Sleaze is back

But, argues Mike Macnair, it never really went away

On Wednesday July 12 Lord Levy, Tony Blair's lead fundraiser among the rich, was arrested for questioning in connection with the 'loans for peerages' scandal. Several commentators in the media have claimed that the trail of the police investigation now leads right into Downing Street. An opinion poll published on Saturday revealed that the New Labour government is now seen as more sleazy than the Tory government that fell in 1997.

Blair had previously avoided commenting on the affair. But on July 16 he claimed on television that it was right that major party donors should get peerages. They were being put into the Lords as 'working peers' on the part of the lists reserved for party supporters, and they were supporting the party with their money. No one had broken the rules.

Sleaze as a political issue is back with a vengeance. Tory ex-prime minister John Major was almost gleeful, saying: "The question of sleaze and mud was originally invented by the Labour Party who threw it at the Conservative Party to damage us politically. What goes around comes around" (The Guardian July 17).

In reality, it has never gone away. Dave Osler's Labour Party plc (2002) documented the links between New Labour and business. But that is not new either. Every disclosure of government documents under the 30-year rule (or where they are finally disclosed after being held for longer periods) reveals the more or less secret influence on government decisions of businesses and rich individuals - and particularly those businesses and rich individuals who have made party donations to the governing party. Harold Wilson was accused of having dodgy relations with Lord Kagan and Robert Maxwell.

Sleaze as a political issue has a long history: it is the continuity of the 'old corruption' targeted by the radicals of the late 18th and early 19th century, and of the 'moneyed interest' which concerned both Tories and 'country Whigs' on the right, and 'old cause' Commonwealthsmen or republicans on the left, in the early 18th century.

'Sleaze', in other words, is not a moral failing of individual politicians or parties, but an institutional feature of the British constitution, created by the revolution of 1688 and what followed. When we look beyond Britain's borders, we can see that political issues about corruption and sleaze of this type are common to capitalist governments everywhere.

I emphasise 'of this type' because the feudal middle ages had its own forms of scandalous political corruption, but these were about permanent patron-client chains ('bastard feudalism' and 'nepotism'), not the scandals about alleged corrupt bargains which we find in capitalist politics. The bureaucratic so-called socialist regimes were medieval in this respect.

Why do they do it?

Sleaze inevitably has two sides. There have to be people who are willing to pay big money for disproportionate influence over politicians' decisions. And there have to be politicians who are willing to accept big money, even though they know that this will involve giving 'favourable treatment' to the donors.

Businesses and rich individuals pay for political favours. They do not necessarily expect an immediate pay-off - if they did, the payment would be corrupt within the existing law. But they do expect favourable consideration when issues come up in the future which will affect them.

Why they do it is, in fact, obvious. The idea that a corporation has no conscience is an old one, dating back to lord chancellor Sir Thomas Egerton and chief justice Sir Edward Coke in the early 17th century. The directors are expected, and required by law, to subordinate other moral considerations to maximising the company's profits. If they can reasonably expect that making payments to politicians will lead to benefits, they will make the payments.

Rich individuals expect to be able to pay for benefits for themselves. That is the point of getting rich. They also tend to think that their wealth reflects their superior abilities and moral strengths rather than (as is usually the case) luck. A consequence is that from their point of view they should get more consideration from government than the undeserving poor: after all, they pay more taxes, and their superior abilities mean that they are entitled to a bigger say in running the country. Bribing politicians is from this point of view merely correcting the unfortunate mistake that we call universal suffrage.

Free market in politics?

If you believe in the free market, why not have a free market in political and state services? Then we could all pay for what we can afford: a driver could slip a police officer a tenner to avoid prosecution for speeding, the local drug-dealer could pay off a chief superintendent to keep his business under the radar, developers could see their local councillors right for help with planning matters, and the big donors to New Labour and the Tories could openly pay for whatever it is they pay for. Britain functioned to a considerable extent in this way in the 18th century and the US well into the 20th century, and some 'third world' countries do so to this day. In essence, a free-marketeer might say, what we have done with anti-corruption legislation from the 19th century on is to distort the market by imposing entry barriers, so that only big corporations and the very rich can pay, and only senior politicians (through their control of 'their' parties) can be paid.

