communist review autumn2009

COMMUNIST REVIEWCR

●● Ernesto Dominguez LópezEuropean Social Democracy:From the Welfare State to Neoliberalism●● Robert GriffithsTrends in the British Economy and Employment●● Rhys McCarthy, Joanne Stevenson and Harsev Bains Organising the Unorganised

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Theoretical and discussionjournal of the Communist Party

Number 54 • Autumn 2009

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HARSEV BAINS is General Secretary of the IndianWorkers’ AssociationERNESTO DOMINGUEZ LÓPEZ is a graduate inhistory from the University of Havana and a researcher atthe Centre for European Studies, Havana, CubaROBERT GRIFFITHS is General Secretary of theCommunist Party of Britain (CPB)DAVID GROVE is an economist and a member of theGreater Midlands District Committee of the CPBPETER LATHAM is a member of the EconomicsCommittee of the CPB and was formerly secretary of theLabour Campaign for Open Local Government. He taughthousing policy to students working in the public sectorbefore becoming a full-time official in UCU.

RHYS McCARTHY is a full-time officer forthe TGWU section of Unite – the Union.TOM MORRISON is Secretary of Clydebank Trades Union Council and amember of the Executive Committee of the CPB.MIKE QUILLE is a poet, socialist andprobation officer, living on TynesideJOANNE STEVENSON is General Secretary of the Young CommunistLeague (YCL)ANITA WRIGHT is Treasurer of LambethTrades Union Council and a member of theExecutive Committee of the CPB

contributors

European Social DemocracyFrom theWelfare State to Neoliberalism

14 Trends in the British Economy and Employmentby Robert Griffiths

17 Organising the Unorganisedby Rhys McCarthy, Joanne Stevenson and Harsev Bains

26 Unity in the Community:The Role of Trades Councilsby Anita Wright and Tom Morrison

30 Orthodox and Marxist Theories of the State, Part 2by Peter Latham

by Ernesto Dominguez López page 5

Theoretical and discussionjournal of the Communist Party

Number 54 • Autumn 2009ISSN 1474-9246

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contents

37 Discussion Contribution:On Keynes, George and Some Land Issuesby David Grove

41 Soul FoodSelected by Mike Quille

DELEGATES AT THE TUC andLabour Party conferences this autumnwill no doubt be pondering what sort ofgovernment we shall have this time nextyear. Some may have already decided –that’s clearly the message from thesignificant number of Labour MPs whoare jumping ship, announcing that theywill not be standing at the next election.But there also seems to be an air ofdefeatism in the trade union movement,a feeling that nothing much can be doneand that we are in for a return of theTories, come what may.

The European Parliamentary electionresults in Britain were something of awatershed. For Labour, the most positivedescription is “devastating”. True, thiswas not a General Election, and thescandal over MPs’ expenses will havebeen a contributing factor. But it isgoing to take more than just the passageof time to make Labour electable – andthe chances of recovery within the nextdecade look bleak, to say the least.

Does this New Labour clique ingovernment deserve re-election? Millions of traditional Labour supportershave given their verdict by abstaining.They are saying “No”, and they havegood reason: New Labour have beenfound out for the fraudsters that they are.

In the 2005 General Election,Labour promised “Forward to increasedprosperity, not back to boom and bust”,with “full employment in every regionand nation”. How hollow that nowsounds, in the wake of last September’sfinancial crisis. Unemployment isrising inexorably, and is expected to beover 3 million by the end of 2010.Politicians’ claims of “green shoots of

recovery” are simply self-serving. For working people and their families,this is the nub: will they have a job, will they be able to get by?

There’s much more of course: thedesperate need for affordable housing –made worse by the credit crunch; theemployers’ attack on company pensionschemes, while the value of the statepension is held down; and New Labour’svigorous policy of privatising almosteverything in sight, which is pervadingthe National Health Service, localgovernment, state education and theRoyal Mail – even if there has been atemporary halt over the latter.

It cannot be denied that New Labourhas pushed through measures which theTories in 1997 only dreamed of doing.There are many voters who would saythat there is now no difference betweenConservative and Labour, and that thisbunch in government deserves to bepunished. There are voices on the leftarguing for the formation of a newelectoral alliance, to capture the mood ofopposition and revulsion, and to standup to the threat from the BritishNational Party, now gloating over its two Euro-MPs.

But let’s just hang on for a moment.Labour in government may indeed havedone the Tories’ dirty work, but a Toryadministration now won’t just be acontinuation of the same: the ground hasbeen laid for even more vicious attack onthe working class. Both Brown andCameron are committed to massivepublic spending cuts after the nextGeneral Election – but you can bet yourbottom dollar that the Tories will be themore ruthless by far.

It is easy to exaggerate the importanceof the BNP. Yes, they are a threat, andtheir two Euro-MPs give them aplatform, money and respectability infurther building their electoral appeal.But, as Nick Lowles points out in theAugust issue of Searchlight, their vote didnot in fact advance much; and indeedwent down compared with 2004 in areaswhere there had been year-round anti-BNP campaigning. The trade unionmovement’s intervention, supporting theHope Not Hate campaign and UniteAgainst Fascism, together with the workdone by the No2EU-Yes to Democracyplatform, made a significant impact.

Opposition to the BNP is not asufficient base on which to build apolitical party – and in fact any attemptto do so could be counter-productive. It is not just that it would shatter broadunity against the fascists, giving themmore scope to strengthen their position.It ignores the fact that, as Lowles states,the BNP vote “is an increasingly hard and loyal vote which is based onpolitical and economic insecurities and moulded by deep-rooted racial

communist review • autumn 2009 • page 1

editorial

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By Martin Levy

As promised last time, CommunistReview is on the web:www.communistreview.org.uk.The site is a bit rudimentary at themoment, but we are graduallyuploading material from backissues, and hope in time to providean opportunity for discussion aswell as post some articles that wedo not have room for in theprinted edition.

prejudice.” That core constituency is notgoing to be won over simply by posing aleft-wing alternative.

Anyone considering establishing suchan alternative should look at the votescast for left-wing organisations in Britainin the European elections. The No2EU– Yes to Democracy platform certainlydid not succeed in taking masses of votesoff the BNP – although it would havedone better if some now calling for analliance had got involved in No2EU, andhad it got even a tenth of the mediaexposure of the BNP. Without access tothe media, any new electoral formationwill find it impossible to establish thecredibility that will make it electable. It was of course not the intention ofNo2EU – Yes to Democracy to get onthe European Parliamentary gravy train,and it is to its credit that it was able on anational scale to make the progressiveleft-wing case for opposition to the EU.That issue is not going to go away,especially as the European Parliament –with its strengthened right-wing majority– is even less likely now to be a defenderof workers’ rights.

The Searchlight article goes on to saythat most of the local authorities withhigh BNP votes were once dominated byheavy industry which has now gone. The people left behind are confused,alienated and resentful, and “the majorityof BNP voters feel that the Labour Party,for many their traditional political home, has moved away from them”.Mobilising the anti-BNP vote, andstarting to undermine BNP support,requires localised campaigning andbuilding alliances within the community.But as Lowles himself concedes, anti-fascist campaigners “cannot build housesand reduce waiting lists, … cannotprevent undercutting of wages and theabuse of migrant workers, … cannot getresources into communities, often thepoorest, dealing with extraordinary levelsof migration. That is the job ofpoliticians and political parties.”

The tragedy is that none of the major parties has any intention oftackling that job. And since there is littleprospect of any serious left-wingchallenge coming along, the consequencein the labour movement can be a sort ofparalysis, opting out of party politics –because hope of change in the LabourParty has been lost – but throwingresources into anti-BNP campaigningbecause that at least offers the chance of apositive outcome.

Important as that campaigning is, itis not a solution. It fits with much of thetradition of the British labour movement

because it is pragmatic. Such anapproach can be useful when you aredealing with the nuts and bolts of theday-to-day situation in the workplace,but it is of no help when a strategy has to be devised to deal with wider changesin society.

As CPB general secretary RobertGriffiths says in his article in this issue,Trends in the British Economy andEmployment, “the current crises underline the need within the workingclass and the communist movement to study Marxist political economy.”Such a study not only elucidates thecauses of the two current crises –financial and economic – but explainshow impossible it is within capitalism toput an end to “boom and bust”. It alsoreveals just how deep the economic crisis

is in Britain and how inadequate are thegovernment’s solutions, in terms ofworking class interests.

But there also needs to be clarity onthe nature of New Labour. There are stilltoo many illusions that Brown and hiscronies are part of the labour movement,that if it weren’t for the Blairites thenthere really would be more “true Labour”policies. This represents a failure toappreciate that New Labour was the jointcreation of Brown, Blair and Mandelson,and that its agenda is part of a patterncommon to social democratic partiesthroughout Europe.

In the lead article of this issue,European Social Democracy: From theWelfare State to Neoliberalism, ErnestoDominguez López of Cuba’s Centre forEuropean Studies demonstrates clearly

page 2 • autumn 2009 • communist review

that social democratic parties throughoutEurope have abandoned support for thewelfare state. Essentially, the economicpolicies that they pursued in the post-warperiod failed in the 1970s because theywere unable to abolish the basiccontradiction which leads to economiccrisis under capitalism. This opened theway for neoliberals to come to the fore,arguing that excessive growth of the statewas the source of the crisis. Socialdemocracy’s response has, however, notbeen to move towards the left, but ratherto the right, into the camp ofneoliberalism.

The Third Way, authored byAnthony Giddens and trumpeted byTony Blair, is the most comprehensivestatement of this shift by socialdemocracy, reformulating its ideological

base in order, as López says, to avoid“entailing excessive tensions between itsdoctrinal body and its practice andspeech.” In other words, socialdemocracy in government will no longerbe committed to the welfare state, publicownership and full employment. The so-called “free market” is now the model.

Reading López’s analysis and critiqueof The Third Way, we can see theconnections with so many New Labourpolicies: Giddens’ “new mixed economy… based on the synergy between publicand private sectors” means privatisationand public-private partnerships;“construction of the new democraticstate” means the introduction of directlyelected mayors and the abolition of a tierof local democracy; “increasing the roleof civil society” in delivering welfare

means privatising both council housingand the work of Jobcentre Plus; thechange from “welfare state” to “socialinvestment state” means that the state isno longer there to support people in needbut to deliver them to the labour market– hence the threats to take away benefitsfrom the unemployed and those on long-term sick.

This is neoliberalism in sheep’sclothing – and it is all of a piece. It willnot be overcome just by attackingindividual policies, although campaignson them can play a role. Without awider perspective any gains made in onearea will be eroded by losses in others orsimply overturned at a convenient laterdate. The government’s climb-down onprivatising Royal Mail at this juncture,and the decision to take the East Coastrail franchise away from NationalExpress, should not provide ajustification for the movement to rest onits laurels. These small gains should beused as the basis for launching a broadoffensive against privatisation altogether.

If New Labour has a coherent set of principles and policies, then the trade union movement needs its own –based on an understanding of politicaleconomy and a raft of measures neededto protect and advance working class interests. There has to be acomplete break – something like theAlternative Economic Strategy whichwas popular on the left in the 1980s,but with political content, since manyissues cannot simply be boiled down to economics.

The People’s Charter - A Charter forChange is the embryo of such a strategy.It is coherent because it links together thepolicies needed to defend workingpeople’s interests collectively, with themeasures required to put them intoeffect. So, instead of redundancies andpublic service cutbacks, it demandsprotection of existing jobs, and publicand private investment to create new jobspaying decent money. It demands anend to the housing shortage by givinglocal government the power and moneyto build and renovate affordable qualityhomes. It calls for an end to profiteeringin public services, and demands that statepensions and benefits be linked toaverage earnings. There is much more.But most importantly, the People’s Charteridentifies that to pay for all this it isessential to take the leading banking andfinance companies into publicownership, and to restructure the taxsystem so that business and the wealthypay more and ordinary people pay less.

The People’s Charter is an embryo.


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Like its parents – and there are many – itis not perfect. Nor is it explicitlysocialist. But, nurtured by the labourmovement it has the opportunity todevelop and become a powerful meansfor challenging the prevailingneoliberalism. Such a challenge will notbe achieved by individual unions goingalone on their own campaigns, or by arefusal to endorse the Charter because,for example: ● it calls for nationalisation of thebanks when this is not TUC policy; ● parts of it would allegedly “endangerthe pensions of our members”; ● unions and TUCs already have theirown “charters”, ie, resolutions passed atconferences;● it is “the basis for a new politicalparty”; or● it is “too aspirational” – i.e. the onlyshow in town that can be supported isthe Labour Party.

All of these look like lame excuses, abasis for doing nothing because of a fearof “rocking the boat”. Well, the boat issinking, and sitting still is not going tosave it from going under. Furthermore:the major banks are already nationalised– although not in the interests ofworking people; final salary pensionschemes are disappearing hand over fist; and overall, if something isn’t donesoon, then all we are likely to have leftare aspirations.

Far from being the basis for a newpolitical party, the People’s Charter isabout the only chance left of saving theLabour Party and protecting the tradeunion movement at the same time. The task is to mount a mass unifiedcampaign around it, which will eitherforce Labour to change course, or will sorevitalise the movement that it will be ina position to mobilise against and defeat

any attacks on it by an incoming Tory government.

There is no denying that anti-tradeunion laws brought in by the Tories haveseverely sapped the strength of themovement. But as the Lindsey refineryworkers and their colleagues around thecountry have shown for a second timethis year, it is possible to overcome such adifficulty with organisation, vision,correct leadership and solidarity. All of these were themes at theCommunist Party’s trade union cadreschool in February this year, and wereproduce in this issue a number of thespeakers’ contributions.

What exactly does the popularphrase, “the organising model”, mean inpractice? And what about that majorityof workers who are outside the tradeunion movement? In his article in the“Organising the Unorganised” section,Unite TGWU organiser Rhys McCarthyshows that it is possible to recruit, and bya careful strategy win victories, inworkplaces where the union is notrecognised; and then to use thesevictories as springboards for organisingacross whole industries. He stresses,however, that this is an approach whichneeds to be adopted even where theunion is recognised: organisation meansinvolving members in decision-making.

In the same section Joanne Stevensontakes up the issue of unions reaching outto the unemployed and to those inprecarious employment, pointing outthat many of these people are young, and

with no experience of the labourmovement. She stresses the need fortrade unions to move away from justprotecting their own members, taking ona wider role in society.

Many unorganised workers, as IndianWorkers’ Association (IWA) generalsecretary Harsev Bains points out, aremigrants who are likely to face racistattacks as the economic crisis deepens.The only way to avoid such a scenario isto strengthen the unity of the workingclass. In co-operation with other migrantcommunities, the IWA has set up aBritish Asian People’s Forum ,and isconsidering establishing a South AsianTrade Union Forum, to work with theTUC in order to bring new forces intothe trade union movement.

In the section “Unity in theCommunity”, two other contributionsfrom the cadre school stress theimportance of work in trades unioncouncils. Anita Wright demonstratesgraphically the key role that they can playin bringing unions and communitiestogether, while Tom Morrison puts thecase for political trade unionism in alocality, linking up with national bodies.

Our current issue concludes with Part 2 of Peter Latham’s article on theoriesof the state and local government –explaining the reality of state monopolycapitalism and returning to the“neoliberalism” theme of our leadingarticle – a further rejoinder from DavidGrove to Jerry Jones’s article in CR52, andour regular Soul Food compilation. ■


■ Communist Review welcomes submission of articles (normally up to 5000 words),discussion contributions and letters – send to [email protected] will be reviewed by members of the Editorial Board and/or Advisory Board,and we reserve the right not to publish.

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EuropeanSocialDemocracyFrom theWelfare StatetoNeoliberalism*


By Ernesto Dominguez López

OVER THE PAST FEWDECADES, a complexprocess of change and break-up has taken placewithin the spectrum ofEuropean political forces.Social democracy,historically one of the mostimportant such forces, isnot immune to thisphenomenon, and on thecontrary is an importantpart of it.

Social democracy, as aconcept, is extremely wideand heterogeneous, sincethe political tendency ofthat name has had acontradictory and diversedevelopment throughouthistory. It originated in therich theoretical and ideologicaldebate within 19th centurysocialist thought, especiallythat based on the then-emerging Marxism. At theend of that century, the samename was used both by themajority of revolutionaryparties and organisations of the

time (eg the Russian Social-Democratic Labour Party),and also by a great number ofmuch more moderate politicalgroupings, including eventhose openly allied toimperialist governments.

The great dividing pointwas the theoretical andprogrammatic definition ofthe road to socialism, therevolutionary proposal having

separated from the gradualistidea, whose main author wasthe German EduardBernstein. The enormousimpact of World War I forcedthe defining of differentpolitical forces in the face ofthe emerging challenges,causing the definitive schismin the Second Internationaland the creation of theindependent revolutionarytendency that came to beknown in general ascommunism.1

The political forces of thegradualist tendency, whichdeveloped into what becameknown as the reformist left,underwent a process ofassimilation by the capitalistsystem, finally integratingfully into it – thoughmaintaining within their partystatutes and programmes theidea of building socialistsociety through “democratic”means, in open opposition tothe construction of so-called“real socialism”.

“Classical”European SocialDemocracy andthe WelfareState

The main core of the politicalplatform of “classical” social democracy was thedefence of the welfare state.Therefore, any analysis of theformer has to start by definingthe latter, as well as therelationship between the two.Likewise, for the purpose ofthis work it is indispensable topresent the basics of thealternative proposal created by capitalism – neoliberalism– which has spread out allover the world at present,winning more and more scopefor its operation, in spite of itssocial impact.

From the reconstructionperiod after World War II andonwards, social democraticparties became the most ➔

Eduard Bernstein 1895

important parties in mostWestern European countries.Reconstruction itself, focusedin terms of the confrontationwith the emerging socialistcamp and in the context of the bipolar world logic ofthe classical Cold War,brought about the practicalestablishment of the welfare state.

It is necessary to pause fora while to consider this issue.The welfare state, whenenvisaged, had a function thatseems to have been forgottenby later Western politicalleaderships. One of itspurposes – perhaps the basicpurpose – was to challengesocialism on its own ground,ie to offer the population analternative within the capitalistsystem, similar to the socialand even economic progressthat the Eastern bloc was ableto export. It was a mechanismfor consolidating Westerncapitalism, in the face of thedanger of possiblerevolutionary impacts fromsocialist construction.

Quite apart from this, wecannot set aside the desire toachieve the widespreadstability necessary for the post-war recovery, together withanother extremely importantfactor, namely the failure – orindeed collapse – of the liberalpattern. That collapse had notonly brought about the deepupheaval represented by the1929-33 crisis, but also thetwo world wars, which caneffectively be understood as asingle process, since the factorsthat caused the former werepresent in the latter, togetherwith other new factors.

The basic antecedent ofthe welfare state was theimplementation of JohnMaynard Keynes’ theories inthe United States, duringFranklin Delano Roosevelt’sadministration (1933-45),namely the well-known New Deal that represented acoherent endeavour directedtowards taking the countryout of the Great Depression.

The pattern was based ona wide social security andwelfare system, connected to

a mixed economy where thestate had industries and themost important branches ofthe economy under directcontrol. It employed amethod of redistribution ofwealth which reduced socialdifferences withouteliminating private property.High taxation and high publicexpenditure are a feature ofthis kind of state.

On the basis of this generalconception, it would be naiveto think that the welfare stateis detrimental to capitalism asa system. In fact, quite apartfrom the logic of confrontingsocialism and therefore ofsecuring capitalism’s rearguard,the welfare state also led to awider concept, namely that ofmaintaining a solvent level of demand that would allowsustainability and theexpansion of markets, as ameans of avoiding economiccrises – or at least delayingthem and weakening theirrecurrence. After all, themarket is the naturalmechanism of reproduction ofcapitalism, as well as a mode of production linked throughmercantile relationships. One of the main means usedby this model for fulfilling itsstabilising and partiallyredistributive2 tasks wasregulation of the markets ingoods, services and also labour.

The model rested on theimplementation of democraticpolitical systems, according tothe pattern of representativedemocracy including a highdegree of political pluralism.The diversity of partyformations does not, however,mean the actual acceptance of different alternatives to the system, but rather thecreation of much more subtlemechanisms of reaffirming the power of the elites, via theconstruction of real socialhegemony.

The implementation ofthis kind of state was not theresult of the sole work of onepolitical force that had chosenit as a main agenda issue, butrather a consequence of theconcrete historical context, ofthe confluence of internal and

external factors that defined aspecific juncture – strictlyspeaking the last stage ofindustrial capitalism, within a bipolar system ofinternational relationshipsmarked by confrontation.

