faces £1 million a year in interest payments on its bonds. If inflation is 10%, so that the prices it gets for all the things it produces and the profits it makes rise by 10% in money terms, the £1 million of interest falls to only £0.9 million in real terms and, as each year passes, it falls further and further. Moreover, if it borrowed £50 million via 10-year bonds, when it comes to redeem them, the £50 million will have fallen in real terms to only £18.5 million.

Roberts refers to the increased number of corporations that, last year, had revenues that barely cover these interest costs; but is that any surprise, given the effects of lockdowns? The fact is that from current absolute low rates of interest, even significant proportional rises will not dent the growing mass of profits being generated, as economies grow rapidly. But those rising rates will severely impact the astronomical asset price bubbles that have been created.

Arthur Bough
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Dictatorship

Gerry Downing, in his reply to me, touches on the questions of the dictatorship of the proletariat, permanent revolution, socialism in one country, Dimitrov and the “counterrevolutionary Stalinist bureaucracy”. Comrade Downing is unable to criticise the mistakes of our past leaders - unless, of course, this leader is Stalin, who also made mistakes and committed crimes, as revealed by Khrushchev’s ‘secret’ speech in 1956.

First, let’s look at the term, ‘dictatorship of the proletariat’. There are different views about where the term came from, but we can be sure that Marx wasn’t its originator. In Marx’s own writings the term is rarely used, although he and Lenin turned it into a principle. In State and revolution, Lenin explained precisely what dictatorship meant: rule untrammelled by any law. In other words, dictatorship is above the law, which means those who are leading the dictatorship are also above the law. Dictatorship, if we take Lenin’s correct definition, means lawless government, including under socialism. I am certainly not a supporter of this Al Capone view as a principle of government, which Lenin seemed to have had no problems with.

If you want to find out how some of Stalin’s actions were possible, you need look no further. At no point in his ultra-left campaign against the Stalinists did Trotsky, to my knowledge, criticise Lenin’s or Marx’s one-sided, anti-dialectical understanding of dictatorship in regard to the socialist transformation of society. Dictatorship should be used when it is necessary or unavoidable, rather than as a principle of socialist transformation. If you want to see people leading the country who are above the law, you are welcome to support comrades Marx, Lenin and Downing on this. But count me out: I am never going to join the Al Capone camp. Rome was ruled over for years without a dictatorship, and they only turned to it in emergency situations, until Caesar put an end to the republic in 49 BC.

On the question of permanent revolution, Trotsky was able to pretend his theory came to pass for two reasons: the revolution in 1917 was triggered by wartime conditions; and Lenin had the good fortune of having Kerensky as an opponent. Without wartime conditions and Kerensky, it is hard to see how the Bolsheviks could have come to power. In all probability socialism would have remained the left opposition to the liberal bourgeoisie, or been defeated by a military dictatorship. The Russian Revolution was fortunate, in that the enemy was politically stupid. This stupidity was personified by the tsar himself, who could easily have undermined the left by granting a democratic government and becoming a constitutional monarch as in Britain. Had he been marginally more politically intelligent, there would have been no revolution in Russia, neither democratic nor socialist.

So, when Trotsky talks about the democratic revolution growing over into the socialist revolution, this is merely abstract theory, which wartime conditions and politically stupid opponents made to appear true. The growing over of the democratic revolution into the socialist revolution depends on factors which theory cannot foresee. It may or may not happen. For instance, India is a negative example; nor did pulling the plug on the apartheid regime in South Africa lead to socialism.

On the question of socialism in one country, during World War I, the right wing in the socialist movement sought to avoid making revolutions in their own countries, based on the argument that socialism in one country wasn’t possible. Lenin exposed this opportunist argument during 1915 in the following way: “Uneven economic and political development is an absolute law of capitalism. Hence, the victory of socialism is possible first in several or even in one capitalist country taken singly” (Selected works Vol 5).

The impossibility of socialism in one country is the foundation of Trotsky’s opposition to Stalin. This argument, which the opportunists had used to avoid revolution in individual countries, was now imported into the communist movement by Trotsky.

Lenin’s position above wasn’t an isolated comment, because in 1916 he returned to the same theme in his struggle against the right wing in socialism: “The development of capitalism proceeds extremely unevenly in the various countries. It cannot be otherwise under the commodity production system. From this it follows irrefutably that socialism cannot achieve victory simultaneously in all countries. It will achieve victory first in one or several countries, while the others will remain bourgeois or pre-bourgeois for some time” (Collected works Vol 19).

Trotsky was wrong to oppose the Stalinists with an argument which the opportunists had used to avoid revolution in their own countries. The Trotskyist movement was based on the suppression of Lenin’s view regarding the possibility of socialism in one country as part of the world revolutionary process. How did Trotsky get away with it?

On the question of Dimitrov, it is important to recognise that class struggle has both an offensive and defensive character. The communist ultra-left and anarchism have a one-sided view of class struggle, believing it is always on the offensive. In essence this is the real meaning of ultra-leftism. Stopping fascism means uniting everyone opposed to fascism in a defensive struggle. This is what Dimitrov was about. The defensive phase must not be confused with the immediate struggle for socialism. The main reason for the defeat in Spain was lack of unity of the left, while the fascists were disciplined and united around Franco, who had the support of Hitler and Mussolini. Politically stupid attacks on the church by the left also strengthened the counterrevolution in Spain, a Catholic country. The Spanish left would have been defeated even earlier, had Trotskyists been in the leadership pushing for socialism, because Britain and France wouldn’t have remained neutral.