Capitalism as such is not a zero-sum game. In boom periods it is a positive-sum game: total social wealth increases, and enough of it 'trickles down' to enough members of the lower orders to maintain at least passive political consent to capitalism. This is the basis of free-market ideology in both its systematic and its common-sense forms. In slump periods capitalism is a negative-sum game: total social wealth decreases, and with it political consent to capitalism. But, as long as people keep clinging to boom-period politics (Labourites, etc) or look to nostalgia politics as an alternative (political islamists, christian revivalists, nationalists, etc), capitalism can hang on until the next boom.

Paying for favours from the state, however, is a zero-sum game and everyone understands that it is. The driver who this week pays off a copper to avoid prosecution for speeding next week runs down a child on a zebra crossing. The drug-dealer who bribes the police is matched by his competitors who suffer either prosecution or personal violence to drive them out of the business. If councillors are 'influenced' to compulsory-purchase land for the benefit of developers, the right of property itself is undermined (many US commentators argue that the supreme court decision in Kelo v New London [2005] does just this). How can anyone be sure the local councillors, or in extreme cases the judges, will stay paid? For every individual firm which gets a contract through 'favourable consideration' after party donations there are several others which did not.

Corruption and sleaze is therefore necessarily both endemic and politically illegitimate in the capitalist political order. It is endemic because it grows out of capitalism itself. It is illegitimate because if it becomes completely generalised each property owner will no longer be able to rely on the state. They will have to employ their own goons and develop their own permanent patronage networks in order to protect their property: and this is to return to feudalism.

Right wing libertarians and anarcho-capitalists argue that the solution is to reduce (libertarians) or eliminate (anarcho-capitalists) the role of the state, because it is the latter's monopolist character that makes state action a zero-sum game. The trouble is that their underlying 'Austrian' or 'marginalist' economic theory is false. This theory assumes at the outset that (a) there are unlimited quantities of land; (b) human food consumption can be reduced to zero while the person continues to work; (c) that the length of the working day can rise to infinity; (d) that 'transaction costs'- ie, the practical difficulties of making contracts - are zero; and (e) that perfect information is available. Under these assumptions free markets tend to an 'equilibrium' in which they produce more efficient outcomes than any other social decision-making system. But the assumptions of marginalist economic models are simply denials of material limits affecting human activity. When these limits are built back in to the models, it turns out that markets fail to deliver essential human goods and that the monopolistic 'public sphere' or state, stepping in to fill the breach, is indispensable to markets themselves. Libertarianism and anarcho-capitalism therefore end in practice merely by providing ideological support for the regime of sleaze.

Those who are paid

In the advanced capitalist countries, the role of small-scale corruption has been much reduced since the 19th century. The key to this reduction has been to proletarianise the state officials. They are paid a living wage (in the case of senior officials, a very generous salary) and are expected to be content with it, and not to seek to elevate themselves into the ranks of the capitalists by bribe-taking. The state is distanced from business - imperfectly - by rules like those controlling movement to and fro between business and the civil service (it is striking that New Labour has sought to weaken these rules). Any future reduction of corruption will necessarily involve the same method: to extend the proletariat, those who live on a wage, at the expense of private business and 'contracting out'.

The politicians who take party donations from business and the rich present a somewhat different problem. This is because they are not (or are only to a limited extent) in it for personal gain.

I do not mean by this to say that Tony Blair is not a cynical careerist. The basic facts of his career - public school, followed by Balliol College, Oxford, followed by the bar, followed by efforts to obtain a parliamentary seat - would imply that he is a cynical careerist, if there is no evidence of consistent political ideas to counter this: and there is no such evidence. Several of his immediate associates have followed similar career paths, or the analogous one of attaching themselves to the Communist Party-led Broad Left in the National Union of Students in the 1970s - at that time a sound path to individual career advancement in the student unions and NUS executive - followed by involvement in the 'soft left' of the Labour Party, again a prima facie indicator of cynical careerism.

The problem this poses, however, is why the many people in the Labour Party who were animated by (Labourite) political goals - whether of the right or of the left - thought it was necessary for the party to be led by a cynical careerist and run and funded in a fashion which would inevitably lead it to be seen as sleazy.

In order to understand this we need to abstract from those mechanisms of capitalist control of politics which do not work through the electoral system - the judicial power, the monarchy's relationship to the police and armed forces, and the ultimate veto power of the USA - in order to focus on those that do: the cost of election campaigns, capitalist control of media outlets, and the patronage powers of central executive government. In this framework it will be possible to see how Labour politicians have come to think that relationships to business and the rich are essential to winning office and thereby achieving even slight advantages for their constituents.