We emphasise this idea:the construction of the welfarestate in western Europe wasnot an achievement of socialdemocracy alone, but thecombined work of diversepolitical forces within thesystem, based on a concretesituation linked to thedevelopment of the deepstructures within the complexsocial matrix. Right-wingparties played an equallyimportant role.3

It is true that socialdemocracy capitalised on thatpattern and transformed itinto the core of its politicalplatform, to such an extentthat it is common to regard itsparties as a single unit. In fact, postwar socialdemocracy, which until the1970s was the main supporterof the welfare state, is what weconsider as “classical” socialdemocracy. Under thisconcept, we group a series offorces, self-defined as socialdemocrats, socialists orLabourists, that had a similarpolitical platformincorporating the benefactorstate as the core, and all ofwhich derived from the longand complex development ofprevious socialist tendencies,

and were located in the leftwing of the political spectrumof the system, with clearlyreformist stances.

This social democracymaintained a series ofcommon principles as axes ofits programme. In the firstplace, they defined the freemarket as the main source ofsocial inequality and of theeconomic crises that scourgedthe system. Based on that,they named the welfare stateas the best alternative. This state, besides controllingthe main branches of theeconomy, mainly in industry,had to guide the operation ofcivil society; thus, regardedfrom the Western traditionalperspective, the state shouldbe above civil society.


Right: Milton FriedmanAbove: Milton with friends in anexcursion at the first meeting ofthe Mont Pelerin Society in 1947.

Theoretically, a democraticstate ought to represent theinterests and will of themajority, so this approachwould obviously have to befully legitimised by thepeople’s command. Therefore, social democracyturned towards the path ofKeynesianism, including animportant policy ofnationalisation as amechanism to ensure themixed nature of the economy.

One of the goals of thepattern, achieved in fact to agreat extent, was fullemployment, to which shouldbe added the development ofeducational and health caresystems, as well as the citizen’ssocial protection duringhis/her lifetime. All this was

to be achieved through state management, asvoluntary associations wereregarded as not very effective.A progressive taxation systemwas developed, which had toact according to levels ofincome, in order to makeresources flow from thewealthiest sectors towards themost needy people as a way ofreducing inequality. In fact,this state has been consideredas the high point ofdevelopment of citizenshiprights in the Western world.

In terms of its political-ideological base, socialdemocracy put forward a roadto socialism involving agradual modernisation ofsociety and the economy thatcontinues until the attainmentof full justice and equality(regarded by some thinkers asa “linear modernisation”4),connected with a strongtendency towardsinternationalism, understoodas links and relations betweenlike political forces around the world.5

The NeoliberalProposalThe neoliberal doctrine had itsorigin in Friedrich vonHayek’s work The Road toSerfdom, which had asimmediate target the BritishLabour Party in the run-up tothe 1945 General Election.Hayek drastically affirmedthat, “In spite of its goodintentions, British moderatesocial democracy leads to thesame disaster as GermanNazism: to a modernserfdom.”6 Together with anumber of followers,including most prominentlyMilton Friedman. KarlPopper, Lionel Robbins,Ludwig Von Mises, WalterEukpen, Walter Lippman,Michael Polanyi and Salvadorde Madariaga – grouped in theMont Pelerin Society – Hayek developed a sharp andconstant criticism of thewelfare state.

The basis of the criticismwas that “egalitarianism”, a

feature of the welfare state,with its market regulationsand policies of social security,annihilated individualfreedom and the vitality of thecompetition system, on whose results everyonedepended. Hayek and hiscolleagues argued that inequal-ity was not only positive, but also indispensable forWestern societies.7

Neoliberalism stressedsystemic competitiveness andthe generation of wealth – not its distribution, whichshould be a natural result offree market mechanisms. The basic principles of thisprogramme are governed bythe logic of supply, not that of demand.

The unusual economicgrowth of the 1950s and ’60sdid not provide scope for thiskind of policy, but thestructural crisis of the ’70sbrought about the collapse of the post-war pattern andpaved the way for theneoliberals. When they toldordinary people that the causeof the recession and crisis wasthe excessive growth of thestate, which wasted resourcesand limited entrepreneurialinitiative with its marketregulations, they broughtabout the rejection of themodel by a population whosaw that the benefits they hadreceived in previous decadeswere fading away.

From this perspective thecause of the crisis affecting alleconomies was considered tobe state managerialinefficiency, together withpressure from the trade unionsand the labour movement ingeneral, over pay claims andfor increasing socialexpenditure. Neoliberalsthought that these factors had destroyed the levels ofnecessary advantage tobusinesses and could not stopgenerating the inflationaryprocess that would lead to the widespread crisis of market economies.

The neoliberal remedyconsisted in upholding a statewith a strong capacity forrepressing the unions and for

controlling the money supply, but with limited social expenditure andeconomic intervention. The government’s supremegoal should be monetarystability: therefore, it wasnecessary to keep budgetarydiscipline, with decreasingsocial expenditure and therestoration of a “necessaryunemployment rate”, ie thecreation of a standby labourarmy that weakened thepositions of the unions.Likewise, taxation reformswere indispensable, in order tomotivate the performance ofeconomic factors, ie thereduction of taxes on largeearnings. Thus, a healthyinequality would revivedeveloped economiesparalysed by stagflation, andwould bring back high rates of growth.8

According to this idea, thestate should be based onprinciples of efficiency similarto those of private companies.In fact, neoliberals point outthat the free market shouldserve as a model for theconstruction of the state, as wellas be the “depository” of theessential virtues of the systemthat has within it the mainmechanism of its reproduction.

Open opposition to theextended state has beeninherent in the developmentof conservative ideology, eversince it gave up defendingfeudal regimens, in favour ofassimilating the earliest liberalconcepts. Now it is alsoexpressed in different ways: forexample, the conception thatthe state acts to restrictfreedom and society’s capacityfor self-management is basedon the idea that civil society iscapable of generating its ownmechanisms of regulation andsolidarity, which can maintainthe necessary stability andbalance among differentsectors, and especially canprotect the weak.

According to this idea,“free” civil society includes, atleast in theory:

... good nature,honesty, duty, self-


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sacrifice, honour,service, self-discipline,tolerance, respect,justice, self-improvement,responsibility, courtesy,civility, courage,integrity, diligence,patriotism, respecttoward others, austerityand dignity.9

These virtues would beinherent in a civil society thatthe oppressor role of an all-embracing state hastransformed into a “utopia”;therefore, state regulation of civil society must beeffectively eliminated.

It must be highlightedthat, in the neoliberal vision,this civil society is perfectlydefined within the frameworkof so-called non-governmentalorganisations (NGOs) andother non-official groups ofcitizens, with responsibility foroffering scope for theexpression and settlement ofspecific interests – inprinciple, non-political ones,although the lobby groupsactive in most of the countrieswould be included within thiscategory because of theirformat, beyond their decisivefunction in the operation ofthe corresponding systems.

Civil society is consideredby contemporary liberalthought as the social spacewithin which the free play oflegitimate private interests takesplace.10 Civil society is parexcellence the space of humanperformance, for which thestate should only be a support,not a regulating element thatdictates the rules. Democracyis understood as the mainsupporting relationship thatallows civil society and thestate to be linked, and isregarded not as a mechanismfor participation, but rather asa formula for developingindependence and buildinglinks between the populationand the state, on a basisderived from the great classicsof contractualism (Hobbes,Locke, and Rousseau).

From this perspective, anon-regulated civil order

would offer more benefits tosociety than those which thewelfare state – the neoliberals’personal evil – can contribute.Once freed to individualinitiative, those benefits wouldaccord more with the specificinterests of the different strataof the population. In fact,according to the mostcontemporary Westernsociological theories, thefunctioning of modern societyis framed by three well-defined reference points,which are, in Claus Offe’sformula11, state, market andcommunity. Thus, inneoliberal terms, the marketand civil society (also calledthe tertiary sector) shouldserve as equal speakers withthe state, in a balancedrelationship, where individualfreedoms and private initiativeare safeguarded from acastrating state regulation.

On the other hand, thewelfare state, with itsredistributional and relativelyequalising policies, is regardedas a source of lack ofmotivation and of the creation of a compliantmentality: individuals are notmotivated to participate inproductive processes as long asthey are beneficiaries of anassistance system that allowsthem to live without working.Thus, according to thisperspective, groups of peopleemerge detached from society,becoming parasites on thesystem and thereby increasingthe pressure on taxationrevenues. Hence the need tointensify tax rates in order to maintain a system thatbecomes more and moreinefficient.

The functions of the stateas a promoter of welfareshould be directly undertakenby the free market, which isqualified to develop theproduction of benefits in everyfield, and which by contrastinstitutions are not able tooffer. In fact the marketshould serve as a model ofperformance for governmentand society, namely one ruledby efficiency whether theprofits sought are strictly

economical or socio-political.From this perspective, equalityis understood as equality ofopportunity, but through theview of strict meritocracy.That is to say, the main thingis a system of competition andsurvival, alien to anyregulation, where the mostqualified individual stands outfrom the rest, and is regardedas worthy of all the rewards.

In the neoliberal proposalthe base of the social structureis the traditional family, whichis protected as the main sourceof the generation of values andnecessary responsibilities forperformance in society. The alternatives to thetraditional family, such asmono-parental or homosexualones, are openly rejected, sincethey are considered asdecadent and disintegration-causing elements. Therefore,this kind of concept findsclose links with Christianreligious fundamentalism,which has a vast number of followers.

Together with this idea,the existence of the traditionalnation-state is defended, sinceit is a necessary juridical andpower framework for stability.That is why one frequentlyfinds in speeches fromneoliberal politicians strongelements of xenophobia and arejection of multiculturalism,as an element tending toweaken traditional nationality.

This, at least at first sight,is in contradiction withneoliberalism’s inherentglobalising nature, in that itpromotes the free flow ofcapital among completely freemarkets, as well as entre-preneurial transnationalism,with all its consequences fornational states. And the fact isthat capital needs anintemational legal frameworkas reference to ensure itstransnational interests; while itmust be remembered that themanaging centres of largetransnational companies arenot abstract entities, butrather have a physicalexistence and therefore, arespecifically located inparticular First World

countries, are controlled bycitizens from those countriesand consequently answer tothe interests of power eliteswith defined nationalities.

From this point of view,the logic of internationalrelations is regarded as thelogic of nation-stateinteraction in a moretraditional model, andconsequently the elite’sinterests are identified withnational interests. In thissense, integrational projectsthat are being promoted atpresent include an importantdegree of defence of inter-governmental construction,and of rejection of supra-nationality and of the effective dominance by ahegemonic power.

This neoliberal proposalseeks to achieve an importantreform of some of the essentialcomponents of the structuresof the system without – andthis must be made clear –changing its main elements, ie the existence and defence ofprivate property, and theelaboration of a contractualframework that guarantees theauthenticity of theinstitutional structure as wellas the relationships specificallyundertaken for each phase ofits development. The waythat elites are created anddevelop links to the levers ofpower can vary – and in facthas done so in the same way asthe definite historicalcircumstances have changed,but always on a common base.This most recent proposal is initself just a reformulation ofthe principles that centuriesago gave birth to the newmode of capitalist production.

SocialDemocraticTransition:The Third WayThe results of electoralprocesses by the end of the1970s and in followingdecades placed Europeansocial democracy at acrossroads. The political,


social, economic andideological formulation thathad sufficed in previousdecades had been exhausted.The failures of socialdemocratic parties in differentelections, as well as theongoing reduction of their social base, saw them in crisis.

The obvious inevitablechange hit the politicalleaderships and ideologistsfrom this tendency with suchforce that social democracywas at first confused andseemingly unable to offeranything new. It is evidentthat its initial transformationswere due more to a simpleempirical reaction to thedemands of the moment thanto a coherent ideological andprogrammatic projection. As Kurt Sontheimer pointedout when referring to hisparticipation in theformulation and approval of

the called Basic Programme ofthe German SocialDemocratic Party:

“The decision toembark on theprogramme review wastaken in a situation inwhich it is extremelydifficult to arrive at aclear picture ofdevelopments in theworld and in society.That is the dilemma inwhich the party findsitself. It knows that inthese changing times areorientation appearsnecessary, but changeitself makesreorientation hard toaccomplish. Scienceoffer no diagnosis ofthe age, no commonunderstanding of whatis happening nor whatfuture developmentswill be.”12

It is worth clarifying that,although in crisis, the socialdemocratic parties were nottotally removed from nationaland regional politicalscenarios, but rather as awhole they lost their previoushegemony and were forcedback into second place,defeated by the forcestraditionally located further tothe right, which openlyproclaimed themselves asneoliberal.

It is also interesting to seehow this panorama, whichdeveloped amid a strongglobalisation process,included, and in fact stillincludes, a revitalisation ofnationalism and its politicalexpression. This has foundbroad scope for operation inthe Eastern European world,and has also established stableroots in well-known separatistcommunities in WesternEurope, such as those of the

Basque country or NorthernIreland. However, nationalismhas also assimilatedultranationalist, xenophobicand racially exclusive conceptsas part of the ideologicalarsenal of important politicalforces that operate within thesystem, not to mention thegroups and parties with thosefeatures that are paving theirown way in national scenarios.

The privatising andderegulating programmesundertaken by governments ofsocial democrat affiliation arewell-known: indeed theFrench Socialist governmentduring François Mitterrand’slong presidency (1981-95),partly coexisting with themost traditional right wing,began this kind ofprogramme, which continuedunder neo-Gaullist (a not tooexact definition) PresidentJacques Chirac, between 1995and 2007, when the Socialist


➔

Above:Anthony Giddens.Top right: Gerhard Schröder. Bottom right:Tony Blair

Lionel Jospin was PrimeMinister.

In Germany, thegovernment of FederalChancellor Gerhard Schröder(1998-2005) had similarcharacteristics, including amarked tendency to dismantlethe welfare state, from aneoliberal perspective. We cansay the same thing if weobserve the recent history ofGreat Britain, where LabourPrime Minister Tony Blair(1997-2007) gave continuityto Margaret Thatcher’sneoliberal policy.

In the face of thissituation, European socialdemocracy has produced analternative political proposalto its traditional one: areformulation of its ideologicalprinciples, in such a way thatit can have a more or lesscoherent base on which toformulate its electoral orgovernment programmes, but without entailing excessive tensions between itsdoctrinal body and its practiceand speech.

Schröder and Blair jointlysubmitted, in 1997, the ideaof The New Centre and The Third Way, respectively,as new programmes for theirparties. The signs of thistransformation are observed infact throughout the OldContinent. The Third Way, anideological and programmaticproposal from one of thegreatest social scientists andpolitical thinkers ofcontemporary WesternEurope, Anthony Giddens,

constitutes a revision andcomplete reformulation of thesocial democratic platform;referring to the currentsituation it is in. Certainly,“third way” is not a new term;since it has been used manytimes and with differentmeanings. In fact, the veryidea of the welfare state, takenon and defended by “classical”social democracy, waspresented as a third waybetween socialism andcapitalism.

Thus, the expression itself does not mean anything,as Giddens himself acknow-ledged.13 The important fact isthat it represents anexplanatory and programmatictheoretical formulation oftransition towards the innerside of social democracy,finding an alleged “thirdalternative” to neoliberalism.It is worth saying that marketfundamentalism and thewelfare state are in a process ofdecline. Having stated this, we will next focus on the analysis of the Britishauthor’s proposal.

Challenges andMain Principlesof The Third WayThe challenges that The ThirdWay faces can be summarised,according to Giddens, in thefollowing: the existence of astrong process of effectiveglobalisation, not in the leastcome to an end; thedevelopment of an extendedindividualism; the seemingloss of meaning of thetraditional left-rightdichotomy; the problem of thecapacity of political actiontogether with the possibleestrangement fromdemocracy; and ecologicalproblems,14 which havebecome one of the mostimportant issues at present.

We could add otherquestions to that list, such asthe loss of social democracy’spolitical identity, the problemof national identity and itsexclusive and racistinterpretation, and the

increase of social differentia-tion, among others.

The general goal of The Third Way (sic) should beto help the citizens to guidethemselves in the greatrevolutions of our time:globalisation, transformations ofpersonal life and ourrelationship with nature.15

According to Giddens, thepolicy of The Third Way must face globalisation with a positive vision, as aphenomenon that goesbeyond the global market,because it is actually a culturalphenomenon, and from thatperspective it must reject anyform of protectionism –although this should not bemistaken for an unrestrictedsupport for free exchange.

This statement is based ona group of principles:1. equality, but from a newperspective that impliesequality as inclusion,understood as the realpossession of rights to equalityof opportunities, to fullintegration in the publicspace, access to work andeducation; 2. the principle of “noauthority without democracy”,which implies renouncingtradition and traditionalsymbols as a basis forlegitimacy, replacing themwith the democraticallyexpressed will, through aredesigned democracy on anactive or participatory base; 3. the principle of “no rightwithout responsibility”, which presupposes theextension of individualresponsibilities as a conditionfor having rights, obviouslyreformulating the principle ofprotection of the weak,making a clear differentiationamong people, based on theircapacity to undertakeindividual responsibilities; and4. the understanding offreedom as individualautonomy or that ofcommunities, in function ofinitiative and its stimulus.

A very curious principle isone that appears enunciated asphilosophical conservatism,which is presented as the

defence of cosmopolitanvalues in function of therecreation of social solidarity.This is associated with “non-linear modernisation”, ie theawareness of its limits, with animportant ecological elementwithin it, and the need forrenewal of social cohesion. It presupposes a pragmaticattitude in the face of change,facing the many-sidedconsequences of scientific-technological development.Reduced to a brief formula, it is a rupture with classicalsocial democratic positions.16

The bases of social justice arethen reoriented towards anadjustment to contemporaryreality: principles change astime goes by.

The Third WayProgramme17

The Third Way, as a politicalplatform for the renewal ofsocial democracy, suggests abroad action programme thatcan be summarised as follows:● Constitution of socialdemocracy in a radical centre● Construction of the newdemocratic state (a statewithout enemies)● Development of an activecivil society● Promotion of thedemocratic family● Creation of a new mixedeconomy● Promotion of equality asinclusion● Development of positivewelfare● Move from the welfarestate to the social investmentstate● Defence of thecosmopolitan nation● As complement, thespreading of cosmopolitandemocracy

The end of the bipolarworld, with the change that itrepresented, eliminated theelement of external pressurethat could mean competitionwith the socialist camp. The lack of enemies isregarded by Giddens as theessential cause of the crisis ofliberal democracy and of the


need to relegitimise the stateand democracy in the West.However, an internal elementis missing here: the exhaustionof a model as a concomitantfactor to the crisis.

In any event, the initialproposal implies theabandonment, even fromdiscussion, of the traditionalleft stance of social democracy,in favour of an indefiniteradical centre – although thiscan be read as the official lackof ideology of socialdemocratic policy, the neglect of the positions thatalready announced the idea of rupture with traditionalsocial democracy.

The proposal ofrestructuring the state, for thecreation of what is called the new democratic state, isbased on the absence ofenemies, and thereforefocused on the adjustment ofdemocratic institutions tomeet the new perspective andits consequences.

According to this idea, thestate should be restructured tomeet the challenge ofglobalisation, which meansbidirectional decentralisation,with the return of power“downwards” and the flow ofpower “upwards”, as acondition of reaffirming theauthority of the nation-state.This should be accompaniedby the expansion of the role ofthe public sphere, understoodas a reform seeking to achievegreater transparency andimpartiality and the reductionof corruption, by subjectinggovernment performance to ahigher level of public scrutiny,given the coexistence ofgovernment and civil societywithin the same informationspace, a new phenomenon. In fact, we believe that thisinformation equivalence isrelative and incomplete, giventhe management of the mediaby the elites in accordancewith their interests, and subtlemechanisms such as theinformation saturation thatbrings about realdisinformation.

A very important elementis the increase of management

efficiency. Therefore, it isadvisable to take businesses,with their functional efficiency,as a model: hence controlsaccording to objectives,effective audits, flexibility ofdecision-making bodies andparticipation of employees, ieofficials, following theprinciple of doing more withless. This does not entail lay-offs, but the improvement ofservice quality, ie the quality ofthe value produced, usingmarket discipline for thispurpose. The market becomesthen a universal point ofreference. The state mustreinforce its capacity for riskmanagement, which does notjust mean supply of protectionfor economic risk, but themanagement and control ofrisks coming from otherspheres, such as that derivingfrom science and technology.

This proposed restruc-turing in the governmentsystem should go via thereplacement of orthodoxvoting methods by other moreeffective ones, carried outthrough democratic

experiments that would allowchanging the ways ofparticipation. That desire fordemocratisation should notonly be at national or locallevels, but should start from acosmopolitan perception of thestate and the universalisation ofdownward democratisation.The latter should mean therenewal of civil society.

Civil society is a majorissue in the Third Way. The promotion of an active civilsociety is a basic part of the policyof the Third Way.18 Herein,civil society is regarded as thegroup of non-profitable andnon-government organisations,with community profile ofspecific groups of interests, orcharitable or self-aidingorganisations that work ascounterparts to the State andthe market, ie the same idea asin neoliberal thought.