On the question of bureaucracy, Trotsky made an ultra-left call for a political revolution to overthrow the “counterrevolutionary Stalinist bureaucracy”. Unless you are an anarchist, you have to recognise that modern societies use bureaucracies. The aim is not to “overthrow” the bureaucracy, but to bring it under the democratic control of society. You can denounce bureaucracy as much as you like, but, as Stalin pointed out, “The surest remedy for bureaucracy is raising the cultural level of the workers and peasants” (Works Vol 10).

From Stalin’s perspective, Trotsky was not only undermining communist control of society by preaching the rightwing view that socialism in one country was impossible: he was also advocating the ultra-left view that bureaucracy, which complex societies use, must be overthrown.

Stalin was wrong to make Trotsky and some of his followers pay with their lives for having political differences, which is a democratic right. Thus it wasn’t enough for Khrushchev to criticise Stalin in his 1956 speech. We need to ask, what type of regime made this possible? Part of the answer can be found in Lenin explaining that dictatorship is rule untrammelled by any law and raising this to a principle.

Tony Clark
Campaign For Democratic Socialism

Strategic aim

Tony Greenstein sent a rather surprising letter to the Weekly Worker attacking not just Eddie Ford, but the whole of the CPGB on its “strategy towards the Labour Party and its understanding of racism” (Letters, July 1).

Eddie quotes the statement from a “senior Labour source”: “We’re haemorrhaging votes among Muslim voters, and the reason for that is what Keir has been doing on anti-Semitism ... He challenged Corbyn on it, and there’s been a backlash among certain sections of the community” (‘Blue and red walls crack’, June 24). Tony states: “The implication is clear: Muslims are anti-Semites.”

As a regular reader of Tony’s blog, I must agree that Keir has been weaponising anti-Semitism: continuing the long-drawn-out witch-hunt to attack socialists and supporters of the Palestinian cause in the Labour Party. Tony has been making this case forcefully and eloquently for some time.

The “source” may in fact have been telling the truth: that Muslims may have noticed what Keir has been doing and feel that it’s a good enough reason not to vote for his party. But Tony has decided that Muslims are too unsophisticated for such an analysis and that Starmer feels he can slip this statement out, so as to, in Tony’s words, “play the race card in order to win the white working class vote”. As Eddie Ford says, “This might or might not be the case”. Personally, I thought it was more likely a bit of early arse-covering in case of defeat - too late and a bit esoteric to stir the white working class hordes to the voting booths.

If Starmer was really playing the race card, would this be a startling departure for a Labour leader? The ‘hostile environment’ was first referred to by a Labour minister, I believe, and Labour has a disgraceful voting record on the matter. And Ed Miliband’s ‘Immigration’ mug was perhaps the most shameful Labour manifestation in the 2015 election. Has the Labour Party, in its long history, produced a line of anti-racist leaders? I think we can agree that it has produced very few socialists in leadership positions and not too many in parliament.

The other big bugbear in Tony’s letter brings us to what the Labour Party is. To quote Tony, “Eddie Ford describes the Labour Party as a united front of a special kind. My own view is that such a formulation is just a rhetorical device to say that you support a reformist Labour Party, come hell or high water.” But Eddie Ford wrote something quite different: “No, we have a strategic perspective of transforming the Labour Party into a united front of a special kind” (my emphasis).

Ford says: “From that strategy, tactics flow.” He goes on: “True, the key question is building a mass Communist Party. Without that there is no possibility whatsoever of transforming Labour into a united front of a special kind, a vehicle in the struggle for socialism.” In other words, the CPGB does not “support a reformist Labour Party, come hell or high water”, and it would take quite a strenuous leap of imagination to say otherwise.

As often described, as quoted from Lenin, Labour is a bourgeois workers’ party. The aim, as Ford says, is to build a mass Communist Party which can then carry the fight to get rid of the ‘bourgeois’ bit. In the meantime it might be the case that the bourgeoisie will totally destroy the ‘workers’ party’ bit, but that hasn’t happened yet - even with the expulsion of Tony Greenstein and many other valuable comrades.

But Tony seems to think that the bourgeoisie have got their way and Labour is finished. So what to do? Build another one, of course, without the inherent impurities of the Labour Party - but also without the union links, the 400,000 or so members and the long-time 10 million or so voters as well.

Bernard Mattson
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Not so stupid?

“So those workers who voted for Brexit were not so stupid as many on the left first thought,” says John Smithee (Letters, July 1). But the market will soon balance out and their wages will fall again, and those who rely on the iniquities of the market to solve their ‘problems’ will ultimately be shown to be as “stupid” as we first thought.

It might be that in a post-pandemic world there are fewer jobs in the hospitality sector (we can only hope so). It should be noted that the current shortages in the hospitality sector are not all down to Brexit. The fact that 1.3 million foreign people are no longer working in the British hospitality sector should indeed fill our communist hearts with joy, but we should weep for all the British people that will end up in this servile existence, no matter how many pence they are being paid above the minimum wage.

Maren Clarke
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