Labour is a good example, because the Tories and Liberals both have back in their early history explicit opposition to corruption. Moreover, nobody ever stands for election on the platform that politicians ought to be bought, or that their own party is the party of City yuppies and fat-cat company directors: there are no votes in it. Capitalist parties - ie, ones dominated by capitalist funding - always start as something else: big business has little interest in funding marginal parties, except for temporary tactical advantage (as in the case of the Social Democratic Party of the 1980s).

Party funding debate

The best starting point is the present debate about party funding, which has been running at a low level since the 1990s, and has been slightly reanimated by the 'loans for peerages' scandal.

Labourites and some other centre politicians have been arguing for extended state funding of political parties in proportion to the votes they receive at elections, on the ground that this is more democratic than the present system. The trouble is that politicians are a pretty unpopular group, and it can be readily anticipated that any such policy will result in media condemnation.

In fact, the media would be right to condemn it. State funding of political parties in substance reinforces the existing major parties at the expense of smaller ones. It is hard to believe that politicians in the major parties would be happy about funding either the British National Party or smaller groups to their own left; and in fact they would put mechanisms into any law to stop this happening. State funding then extends state control of politics and reduces political democracy. In fact, within the major parties this would also be true. Central state funding would add to the - already excessive - patronage and disciplinary powers of the central apparatus over the local parties.

The alternative proposed is to make major cuts in the parties' national spending on election campaigns. Surprising as it may seem, it is Labour politicians who are at the moment most resistant to this option. They are willing to have tighter rules on corporate political donations. The Tories are willing to concede these - but then the Tories want these matched with cuts in trade union funding of Labour, and Labour does not want to give way on this.

The hidden secret in this argument is also the secret of Blair's relationships to Murdoch and to businesses and rich figures. It is this. The whole debate is conducted on the assumption that spending money on advertising - giving visibility and coverage - can make a difference to election campaigns. This is not entirely clear where the difference in spending is marginal - say, between Labour and Tories - but it is pretty clearly true where the differences are on a large scale. The SDP of the 1980s, and the UK Independence Party more recently, showed that lots of media exposure can produce dramatic results in election performance. Respect, or the Socialist Alliance before it, might get a lot of votes if it got the same exposure as the major parties.

Now suppose the national advertising spend of both parties was dramatically curtailed. The national media exposure of the two parties would then depend wholly on the extent to which the media was willing to give them exposure. And here there is a dramatic difference. Murdoch controls The Times and The Sun. The Daily Telegraph is a traditionally Tory paper, as are the Mail and Express, the London Evening Standard and most of the locals. The Mirror has traditionally been Labour, but that was at least partly an artefact of Robert Maxwell's relationship with the party and cannot now be taken for granted. Both The Independent and The Guardian are by instinct Liberal Democrat papers, though they have given support to Blair and will, in the absence of the Lib Dems breaking through to be the main alternative to the Tories, support a sufficiently rightwing Labour leadership.

It used to be claimed that this difference reflected the 'natural Tory majority' - ie, that the Tory press predominated because of popular demand. Since the later 1980s this has been plainly untrue. The Tory press predominates because of advertising revenue, and because of subsidies to papers by their owners from other and more profitable businesses; and because owners prefer their papers at least not to be clearly committed to Labour. The Tories thus get large amounts of free advertising from their press.

In this situation it is entirely understandable that Blair's relationship to the Murdoch press has been cherished by the Labour leadership; but also that the Labour leadership wishes to be free to raise and spend very large sums on advertising - just in case this relationship broke down. But these very large sums inevitably have to come from rich individuals and from corporations. Even if the unions were prepared to cough up on a much larger scale than they have recently, their resources are relatively weaker than they were before Thatcherism: membership is down, and down especially in the better-paid sectors in private industry; and conversely the Thatcher governments' tax and regulatory 'reforms' and the effects of financial globalisation have shifted much more liquid wealth, available for spending on donations, into the hands of corporations and rich individuals.

Again, there is nothing inherently new about this. Before universal suffrage and before the anti-corruption reforms of the mid 19th century, it was necessary when standing for election to offer direct bribes, 'entertainments', etc to the electors. The result was that the parliament was very roughly a 'shareholders' meeting', with the very rich directly present in the House of Lords, and others represented in the Commons in proportion to their wealth, as reflected in their ability to bribe electors. What has changed is the concentration of capital and the mediation of the process through the advertising industry and capitalist-owned mass media.