It is expected that thegovernment should associateitself to this sector for col-laboration, but also for mutualcontrol. The restructuring ofthe community as part of therenewal of civil society should

serve as support to socialrestoration and to democraticpressure “from the bottomup”. This must be an environ-ment of local initiative, whichmust complement and inmany cases substitute for thegovernment’s actionconcerning collaboration andprotection; in some situationsthis should attract the state to involvement with the civil arena, but in others, civil society must foster itswithdrawal.

The projection of thecommunity towards “post-materialist” principles standsout to a great extent, ie it goes beyond material needs to focus on questions ofidentity, of social linking, of psychological stability,among others.

This civic order should berestored mainly for thepoorest people, who exper-ience a relative desocialisationdue to action being focusedon the mere material sphere.

In this “new” conception,civil society protects theindividual from the pressureof a state power that can beoverwhelming, since the Statecannot devolve into civilsociety.19 However, it mustregulate that renewal, bymediating the conflicts that necessarily arise in thistertiary sector. In fact, itcovers to a great extent theneoliberal proposal of theindependence of civil society,which is per se conceptualisedin a similar way.

The proposal of a newmixed economy is based onthe synergy between publicand private sectors, takingadvantage of market dynam-ism and allegedly keeping inmind the public interest. It should be based on thebalance between deregulationand regulation, as well asbetween economic and thenon-economic issues, attransnational, national andlocal level. In other words, theaim is to liberalise marketsofficially and to introducederegulations, at least partially,without making the statedisappear.


A very important element isthe increase of managementefficiency. Therefore, it is

advisable to take businesses, withtheir functional efficiency, as a

model: hence controls according toobjectives, effective audits,

flexibility of decision-makingbodies and participation of

employees, ie officials, followingthe principle of doing more withless. This does not entail lay-offs,but the improvement of service

quality, ie the quality of the valueproduced, using market disciplinefor this purpose. The market

becomes then a universalpoint of reference.

➔

Undoubtedly, the generalidea of this issue is thestimulation of an economythat has become very sluggish,appealing to the entrepreneur’sinitiative, expanding freedomsand reducing controls. The mixed nature of theeconomy is given by theconcern, more or less real, forthe integration of economicgrowth within a generalcontext aiming at culturaldevelopment. The practicaleffect of this idea is actually topoint to the independence ofthe economy from the state.

Contrary to traditionalsocial democracy, The ThirdWay stresses wealthgeneration, based on theexistence and omnipresence of the global market, althoughit does not presupposeneglecting the individual.However, it is focused onproviding conditions for theoperation of markets. The government has to continueplaying an essential role invest-ing in human resources and in the required infrastructure to develop entrepreneurialculture.20

Consequently, the stateought to reformulate itsstructures and welfareprinciples in order to focusthem on the qualifications ofthe population, so as toachieve better integration intothe entrepreneurial system,

ie to create the qualities forparticipating the labourmarkets, thus supplyingbusinesses’ needs.

Investment in education isof special importance, not as amechanism for the solution ofsocial problems, but as a basisfor the new redistribution. In fact, according to the ThirdWay proposal, the state mustset aside any condition of asocial security network thatbenefits those in need, ie thatof a wealth redistributor agent,in order to take into accountthe new principle, that ofredistribution of possibilities.The level of social expendituremust be maintained, butaccording to these priorities.People should be focused ontaking risks, understood as therisk of initiative, eliminatingthose tendencies branded asaccommodating traditionalwelfare as well as its allegedmoral risks, in order to be ableto overcome transition stages,ie to be reinserted in thelabour markets.

In the sphere of welfare,the role of both the tertiarysector and the privatecompany must be increased,the latter through associationsfor public projects (andfurthermore for the financialsupport of organisations from“civil society”), the state being a channel to welfare.This deals with the creation of

a positive welfare society,where the state is not only agenerator and distributor, butalso a co-manager, jointly withthe other two sectors. In practice, this means theprivatisation of social securityand assistance mechanisms.

The emphasis is not madeon direct and simple protec-tion, but on the stimulus ofinitiative and autonomy, ie on the capacity for self-help,on receiving advice rather than on the perception oftangible assets. Local initiativeis regarded as a vital link inthis mechanism. Meritocracyis accepted as part of this –indeed, a limited one, but ameritocracy all the same,which shapes the resultingsociety and is openly based on competition.

There is somethinginteresting here: welfare, inorder to be real, must bedirected to the great majorityof the population, not only tothe poor, because that impliesa differentiation. Thus, thebest economically positionedsectors must also be recipients,which should contribute toavoiding the voluntaryisolation of elites.

In general, according tothis approach, the welfare stateis essentially non-democratic,depending indeed on a verticaldistribution of liabilities.21

Therefore, it must be replaced

by this “investment state”,which is in charge ofproviding human assets to the market.

Based on what has beenmentioned, it is obvious thatEuropean social democracyhas experienced a deeptransformation which hasaffected its own theoreticaland ideological base. We arespeaking about a change notonly in its discourse, but alsoin the very principles thatshould rule the performanceof this political force. It is achange that its political leadersand ideologists have notundertaken, but rather havetried to channel.

Giddens’ work means thetheoretical approach to anunavoidable reality, by arenowned scholar who islinked to the leading circles ofLabourism: the gradual andunrestrained disappearance of classical social democracy.Basically, openly acknowledgedor not, the policy of The ThirdWay has become the patternthat rules the operation ofsocial democratic forces in the whole region, with more orless clarity.

Certainly, in spite ofGiddens’ unquestionablebrilliance, his programme doesnot offer a real alternative tothe marked neoliberal coursethat the economies and statesof Western Europe have been


Investment in education is of special importance, not as a mechanism for the solution of social problems, but as a basis for the new redistribution.

adopting for at least twodecades. Based on what hasbeen pointed out above, wecan observe the deeplyneoliberal nature of the ThirdWay programme which, infact, answers to a specificjuncture when it takes on thepredominance of the markets,even as a point of reference forthe state and civil society, andthe actual conceptions of bothactors. According to itsformulation, the terms in thestate-market relationship arereversed, with a predominanceof the second, which is openlysubordinated to governmentmechanisms in function of itsspecific needs. The declareddefence of social interests isjust a protective varnishagainst possible reactions fromthose excluded from society.

It must be understood thatthis is the consequence of amuch more complex processof transformation than merely

the neoliberalisation of socialdemocracy. The shifting ofsocial democracy towardsapproaches of a neoliberalprofile constitutes a sample ofthe transformation that hastaken place within thepolitical structure, whichrelates to deep changes inother structures which we willspeak about in future works. It is obviously a matter of thetransition from an alreadyfinite juncture into a new one,related to new structuralelements. If the politicalparties of a system want tocontinue existing, they have tochange together with it and inthe same way, otherwise, theyare replaced by others thatadapt themselves better to theexisting definite circumstances.That is what has happened toEuropean social democraticforces in the transition to the first post-industrialjuncture.


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1 On this issue, it would be veryinteresting to see G D H Cole, History of Socialist Thought, PalgraveMacMillan, London, 2003, Vols 5and 6.2 We emphasise the partiality ofredistribution; important as it is, it isin no way predetermined to eliminatesocial differences.3 On the construction of thewelfare state in Europe, it would beinteresting to see: E Hobsbawm, Age of Extremes: the Short TwentiethCentury History 1914-1991, MichaelJoseph, London, 1994; P M Kennedy,The Rise and Fall of the Great Powers:Economic Change and Military Conflictfrom 1500 to 2000, Unwin Hyman,London, 1988.4 A Giddens, The Third Way: The Renewal of Social Democracy,Polity Press, Cambridge, 1998, p 7.5 Hence the existence of theSocialist International as a concurrent space of social democracyat a world level.6 Excerpt from P Anderson,Neoliberalismo: un balance provisorio(Neoliberalism: A Provisional Balance),in A Borón, P Anderson et al, Latrama del neoliberalismo: mercado,crisis y exclusion social (The Plot ofNeoliberalism: Market, Crisis andSocial Exclusion), Social Sciences,Havana, 2003, p 17.

7 Ibid, p 18.8 See M Friedman, R Friedman,Free to Choose, Avon Books, NewYork, 1981 and Borón, Anderson etal, op cit.9 D Green, Reinventing CivilSociety, Institute of Economics Affairs,London,1993, p viii.10 F de Trazegnies Granda, El rol dela sociedad civil, (The Role of CivilSociety) in Democracia y SociedadCivil, Fundación Friedrich Naumann,Bogotá 1994, p.8011 C Offe (2003), Civil Society andSocial Order. Demarcating andCombining Market, State andCommunity, in Herausforderungen der Demokratie. Zur Integrations –und Leistungsfähigkeit politischerInstitutionen, Campus,Frankfurt/New York, 2003, pp 274-296 “ -Ed.12 Giddens, op cit, p 24.13 Ibid, p vii.14 Ibid, pp 27-8.15 Ibid, p 64 (emphasis from theoriginal).16 On the issues of challenges andprinciples see ibid, pp 27-68.17 Ibid, pp 69-155.18 Ibid, p 78.19 Ibid, p 86.20 Ibid, p 99.21 Ibid, p 112.

*First published in European Studies Journal 77, pp 33-50(Havana, 2007), and edited here for English and style. – Ed.

Notes

■

want to outline ten brief but, I hope,thought-provoking reflections on the current economic situation and

its implications.First, we need to distinguish clearly

between a banking and financial crisis, on the one hand, and a cyclicaleconomic crisis on the other. They aredistinct but, in today’s case, intercon-nected. The British economy, inparticular, managed to postpone acyclical downturn by two or three yearsthrough a massive expansion of private,household and government debt. The first two elements were notsustainable over the long term, as real wages were – as always – held down in the drive to maximise profit.The “financialisation” of debt-basedcontracts and other derivatives led to theloss of confidence in the financialmarkets and the collapse of banks,mortgage, insurance and underwritingcompanies. This put paid to any further post-ponement of a cyclicaldownturn and, in fact, signalled thebeginning of it.

Second, credit and commercial shocks to the system are nothing new.Like cyclical economic crises, they arisefrom the drive to maximise profit, theaccumulation of capital and the need toinvest it at a profit; but they are distinctfrom the normal cyclical crisis of over-accumulation and over-production.Marx and Engels wrote 150 years agoabout shocks brought on by overseasinvestment fraud and by wild speculationin the railway industry. At the sametime, as we see today, credit or currencyshocks can intensify a cyclical crisis andlimit the system’s capacity to counteractit. The distinction is important not leastbecause different measures are required tochallenge different types of capitalistcrisis in the interests of the working classand the people generally.

Third, we should expose the role of“fictitious capital”, funded ultimatelythrough credit, in providing the basis forthis latest banking and financial crisis.As Marx first explained, fictitious capitalis embodied in the inflated value ofstocks, shares, commodities and – today,

above all – financial derivatives (contractsand options to buy debt-, mortgage- andinsurance-based policies, together withbetting on the movement of variousmarket indicators). As the result ofmonopoly pressure and speculation, ithas grown at four times the rate of thereal economy, of the real value of capitalas reflected in the world’s gross domesticproduct of goods and services.According to the Bank for InternationalSettlements, the value of all the financialderivatives in the world market reached$681 trillion in late 2007, while theworld’s annual GDP is $61 trillion. This was always going to be unsustain-able – how long can the value of all thechips being bet in a casino be ten timesthe value of all the goods and servicesthey can buy in the whole outside world?Sooner or later, the value of the chips willcollapse as everyone tries to cash them in.

Fourth, we should proclaim theabsurdity of the notion that cyclicaleconomic crises can be abolished withoutabolishing capitalism itself. From 1999onwards, Gordon Brown repeatedly


Trends in theBritish Economyand Employment

By Robert Griffiths

I

claimed that he had put an end to “boomand bust” in Britain. He certainly hasabolished the “boom”. But monopolycapital’s drive to maximise profit andmarket share, while holding downworking class purchasing power, willalways, periodically, end up in “bust” – producing more commodities than canbe sold at a profit.

Since the end of the Second WorldWar, we have seen such crises in Britainin 1956-58 (when the output of goodsand services fell by 2.2 per cent), 1973-75 (when output fell by 3.9 percent), 1980-81 (a fall of 6.1 per cent intotal leading to 11.9 per centunemployment) and 1990-92 (a 2.7 percent drop which produced 10.7 per centunemployment). Already in the firstquarter of 2009, the British economy hasshrunk by 4.9% compared with the samepoint in 2008. The official unemploy-ment count – an underestimate eversince Tory governments fiddled thefigures – has reached nearly 2.25 million,just over 7 per cent of the workforce.

Classical liberal economics could not

abolish these cyclical crises in the late19th and early 20th centuries; nor couldKeynesianism up to the 1970s despitemassive post-war reconstruction andCold War rearmament; and neither hasneoliberalism in the 1990s and now inthe present day. We have to re-emphasisethe intrinsic character of capitalism as asystem not only of exploitation andinequality, but one of insecurity,militarism, depletion of finite resourcesand the wasteful periodic destruction ofenormous forces of production.

Fifth, we should investigate anduncover the extent to which capitalist“globalisation” – this relatively recentphase of imperialism – has contributed tothe banking and financial crisis and tothe cyclical economic crisis of capitalism.State power and monopoly power at thenational and international levels havecombined to enable real capital, creditand therefore fictitious capital to expand massively. At the same time,internationalisation of the worldcapitalist economy through theoperations of transnational corporations

and interlinked 24-hour financialmarkets has led to greatersynchronisation of national economies,to the point where it is increasinglyunlikely that a major national economyor two can, alone, be in a stage ofexpansion, and therefore able to help pull the others out of a cyclical recession– until strong enough economies develop which are not reliant upon andfully integrated into the process ofcapitalist globalisation.

Sixth, the current crises underline the urgent need within the working classand communist movement to study anddevelop Marxist political economy. As capitalism has developed new forms,not least through “financialisation” andespecially the growth of derivatives, themovement has neglected economicanalysis and concentrated instead onmatters of industrial and political tactics,or on issues and ideological questionsoutside the economic sphere. Yet peoplewant the left to provide explanations for– and alternatives to – today’s capitalistcrisis, which requires us to develop and


➔

apply our Marxist understanding in newconditions, rather than dusting off oldpredictions and old slogans and thenpresenting them as though they are new.

Seventh, we must prepare ourselvesand the working class and progressivemovements for the likelihood thatimperialism will attempt to reorientateitself strategically. Already we see movesaway from neoliberalism, with the US,British and other governments usingmeasures of public borrowing, publicexpenditure and capitalist nationalisationto try to stabilise the banking andfinancial system and counteracteconomic recession. There is talk oftighter national and internationalregulation of the financial system. There is growing recognition of the need to combat global warming andclimate change, although so farimperialism’s efforts have consistedlargely of empty declarations whiledemanding that developing countriesforego development. Carbon emissiontrading schemes give the world’s majorpolluters the right to pollute, on thebasis that they can afford it. We shall seewhether or to what extent USimperialism adopts a more flexible,multilateral and less aggressive stance ineconomic, political and military affairs.In any event, we have to remain vigilant,to make an objective analysis ofdevelopments, and to step up mass andpopular pressure for anti-monopoly andanti-imperialist policies.

Eighth, as recession deepens, weshould not develop fresh illusionsabout Keynesianism or state-monopoly capitalist measures ofnationalisation or market regulation.Instead, we should seek to go beyondsuch measures. So, for example,while increased governmentspending can maintain economicdemand, we should demand that itbe funded from progressive taxationon the rich and big business.Proposals for nationalisation offailing enterprises should include achange of direction for suchenterprises, towards broader socialand environmental objectives, andso on. The working class andcommunist movement needs tostep up its efforts to mobilise broadmasses of the people around ananti-monopoly programme whichcan make inroads into the wealthand power of the capitalist class.

Ninth, although the crisis isinternational, we should notunderestimate the significance of thepeculiarities of the British economy.

These present us with particularproblems requiring particular responses.Both the International Monetary Fund(IMF) and the Organisation forEconomic Co-operation andDevelopment (OECD) are forecastingbigger falls in economic activity inBritain than in other advanced capitalisteconomies in the course of 2009.Neither body has explicitly identifiedwhy we are especially doomed to a longerand deeper depression, although theOECD acknowledges the decline ofhouse prices and its impact on consumerspending as a major factor.

But some of the underlying structuralweaknesses of the British economy aredisplayed for all to see in the reportsissued by such bodies and the UnitedNations Council for Trade andDevelopment (UNCTAD).

For example, manufacturing inBritain now accounts for just 13 per centof the value (defined in capitalist terms)

created in the national economy – downfrom 21 per cent in 1996, the year beforeNew Labour came to office. The share ofservices has risen from 68 to 76 per cent.Only France and the US are as reliant onservices as Britain, while the share ofmanufacturing in Germany, Italy, Japanand Sweden, for example, ranges from 18 to 23 per cent.

Research and development (R&D)on science and technology accounts forjust 1.78 per cent of economic activity(gross domestic product, GDP) inBritain, two-thirds of the level in the G7advanced capitalist economies.Government and higher education haveto carry out 55 per cent of this, whileindustry undertakes 45 per cent. In theG7 as a whole, industry conducts two-thirds of all R&D.

Of British government spending onscience and technology R&D, 28 percent is in the military field – four to fivetimes the proportion in Germany,Australia and Japan; 14 to 15 times thatin the Netherlands and Italy.

Taxes on corporate income accountfor 9 % of tax revenues in Britain,slightly above the EU average but below

Australia (19%), New Zealand(17%), Japan (16%) and even theUS (11%).

British transnational corpora-tions export capital on a prolific

scale, leaving Britain twice asdependent on inward investment asother EU states, and four times moredependent than the US. As at 2007,the British capitalist class ownedbusiness assets around the worldvalued at $1,709 billion, excluding

financial portfolios. Only the US monopoly capitalists have

more direct investments outside theirhome country.

Income from these foreigninvestments prevents Britain’s balance ofpayments deficit from being three timesbigger than it already is.

Tenth, these are the main factorswhich help explain why the economiccrisis in Britain is likely to be deeperthan in most if not all other developedcapitalist countries. Whether it turnsout to be longer depends at least in parton the measures adopted by this NewLabour government. The CommunistParty calls for the left and the labourmovement to fight for a Left-WingProgramme of policies to boosteconomic demand, invest in sustainableenergy and productive industry, enhance public services and takeownership and control over key sectors of the economy.


■

I WORKED WITHIN theorganising department of theTGWU section of Unite forabout three or four years and was involved from thebeginning in organising thecleaners in Canary Wharf and then at the Houses ofParliament where the cleanerstook part in the first strikeever held there. It was goodfun helping the cleanersorganise themselves andhaving the confidence toorganise a strike and win theirdemand for a living wage.

I want to outline some ofthe strategies and thinkingbehind union organising andalso move it back into themore traditional side of tradeunionism. The strategies andtechniques which we andother unions are using are


Going Back toBasics

By Rhys McCarthy

➔

Organising the Unorganised

shifting away from servicingindividuals and intoorganising collectively. I trulybelieve that organising is asocialist and left-wing strategy,while the servicing culture is a right-wing strategy.Organising is about goingback to basics, to what tradeunions used to do and whatthe Communist Party used todo. What was successful thenwas effective communicationwith the members about theirproblems and issues, buildingaround that and followingthrough with collective action.

It is obvious that generallytrade unions have lost thatability for quite a while.

In response to Thatcherismand neoliberalism, the unionsstarted to mirror the shift inwider society and beganpandering to the individual,“Got a problem? Join theunion”, and providing serviceswith statements like “Join ourunion, you’ll get cheaperRAC” and “We give you freewills.” This moved away fromthe collective to the individualand it has been a disaster.What members want is aboutstanding up to the boss or themanager and defending andimproving their terms andconditions. This is whatmaintains and grows member-ship. We are still picking up

the problem of individualismtoday so we need to get ouract together and completelyturn this around. It has beena slow process but there ischange now, especially withinmy own union.

Five years ago, when youtalked about organising, therewas negativity from some full-time officials. I believethey had got used to a cultureof servicing and spending toomuch time running aroundresponding to phone callsfrom individuals and repres-enting them at disciplinaryand grievance hearings –basically acting as well paidroving super shop stewards.

Now Iam a full-

time officerand I could

spend my daysdriving around in

my nice comfortableVauxhall Astra,

representing individuals– but that is really justmanaging decline and doesnot grow trade unionism.We need to get back to thefundamental organising ofworkers. I am pleased thatthe Unite joint general

secretary, Tony Woodley, whowrote in his election manifestoabout fighting back andorganising, has put this intopractice with a bold program-me for 100 organisers. I waspart of that process and whenI look back the outcome hasbeen very positive.

