WeeklyWorker

19.12.2013
Rail infrastructure could still be derailed

Economic crisis: Only our class can force change

After exploring the possibilities of capitalism ending the depression, Hillel Ticktin stresses the necessity of working class organisation

In my previous article, I reached the point of asking whether it is possible for the ruling class to introduce a reform of the system in order to take capitalism out of the present depression; and, if it is possible, what that would entail.1 There are two parts to the question.

Firstly, can there be a temporary solution? In other words, is it possible for there to be sufficient expenditure, increased investment or a limitation of profits for an exceptional period? Could there be a repeat of what was done in the United States in 1933 under president Franklin D Roosevelt, who ameliorated the depression for a time, even though in fact he did not end it? So can there be considerably lower levels of unemployment and a growing standard of living?

Secondly, can capitalism return to what existed after 1945? Can there be a more permanent form of compromise?

Let us first of all note that the period after 1945 remained a period of warfare in the form of the cold war, including actual conflict, such as the Korean war of 1950-53. US expenditure on armaments was considerable, meaning that the world was really still in a stage of economic warfare at least.

One of the effects of the cold war was that there was an absorption of surplus product, or surplus value, into the arms sector, which in the US was, of course, enormous - though as a percentage of GDP it went down over time. But it was also true of other developed countries that they maintained an arms sector, though it was nowhere near as important as that of the US, the crucial world economic power.

The cold war performed an ideological role as well, using anti-communism as a means of control. Not only in terms of ideas - many people in the US had actually experienced Stalinism in Europe and rejected it - but also in terms of its use by the state as a means of smashing the resistance of the working class. It was successful in achieving that - not only in the US, but in Britain too.

There are a number of other aspects of the cold war which are also important, but we can leave those aside here. Crucially though, it is not just the cold war that has ended, but the ideological control that came with it. One can argue that the failure of the Soviet Union can still be used as a stick to beat socialists, but over time the USSR will no longer be regarded as a socialist failure: simply as a failure. People will recognise that Stalinism could not survive and that the USSR was not socialist. In an inchoate way that already exists. There is no longer a Soviet Union standing before us: it must be conjured up in the imagination.

Historically - not just in the last hundred years, but over centuries - it has been the role of the state to take control of warfare and consequently it has been accepted that the state must also prepare for a war economy. It is true that today there is outsourcing of military preparations to a degree, but nonetheless it has to be paid for, even if some of it is performed by private enterprise.

Planning?

So is there something else that can take the place of what amounted to a nationalised sector, something which is not military production? If not it is difficult to see how it would be possible to run a modern economy with full employment if profit is the only goal. Would the capitalist class be prepared to see the economy of the world effectively planned by the population, in the interests of the population? Alternatively, would the population be prepared to see the economy planned by the capitalists? I am talking about a deliberate decision to develop the infrastructure to the degree that is needed.

In a number of capitalist countries - the US, Britain, Germany - the infrastructure has been allowed to run down. To put it back up would require large-scale investment, and that would lead to a very significant boost in demand and employment. It is perfectly possible to do that, but it would have to be planned, and it could not simply be organised on the basis of a competitive economy - the inputs required are too large and there are only a limited number of firms that could actually play a part. While extensive nationalisation would not be necessary for that to take place, it would be necessary to place certain sectors under state control, with firms carefully chosen for particular work.

In Britain we have seen a considerable degree of discontent over the way the private energy companies are able to increase the price of electricity, and it is fairly clear that those companies are dealing with the whole issue in a highly inefficient way. How far any economy could allow that to go on is open to question.

What I am posing then is this. Would it be possible for a capitalist economy to be planned in order to increase investment and employment? Could that happen without extensive control over the economy itself? Would it not call into question the profit motive?

In the period after 1945, it was possible to adopt the policies I have previously described - to implement a massive house-building programme, for example. That was in a period when the so-called ‘mixed economy’ was accepted and there were large-scale nationalisations - in the case of Britain, coal, electricity, gas, transport, etc. Would the bourgeoisie be prepared to go back to that era?

To pose that question is to say that they are not prepared to do it right now - and the point I am making is that it is highly unlikely the capitalist class will accept such a change. Can you imagine a figure like Warren Buffett doing so? Therefore, a return to the period that ended around 1970, even on a very superficial level, does not look very probable. But what about a temporary solution, where aspects of such a policy are introduced?

The Conservative government is quite keen on the HS2 high-speed rail scheme, not only running from London to Birmingham but on to Leeds and Manchester. But it is interesting that the government is not proposing to begin it quickly. The idea is to start the project in 2017 and only complete it in 2032. So its impact on the economy will be minimal - and it is, of course, not even clear whether it will happen at all. None of this is an accident.

Can one imagine a situation where the capitalist class is forced to introduce new industrial firms? Officially the British government is for increased production and, of course, in general terms various other countries are also committed to ‘bring back industry’. But they are not doing much about it. While it is quite likely that there will be some industrialisation - it is easier for that to happen here than in China, where costs have gone up and there are more controls - that is as far as things are going. Can one imagine a policy which is not de facto austerity, where the state ensures that everyone has their own house or flat? Well, obviously not. They are still talking of the private sector doing it.

Can we imagine a Labour government elected that is no longer in favour of austerity and is prepared to nationalise the electricity companies? Labour has already rejected the idea, so what will actually change in respect of those companies? Not very much: they still have to make profits. It may be that their profits are excessive - not just from the point of view of a socialist, but from a consideration of costs, dividends, etc. It would not be hard to create a balance sheet where costs were much lower. However, given the nature of a capitalist economy, that is not going to happen. So it is not very likely that much will change in that regard.

Revival

In that case, can we only see ahead of us a long economic desert? That is the implication. The future is behind us, while in front of us there is a depression. That is what it looks like - unless, of course, a strong working class movement developed, forcing changes in the economy. At first the ruling class might make concessions, but, once the process began and the working class started to win victories, it would go on winning victories and the ruling class would certainly make a stand to try and stop it.

The likelihood is that over time the working class will begin to act - that is the only way forward, in fact. When one says that, one should be very clear that ‘the worse is not the better’. That was the viewpoint of Mikhail Bakunin and various anarchists, but it is simply not true. The French revolution took place during an economic upturn, not a downturn. Today it is also more likely for the working class to be prepared to act in an upturn - even one where the depression itself has not yet ended, but where workers begin to feel a degree of confidence, where they are certain that they can act. It is at that point that we will see the building of a working class movement, and it is at that point that the ruling class will realise it will have to concede. But, once it does so, the confidence of the working class will grow and that will feed on itself. No doubt there will be defeats as well as victories, but it is the only way that things can go.

I am not saying that this will happen tomorrow, and it is not possible to forecast the future - what I have described may turn out to be completely misplaced. Resulting from a miracle perhaps (and it would have to be a miracle), the ruling class might suddenly believe that it has to make concessions - and those concessions might, under working class pressure, lead to further concessions.

However, we must try to bring the day forward when the working class is prepared to act. The fact that we are in a depression does not mean that capitalism is going to come to an end. Things will not necessarily get worse and worse either. But the fact is, the ruling class does not know its way out of the depression - it has no way out that does not lead to a loss of control, and it is not prepared to risk such a situation. On the contrary, the working class has to form itself into a movement, it has to form itself into a party, in order to bring about change.

This is an edited version of a podcast available on the Critique website: www.critiquejournal.net/audio/current-stage-crisis-2013/3_ Is-a-recovery-possible.mp3.

1. ‘His side is winning the class struggle’ Weekly Worker December 5.