Before the flood

Labour has been a pro-capitalist party - by way of its loyalty to the British constitution and the national interest - since it was founded. But Blair's full embrace of business and the rich, and therefore sleaze, is new. Yet the capitalist domination of the press is a long-standing feature of British politics, and Labour nonetheless managed to win elections. How?

The answer is that the Labour Party had - and to a very limited extent still has - means of communicating with the broad mass of the working class which are not dependent on the capitalist-dominated media.

The first of these means is the trade unions, which, as I say, have been massively weakened since 1979. A significant part of this is things that they did to themselves, or rather that the Labour and union leaderships did to them, under the 1974-79 Labour government. The acceptance of the regime of industrial tribunals weakened the immediate link between union membership and shop stewards and employer disciplinary action, and thereby weakened the stewards' - and hence the unions' - ability to deliver immediate resistance to speed-up, unsafe working, etc. The systems of deduction of union dues from wages or payment by bank standing order similarly weakened the relation between the local organisations and their members; they also rendered the unions effectively incapable of maintaining illegal action. Thatcherism and financial globalisation merely accelerated the processes by reducing the workforce employed in the traditional industrial and geographical bastions of the trade union movement. But before the changes of 1974-79, the base of trade unions was not their legality, but the immediate relationships between member, steward and branch, between branch and region, and so on. These relations were a means by which the case for voting Labour could be passed on despite The Sun and all the rest.

The second means is the Labour presence in local government and - going along with it - the ward organisations of the party, the loosely associated trades and Labour clubs; and their connection, through the general committees, with the local trade union movement. In the high period of growth of the party, Labour inherited the proud civic traditions of the old Liberals. The councillors could deliver real improvements to their constituents within the framework of capitalist legality. All this has changed as a result of a combination of actions by the state and the party leadership: the public spending controls of the 1970s; increasingly aggressive judicial review from the same period, reviving a tradition the Poplar councillors had faced in the 1920s; imposing central, legally-regulated duties on local government, giving central government control of an increasing share of local government budgets; and finally the assaults of the Tories in the 1980s, critically the uniform business rate: this has declined relative to inflation, forcing domestic rates (council tax) to rise.

These changes have driven local authorities towards distance from their constituents and towards sleazy relations with property developers (etc), reducing the councillors' ability to speak to the masses. But they have also made it increasingly difficult for local authorities to do anything without central government support; and the Thatcher and Major administrations dishonestly manipulated the system of central financial support to tighten the squeeze.

By the early 1990s, the Labour councillors and the local parties behind them were utterly desperate for a friendly government, and willing to give up anything to get it. In 1997 they got it "¦ or so they thought - Blairism continued Thatcher's squeeze on local government, merely redirecting more of the remaining financial support towards Labour councils.

Meanwhile, the Labour leadership has increasingly sought to impose its will on the local organisations and deprive them of the voice they had - even if it was only a voice - in the national conference. And it has materially weakened them by moving to a national membership system and payment of dues by bank standing order. With each step it has diminished the ability of the Labour Party to address workers outside of and against the capitalist-dominated media.

Of course, the Tories also had their local councillors, their constituency associations and their network of clubs, etc. But they were willing to sacrifice all this under Thatcher in the hope of getting rid of the Labour Party or at least bringing it fully under corrupt central control. The sacrifice was real: Thatcher's local government reforms and the accompanying offensive of the barristers had the effect of breaking the mechanisms which drew new activists at the base into Tory politics, and the Tory councillors' links with their constituent voters, so that the defeat in 1997 has left the party immensely weakened. But they calculated it was worth it: after all, they owned the press. By 1994 it was clear that this could not save them from defeat in the next election, and the media swung behind Blair to secure Thatcher's legacy.

In this climate the Lib Dems have grown for two reasons. First, not being in immediate contention for government made them appear as 'clean' outsiders. Second, lacking the suffocating embrace of media coverage meant that they preserved better than Labour and the Tories the elementary forms of a local politics based on face-to-face and door-to-door communication.

Capitalist media

No-one set out to create sleaze scandals. What they set out to create is 'improved British competitiveness': to give more power back to management, and to redistribute wealth so as to get the rich to work harder by paying them more and get the poor to work harder by paying them less. This required a struggle against political democracy, in which the partial democracy of the Tory Party was sacrificed to the need to destroy the partial democracy of the Labour Party and the trade unions. It is as a consequence of this struggle that we now have more obvious sleaze, and a cynical electorate decreasingly willing to vote.