Two of us organisers wereput into that bastion ofcapitalism, Canary Wharf.We went through a pro-gramme of surveying thedifferent sites and companies.Some years previously therehad been in-house cleaners,but by this time it was all done by third-partycleaning companies, bigmultinationals like ISS andMitie. We started by findingout where the cleaners enteredthe workplace – they certainly

didn’t go throughthe front door.Then we put outcontact cards,started talking to

people to identify those whowere leaders – basically peoplewho wanted to stand up, werenot afraid and wanted to makechanges in their workplaces.Then we began to puttogether a database of workers,mapping the workplace,finding out who was on whatsection and what shift, andgetting our identified activiststo do the work, so that theytook ownership of it.

From the activists wefound out what the issueswere. Clearly, if you are onthe minimum wage, then payis likely to be the major issue


but we also found thatbullying was rife and,shockingly, that workers couldbe quite legally fired on awhim. There was and still is aculture in the contractcleaning industry that acleaner could be removedfrom the site simply if theclient requested it – forexample, if some merchantbanker, sitting at his table on aMonday morning, didn’t likehow a cleaner walked pasthim. Maybe the cleaner didn’tsmile at him, or maybe hadthe temerity to look him inthe eye. Unless discriminationcould be proved – alwaysdifficult – then all the cleaningcompany had to do was to tryto find work for that employeeelsewhere within theirbusiness. If they can’t do thatthen they can legally dismissthe cleaner.

We soon began to targetissues like that, and then wehad a case of cleaners beingremoved, not for “looking the wrong way”, but fortouching rubbish from lostproperty – rubbish which wasabout to be thrown away fromthe basement of the building.For this the client, HSBC,requested that five of ourmembers be removed from theworkplace. In response wepublished newsletters,targeting the then CEO ofHSBC, Sir John Bond, sayingthat we would go to the presswith the slogan, “Cleanerssacked for touching rubbish”.To cut a long story short, wealso said, “There will be ademonstration of the cleanersoutside your offices unless youreinstate them. We want themto be treated exactly the sameas your directly employedworkers.” We had a meetingwith a senior HR officer in thecompany, as a result of whichthey opted for an investigation– whose outcome was thatonly one of the five would beremoved. Not only did wesave the jobs of the other four,but also we made sure that theone who was removed endedup on a contract with thesame pay and conditions.Small wins like this gave the

workers confidence to getinvolved and stand together.

All this is about beingcreative, understanding wherethese companies’ strengths andweaknesses are. We appliedleverage on big household-name banks, and used theirwealth and status to embarrassthem. So, for example, whenthe banks were putting on bigcultural events in the middleof Canary Wharf, subsidisedopera with champagne andcanapés flowing freely, then we would go along with the cleaners and hand outleaflets about poverty pay andthe cleaners’ demands for aliving wage.

Building links with localcommunity groups likechurches has also provedeffective. Our members areblack African and LatinAmerican, and are involved ineither the local evangelicalchurches or the Catholicchurch, so we worked with anorganisation called LondonCitizens which was veryuseful. Particularly at the

beginning, they opened doorsand got access to those bankswho didn’t want to talk tounions but felt the need totalk to London Citizens,because it was a faith-basedand community organisation.

On one occasion we had put in a pay claim toMorgan Stanley over theLondon Living Wage, whichat the time was £6.70 perhour. The claim would havecost only £300,000, butMorgan Stanley said that theyweren’t going to agree to it asour members weren’t theircleaners, they were employedby a third party. This ofcourse is a deliberate capitaliststrategy, using third parties,outsourcing and privatisationto weaken workers and tradeunions. So we put it back toMorgan Stanley: “They areyour cleaners, they clean yourbuilding, whether it’s donethrough a third party or not.Even if the cleaning contractorchanges, the cleaners still workat your building and you havea responsibility towards them.”

The bank used the same oldscript that they were not theircleaners but we decided to re-write the script: “They areyour cleaners, you haveresponsibility towards them,you hold the purse strings andthe bill is £300,000.”

While this pay dispute wasgoing on, I myself and acolleague visited our membersat Morgan Stanley’s plushoffices. When there, wenoticed a big poster about aseason of plays at the Old Victheatre which was beingsponsored by the company. It turned out that thissponsorship was to the tune ofhalf a million pounds a year,basically corporate socialwelfare for the middle classes.So Morgan Stanley werehappy to subsidise the theatretickets for the middle classes,but not their cleaners’ payclaim, which would have costthem only £300,000.Working with LondonCitizens, we had the cleanerspicketing the Old Vic overtwo weeks, with loud hailers


➔

and leafleting. Finally, it gotto the extent where MorganStanley called the TGWU andsaid “Pull your dogs off fromoutside the theatre, we willmeet with you.” Seniorofficials met with the contractcleaner and Morgan Stanleyand they settled and paid up.

This kind of organisinghas developed into a strategywhich the union has taken upand developed into a widersectoral approach, targetingother companies within thesame industry – such asmoving from Canary Wharfto cleaners throughout theCity of London – but alsoother industries such as meatprocessing, logistics andaviation. This is because it isultimately ineffective to targetjust one company in a widersector, particularly if increasedlabour costs lead to

undercutting by their non-unionised competitors.Organising companies along asectoral basis can stop a “raceto the bottom” in terms of pay and conditions; and, byorganising and gaining newrecognition agreements, myunion has had the strength toimplement industry-wideminimum standardagreements.

In aviation, BA and theBAA have high levels ofmembership: workers havegood pay and conditionsbecause the union has beenwell organised and its shopstewards are doing thebusiness. However, they arenot immune to threats, suchas outsourcing and low-costairlines potentially under-cutting them and taking newbusiness. So within aviationwe have targeted the security

industry and low-cost airlines,although ultimately we needto target and organise Ryanairas well.

Organising is a continuouscycle in which the unionidentifies the issues, anddecides which are widely feltand deeply felt. You may haveto go for an easy issue at first:you could be starting from alow level where a lot of peopleare scared and have never dealtwith trade unions before; theymay be young and have lived30 years of Thatcherism andNew Labourism; or they maybe migrants – like cleanersfrom Colombia, wherebelonging to a trade union canamount to signing your owndeath warrant. As I saidbefore, issues must be widelyfelt and deeply felt; and oncethe issue is identified youorganise around it – sending

out newsletters, signing upcollective petitions andeducating and agitatingmembers around their issues,which will then lead into theirtaking collective action.

It is the members whohave to take the action, notthe “outside” union. On thesites I deal with I stillsometimes get the question,“What’s the union going to doabout it?” Many membersthink that, by paying £2+ aweek to the union, they handover all responsibility to it andthat this man or woman whois the full-time official issomehow some superman orsuperwoman who is going tosolve all the problems withtheir wise words. Now I dolike to think that I candispense wise and sometimesangry words – but if I haven’tgot members backing me up


Ruskin House, Croydon, LondonOctober 16-18 2009International Rally

CAPITALISM – WE CAN’T AFFORD IT. HUMANITY’S FUTURE IS SOCIALISM!

Plenary Sessions on:■ MOBILISING AGAINST RACISM AND FASCISM■ THE GREAT MINERS’ STRIKE AND ITS LESSONS■ THE CRISIS OF WORKING CLASS REPRESENTATION■ ECONOMIC CRISIS – THE SUNSET FOR CAPITALISM?■ THE PEOPLE'S CHARTER AND THE STRUGGLE FOR CHANGE

For further details, and provisional registration contact:CPB, Ruskin House, 23 Coombe Road, Croydon CR0 1BD,t: 020 8686 1659, e: [email protected]

COMMUNIST UNIVERSITY OF BRITAIN

and prepared to take collectiveaction then I am not going tobe able to put a lot of pressureon the company.

I have talked a lot about“organising the unorganised”,but many of our union-recognised workplaces are inreality disorganised andunorganised. “Organisingthe unorganised” in myopinion is not just about newgreenfield sites or migrantworkers. Too many of ourrecognised workplaces havemembership below 50%,with passive and inactivemembers; where shopstewards service the membersbut don’t collectively involveany of them in the process;where the shop steward justturns up to pay negotiationsbut hasn’t asked the memberswhat they want in the claim.How many readers of thisarticle – shop stewards orotherwise active in the tradeunion, in recognisedworkplaces – do a pay claimsurvey, go and ask themembers what they want, letthem have ownership of itand then base the pay claimon that? I hope you all dobut I take a guess and saymany do not.

It is not just shop stewardsnot doing it properly. A fewyears ago, to my horror, Icame across a full-time officialwho submitted a one-line payclaim to a company: “Asubstantial pay increase” wasthe demand. It must havetaken him a long time to comeup with that one short

statement and it was quiteobvious he hadn’t askedanyone, let alone the shopstewards about the pay claim.I’m surmising what happenedat the subsequent meetingwith management but Iimagine it went somethinglike this:Full-time officer: “We’d like asubstantial pay increase.”Company manager: “No!”Full-time officer: “Oh, OK, then.”

How many readers havemapped the workplace toknow where members andnon-members are? How manyhave organised a collectivegrievance around a workplaceissue? Do we put out regularnewsletters that involve ourmembers and challenge theemployer? If we are going tobe effective we all have a partto play – be it members, shopstewards and full-time officials– in getting organised, beingproactive and being preparedto take collective action.

It is not always easy andwe are not always successfulbut we must try and fight. Ihave recently had a couple ofdifferent workplaces whereredundancies have beendeclared. One of them isDHL Argos, which is makingapproximately £320m profit ayear. Its CEO was on SkyNews saying, “Someone has totake a stand about the fear ofjob insecurity, because it’saffecting consumer spending”,but on that very same dayArgos announced over 300redundancies – 95 of them at

one of my DHL sites.Obviously the “stand” appliedto everyone else and not toArgos. They were making cutsto maintain profits for theirshareholders in the City. For me, it is clear that the Cityand the greedy bankers havecreated this current economicsituation but once againordinary workers are payingthe price. Unfortunately, forsome of our members thepenny has not yet dropped.

The statutory notice periodof 30 days was under way andthe clock was ticking. I metwith my shop stewards and myfirst question was, “What areyour members going to doabout it?” The response was,“Nothing much, as they arescared”. At first there wasamongst some a feeling ofdefeatism and that all they hadto do was make sure that thecompany followed a properconsultation process.However, we decided to workout a strategy to take on thecompany: putting togethernewsletters actively criticisingArgos and DHL; talking abouttaking some sort of collectiveaction including a strike ifnecessary; signing a collectivegrievance; talking about goingto the press and demonstratingoutside Argos headquarters;approaching the local LabourMP to ask for his support. All of this was about puttingpressure on the company.

Unfortunately in thisinstance our success waslimited: we did put in acollective grievance, we did

get press publicity andinvolve our local Labour MP,but we were not successful inmoving our members to amore militant stance or indrastically changing thecompany’s decision – and inthe end some 65 people weremade redundant. However,tough lessons were learnedand it was important that theshop stewards were being seento be proactive and organisedin trying to garner supportand action from theirmembers. They certainlycannot be accused of standingby and doing nothing. If youare at point A and yourmembership is quite passive,it may be too much to expectto move straight from A to Zand say, walk out on strike,but we need to be prepared toassist them in that journeyand take them step by step.We were and are educating,agitating and communicatingwith our members and wewere putting the issue back tothem, “What are you going to do? We can help andsupport you.”

We have to organise andnot solely service even in ourso-called recognisedworkplaces, because in thiscurrent economic crisis thingsare going to get worse, notbetter. This way we can startto make a difference for whenthe company comes to attackor make cuts next time. If weorganise and fight, we maynot always win; but if we don’t organise and fight we will surely lose.


■

UNEMPLOYMENT AMONGSTyoung people in particular isskyrocketing. With the credit crunchand economic crisis now hitting, leadingto cuts in both secure and insecureemployment, the reliance on precarious,marginal, peripheral, insecure or unstablework within the British economy meansthat the effect on working people will be disastrous.

The official figures for April 2009show registered Jobseekers’ Allowance(JSA) claimants – not the same asunemployment – at 1.5 million, thehighest since 1997. Most predictions arethat real unemployment will pass 3.25million by the end of 2010.Unsurprisingly, the majority of thosewho were in precarious work – women,youth, ethnic minorities – are the samegroups that are now flooding to the JSA.Furthermore, the Commission forEmployment and Skills predicts that afterthe recession men will take both themajority of newly created jobs and thelargest share of jobs in previously female-dominated industries.

We must not view this developmentwith the eyes of the past. It is importantto understand the context of massstruggles around unemployment in the1930s and 80s but we must also fullyunderstand that the nature of work andemployment has changed dramaticallyover the last two decades.

It is estimated that almost half of theunemployed workers are and will beunder the age of 25. Employers areapparently looking for experience; but

if you are under 25, how can you haveexperience, given that everything on offerhas been precarious work, dead-end jobs?How much worse is joblessnesscompared to part-time, temporary,contracts, so-called flexible, insecureemployment? Few young people whohave one of these jobs think they arebetter off on the dole but what choice dothey have? That is why the YoungCommunist League has put forward theslogan “No more McJobs! Give usdecent work now!”

It is not going to be easy to reach out to millions. Most trade unionists,perhaps as many as five out of six, have full-time and permanent jobs. The proportion of unionised full-timeworkers is 50% higher than theproportion of part-time workers, buttemporary and agency workers show thelowest level of organisation. Maybe this has something to do with the factthat they have little power, and that themovement is structured only toconcentrate on trade unions’ ownmembers and not to fight for“precarious” workers. In fact, often thereis a generally condescending attitude thatall precarious workers are migrantworkers who do not know any better, orare prejudiced against us, becauseemployers use precarious workers toundercut wages and conditions inunionised workplaces.

Union density drops to about halfthat of older workers amongst thoseunder 20. It is not that young people areresistant to unions: indeed, wherever a

union is prepared to fight, the activistsare drawn from those under the age of40. The problem is that a wholegeneration has hardly any hope that theytoo can have a union – and theresponsibility for this must lie with theunions themselves rather than with theunorganised workers. This is especiallyprevalent in the private sector whereunion density is way below that in thepublic sector.

It is not just a problem in smallerworkplaces but larger ones as well.Think of the massive warehouses that arenow being developed all over thecountry. Where are the unions? They are going to have to scratch andunderstand the world of work as it istoday, how the economy is structuredand how bosses look for weak links inworkers’ situation. Capitalism has itsweak links too, and it is long past timethat workers and trade unions looked for them.

We need to know where our power isand use it to our advantage – for example,the way all major retail outlets depend ona tight supply chain to bring in theirgoods. Few firms operate on large-scalelocal warehousing. How often have youbeen to a big store in a retail park andbeen told they haven’t got something youwant but that it is in stock at somebranch 10 miles away? Almost everythingthat is on sale has to be transportedsomewhere. Almost all commodities forsale are brought to these islands fromabroad. They pour into a handful ofports in massive containers and then are

The Unemployed andThose inPrecariousEmployment


By JoanneStevenson


cascaded by road, rail, occasionally bywater and too often by air.

Take Merry Hill Shopping Centre in the West Midlands, for example. This entire site was once one of Europe’slargest steel works, Round Oak. At itsheight it employed many more workersthan the number that work there nowbut there are still some 9000 workers in acomplex of more than 300 shops andleisure facilities. Many of the stores weresucked out of the surrounding towns andcities leading to further decay of the area.This site is a virtual fortress of capitalism,physically separated – except by privateroad access – from nearby places such asDudley, which have practically lost theirtown centres. Despite a long history oftrade unionism in the Black Country,how many in Merry Hill are organised?Hardly any.

How do the goods get there?Competition between unions such asUSDAW and Unite is fierce yet nothinghas been done to consider organising thisgroup of workers. The economic powerretail and transport workers would have, if they combined, is tremendousbut fragmentation, union rivalry and an inability to reach out to the mass of particularly young people and women seems to stand in the way ofrealising this.

It is not just a question of solidarity.A union that can demonstrate itscommitment and power to youngpeople, by action across the board onperipheral work going beyond lobbyinggovernment for aid or legalisation, couldearn tremendous kudos amongst thenon-unionised and precarious workforce.

Despite the growing experiencearound the world, and some limitedsuccess even here in Britain, there are stilltrade unionists that claim that organisingprecarious workers, such as in callcentres, is virtually impossible to achieve.That was said about women workers inconsumer goods manufacturing beforeWorld War 2. I daresay it was said aboutthe teenage girls working in Bryant &May in the 1880s. It may seem difficultto accept, but Austin car workers wereprecarious workers when they carried onworking during the 1926 General Strike.However, three years later the GreatDepression began and although theywere still unorganised some 800,000workers went on strike. It took severalmore years for them to become thetightly organised workforce that historyremembers now.

Yes, there isn’t an easy way to recruitand organise precarious workers. At firstsight it may seem that the ever-rising job

losses will make the task next toimpossible; but if we don’t accept thechallenge then we will be giving up anentire generation to virtual slavery. So what is to be done?

The first task is to recognise that thenotion of unions only existing to protecttheir current membership is flawed.Unions need to reach out to the mass ofyoung people around the slogan “Decentwork for all now!” If they grasp thischance to speak to millions of youngpeople in a language they can understandthen the possibility for mobilising themis unstoppable.

Secondly, the slow-to-move Britishworking class needs to learn lessonsfrom around the world: the unorganisedcan be organised, be they unemployedthis week or agency workers the next.Italian unions have set up specificunions for self-employed and agencyworkers and are about to organiseunemployed workers as well. Tens ofthousands have joined. 90% of agencyworkers are covered by nationalcollective agreements. Company-levelagreements cover self-employed workers.In call centres negotiations areconducted jointly by representatives ofboth atypical and stable workers. Some 20,000 precarious workers,especially in call centres, have beenbrought into decent work.

Only a couple of years ago Frenchyouth rejected the “first employmentcontracts” introduced by thegovernment, which would have made iteasier to sack workers under the age of26. France was gripped by hugedemonstrations and solidarity strikes thatstopped the project. A few months latera lengthy general strike in Denmarkstopped welfare cuts that would havediscriminated against young people. The same year Latin Americanimmigrants mobilised in all majorAmerican cities to stop punitivelegislation aimed at their residentialrights. And of course around a millionFrench workers once again moved intoaction by holding a one day nationalstrike to protest against the government’seconomic, welfare and fiscal measuresaimed directly at targeting households.

It is in the interests of capitalism todemoralise and distract workers,weakening any sense of collectivism.Those who cannot see a way out of thesituation, who feel powerless, are morelikely simply to accept their lot thanthose who are emboldened by a sense oflimited power. It is in the interests oforganised labour to avoid the dangers ofsectional thinking that makes unions andtheir leaders think that pay settlementsare the beginning and end of their role.Unions cannot organise single workplacesany more, or even a string of singleworkplaces owned by one employer; theyhave to think in terms of entire industriesand how these interconnect with thecommunities they seek to serve. If theydon’t, then workers will do it for them, asthe construction workers at Lindsey did.Protests at Total’s decision to award a£200m construction contract to anItalian firm using Portuguese and Italianlabour borrowed Brown’s obscene use ofthe slogan “British jobs for Britishworkers.” But it raised the question ofthe low costs of imported labour at atime when unemployment is rocketing.

The way to organise the unorganisedis not to pass weak-ass legislation thatdeals only with the situation facing aminority of workers that most employerswill ignore anyway. Rather it is to showworkers that they have the power to stopthe slavery – not by walking away fromthe job but by standing up in solidarityagainst the injustice. Trade unionists –our brothers, our sisters, our mothers,our fathers, our cousins – have the powerto stop the employers, to stop thecountry, to cost capitalism millions andto make the capitalists treat us likehuman beings. This approach needs to start here and now.


■

IT IS A MYTH that therecession is global. I returnedrecently from India where theyare projecting a 6% growth inthe economy despite theglobal downturn. The savinggrace for India and itseconomy today is that Indiadid many years ago whatBritain is loosely trying to do today but is not doingquite right – nationalisation of the banks.

In fact the banks in Indiaremain nationalised despitethe efforts by the UnitedProgressive Alliance (UPA)government to reverse that. It is also the fact that pensionsand the insurance sector havestayed under state control –again, despite the efforts ofthe UPA government, whichthe left at first supported fromoutside. One of the thingsthe left was very positiveabout was that there was noway that the UPA governmentwould be allowed to moveaway from the commonminimum programme it had

agreed, and privatise thiscritical sector.

Academics, the media andthe intelligentsia have allpicked this up, and it has beenrecognised throughout thecountry that, had it not beenfor the left, then India toowould have suffered in therecession – because it washeavily reliant on foreigncompanies setting up their callcentres, which is the areawhere unemployment is nowbeginning to impact. There iscurrently a state sponsoredworldwide media advertisingcampaign entitled “IncredibleIndia” that generally projectsIndia as shining andincredible. But the reality ofpeople’s lives is very different.The only incredible thingabout India is that themajority of people are stillliving below the poverty line,that we have malnourishedchildren and unemploymentand that the youth are seekingredress overseas. That is thereality of India’s economic

conditions, but they couldhave been worse had it notbeen for the influence of the left.

Coming back home, whatare the impacts of therecession on migrants inBritain? This is a crucial timefor us, for the migrantcommunities living overseas,because it is really a questionof survival. Britain is goingthrough a deep recession – oras Brown admitted (albeit as aslip of the tongue) adepression – and if it getsworse, then the migrantcommunities could faceattacks. We have alreadywitnessed that with the cyclicrecession and “race riots” inthe 1980s and the targeting inthe speeches of people likeEnoch Powell in the 1960s.We have gone through all ofthis, and we don’t want to gothrough it again. We believethat the only way forward isfor migrant organisations likethe Indian Workers’Association (IWA) to work

with the trade unions andwith working class parties likethe CPB, to try and upliftourselves and to make surethat together we can face theonslaught as a class ratherthan be segregated intodifferent sections.

So for us “organising theunorganised” could not bemore crucial. We had an IWAconference in January, wherewe put this issue, because forus it is not just a question ofretaining the presentmembership but of trying torecruit others. So what are theissues that we looked at? The first was: what about ourimage? The IWA still callsitself Indian Workers, though ithas been in existence in thiscountry for 70 years now.Why are we not retaining andrecruiting more members?Why are we not attractiveenough to the young people inthis country? These arequestions that we put to ourconference and we identifiedcertain things.

STAYING VISIBLE



By Harsev Bains

One point is to moveforward by rebrandingourselves, recognising the factthat we are British Indians. If America can have an AfricanAmerican as president then weshould also recognise that weand our future generations areBritish Indians. So we arerebranding ourselves as theBritish Indian WorkersAssociation, to make the IWArelevant to young people. The message goes out veryclearly because we want tocommunicate – internallywithin our organisation butalso externally. What are weselling to people, what are we actually saying to them?

We have to ask ourselveswhy people should want tojoin us. If we can convinceourselves then perhaps we canconvince others. There is nopoint in just coming out atelection times: we have tomake the organisationrelevant, we have to stayvisible, stay amongst thecommunities – because that iswhere the unorganised are.They are not within ourconferences, within ourseminars, within our publicrallies – they are outside andnot coming to us, so we needto go to them. And once wehave taken on an issue weneed to remain accountable topeople and always accessible.

There are other things as

well. Because a number ofpeople in Britain seethemselves as South Asians, wehave posed another question:why should we leave behindsections of the Bangladeshis,the Pakistanis, the Sri Lankanswho are here in large numbers– as indeed are migrants fromLatin America and elsewhere?British Indians themselvescannot do everything, and weneed to involve others too.For that we have set up aBritish Asian People’s Forum,and we also discussed the idea– from the World Federationof Trade Unions – of settingup a South Asian Trade UnionForum in this country,engaging and involving allthose non-unionised peoplewho haven’t been approachedby any union so far, whetherthey are working as cleaners,as caterers in small restaurantsetc, or working in privatenursing homes. There areliterally hundreds of thesenursing homes up and downthe country, and people havecome from South India andSri Lanka in very largenumbers to work in them. It may be illegal to employpeople below the minimumwage, but there are ways andmeans, and some of thesepeople are not getting theminimum. We need to engagewith them, to involve them asour members, to organise

them: we can start demandingthe minimum wage if they arebrought into some sort ofunionised environment.

So these are real issues forus, this is something that weare trying to do in order toorganise people. A SouthAsian People’s Forum hasalready been set up inBradford – and by the Muslimcommunity. You know,Muslims have got a tarnishedimage – they are presented asextremists, without a clueabout progressive ideas. Well,the people up in Bradfordwho have organised the SouthAsian People’s Forum are nowworking with us and sayingthey would like to puttogether a South Asian TradeUnion Forum. The Centre ofIndia Trade Unions (CITU)has agreed to support us inthis. The CITU presidentcame and discussed it withBrendan Barbour and theTUC, and it has been agreed –at least in principle – that itwould be linked to the TUC,because we are not suggestinga break-away in any shape orform. We are saying that wewant to supplement what thetrade unions are doing, so wefeed into them, we supplythem with their members:here is a trade unionists’organisation, it is a forum,send in members and say, nowget involved in the T&G,

Unite, the GMB, whereverthey are.

The other thing that weare recommending, to all ourmembers, and to those thatthey are recruiting, is that theynot only join trade unions butthat they get involved intrades councils. Twenty yearsago trades councils were veryrelevant to community life.They may still remain relevantto trade unions but I am not100% convinced that thetrades councils of today arerelevant to community life,that they are picking up oncommunity issues. How oftenis a trade union actuallyintervening in community lifeand on issues actually affectingpeople’s lives? These are issuesthat we can only take up if weget involved. As RhysMcCarthy remarks elsewherein this issue of CommunistReview, there is no point inpaying £2 a month andexpecting the union to doeverything. We are the tradeunions, we are the tradescouncils and if we get involvedI certainly think that we canmake a difference.

It is a very simple idea.Initially you organise, thenyou educate, then you agitate,then you come back toorganise again. That way youbuild your organisation. I really think that Asianworkers have shown in thepast their capacity to organiseand certainly to lead the way –whether it was Grunwick, Pall Mall, the cleaners atHillingdon Hospital, or therecent Gate Gourmet dispute.Generally it has come fromwomen workers, the mostvulnerable, the mostprecarious workers becausethey have nothing to lose buttheir chains. They are willingto stand up and be counted.

We are today making acommitment that wherever anIWA exists, they should becontacted and drawn intoinvolvement, because we need all progressive elementsto be working and pressing the right buttons together. I am sure that can happen.


■

I HAVE BEEN a devotee of the tradescouncil movement for over thirty years.When I was a trainee teacher I joined theNUT and was delegated to Battersea andWandsworth Trades Council. This wasthe first time that I came across the tradeunion movement with all the differentranges of people working in thecommunity. It connected severalelements of what I saw as important: myjob, my commitment to my profession,my union, and my local community.That is what is unique about tradescouncils: they have a very powerful wayof knitting together the different aspectsof people’s lives.

Unions are very different in the waysthat members can engage, but a tradescouncil gives you an opportunity to see amuch broader experience of what tradeunionism actually means. For meBattersea & Wandsworth was a realeducation because, apart from gettingthat perspective, I also met up with goodcomrades who actually were leaderswithin their own unions and commun-ities – in the tenants’ movement, inBattersea power station, in manydifferent walks of life.

At that time Battersea &Wandsworth had no full-time workers,no Workers’ Beer Company, though itwas still a thriving and strong tradescouncil. It was in its very early stages ofbuilding up affiliations and participationin meetings, but it had an organisation

that was able to do a great deal. It wascommitted to trying to increase tradeunion membership, so it engaged in a lotof activities simply to recruit workers to atrade union. For example, we leafletedwhen Asda opened a new supermarket inClapham Junction, and when refusecollection was compulsorily tendered outto a private contractor, – many of theworkers then were not trade unionorganised. So we would engage: just asmall group of people, at different pointsacross the area, where trade unionism wasneeded, to help and support new sectorsof workers.

Battersea & Wandsworth also had avery strong commitment to anti-racism,helping to establish WandsworthAgainst Racism as a strong non-sectarian anti-fascist, anti-racistmovement, This united a whole rangeof people, gaining respect for its localcampaigning work while remainingsemi-detached from some of thesectarian arguments that occurred onthe national stage around anti-racismand anti-fascism at that time.

Most importantly, the trades councilcampaigned to defend local services. At this particular time, Wandsworthbecame a Tory borough, linked to thevery aggressive Thatcher Torygovernment, and a lot of the nationalpolicies were played out within that localauthority. The council went well beyondcompulsory competitive tendering in

trying to develop the privatisationprogramme. It was trying to sell offcouncil housing and whole estates,decanting large groups of tenants intovery low-class housing, refurbishing theoriginal estates and then selling them toprivate developers as private rentedaccommodation. There wereoccupations which were supported andled by the trades council; there was unitywith UCATT, who represented membersof the disbanded central workforce; there was great unity amongst variousforces in the community which reallyinspired me and many other people whobegan to see the power of a localcommunity and the trade unionmovement working together.

One of the incredible strengths oftrades councils is their potential freedom.They have a structural relationship withthe TUC but they can do things thatindividual unions, correctly orincorrectly, are quite limited on –particularly campaigning in theinternational field. My union, forexample, took a long time before beingable constitutionally to affiliate toorganisations like Cuba Solidarity,whereas the trades council had beeninvolved in many internationalmovements for a long time.

Of course, the TUC does have keyobjectives for trades councils and they arepretty much what I have mentioned:raising public awareness of trade


Engaging whereTrade Unionism is Needed

Unity in the Community

By Anita Wright

unionism and rights at work; promotingand organising recruitment for the tradeunion movement; and supporting unionand community campaigns. The phrasethey use is “For dignity and respect in theworkplace and beyond”, so it is a prettywide remit. Basically what they’re sayingis, “Get on and organise”. At theSERTUC conference there were fantasticexamples of trades councils who weredealing with things culturally, politicallyand in local campaigns that broughtpeople together to raise morale aboutwhat is possible.

Of course it means a lot of work.Many of us are working full time, or arein a position where money is a limitedresource within our local communities.But in the current economic climatetrades councils are really vital because ofthe way in which the media attempts todissipate energies and split people offfrom each other. It is a deliberate tactic,to prevent communities coming togetherand saying, “Enough is enough” aroundissues such as public services. There isalmost an attempt to impose the line of“Well, we are on this road to completeprivatisation of all our local resources sowe just have to deal with it.” However,we can begin to combat this if acommunity can come together with thestrength of the trade union movementbehind it.

Having moved jobs, I am now inLambeth trades council, which like

Wandsworth was a vibrant organisationin the late 70s and 80s, with big anti-cutsmovements. We need to hang on to thehistory of these campaigns because wehave a lot of organisational capacity inour communities today. In Lambeth weare engaged in campaigns againstprivatisation and in defence of socialservices. In conjunction with DefendCouncil Housing we have done a lot ofleafleting against the Arms-LengthManagement Organisation (ALMO).We have also done some work withBECTU over the minimum wage notbeing paid in our local cinema. The biggest issue for us was the nationalRemploy campaign, as Brixton had oneof the largest factories, subsequentlyclosed. Some of our delegates are stillfrom the unions that were organising atthe Remploy factory.

The other thing that that we havedone is to stretch beyond what wethought we could. Banner Theatrewere very keen to work with us, to puton a production in Lambeth aroundmigrant workers and their exploitation,both in the workplace and back in thehome countries. Although we had verylittle money, we booked the PurcellRooms on the South Bank andmanaged to get 250-300 people there,simply by publicising it and asking theGMB and Unison branches for supportto make it happen. Financially, it brokeeven, but more importantly it brought a

lot of people to an event that was bothculturally vibrant and politically veryuseful, enabling us to move on intoother areas around vulnerable workersin our community.

On a day-to-day level we are just asmall group of people holding thingstogether but we now have a reputationin the local community that we makethings happen – so much so that thenewly-adopted Labour candidate forStreatham wants to talk to us, and thetrade union liaison officers within thelocal constituency parties are attendingthe trades council meetings. They see itas a mechanism for doing things whichthey can’t do within the Labour Party.The trades council is suddenlybecoming a forum for discussion,bringing us into closer links with thelocal LP, and offering some potential to move it away from its currentpolitical position.

We take on some issues, and haveaffiliated to some organisations, whichhave given us a vibrant debate at times.When the Human Embryology andFertilisation Bill was going throughParliament we had a lot of localcampaigning within the community; wehave just affiliated to the Charter forWomen. The trades council sees itself ashaving fingers in many different pies butalso pulling things together so that there is a potential for greater work and drawing in more people.


■

IN SCOTLAND, tradesunion councils are allowed toplay a far bigger role thandown South, so I want to talkabout how they fit into thebroader movement. I alsowant to discuss the issue of“regeneration” and how tradescouncils have been involved incampaigning on that.

Given the depth of the current economic crisis,trade unions need to adopt abroad leadership role withinsociety, building campaigninglinks with communities. To do that, they will have tomove beyond the defensiveeconomic agenda and embracepolitics. Within that context,trades union councils areabsolutely key, since theirtraditional role has been torepresent trade unions andsupport workers within theirarea, to build solidarity andindeed just to get workers tojoin trade unions.

My own trades council,Clydebank, is a very smallgroup of activists althoughthere is now increased interestin sending delegates. Like allother STUC affiliates, we getthe option of putting threemotions to the STUC annualconference. Trades councils’

voting potential is small butthey do generate the moreradical and political motions.I have been a delegate to theSTUC for the last 14 or 15years, and I find that thisdoes give more freedom than you might get in adelegation from one of thebigger unions.

The importance of tradeunions being political can beseen in the campaign over the“regeneration” programmeswhich have been taking placeall over Britain. Since 2004,communities and tradeunionists on Clydeside havebeen coming together in aseries of conferences based inworking-class areas; while,quite independently, activistsin Dundee held their ownconference on “regeneration”.Both of us came to the sameconclusion: that“regeneration” had little to dowith furthering the interests ofworking people, but rathermore with providing a hiddensubsidy for large-scale privateproperty development.

In working-class areas likePartick, Port Glasgow andClydebank, we heard the samestory from local activists:“regeneration” being driven by

commercial developers. High-cost private housingalong the banks of the Clydewas much in vogue, as there isnot much profit in affordablepublic housing. There waslittle interest in infrastructureor services required byworking-class housingschemes, away from the river zone, because plans hadto work for the market. The solution, the activistswere told, was to be found inluxury flats, five-star hotels,casinos, out-of-town shoppingcentres etc. Everybodywas getting the sameline, and to us thiswas the fantasyworld of market-led solutions topoverty, poorhousing andloss of employ-ment in ourcommunities.

So we wouldask the question:where was thegenuine con-sultation withcommunitieswhen skilled jobswere lost, to bereplaced by low-paid insecure

casualised employment? In the likes of Clydebank, wewent from highly skilledshipbuilding, engineering, etcto the service economy –shops, banking and all the restof it. In housing, Thatcherhad moved the public subsidyaway from rents onto HousingBenefit, which had the effectof jacking rents up, makingthem too expensive for thosein employment, forcing themto buy their houses, leaving


By Tom Morrison

EmbracingPolitical TradeUnionism

Unity in the Community

housing schemes in the mainpopulated by the unemployed,long-term sick and pensioners– those on Housing Benefit,basically.

What we need are labourmovement solutions, a publicsector alternative tocommercially driven“regeneration”. By starting todraw up alternative plans forour local areas, based onlabour movement policypositions, we could providethe foundation for localcampaigning and theintervention at a nationallevel. We could be workingwith local tenants’ andresidents’ organisations, andanti-poverty groups, todevelop policy initiativeswhich would counter thedominant neoliberal agenda.An alliance of communitiesand trade unions should be amajor, probably the major,force in mobilising support forthe progressive policies of ourmovement, developing publicsector solutions to theproblems of affordablehousing, fuel poverty,sustainable energy supply andconservation, andcomprehensive publictransport provision.

Clydebank TUC got amotion passed at the STUC

calling on it to examine theoperation of “regeneration”projects across Scotland. The motion expressed concernat the degree to whichcommunity planning wastaking decision-makingpowers away fromdemocratically accountablelocal authorities and investingthem in unelected quangos. It noted that much of theexpense on “regeneration”appeared to be a heavy subsidyfor large-scale propertydevelopers and was in manycases detrimental to the needs of local communities. It argued for trade unions and communities – serviceproviders and users – to cometogether to fight thepromotion of big businessinterests, and pointed out thattrades councils could be thevehicle for giving leadership toa divided community from aclass perspective.

We need to put the casefor political trade unionism ina given locality and link upwith our national bodies, inour case the STUC, to make it nationwide. Our pastexperience was thatcommunity activists in themain were led by retired tradeunionists made redundant oron long-term sick. That is notthe case today, as manyyounger activists have neverbeen in a trade union, and

do not see us as natural allies.The trade union movementmust win their respect: by taking trade unionism and socialist politics intoworking class communities,we can play our part increating a new generation ofcommunity activists who seetheir interests as being onewith organised labour.

Following resolutions atthe STUC last year anationwide conference wasorganised, the biggest I haveattended for many years, andone which I had the privilegeof chairing. What came out ofit? Well, for one thing, jointlobbying of the ScottishParliament by the STUC and the Scottish Tenants’Association, on public sectorhousing. There have beensimilar initiatives at local levelby trades councils, and inClydebank we have held awhole series of publicmeetings to discuss issues andplan action, drawing incommunity activists and localtrade unionists.

There are several ways torebuild our movement, butthe role of trades unioncouncils should be high up onthe agenda. Community tradeunionism was a key insustaining major conflicts suchas Upper Clyde Shipbuilders –a dispute which politicised awhole generation. The tradeunion movement was seen asfighting for the interests of the whole community, notjust a section.

The deepening economiccrisis, with risingunemployment,particularly amongcasual workers, part-timers and often

unorganised workers inthe private sector,

demands a strengtheningof these links with thecommunity. We haveincreasing problems ofrepossessions andevictions, and we want tobuild up to a positionwhere we are strongenough actually to go inteam-handed and stopthese things with direct

action. I don’t think we havequite reached that stage yet,but that is the plan as we buildfor the future.

Organised workers inmanufacturing and the publicsector are also under seriousthreat, so local campaigning isrequired againstunemployment and forinvestment in infrastructure,housing and services whichaddress social needs. We havebeen putting a lot of stuff intothe local press, and leafleting,and the local radio stationactually picked it up. All thatis part of lobbying politiciansand trying to pressurise theminto policies in the interests ofworking people.

On a national scale wehave to work within our ownunions, the Wales TUC,Scottish TUC and the BritishTUC for a strengthening oflocal trades union councils in order to help ensure thebest co-operation on localaffiliates’ organising agendas.We should be telling theleaderships to explore whatsupport – in our case, fromthe Scottish Government –can be provided forunemployed and communityresource centres in areas worsthit by unemployment. The unemployed workers’centres throughout the west ofScotland were originally set upby trades councils along withlocal authorities. Althoughthere is the thorny question ofpolitical independence, andwhat the centres can campaignon, they are still attempting tobring together workers out ofwork and workers in work.

We should be optimistic.Certainly in Scotland there areexamples of community andtrades council joint campaign-ing work, and victories overhousing stock transfers andagainst privatisation. Our work with the STUCtakes that struggle to thenational level, and we arelooking to build links withother activists across Britain.We are trying to put the “red”back into Clydeside and we hope you will join us in that struggle.


■

The concept of state monopolycapitalism “originated in Soviet and EastEuropean writing in the early 1950s”,and as the Marxist economist LaurenceHarris also notes:

“In most analyses of this stage thestate is linked in some way withone fraction of capital, monopolycapital represented by giantenterprises and large financialblocks. The existence of such astage, distinct fromMONOPOLY CAPITALISM, iscontroversial, but the idea hasbeen an important theoreticalfoundation for the strategies ofCommunist parties. The classnature of the modern capitaliststate is seen to turn on monopolycapital being ranged against allother fractions and classes so thatan anti-monopoly alliancecomprising medium and smallcapitals, the working class, andmiddle strata can be built in thestruggle for state power.”3

I: The British Stateby James Harveyand Katherine Hood

Writing at the height of the Cold War in1958, James Harvey and Katherine Hoodapplied the theory of state monopolycapitalism to the British central state,including local government. Moreover,as Ralph Miliband commented, The British State was “the only notablework of Marxist inspiration on theBritish political system to appear” afterHarold Laski’s Parliamentary Governmentin England, published in 1938.4The latter study

“was a pioneer work, whichplaced the institutions of theBritish system of government intheir social context, and showedthe functions they performed inthe defence of class-based societyin Britain. However, the booksuffered from a basic weakness,namely the pervading notion that

the Labour Party’s attainment ofthe role of principal oppositionparty had transformed the wholeBritish political scene …. The whole political scene inBritain would indeed have beentransformed, had the LabourParty in the inter-war years beenthe socialist party which hewanted it to be, or at leastbelieved that it must soonbecome. But … the Labour Partywas not then, and was not on theway to becoming, such a party…. Notwithstanding itsweaknesses, ParliamentaryGovernment in England … drewmuch from Marxism.”5

The British State, according toMiliband, also

“had very substantial merits; andthere was much about itsinterpretation which was sharplypenetrating. But … itsideological provenance was then


Orthodox and MarxistTheoriesof the State and Local Government

Part 2:

The Theory of ‘‘State MonopolyCapitalism’’1

Part 1 of this article in the previous issue of Communist Reviewdiscussed the methodological and theoretical basis of my newpamphlet Local Democracy versus “Local Governance”, and criticallyanalysed orthodox non-Marxist theories of the state and local government.2 Part 2 in this issue focuses on the Marxist theory ofthe state and local government in terms of state monopolycapitalism. Section I reassesses James Harvey and Katherine Hood’spath-breaking 1958 study of The British State. Section II discussesAntonio Gramsci’s theory of the historic bloc and state monopolycapitalism. Section III reviews trends in British state monopolycapitalism since 1958 – and how they relate to local government.