At the centre of the problem of sleaze in countries with universal suffrage is capitalist control of the major means of political communication - the mass media. This control is opposed to political democracy. It would be obvious if what was going on was paying the speaker for the right to address the Commons - or to be the first or last person called in debate - that this was anti-democratic. It would be equally obvious if at a trade union conference the employers set up a rival public-address system to drown out the speakers. In fact capitalist control of the media has the same effect, on a larger scale. The significance of sleaze scandals is that they bring this fact sharply to the surface.

Now it may be said that this is not new. It formed part of the argument of Lenin and other Bolshevik leaders in 1918-20 for the suppression of capitalist and Menshevik publications and the nationalisation of the presses, etc, placing the means of political communication in the hand of the state. For example, point 8 of the 'Thesis and report on bourgeois democracy and the dictatorship of the proletariat' for the 1st Congress of Comintern (1919):

"'Freedom of the press' is another of the principal slogans of 'pure democracy'. And here, too, the workers know - and socialists everywhere have explained millions of times - that this freedom is a deception because the best printing presses and the biggest stocks of paper are appropriated by the capitalists and, while capitalist rule over the press remains - a rule that is manifested throughout the whole world all the more strikingly, sharply and cynically - the more democracy and the republican system are developed, as in America for example "¦ Genuine freedom and equality will be embodied in the system which the communists are building, and in which there will be no opportunity for massing wealth at the expense of others, no objective opportunities for putting the press under the direct or indirect power of money, and no impediments in the way of any workingman (or groups of workingmen, in any numbers) for enjoying and practising equal rights in the use of public printing presses and public stocks of paper" (www.marxists.org.uk/archive/lenin/works/1919/mar/comintern.htm).

What is wrong with this policy should be apparent from what followed. Without freedom of information and communication, the state created by the working class frees itself from the working class and becomes first the Stalinist bureaucratic dictatorship, then in the end a capitalist political regime (Putin's Russia, etc).

What to do?

Our Draft programme contains no proposals on the problem, though it is one which was discussed widely in the Labour Party in the 1970s and 80s. These Labour left discussions generally pointed towards the sort of nationalist regulatory regimes of control of media ownership found in some continental countries. It should be clear enough that this leads only to a form of censorship and does not affect the underlying capitalist control of the press.

It is a widespread belief among people influenced by anarchism that the internet provides the solution, replacing centralised media by decentralised and 'networked' arrangements. But the web's infrastructural core involves capital investment comparable to railways. The Chinese government has shown that considerable state control of internet content is possible; and the US Congress is currently considering legislation which would allow commercial differentiation in speed of service - the first step towards full commercial control. Already service providers are mainly commercial operators and there are significant signs of their beginning to use the control they have to police content.

The democratic-republican solution to the problem of capitalist ownership is not media nationalisation. It is to eliminate capitalist subsidies to news media, both directly and in the form of commercial advertising. If the media were forced to rely on sales, subscriptions, individual donations and those subsidies which could be obtained from supporting political parties for the whole of its income, it might well be the case that there would still be a mass market for Tory media - even after the working class had taken power in the form of a democratic republic and the accompanying destruction of the deeper structures of the capitalists' political power. There would certainly be a niche market for it. But this would not in itself be a form of capitalist political power, since it would not be political power created by the ownership of the means of production.

There is, of course, no immediate practical chance of obtaining legislation against subsidies from capitalist business and commercial advertising in news media. But what certainly is possible, because it has been done before, is for the workers' movement to break the capitalist monopoly of the means of information. To do so does not mean in the first place setting up a competing commercial national daily run by the Labour or trade union bureaucracy or their nominees: this has been tried before and the result is utterly boring. The core of the answer is to revive democratic face-to-face and door-to-door politics at the base: the original basis of the workers' movement and a practice still successfully exploited by the Lib Dems and the Greens.

But to do this requires breaking with the control of the Labour and trade union bureaucracy in local party politics and in the unions themselves. And it requires abandoning the illusion that it is possible to get a democratic and pro-worker government through playing the game dictated by the capitalist-controlled media. More than anything else, it requires the struggle for a workers' party which is able to openly identify the capitalist character of the media and the extent to which this corrupts political life in general. That in turn implies, in present conditions, a party which is willing to be anti-constitutional and to stand openly for the working class to take political power. Or in other words "¦ a Marxist party.