By Peter Latham

too much out of tune with the ideological bias of mostwriting on British governmentand politics to give the book any resonance.”6

Harvey and Hood state that theirpurpose is

“to look below the surface at thereal content of British democracy;to make an examination of theBritish state, how it works, whoruns it and in whose interests; and from all this to see whatconclusions can be reached aboutthe way forward to Socialism in Britain.”7

Two “rival” theories of the state arethen defined. The social democratictheory, which

“accepts the widely-held liberalview that the State is a piece ofneutral machinery, impartial inthe conflict between workers andcapitalists; it therefore considersthat the existing State can be usedfor the purpose of creating andorganising a planned socialistsociety just as well as it hashitherto been used for organisingcapitalist society”8

and the Marxist theory, based on a“study of history”, which

“led Marx and Engels to exactlythe opposite conclusion … thatthe State only came into existencewhen society became divided intoclasses, and to the theory thatwhile there is one class whichexploits another, the State is theinstrument for maintaining thedomination of the ruling class.”9

Section 5 of Chapter II: The MarxistTheory and the British State is entitledMonopoly Capitalism and the British State.Sub-section (1) headed Growth of StateMonopoly Capitalism begins by arguingthat profound changes in the nature ofcapitalism – first referred to by Lenin10

who “did not distinguish this as aseparate stage from monopolycapitalism”11 – had modified a key aspectof the nineteenth century British stateanalysed by Engels:

“The change from competitive tomonopoly capitalism has had aprofound impact on the BritishState. As the economic power and

wealth of the monopolies hasgrown, the State has ceased to bethe ‘executive committee’ of thebourgeoisie as a whole (as Engelscalled it). It has become more andmore subordinated to thedominant group of greatmonopolies, and has become aninstrument which they use notonly against the workers, but alsoagainst the smaller capitalists andthe independent producers. …The monopolists have beendriven to extend the use of theState on an ever-increasing scale,both as an instrument forcoercion and for the purpose ofregulating the economic life of the country. This has led to agreat expansion of the armedforces, along with a strengtheningin the power and efficiency of thepolice and the secret police; andto a tremendous increase in thesize of that part of the Stateapparatus concerned withindustry and finance …. themonopoly stage of capitalism …gradually develops into ‘statemonopoly capitalism’.”12

Harvey and Hood in the followingchapters – on political parties, thelegislature (including the Cabinet), themonarchy, key state personnel, the armedforces, the police, the secret politicalpolice, the legal system, the civil service,the Foreign Office, the economicfunctions of the state, the social services,local government, the BBC and ITA andthe established church – “test” thetheories to decide whether “the historicalcontinuity of the British State isconsistent with either the social-democratic or the Marxist theory”.13

Their main conclusions were as follows:The “study of all the different organs

of the State” contradicted the social-democratic view that “socialism can beintroduced step by step within theexisting political framework” because

“… the machinery of the Statehas been shaped and developed by the capitalist class as aninstrument to safeguard andpromote the capitalist mode ofproduction. The capitalist classhas been compelled to make bigconcessions to the demands of theworking people in the shape ofsocial reforms and othermeasures. But it has never forone moment lost sight of the needto strengthen the State as the

instrument of its rule … and hasconsistently followed the preceptlaid down by … Robert Lowe …[regarding] ‘safeguards againstdemocracy’.”14

The above developments coincidedwith anti-democratic trends:

“There has been theconcentration of power in thehands of the leaders of the twomain political parties, the declinein the role of the House ofCommons, and the increasingpower of the Cabinet and of thepermanent civil service; the greatexpansion of the armed forces; theincreasing influence of the secretpolice; the growth in the power ofthe Home Office over theordinary police at the expense of the local police authorities; thepassing of new laws restrictingsome of our traditional civilliberties; the continuing trendtowards centralisation in theapparatus of the State and the serious decline in theindependence of the elected localauthorities; the great developmentin the use made of the monarchyfor propaganda purposes; and theconcentration of the means ofpropaganda – press, broadcasting,television and cinema – into thehands of a very small number ofpowerful groups.”15

The working class cannot take power“simply by means of a change in thepolitical composition of the House ofCommons and the Cabinet following an electoral victory in the country”.16

Hence:

“The leading positions in thearmed forces, the police, the civilservice and the diplomatic service,as well as the nationalisedindustries, will need to be filledby men and women who can berelied upon to be loyal to asocialist government and insympathy with its aims.”16

Harvey and Hood’s Chapter XVI:Local Government begins with adiscussion of the empirical evidencesupporting their proposition that sincethe middle of the nineteenth century:

“The capitalist class in Britain hasbeen extremely successful inadapting the traditional system of


➔

local government so as to retainthe appearance of democraticcontrol of social services by thepeople, while in practicemaintaining firm directionbehind the scenes.”17

From the beginning of the eighteenthcentury until the middle of thenineteenth century, local government inmany rural and urban areas was run bythe landed gentry, while many townswere governed by corrupt municipalcorporations controlled by local propertyowners. The Municipal CorporationsAct of 1835 – the first step towards localgovernment as we know it today – wasthe result of pressure from the risingindustrial capitalists. The growth ofcentral control over local authorities sincethe mid-nineteenth century was due tothe need of the capitalist class for aneffective police system, a repressive poorlaw, sanitation, health, housing andeducation services; and local authoritieswere eventually used as agents foradministering these services with centralgovernment enforcing minimumstandards. The other main reason forcentral control was that, as the franchisewidened and opportunities for theworking class to elect their ownrepresentatives grew, central governmentwas used to hold back any activities bylocal authorities trying to carry out thewishes of their working-class electors –for example, the struggles over poor reliefin the 1920s and ’30s, when Boards ofGuardians and Public AssistanceCommittees paid relief to theunemployed above the scales approved bycentral government.18

Harvey and Hood also meticulouslyanalysed four main methods of centralcontrol over local authorities up to 1958:1 Finance. The amount of revenue thatcould be raised from the rates was limitedbecause it was a very regressive andinelastic tax which prevented anyworking class authority from raisingmore money from its wealthy ratepayerswithout at the same time penalising itspoorest. To persuade local authorities toprovide the services required, centralgovernment supplemented rates bygrants, which could be withdrawn if theauthority did not carry out its functionsas approved by central government.Nowadays, local authorities receiveconsiderably more from grants than fromCouncil Tax; while loan sanction powersfor capital expenditure are also used torestrict the freedom of local councils to decide what is most needed for thepeople in their areas.

2 The doctrine of ultra vires – “beyondthe powers” – has been mainly used torestrict municipal trading. Afterprolonged struggles in the nineteenthcentury local authorities were permitted– though only reluctantly – to engage inthe supply of water, gas, electricity androad passenger transport; “but anyextension into other fields which couldbe a source of profit to private enterprisehas been most strenuously resisted”.19

3 The power of the district auditor.The function of the district auditor is toexamine local authority accounts,disallow any unlawful items ofexpenditure, and surcharge councillorsthe amount of any loss or deficiency.This right has been used many times forultra vires actions. Auditors can alsodeclare unlawful any expenditure on apermitted object which they consider is“exorbitant” or “unreasonable”. For example, the House of Lords in 1925 allowed an appeal which preventedPoplar Borough Council paying aminimum wage of £4 a week to all its employees, including women. Lord Atkinson stated that in his opinionthe Council would be failing in its duty if in settling the employees’ wages they“allowed themselves to be guided … bysome eccentric principles of socialisticphilanthropy or by feminist ambition tosecure the equality of the sexes in thematter of wages in the world of labour”.20

4 Default action. Central governmentmay also act in default of a local authoritywhich refuses to act in the way required.Nearly every major statute conferringpowers on local authorities includesdefault powers. The latter powers wereused to remove Poor Law Guardians andPublic Assistance Committees in the1920s and ’30s. In 1954, when CoventryCity Council refused to carry out its civildefence functions in protest against thegovernment’s failure to abolish thehydrogen bomb, the Home Secretaryappointed a Commission to carry outthese functions.18

However, as today, such challengeswere comparatively rare. For, as Harveyand Hood noted in 1958:

“It must not be assumed from thisthat every local authority isstraining at the leash, ready andwilling to jump into action wereit not for the restraining hand ofWhitehall. On the contrary, inthe County Councils and thesmaller authorities outside theindustrial areas the Conservativesare strongly entrenched – oftencamouflaged as ‘independents’

who are not concerned with ‘partypolitics’. Although this isbreaking down and‘independents’ are being steadilyreplaced by open Conservatives,the idea that party politics shouldbe kept out of local government isstill widely held, and helps toconceal the class character of thelocal government apparatus.”18

Meanwhile, in those areas where

“the party system is in fulloperation, the main tendencyamong Labour Party Councillorshas been to accept in practice theentire system of local government,with all its limitations …. Oncethe municipal elections are over,majority and minority parties tendto co-operate closely in the smoothrunning of the machine. And thevalue of the two-party system tothe capitalist class is shown by theease with which local working-class leaders, once they are elected,become absorbed in the pettydetails of administration, lose alltraces of militancy and regardminor improvements as ends inthemselves rather than stepstowards fundamental change.”21

Simultaneously, as part of the drivetowards centralisation, services – such asunemployment relief, hospitals, thesupply and distribution of gas andelectricity and valuation for rates – weretaken out of the hands of localauthorities altogether. After 1945, a bigtransfer of services – police, elementaryeducation, maternity and child welfare,fire brigades and planning – fromLabour-controlled district councils toConservative-controlled county councilstook place, which would not have beennecessary if central government hadreorganised the former into larger units.22

Harvey and Hood’s alternative policyfor “socialist decentralisation” of localgovernment included: 1 Fundamental reorganisation of itsstructure and areas. The areas of manylocal authorities were too small forefficient administration, which was usedas an excuse to deprive them of powers.Hence a system of directly elected uppertier “regional councils” covering at least amillion people for hospitals, gas,electricity, road passenger transport, newtowns, sewage disposal, trunk roads andtechnical education was needed. The lower tier of the new structure –based on the existing county borough,


borough and district councils withrevised boundaries – would be respon-sible for education, maternity and childwelfare, housing, sanitation, sewerage,refuse disposal, district roads, parks andplaying fields, libraries, museums and artgalleries, hospitals and health centres andthe welfare of the elderly.2 Abolition of the doctrine of ultravires. Local authorities, instead of beingconfined to those functions expresslyauthorised by statute would then be ableto do anything not forbidden by law.This would mean “elected localauthorities for the first time would beable to expand their functions inaccordance with the wishes and needs oftheir electors, and to take over manythings now run by private enterprise…[such as] industries of a localised nature,some types of wholesale and retaildistribution, and the provision ofcinemas, theatres and social and culturalactivities of all kinds.”23

3 A Local Income Tax. This wouldreplace the regressive rating system undercapitalism – though in a socialist system.when the principal means of productionhad been nationalised, “a tax based on theturnover of local industry and trade mayprove to be the best form of local tax.”24

4 More councillors. This would benecessary to maintain close contact withthe electors and cope with the additionalwork involved due to the expansion offunctions.5 Abolition of Aldermen. These wereappointed councillors – usually ex-councillors – and they were not abolisheduntil the 1970s except for the City ofLondon Corporation.

Finally, Harvey and Hood stress thatwith “all its limitations”, localgovernment in Britain

“has grown up with one greatadvantage – the committeesystem, whereby large numbers ofelected councillors have …acquired a vast fund ofexperience, often combined withan intimate knowledge of theproblems of people. Many …have given outstanding anddevoted service to those whoelected them. The programme ofreform outlined … would providethem with opportunities whichthey can never hope to have in acapitalist society.”25

Yet New Labour, as pointed out inPart 1 of this article, has now abolishedthe committee system in all but thesmallest local authorities.

II:AntonioGramsci’s Theory ofthe Historic Blocand State MonopolyCapitalism

Roger Simon (James Harvey)26

subsequently revised his approach totake into account Gramsci’smodification of classical Marxism,including Leninism. Lenin saw poweras concentrated in the state and underthe exclusive control of the capitalistclass (or part of it) and took the view –as did Harvey and Hood – that theconstruction of socialism could onlybegin after the working class tookpower. Conversely, Gramsci’s conceptof the integral state – “political societyplus civil society, in other words,hegemony protected by the armour ofcoercion”27 – implied that the workingclass could only achieve state power afterit had won a substantial measure ofhegemony in civil society.28 Simon stillrejected the social-democratic theory ofstate neutrality, but he also rejectedGramsci’s view that factory councilsshould replace parliamentarydemocracy.29 Hence, as well as thedemocratisation of parliament, Simonadvocated direct democracy in the localcommunity and workplace plus broadalliances based on the left and othersocial movements.30

John Hoffman – who by 1995 had aWeberian view of the state31 –interpreting Gramsci’s contributionfrom within classical Marxism in 1984argued that he treated consent andcoercion as organically separate,whereas they should be understood asdialectically united because coercion isthe “ethical expression of the fact thatpeople have to produce”.32 Just asconsent and coercion are two aspects ofa single process in the economic sphere,so also are they in the political sphere; and this economic coercion,according to Hoffman, is re-expressedin the state as the coercive institutionwhich at the same time commandsconsent. However, the FurtherSelections from Gramsci’s PrisonNotebooks published in 1995 includewritings on political economy not inthe 1971 Selections from the PrisonNotebooks: for example, his unequivocaldefence written in 1932 of Marx’stheory of value and the tendency of therate of profit to fall, against BenedettoCroce’s criticisms.33 Nor, contrary toHoffman’s 1984 reading, was Gramsci

treating consent and coercion asorganically and dialectically separatewhen he wrote that in Marx:

“there is contained in a nutshellthe ethico-political aspect ofpolitics or theory of hegemonyand consent, as well as the aspectof force and of economics.”34

The Further Selections therefore showthat it is incorrect to view Gramsci asuninterested in political economy andonly concerned to theorise the“superstructure”.

Similarly, Ercan Gündogan in hisrecent discussion of conceptions ofhegemony in Gramsci’s unfinished articleon the Southern Question35 and thePrison Notebooks – contrary to Hoffman– also insists that:

“Gramsci tries to fuse force andconsent as an analysis of theconditions of socialism in theWest. Neither does he ignore theforce and coercion in socialist andbourgeois politics, nor were Leninand the Communist Internationalblind in the face of politics ashegemony. It should also beremembered that Gramsci lived ina country where Fascism firstintroduced itself.”36

Gündogan also agrees with Simon that, although “Gramsci did notthink that force and the seizure ofpolitical power were unnecessary”, hethought that


Antonio Gramsci (1891-1937)

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“force and the seizure of power werenot adequate for socialisttransformation, putting aside theseizure of political power bysocialists”.37

Gramsci is therefore perhaps bestconsidered as the theorist of the historicbloc: that is, that a hegemonic classcombines leadership of a bloc of socialforces in civil society with its leadershipin the sphere of production.Revolutionary change occurs when thehistoric bloc constructed by the capitalistclass disintegrates and is replaced by anew historic bloc built up by theworking class. Gramsci’s thought,although it further developed ourunderstanding of the politics of socialisttransformation, is also consistent withboth Lenin’s view regarding the primacyof politics in revolutionary change – andthe basic principle of historicalmaterialism as stated by Marx in the1859 Preface to his A Contribution to theCritique of Political Economy: “The modeof production of material life conditionsthe general process of social, politicaland intellectual life.”38 The concept ofthe historic bloc enabled Gramsciaccurately to detail the balance of classforces in the society of his time: which –together with his other key concepts –are still relevant when devising politicalstrategies to defeat New Labour’s projectfor big business control of localgovernment under conditions of statemonopoly capitalism. Furthermore, asHans Heinz Holz recently wrote:

“The change in productionrelations leads to the replacementof the old social formation by anew one. The transition iscontinuous in mode of life, andabrupt in the revolutionaryoverthrow of the political rulingrelationships. Both forms of thetransition are forms of the classstruggle, which Gramscicharacterised by the metaphors‘war of position’ and ‘war ofmovement’. In the period of theformer, a culture of the ruleddevelops in opposition to theruling classes’ culture (alwaysoccurring in parallel with thedevelopment of the productionrelations). Once the culture of the oppressed has become strongenough to shape the guidingconceptions of the mode of life,then the time is ripe for the warof movement, for revolutionaryupheaval.”39

III:Trends in BritishState MonopolyCapitalism since1958Paul Bocarra and other FrenchCommunist Party theorists in 1971provided the major and mostsophisticated analysis of state monopolycapitalism in the second half of the lastcentury. They saw economic crises as theoutcome of over-accumulation; and thestate’s modern role, as in the presentfinancial crisis, as attempting to overcomecrises by the ‘devalorisation’ of capital.40

Ben Fine and Laurence Harris usedprevious work on the British economy toemphasise a dual periodisation betweenmonopoly and state monopolycapitalism.41 This section thereforereviews trends in British state monopolycapitalism since 1958; and also discusseshow they relate to local government.

From the late 1950s, as the Marxisthistorian John Foster shows, Britain hada dependent alliance with the UnitedStates that began when HaroldMacmillan announced the finalwithdrawal from formal empire:

“In place of empire the focus wason the modernisation of Britain’smanufacturing base. This was tobe done through the attraction ofa new generation of US branchplants into Britain and theintroduction of a National Planand state-aid for the creation ofgiant British firms such as GECand BMC.”42

Meanwhile finance capital was onlywilling to commit money to Britain’sindustrial modernisation if new powerswere taken to control the trade unionmovement. After Labour won the 1974General Election:

“Fierce conflict then eruptedwithin both the ConservativeParty and the state apparatusabout how to maintain capitalistrule. The previous governmentwas accused of allowing thecountry to become ungovernable.Calls were made for a decisivebreak with Keynesianism.”43

The Conservative establishment ledby Edward Heath, James Prior, MichaelHeseltine and Chris Patten had thebacking of the CBI, the Financial Timesand the Economist. Their opponents, ledby Keith Joseph and Margaret Thatcher

were supported by the Institute ofDirectors, the Daily Telegraph and thinktanks such as the Institute of EconomicAffairs, which promoted theorists fromthe American monetarist New Right.The most notable of these, MiltonFriedman, advocated economic “shocktreatment” as the only solution to labourmilitancy – by drastic deflation, massunemployment and the selling off of allpublic assets.44 Friedman also arguedthat the availability of oil revenuesprovided an ideal opportunity to re-establish the City of London as a worldbanking centre. The election of Thatcherin 1975 as leader indicated the hegemonyof this faction. In the 1976 interventionby the IMF, the enforced adoption ofmonetarist policies, leading to cuts inservices and wages, led to the defeat ofthe Labour government in 1979.

Between 1979 and 1990 theThatcher group succeeded inimplementing its programme without thepromised benefits for British financecapital because most of the institutionswere US owned. Moreover, as Fosterfurther notes:

“In parallel to the switch tofinance and services there was asharp change in the economicfunctioning of state monopolycapitalism. It moved from beingprimarily based on an indirect‘external’ Keynesian marketredistribution of income tomonopoly capital to a direct andinternal income redistribution.”45

For example, as Mervyn King showedin 1975, the state steadily reducedcorporate taxation to sustain profits inthe post-war period.46 The privatisationof local government services since 1979 isalso an example of direct redistributionto monopoly capital.

In 1985, the Conservatives abolishedthe six Metropolitan County Councilsand the Greater London Council, whichwere all Labour-controlled. The GLC andSouth Yorkshire, in particular, hadpioneered collective, “progressive-populist” initiatives in the limited spheresof authority available to them. By 1988the financial independence of localgovernment was virtually eliminated. The 1988 Local Government Act replacedrates by a fixed “community servicecharge” payable by every adult regardlessof income, which came to be known asthe “poll tax”. Even people on socialsecurity had to pay 20 per cent. The polltax accounted for around 25 per cent oflocal government revenue, the rest coming


from central government under variousguises. If councils wanted to increase theirtotal spending by one per cent, therefore,they would have to raise the communitycharge by at least four per cent. Theintroduction of the poll tax, however, hadmomentous unintended consequences.There were massive refusals to pay, riots,imprisonments and warrant sales for non-payment. The defeat of Thatcher in the 1990 leadership election wastherefore in part due to the recognitionwithin the Conservative Party that publichostility to Thatcherism was making them unelectable.

Michael Heseltine becameEnvironment Secretary in 1990 and set upa review of the finance, structure andinternal management of local government.The poll tax was replaced by the regressivecouncil tax in 1992, but – followingHeseltine becoming President of the Boardof Trade in 1992 – Tory proposals for US-style elected mayors and the abolition ofthe committee system were notimplemented until nearly a decade later byNew Labour. Nevertheless, between 1995and 1998 single-tier unitary authoritieswere introduced in England’s non-metropolitan areas, and in the whole ofWales and Scotland, which reduced thenumber of councils by 77 per cent, and thenumber of councillors by 31 per cent.Thus the two Major governments furtherreorganised the structure of localgovernment in England, Wales andScotland to meet the needs of big businessand the privatisation of services.Meanwhile the immediate objective ofHeseltine’s industrial policy – concentratingon energy and aerospace in particular – wasmembership of the euro-zone: which endedin September 1992 when the pound wasforced out of the European exchange ratemechanism. Thereafter, Major’sadministration was paralysed by divisionsbetween supporters of EU integration(Heseltine and Kenneth Clarke) and thosesupporting a US alignment based onsterling and an “independent” City ofLondon (Michael Portillo, MichaelHoward and John Redwood).

Meanwhile, as John Foster states:

“In parallel with the paralysis ofthe Conservatives, the LabourParty came under theadministrative dominance of astrongly Atlanticist group led byBlair, Brown and Mandelson.This takeover was assisted by theweakened position of the tradeunion movement and activeintervention in it by state agenciesto marginalise the left.”47

New Labour’s policies have beenclosely aligned to those of the US.Initially New Labour became the EUchampion for Clintonite free marketglobalisation. This sought a furtheropening of the EU financial markets,banking system and company ownershipto penetration by US and Britishfinancial institutions, and pressed for theneoliberal transformation of nationallabour markets, social security andpension systems (a programme pushedthrough by Blair at the 2000 Lisbonsummit). Politically, this period saw aformal shift of powers away from theWestminster Parliament to the EUCouncil of Ministers under the treatiesof Nice and Lisbon, and as Foster also emphasises:

“The mandatory opening ofservices to competition underminesParliament’s ability to providecomprehensive public sectorprovision. More important still,the transfer of economic powers tothe EU limits the scope for anyParliamentary action to curb bigbusiness and places major barriersin the way of state interventions toprotect industrial employment.Above all, Parliament loses thepower to implement the type ofalternative economic and politicalprogramme which mobilisedopposition to state-monopolycapitalism in the 1970s. Across theEU as a whole, the treaties of Nice and Lisbon have seriouslyweakened the potential ofdemocratic institutions tointervene against monopoly capital.The timing of these changes is notaccidental. They meet the commoninterests of finance capital in aperiod when monopoly capital inFrance, Germany and Britain ishaving to attack the post-wareconomic and political gains ofworking people and when nationalpolitics are therefore becomingmore volatile and unpredictable.Hence, far from weakening theexisting structure of state power atthe level of the nation-state, thetransfer of powers from nationalparliaments to the EU directlystrengthens the state power ofmonopoly capital in each.”48

These years saw a precipitous dropin manufacturing employment, farmore than over the previous ten years,an intensification of privatisation andof public subsidy to the private sector

and a credit-fed boom in the servicesector that led directly to the currentcrisis. Finance capital may still prefer aNew Labour government to disciplinethe unions. But, as the recessiondeepened, the so-called Brown“bounce” was over by January 2009when all five polling organisations –ICM, ComRes, Ipos, MORI, YouGovand Populus – showed the Tories withdouble-digit leads.

Meanwhile, as councils’ confidence inbanks has plummeted, local governmentdeposits in the Treasury have rocketedmore than tenfold following the Icelandicbanking collapse. For example, localauthorities placed £10.1 billion into agovernment account specifically forcouncils in October 2008.49 This figurewas the first evidence that localgovernment is carrying out its threat toabandon the private banking systemfollowing ministers’ refusal to guaranteetheir deposits in Icelandic banks. InJanuary 2009 the Local GovernmentAssociation published the results of asurvey showing the effects of theeconomic crisis on local authorities at theend of November 2008, since when thesituation has deteriorated even further.The main findings were that:■ 72.9 per cent of local councils hadrevised their overall budget position sincethe start-of-year budget planning as aresult of the economic slowdown, eitherexpecting reduced income or greaterdemands on expenditure through higherdemands for services.■ Half the respondents indicated thatexisting public sector capital schemes hadbeen adversely affected by the economicslowdown, and more than three-quarters(79.2 per cent) that private sectorschemes had been adversely affected.■ Three quarters of respondents whoindicated that public sector schemes hadbeen affected reported that they had beenaffected by falling land values (75.7 percent), with the next most common factorbeing developers’ lack of businessconfidence (50 per cent). Private sectorschemes had mostly been affected bydevelopers’ lack of business confidence(89 per cent), developers’ lack of finance(77.1 per cent) and falls in land value(50.8 per cent).■ Just under one in seven respondents(13 per cent) had cut jobs as a result ofthe slowdown, and around a fifth (22.1per cent) had introduced a recruitmentfreeze (though none in London).50

Despite the recommendations in theJulius Report for more privatisation,referred to in Part 1 of this article,evidence is now accumulating that – as


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the crisis of state monopoly deepens –local authorities are bringing back in-house previously privatised services.51

Moreover, government help is now onthe agenda because the banks areincreasingly unwilling to finance New Labour’s PFI programmes, – whichas Professor Allyson Pollock states –

“is a potential disaster forWhitehall because mostinvestment in public services isprivately financed and there is noplan B …. With the banksunwilling or unable to lend thecapital to PFI deals, thegovernment has signalled it might

take on more risk by accepting a49 per cent stake in financing theprojects. But this undermines thegovernment’s sole justification forthe PFI policy, namely risktransfer …. [Now] that the riskshave reverted back to thetaxpayer, it is time to look atconventional government fundingand restore publicaccountability.”52

The third and final part of this articlein the next issue of Communist Reviewdiscusses other British radical andMarxist work on the state and localgovernment from the late 1960s to

New Labour. The theories analysedinclude: Ralph Miliband’s theory of“containment of class conflict andpressure from below”; CynthiaCockburn’s “structuralist” theory of the“local state”; the “dual state” theory ofAlan Cawson and Peter Saunders; SimonDuncan and Mark Goodwin’s “socialrelations” and “uneven development”theory; and Christopher Stoney’s Marxistcritique of “strategic management” inlocal government. The concludingsection of Part 3 considers implicationsof the issues raised in this article for thestrategy and tactics needed to win the battle to reinstate local democracy.

1 There is a massive literature onthe development of the Marxisttheory of the state from Marx andEngels, through to Lenin andGramsci plus the revival of interest inMarxist state theory after 1945 andcontemporary debates. See, forexample: C Hay, Marxism and theState, in Marxism and Social Science(A Gamble, D Marsh and T Tant,Eds), Macmillan, Basingstoke, 1999,pp 153-74, which provides a usefulsummary of the debate up to 1999;and Marxist journals such as Capital& Class and Critique, which bothregularly include articles and bookreviews on Marxist theories of thestate. 2 See P Latham: Local Democracyversus “Local Governance”: How toDefeat New Labour’s Project for BigBusiness Control, a discussiondocument to be published by theEconomic Committee, CommunistParty of Britain, 2009; and Orthodoxand Marxist Theories of the State andLocal Government. Part I: “Classical”Liberal, Social-Democratic andNeoliberal Theories, in CommunistReview, No 53, Spring 2009, p 16.3 L Harris, in A Dictionary ofMarxist Thought (T B Bottomore, Ed),Basil Blackwell, Oxford, 1983, p 468.4 H Laski, ParliamentaryGovernment in England, Allen andUnwin, London, 1938.5 R Miliband, CapitalistDemocracy in Britain, OxfordUniversity Press, Oxford, 1984, pp16-17.6 Ibid, p 17.7 J Harvey and K Hood, TheBritish State, Lawrence and Wishart,London, 1958, p 9. 8 Ibid, p 11.9 Ibid, p 12.10 For example: “The question ofthe state is now acquiring particularimportance both in theory and inpractical politics. The imperialist warhas immensely accelerated andintensified the process of transfor-mation of monopoly capitalism intostate-monopoly capitalism” (V I

Lenin, Preface to the First Edition ofThe State and Revolution, in CollectedWorks, Vol 25, p 387; see alsohttp://www.marxists.org/archive/lenin/works/1917/staterev/preface.htm,(accessed 7 January 2009).11 Harris, op cit, p 469.12 Harvey and Hood, op cit, p 24.13 Ibid, pp 17, 18.14 Ibid, p 281.15 Ibid, pp 281-2.16 Ibid, p 283.17 Ibid, p 253.18 Ibid, pp 240-6.19 Ibid, pp 248-9.20 Cited by Harvey and Hood, opcit, p 251.21 Ibid, pp 253-4.22 Ibid, pp 255-7.23 Ibid, p 259.24 Ibid, p 260.25 Ibid, pp 260-261.26 Writing at the height of the coldwar Roger Simon and NoreenBranson – both Communist Partymembers – used the pseudonyms ofJames Harvey and Katherine Hood.27 A Gramsci, Selections from thePrison Notebooks of Antonio Gramsci(edited and translated by Q. Hoareand G. Nowell Smith), Lawrence andWishart, London, 1971, p 262.28 See R. Simon, Gramsci’s PoliticalThought: An Introduction, Lawrenceand Wishart, London, 1982, pp 72-74.29 Ibid, pp 105, 115.30 Ibid, pp 103-4.31 See J Hoffman, Beyond the State:An Introductory Critique, Polity Press,Cambridge, 1995, whichdistinguishes between the state andgovernment, the latter referring tothe negotiation and arbitration ofconflicts of interest, whereas theformer (using Weber’s definition)involves the use of force to tackleconflict. 32 J Hoffman, The GramscianChallenge: Coercion and Consent inMarxist Political Theory, BasilBlackwell, Oxford, 1984, p 212. 33 Further Selections from the PrisonNotebooks, translated and edited by

Derek Boothman, Lawrence andWishart, 1995, or the transcribedversion in the Elect Books CD Rom,London, 1999. See Chapter III: TheNature and History of EconomicScience, pp 161-190 (L & W), pp290-321 (Elect); Chapter IV:Economic Trends and Developments,pp 191-277 (L & W), pp 322-419(Elect); and Chapter VII: ThePhilosophy of Benedetto Croce, pp 362-475 (L & W), pp 512-639 (Elect). 34 Ibid, p 399 (L & W), p 553(Elect).35 Gramsci – who began his longarticle on the Southern Question inOctober 1926 – was arrested before itwas completed. 36 E Gündogan, Conceptions ofHegemony in Antonio Gramsci’sSouthern Question and the PrisonNotebooks, in New Proposals: Journal ofMarxism and Interdisciplinary Inquiry,Vol 2, No 1, November 2008, pp 56-57; see alsohttp://nitinat.library.ubc.ca.ojs/index.php/newproposals/article/view/142/236, accessed 2 January 2009.37 Ibid, p 57, my emphasis.38 K Marx and F Engels, CollectedWorks, Vol 29, p 263; see alsohttp://www.marxists.org/archive/marx/works/1859/critique-pol-economy/preface.htm (accessed 5 January 2009).39 H H Holz, The New in the Old –The Old in the New, in CommunistReview, No 51, Autumn 2008, p 36.40 P Bocarra (Ed), Le Capitalismemonopoliste d’État . Traité marxisted’économie politique. Vols 1 and 2,Editions Sociales, Paris, 1971.“Devalorisation” of capital is theterm that Marxists use whenanalysing situations such as thepresent financial crisis in which we are witnessing a massive“correction” – the falling stockmarkets, housing market – expressedin write-downs, defaults,bankruptcies, mergers and fire salesof financial institutions, and nowtheir ownership or part-ownershipby capitalist states.

41 B Fine and L Harris: RereadingCapital, London, Routledge, 1979;The Peculiarities of the BritishEconomy, London: Lawrence andWishart, 1985. 42 J Foster, The Politics of Britain’sEconomic Crisis, EconomicCommittee of the Communist Partyof Britain, London, June 2008, p 18.43 Ibid, p 19.44 M Friedman, From Galbraith toEconomic Freedom, Institute ofEconomic Affairs, London, 1977.45 Foster, op cit, pp 20-21.46 M A King, The United KingdomProfits Crisis: Myth or Reality?, inEconomic Journal, Vol. 85, March1975, pp 33-54. King is nowGovernor of the Bank of England;and this article provided a defence ofstate monopoly capitalism againstAndrew Glyn and Bob Sutcliffe’sBritish Capitalism, Workers and theProfits Squeeze, Penguin Books,Harmondsworth, 1972. 47 Foster, op cit, p 22. See also MBarratt Brown, The Captive Party:How Labour was taken over byCapital, Socialist Renewal new series,pamphlet number 2, SpokesmanBooks, Nottingham March 2001. 48 Foster, op cit, p 22.49 J Illman, Councils’ £10 billionFlight to Safety, in Local GovernmentChronicle, 30 October 2008.50 IDeA/LGA/SOLACE, Survey ofthe Impact of the Economic Slowdownon Local Authorities 2008, 15 January2009, pp 1-16, <http://www.lga.gov.uk/lga/publications/publication-display.do?id=1396273>, accessed 31 January 2009. The survey wassent to all 388 chief executives oflocal authorities in England on 10 November 2008. At the close of the survey (30 November 2008)155 (39.9 per cent) had responded. 51 Association for Public ServiceExcellence. Insourcing: A Guide for Local Authorities Bringing Services Back In-house, Manchester,January 2009.52 A Pollock, The Observer, 1 February 2009.


Notes

■


MY FIRST RESPONSE (inCR53) addressed thedifferences between Jerry’saccount of the economic crisis(in CR52) and a rigorousMarxist analysis. In hisopening paragraph Jerryrevealed his distance fromMarxism when he bracketedMarx with Adam Smith, JM Keynes and Henry Georgeas among “the foundingfathers of economics” and“those four great originalcontributors to economictheory”. This suggests thatJerry sees economics as anobjective science, to whichvarious thinkers have madecontributions that can beevaluated on their merits.Such an eclectic approachignores one of Marx’s greatestinsights: that the ruling ideasof any epoch are the ideas ofthe dominant class, and thattheir role is to underpin thatdomination.

Bourgeois economics – inits different forms – is what istaught in colleges anduniversities throughout thecapitalist world, and peddleddaily in the capitalist press.And its function is precisely

to conceal the reality ofcapitalist exploitation, and thetrue nature of economic crises,behind a façade of superficialexplanations of economicphenomena. It seems to methat Jerry’s failure to recognisethis means that he cannot bedescribed as a Marxisteconomist.

KeynesIt’s important for the left oftoday to be clear about whereKeynes stood. A lot of people,including some in the labourmovement, are advocating so-called Keynesian measures tolift us out of the presentrecession. Jerry stated thatKeynes developed “a newtheoretical approach that came to be known asmacroeconomics, whichspecifically addressed theproblems of managingeconomies as a whole, thus tomediate between the manycontradictions arising in acapitalist economy.”1

I’m not sure what Jerrymeans by mediation in thiscontext. What is certainthough is that neither intheory nor in practice could

On Keynes,Georgeand Some Land Issuesa further response to Jerry Jones

By David Grove

Money men: top Adam Smith, Henry George and JM Keynes

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Keynes’s ideas resolve the basiccontradictions of capitalism.This is because thosecontradictions figure nowherein his analysis.

Keynes’s work on therelationships between invest-ment, savings, consumptionand money supplyundermined the previouslyreceived wisdom thatcapitalism would always reachequilibrium with fullemployment – if the economywasn’t distorted by extraneousfactors such as monopolies,trade unions, and govern-ments. Keynes explored someof the mechanisms of thebusiness cycle and to thisextent brought bourgeoiseconomics closer to reality. He also provided a theoreticalbasis for governmentintervention in the market.

But like all concepts inbourgeois economics, hisaggregates of income andexpenditure and otherquantities reside in the spheres of the exchange ofcommodities and thecirculation of money. They ignore the underlyingreality that surplus-value iscreated in the sphere ofproduction, where capital isaccumulated, and where thefundamental contradictionsarise. The exploitation ofworkers, the clash betweensocial production andindividual appropriation, and the resulting classstruggle, have no place inKeynes’s economic model.

Perhaps that is why hefailed to appreciate thesignificance of the increase inmonopoly, giving rise to thedominance of finance capitaland its use of the capitaliststate to increase itssuperprofits. Another longarticle would be needed todeal adequately with thisaspect of Keynes’s thought.Suffice it to say that byignoring monopoly heconcealed the extent to which his theories serve theinterests of finance capital. For instance, his emphasis oninflation as a means ofreducing real wages has the

effect of transferring surplus-value to the most dominantsections of the capitalist class.

That is why it is notpossible to bolt togetherKeynes and Marx to create anew economic model.Marxists may use some ofKeynes’s insights to enrich an account of capitalistinstability – but only withinthe framework of Marx’sunderstanding of the turnoverof capital.

Jerry does point out thatKeynes was a defender ofcapitalism. But he fails to notethe depth of Keynes’sopposition to Marxism. He writes that Keynes “had tolearn those lessons ineconomics without havingaccess to Marx’s foresight.”1

Keynes, however, wrote thatCapital was “an obsoleteeconomic textbook…not onlyscientifically erroneous butwithout interest or applicationfor the modern world”.2

As ever, these theoreticaldifferences have practicalconsequences. In the light ofJerry’s comments on thechanges in the UK house priceindex since 1950, it seems tome that he has bought intothe reformist social democraticmyth that post-war fullemployment was largely dueto Keynesian policies; if only they had been keptgoing, “managed capitalism”could have avoided booms and slumps, and bubbles that burst.

Many factors contributedto the long post-war period offull employment. Amongthem the most “Keynesian”was probably the massiveexpenditure on rearmament atthe behest of US imperialism.This was accompanied bysevere wage restraint – anotherKeynesian policy.

Keynesian policies werenot abandoned just becausefinancial capital mushroomedin response to deregulationand relaxation of creditcontrols. The principal reasonwas that the militant action ofthe organised working classended the wage freeze, anddefeated attempts by both

Labour and Conservativegovernments to limit tradeunion freedom. In thesecircumstances the ruling classturned to other ways offighting the class war: amongthem an increase inunemployment, whichenabled them more easily toattack individual trade unions,and to introduce one legalcurb after another on theworkers’ right to organise.

The Fallacy ofCompositionUnder this heading Jerryturned to remedies for thepresent crisis. In a curiouspassage he suggested that, ifcapitalists knew what was bestfor them (and for the whole ofsociety), they would raisewages when profits arethreatened, and increaseinvestment when marketscontract. But if they did thisthey would no longer beacting as capitalists.

Jerry appears to assumethat capitalists would preferfull employment – if theirprofits could be maintained.But there’s the rub. To raiseprofits by keeping wagesdown, capital has alwaysneeded a reserve army oflabour. If it can’t get it fromdisplaced peasants or fromimmigration, it will get itthrough unemployment.

Recessions are notnecessarily unwelcome to theruling class. The economistJoseph Schumpeter saw themas periods of “creativedestruction”, when weakerfirms go to the wall, leavingthe survivors bigger andstronger than before. Marx also explained thepositive role of periodic crisesin hastening the trend towardsthe domination of the bigmonopolies. At this momentfinance capital is takingadvantage of the recession tohasten the destruction orrelocation of Britishmanufacturing.

I suppose Jerry wouldargue that governments shouldcreate a fiscal and regulatoryframework that would inducecapitalists to continue

investing at the onset of arecession. It is unlikely thatthe monopoly capitalist statewould introduce suchmeasures. But they could bepart of the programme of aleft government, backed by astrong grass roots movement,dedicated to establishing anAlternative Economic andPolitical Strategy. Someweaker capitalists might evensupport such a policy; theworking class should certainlytake advantage of anydivisions among its exploiters.

But once such a strategythreatened the privileges offinance capital, it would meetwith growing resistance fromthe establishment. And so theissue of state power wouldarise. To make further progressthe working class would haveto seize and dismantle themonopoly capitalist state, andproceed not to managecapitalism but to constructsocialism. This prospect is along way from Keynes’sthought – but it is the onlystable alternative to thepresent crisis-ridden system.

Land in class societyWhen Jerry reaches HenryGeorge he turns away fromthe present crisis and pursueshis special interest in landeconomics – and I’d like tofollow his example. “Single-tax” George was the maverickAmerican economist who in1879 published Progress andPoverty. That book’s critique ofclass society centres on so-called “land values”.

Now land as such – virginland – has no exchange-value,because no human labourwent into its creation. Land has a use-value that isconsumed in the processes offarming, mining or building.To release this use-value,human labour has to modifythe land’s natural qualities invarious ways, such as puttingin roads or utilities. These actions give improvedland an exchange-value. But in advanced societies, theprice (or rent) of land –especially land ripe fordevelopment or redevelop-



ment – is generally manytimes the value of the labourembodied in it.

This divergence betweenexchange-value and price doesnot arise simply because land isscarce, as Jerry implies. It arisesbecause land is also privatelyowned. Since each plot of landis unique, and it is rarelypossible to substitute one plotfor another, land ownership is amonopoly. It wasn’t Marx butWinston Churchill, then aLiberal, who said (in 1909) thatthe land monopoly “is by farthe greatest of monopolies”.3

The divergence betweenthe exchange-value and theprice (or rent) of land hasescalated during recentproperty booms. This givesrise to the common belief,echoed in Jerry’s article, thatrising land prices (which hecalls “values”) have beenresponsible for the rise in thesale prices or rents of homesand other property. The truerelationship is the other wayround. Rising property pricescause rising land prices.

This paradox results froma peculiar feature of theproperty market. Most of thebuildings offered for sale orrent at any one time are “old”.Perhaps around ten per cent ofthe homes sold each year arenewly built. So prices aredriven mainly by the demandfor existing homes, most ofthem sold by one owner-occupier to another. As Jerrypoints out, the surges indemand in the 1970s andsince were fuelled by theavailability of credit.

Since the builders of newhomes charge as much as themarket will bear, they set theirprices to reflect those ofcomparable existing homes.Because of the land monopoly,much of the differencebetween the building cost andthe sale price is appropriatedby landowners. The lattersimply increase their share ofthe surplus value created bylabour in the process ofconstruction.

As for existing houses, alarge part of the increase in

their prices is the notionalprice of the land on whichthey stand. Homeowners arenot usually aware of this –except possibly when theyinsure the building for a lotless than they paid for it.

The fact that demand andnot supply is the maindeterminant of house prices isvividly illustrated by recentmarket trends. There has beena dramatic fall in house prices– at a time when the supply ofnew homes has also droppedsharply! Academic studiesduring the boom years showedthat a very large increase in thesupply of new homes wouldhave been required to bringabout even a small reductionin prevailing house prices.

Rising land prices and rentscan, as Jerry says, also resultfrom economic growth – andfrom changes in the pattern ofactivities. For instance, the shiftfrom manufacturing to serviceshas upped the price of land intown and city centres.Landowners also pocket moresurplus value as a consequence

of public and privateinvestment that raises theaccessibility or amenity of their holdings.

Taxation ofLandownersThere has always been awidespread feeling that at leastpart of the additional surplusvalue appropriated bylandowners when propertyprices rise should be clawedback for the benefit of thewhole community by someform of tax or levy. After all,the increase owes nothing tothe actions of the landowners.

Jerry argues strongly for anannual land value tax (LVT)that he says would reduce theprice of land and could replaceother forms of taxation. But itis far from certain that such atax would significantly reduceland prices. This woulddepend on the extent to which the landowner can passon the tax to the occupier –and the latter to the consumer.And this would be a functionof demand.

➔

If the tax were imposed onresidential owner-occupiers –which appears to be Jerry’sintention – it would hardly bepopular. Though he arguesthat LVT is not really a tax atall, it would indeed be asunfair as the present counciltax or the former rates. While people with higherincomes tend to live in moreexpensive homes, the greater“value” of the property is notgenerally proportional to thegreater income. So the tax is aregressive one – and it wouldbear heavily on those whoseincomes are reduced byunemployment or retirementbut who continue to live inhomes bought in moreprosperous days.

It is surprising that Jerrysuggests using the yield fromLVT to reduce income tax, aninherently progressive tax,rather than indirect taxes suchas VAT that bear most heavilyon poorer families.

The moral indignation ofsome LVT campaigners isredolent of the struggle by“productive” capitalists against“unproductive” landowners.But the surplus valueappropriated by landowners isbut a small fraction of thetotal surplus value created bythe labour of working people.And with more and more land in the hands of largeproperty companies, thedistinction betweenlandowners and capitalists isincreasingly blurred. As amethod of taxing the rich,LVT is deeply flawed.

For a final word on HenryGeorge we can’t do better thango back to our own greatEnglish Marxist, WilliamMorris, who wrote:

“The worst enemies ofthe people today arethose whom our‘Prophet of California’leaves untouched byhis denunciations andunscathed by hissarcasm. To MrGeorge the robber of ahundred is a villainindeed; the dexterousannexer of many

thousands may passfull pocketed on hisway as a benefactor ofhis race.”4

Town and CountryPlanningThere is another aspect ofLVT that deservesconsideration – its impact onthe ability of local authoritiesto control the use of all landin the interests of the wholecommunity. In the sixty yearssince the post-war Labourgovernment introducedcomprehensive control of landuse, the progressive intentionsof planners have beencontinually frustrated by theprivate ownership of land.This constraint has affectedplanning decisions in twoways: through the pattern ofland prices, and thefragmentation of ownership.

LVT, even if it broughtsome land prices down,would do nothing to alter theexisting disparity in “value”between similar pieces of landin different locations. It is thetyranny of land “values” thathas led to the concentrationof development in the mostprofitable locations, resultingin congestion and longjourneys to work. It is theskewed distribution of land“values” that results in onlythe well-off being able to livein the most favourablelocations – near city centresand open spaces, for instance– and forces providers ofsocial housing to build in theleast pleasant and accessibleplaces. Local developmentplans can’t zone the “best”sites for housing or openspaces or social buildingsbecause the cost would beprohibitive.

Some bourgeoiseconomists argue thatdifferences in the prices ofland in different locations arenecessary to ensure that land isused in the most “efficient”way. Concentrateddevelopment gives rise toagglomeration economies thatraise productivity andstimulate innovation. It may

well be the case that thepresent inequitable pattern ofland values leads to themaximum profit for capitalistoccupiers, but this is notnecessarily the best outcomefor the whole of society.

It has even been suggestedthat a socialist system that hasended the market in landwould have to fix notionalland “values” to ensure thatevery plot was put to the mostbeneficial use. But surely amature socialism would beable to devise moredemocratic ways of achievingthat end? There have been(are?) societies without privateland ownership and they havedevised social methods ofoptimising the use of land.

Fragmented privateownership prevents the mostsocially desirable patterns ofdevelopment. It is responsiblefor the aesthetic andfunctional chaos of most ofour city centres, whereindividual owners carry outthe most profitabledevelopment of each site (andindividual architects displaytheir talents) with scant regardfor the surrounding area.When several adjoining sitescan be dealt with as a unit, thewhole is often greater than thesum of the parts. It mayprovide an opportunity tosolve problems like trafficcirculation or local open spacethat can never be solved whilethe sites are treated as separateentities. Assembling land bycompulsory purchase is rarelyattempted because it proves sotime-consuming andexpensive. But if all urbanland were leased from the local planning authority theycould actually createopportunities for beneficialrenewal by promotingrelocation of some activities tomore suitable sites, freeing upland for comprehensiveredevelopment.

Only the social ownershipof all land ripe for develop-ment or redevelopment wouldmake genuine town andcountry planning possible. Inthe Communist Manifesto thefirst of ten measures listed by

Marx and Engels to makeinroads into the rights ofprivate property was“Abolition of property in landand application of all rents ofland to public purposes.”5

The Communist Party’sprogramme Britain’s Road toSocialism states in the sectionon the Alternative Economicand Political Strategy that,

“To enable industrial andsocial development to takeplace in a planned andbalanced way, the big landedestates in town andcountryside will have to betaken into public ownership.The free market in land will have to be brought under local and democraticcontrol, within an overallnational plan.”6

Climate changestrengthens the case for thesocialisation of land. It will be a necessary basis for a more eco-friendly agricultureand for patterns of urban andrural development that reducethe requirements for traveland energy.

The timing and extent ofland nationalisation by a leftgovernment, and thecompensation (if any) tolandowners, would of coursedepend on the way thebalance of class forces developsin the course of progressivestruggle. But to discuss thetaxation of land “values”without reference to theprospect of social ownership,as Jerry Jones does, is to ignore a vital issue in the advance to socialism.

Notes

1 J Jones, Causes of the CurrentEconomic Crisis, in Communist Review,No 52, 2009, p 31.2 Quoted in J Eaton, Marx versusKeynes, Lawrence & Wishart, 1951.3 W S Churchill, The People’s Land,in The People’s Rights (1909); seehttp://wealthandwant.com/docs/Churchill_TPL.html -Ed.4 W Morris, in Justice, 5 April1884.5 K Marx and F Engels, CollectedWorks, Vol 6, p 505.6 CPB, Britain’s Road to Socialism,7th Edition, 2000.


■


POLITICAL POETRY, as theliterary critic Arnold Kettledefined it, is “poetry in whichthe question of power getsrecognition and expression.”Poets have articulated a largerange of thoughts and feelingsabout the way things are,politically. These have includedintellectual dissent andemotional disassociation; rage,misery and disgust; joy andhope; and various kinds ofvision of better kinds of politicaland economic arrangements.

Poetry has a long historyof political engagement.Broadly speaking the kind ofpolitical poetry written inEnglish which springs fromlibertarian, egalitarian andsocialist values can beclassified in a number of ways,but probably the simplest wayis to use the basic politicalunit of the last few hundredyears, ie the nation state.

There is firstly an English

tradition which goes all theway back to the rural andpeasant revolts of pre-industrial society. Thistradition includes a populistelement, poets like ThomasWyatt, Gerrard Winstanley,and John Clare, and isrepresented in contemporarypoetry by John Cooper Clarkeand Linton Kwesi Johnson.And it includes a moreconsciously thought-throughrepublican tradition, expressedin John Milton, WilliamBlake, Arthur Hugh Clough,early WH Auden, and (in ourown time)Tony Harrison.

And then there are distincttraditions from other parts ofthe world, from Scotland,Ireland, North and SouthAmerica, Russia and EasternEurope. These traditions arericher and more consciouslysocialist than the Englishtradition. Poets who haveproduced great political poems

in these traditions includeRobert Burns, HughMacDiarmid, Seamus Heaney,Paul Muldoon, WaltWhitman, e. e. cummings,Pablo Neruda, Bertolt Brecht,Osip Mandelstam, MarinaIvanovna Tsvetayeva, MiroslavHolub, Zbigniew Herbert,and many, many others.

In this issue ofCommunist Review I am goingto present a few poems fromthe “populist” tradition inEnglish verse, together withsome brief backgroundinformation. In future issues I hope to do the same for theother traditions. At the sametime, I invite readers to let mehave your comments andsuggestions for good poemswhich (explicitly or not soexplicitly) express socialistvalues, including your ownwork. Especially poems aboutthe current capitalisteconomic and political crises!

SOULFOODA regular

literaryselection

Selected by Mike Quille

John Cooper Clarke(born 25 January 1949) isa performance poet fromSalford. He became wellknown in the late 1970sduring the flourishingpunk movement. His setconsists oflively, rapid-firerenditions ofhis poems,mixed withstand upcomedy.

This is a new poem, off his website:

APART FROMTHEREVOLUTIONEach drop of blood a

rose shall beall sorrow shall be dustblown by breezes to the

seawhose fingers thrustinto the corners of

restless nightwhere creatures of the

deepavoid the flashing

harbour lightsin search of endless

sleepthere were executionssomebody had to payapart from the

revolutionit’s another working day

a million angels singpeasants eating cakewedding bells are ringing

the room begins toshake

the children free frommeasles all

have healthy teeth andgums

they live in thecathedrals

and worship in the slumspoverty andpollution

have all been swept awayapart from therevolution

it’s another working day

➔

• autumn 2009 • communist review

Gerrard Winstanley (1609 - 1676) was areligious reformer and political activist during theEnglish Civil War. He was one of the founders of the English group known as the Diggersbecause they took over public lands and dugthem over to plant crops. The Diggers’ Song(below, slightly shortened) is a ballad written byWinstanley, a protest song by early communists.

THE DIGGERS’ SONG

John Clare (1793 – 1864) was an agriculturalday labourer who became a self taught poet andwriter. He lived at a time of huge changes tothe English countryside, brought on by theintroduction of the Enclosures, and by newtechnology.

In much of his poetry he explores thedifferent meanings – social, political andaesthetic – of the economic changes aroundhim. Against a natural, Edenic background of awise, organic Nature, he sets the cant and greedand hypocrisy of landowners. A sense ofpersonal and political crisis is expressed in anumber of his poems, including themasterpiece The Fallen Elm reprinted below,which moves disturbingly from an elegiaclament for a balanced, healthy rural society, toan angry, accusing diatribe against the injusticeof enclosure.

The sense of alienation and disassociationinduced by this crisis developed into severemental health problems, and he spent the lastsad twenty years of his life in an asylum,himself a “fallen elm”.

Linton Kwesi Johnson(born 24 August 1952) is aJamaican-born but British-

based dub poet. He became thesecond living poet, and the only

black poet, to be published in thePenguin Classics series. His poetry

involves the recitation of his own versein Jamaican Patois over dub reggae music.

“Writing is a political act and poetryis a cultural weapon...”, he told an

interviewer in 2008. Most ofJohnson’s poetry is political,often dealing with theexperiences of being anAfrican-Caribbean inBritain, but also on wider themes, as in thepoem right.

You noble Diggers all, stand upnow, stand up now,

You noble Diggers all, stand upnow,

The waste land to maintain,seeing Cavaliers by name

Your digging to disdain andpersons all defame.

Stand up now, stand up now.

Your houses they pull down,stand up now, stand up now,

Your houses they pull down,stand up now;

Your houses they pull down tofright poor men in town,

But the Gentry must comedown, and the poor shallwear the crown.

Stand up now, Diggers all!

With spades and hoes andplowes, stand up now, standup now,

With spades and hoes andplowes, stand up now;

Your freedom to uphold, seeingCavaliers are bold

To kill you if they could, andrights from you withhold.


Their self-will is their law, standup now, stand up now,

Their self-will is their law, standup now;

Since tyranny came in, theycount it now no sin

To make a goal a gin, to starvepoor men therein.


The Gentry are all round, standup now, stand up now,

The Gentry are all round, standup now;

The Gentry are all round, oneach side they are found,

Their wisdom’s so profound, tocheat us of our ground.


The Lawyers they conjoin, standup now, stand up now,

The Lawyers they conjoin, standup now!

To arrest you they advise, suchfury they devise,

The devil in them lies, and hathblinded both their eyes.


The Clergy they come in, standup now, stand up now,

The Clergy they come in, standup now;

The Clergy they come in, andsay it is a sin

That we should now begin ourfreedom to win.


The tithes they yet will have,stand up now, stand up now,

The tithes they yet will have,stand up now;

The tithes they yet will have, andLawyers their fees crave,

And this they say is brave tomake the poor their slave.


‘Gainst Lawyers and ‘gainstPriests, stand up now, standup now,

‘Gainst Lawyers and ‘gainstPriests, stand up now;

For tyrants they are both, evenflat against their oath,

To grant us they are loth,free meat and drink and cloth.


To conquer them by love, comein now, come in now,

To conquer them by love, comein now;

To conquer them by love, as itdoes you behove,

For He is King above, no Poweris like to Love.

Glory here, Diggers all!


➔

THE FALLEN ELM

Old elm that murmured in our chimney top

The sweetest anthem autumn ever made

And into mellow whispering calms would drop

When showers fell on thy many-coloured shade

And when dark tempests mimic thunder made

While darkness came as it would strangle light

With the black tempest of a winter night

That rocked thee like a cradle to thy root

How did I love to hear the winds upbraid

Thy strength without – while all within was mute

It seasoned comfort to our hearts’ desire

We felt thy kind protection like a friend

And edged our chairs up closer to the fire

Enjoying comforts that was never penned

Old favourite tree thou’st seen time’s changes lower

Though change till now did never injure thee

For time beheld thee as her sacred dower

And nature claimed thee her domestic tree

Storms came and shook thee many a weary hour

Yet steadfast to thy home thy roots hath been

Summers of thirst parched round thy homely bower

Till earth grew iron – still thy leaves was green

The children sought thee in thy summer shade

And made their play-house rings of sticks and stone

The mavis sang and felt himself alone

While in thy leaves his early nest was made

And I did feel his happiness mine own

Nought heeding that our friendship was betrayed

Friend not inanimate – though stocks and stones

There are and many formed of flesh and bones –

Thou owned a language by which hearts are stirred

Deeper than by a feeling cloathed in words

And speakest now what’s known of every tongue

Language of pity and the force of wrong

What cant assumes, what hypocrites will dare

Speaks home to truth and shows it what they are

I see a picture which thy fate displays

And learn a lesson from thy destiny

Self-interest saw thee stand in freedom’s ways

So thy old shadow must a tyrant be

Thou’st heard the knave abusing those in power

Bawl freedom loud and then opress the free

Thou’st sheltered hypocrites in many a shower

That when in power would never shelter thee

Thou’st heard the knave supply his canting powers

With wrong’s illusions when he wanted friends

That bawled for shelter when he lived in showers

And when clouds vanished made thy shade amends

With axe at root he felled thee to the ground

And barked of freedom – O I hate the sound

Time hears its visions speak and age sublime

Had made thee a deciple unto time

- It grows the cant term of enslaving tools

To wrong another by the name of right

It grows the licence of o’erbearing fools

To cheat plain honesty by force of might

Thus came enclosure – ruin was its guide

But freedom’s clapping hands enjoyed the sight

Though comfort’s cottage soon was thrust aside

And workhouse prisons raised upon the site

E’en nature’s dwellings far away from men,

The common heath, became the spoilers’ prey

The rabbit had not where to make his den

And labour’s only cow was driven away

No matter – wrong was right and right was wrong

And freedom’s bawl was sanction to the song

- Such was thy ruin, music-making elm

The rights of freedom was to injure thine

As thou wert served, so would they overwhelm

In freedom’s name the little that is mine

And there are knaves that brawl for better laws

And cant of tyranny in stronger powers

Who glut their vile unsatiated maws

And freedom’s birthright from the weak devours

MORE TIME

wi marchin out de ole towards di new centri

arm wid di new teknalagywi getting more an more producktivitysome she tings looking-up fin

prosperitybut if evrywan goin get a share dis

timeole mentality mus get lef behine

wi want di shatah working daygi wi di shatah working weeklangah holidaywi need decent pay

more time fi leasure

more time fi pleasuremore time fi edificaeshunmore time fi reckreashanmore time fi contemplatemore time fi ruminatemore time fi relatemore timewi needmoretimegi wi more time

a full time dem abalish unemploymentan revalueshanize laybah deploymenta full time dem banish owevahtimemek evrybady get a wok dis time

wi need a highah quality a levitywi need it now an fi evrybady

wi need di shatah working yeargi wi di shatah working lifemore time fi di huzbanmore time fi di wifemore time fi di childrenmore time fi wi fren demmore time fi meditatemore time fi createmore time fi livinmore time fi lifemore timewi need more timegi wi more time

• autumn 2009 • communist review

Mike Quille is a poet, socialist and probation officer, livingon Tyneside.

This poem was prompted by a visit to the exhibitioncalled ‘Rank’ at the Northern Gallery for Contemporary Art

in Sunderland. The exhibition (which is highlyrecommended) brings together various representations of ourunequal society by artists and social scientists, from theRenaissance to the present.

Suppose we call a giant paradeof everyone in the economywhich takes an hour to pass.Let’s put the marchers in order, sothe poorest march at the front,and the richest march at the back.And let’s imagine that people’s heightsare proportional to their income.Those earning average incomeswill be of average height;and those earning twice the averagewill be twice as tall as that.Let’s watch as this monster parade goes past.

At first, we can’t see any marchers:underground, they’re walking upside down:owners of loss making businesses.

Then upright marchers start to come pastbut they’re only tiny, inches high:old people and youngsters, mainly,and the long term sick, and the unemployed.

Ten minutes in, some dwarves appear,heads held high (waist high) they pass,cleaners, cooks and classroom assistants,packers, bottlers, canners and fillers,hairdressers, lifeguards, general labourers,carers, drivers and nursery nurses.

Half an hour’s gone, and we’re half way through,and the skilled workers start to appear:scaffolders, riggers and call centre agents,nurses, plasterers, printers, typists,machinists, clerks and welders…..yetStill only five feet tall!

It’s 45 minutes before they’re six feet tall,but their height is rising sharply.Doctors, lawyers and MPs (on expenses)Stomp past, twenty feet tall! And then,

accountants, directors, corporate managers,landowners, fund managers and those famous

bankers,fifty, a hundred, five hundred feet tall,you can only see up to their knees!

And in the last few seconds,at the very very end are the giants of the Giant Parade:Gates and Buffet and Mittal and Green,Abramovich, Rausing,Westminster, wow….the soles of their shoes are a hundred feet thick!What’s more, these men are getting much taller, much faster than everyone elsein this money-mad, monstrous parade.

**********

So my questions to all you six footers outthere are these:

shall we stop this Giants’ Parade?Or shall we just watch them grow taller?

Tell me how long will it beTill the dwarves get restless?

Well?

WHEN WILL THE DWARVES GET RESTLESS?

Junk food: an irregular cartoon strip

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The Politics of Britain’s Economic Crisis

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