Category: Jeremy Corbyn

July 17th, 2019 by geoffhodgson1946

Geoffrey M. Hodgson

The meaning of socialism

The word socialism first appeared in 1827. Robert Owen defined socialism as “the abolition of private property”. Karl Marx took a similar line, and extended the idea of common ownership to the national economy. At least at that time, socialism and communism were virtually synonymous, especially in terms of their shared vision of the final goal. They both meant the common ownership of the means of production, and the end of markets and competition.

Robert Owen

This view persisted throughout the twentieth century, including within the UK Labour Party. George Bernard Shaw wrote with approval: “Socialists are trying to have the land and machinery ‘socialised,’ or made the property of the whole people”. In 1908 the Labour Party Conference passed a resolution, adopting the aim of “the socialization of the means of production, distribution and exchange to be controlled by a democratic state”. In 1924 Sidney Webb summarized his view of socialism as involving “(1) Collective Ownership; (2) Collective Regulation; (3) Collective Taxation; and (4) Collective Provision”.

Similar views were found among Labour Prime Ministers. J. Ramsay MacDonald saw socialism as “a movement to supplant Capitalism altogether, by organising communally the services which Capitalism performs or ought to perform.” In 1937 Clement Attlee wrote of the “evils” of capitalism: their “cause is the private ownership of the means of life; the remedy is public ownership.” Attlee then approvingly quoted the words of Bertrand Russell: “Socialism means the common ownership of land and capital together with a democratic form of government.”

In my book Is Socialism Feasible? I show the persistence of this view of socialism. I also discuss several attempts to change its meaning, including by Douglas Jay, Anthony Crosland, Deng Xiaoping and Tony Blair. Blair tried to shift the meaning to social-ism, by replacing the goal of common ownership by vaguely-specified “ethical values” and a recognition that individuals are socially interdependent. This attempt to revise the meaning has not made much of a mark.

Deng Xiaoping faced the problem of persuading the Chinese Communist Party to support his enormously successful market reforms. Deng declared:

“The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all … common prosperity is the essence of socialism.”

Note the subtle shift from property to prosperity. If that is socialism, then few people are not socialists.

But the original meaning endures. The Merriam-Webster Dictionary defines socialism as “a system of society or group living in which there is no private property” or “a system or condition of society in which the means of production are owned and controlled by the state.” This is remarkably similar to the original definitions of Owen and Marx.

How moderates help Corbyn, and socialists help Trump

Among prominent living politicians today, including Jeremy Corbyn, Bernie Sanders and Jean-Luc Mélenchon, Socialism has retained its original meaning, of widespread common ownership, or at least they have not renounced that original definition.

Bernie Sanders

At the same time, leading Labour Party moderates who support a mixed economy continue to support “democratic socialism”. By doing so they give succour to the full-blooded socialist left, who are much closer to the enduring traditional view of socialism than the moderates themselves. We can pretend that the word socialism has shifted in meaning, but there is little evidence of a major and widely accepted change.

Moderate or otherwise, those using the “democratic socialism” label help to sustain the mistaken idea that socialism (in its enduring and prevalent sense) is compatible with democracy. History and theory both show that a totalitarian concentration of political power flows inevitably from the unmitigated concentration of economic power in the hands of the state that is associated with large-scale socialism.

Alexandria Ocasio-Cortez

A similar problem exists in the US, particularly after the recent election of a young group of socialists to congress, including the impassioned and eloquent Alexandria Ocasio-Cortez. Along with Sanders, they are members of the Democratic Socialist Alliance (DSA) within the US Democratic Party.

The DSA argues for “a vision of a humane international social order based both on democratic planning and market mechanisms”. They also argued that “widespread worker and public ownership will greatly lessen the corrosive effect of capitalists [sic] markets on people’s lives”. While, unlike many other socialists, the DSA notably accepts an enduring role for markets, its agoraphobic bias is revealed by the failure to mention the corrosive effects of bureaucracy on people’s lives.

In some statements, leading DSA politicians seem to favour Nordic-style, welfare state capitalism. But they have not made it clear that they support the large private sectors and financial markets that are prominent in all the Nordic countries. Instead, they go along with the abolition of capitalism. They distance themselves from the Communist regimes of the past. But while the experiment with socialism in Venezuela has led to a catastrophic human disaster, they fail to come out in full condemnation of that regime.

This helps Trump. Not only does he mobilise racist prejudices, he also uses their self-declared socialism to describe them as communist. Given that socialism and communism were (at least originally) virtual synonyms, this ammunition is handed to Trump by his most fervent opponents.

The changed meaning of social democracy

When Social Democratic parties were first formed in Europe in the nineteenth century, most were strongly influenced by Marxism. They were fully socialist in its original sense.

Some separation of meaning between socialism and social democracy occurred beforehand, but it was brought to a head by the onset of the Cold War in 1948. Europe as a whole, and Germany in particular, were divided between the Eastern and Western Blocs.

All socialist and communist parties had to choose –  the East, the West, or a plague on both? With Moscow ties in many cases, almost all Communist parties chose the East. Many moderate Socialist, Social-Democratic or Labour  parties chose the West.

SPD Congress in Bad Godesberg 1959

At its Bad Godesberg Congress in 1959, the German Social Democratic Party (SPD) made fundamental changes to its aims. It dropped its opposition to capitalism, and it abandoned the Marxist analysis of class struggle. The SPD declared:

“The Social Democratic Party therefore favours a free market wherever free competition really exists. Where a market is dominated by individuals or groups, however, all manner of steps must be taken to protect freedom in the economic sphere. As much competition as possible – as much planning as necessary.”

The crucial point here is that the SPD moved from (temporary or permanent) toleration of markets and competition, to accepting markets and competition as desirable, alongside strong public enterprise and state regulation where necessary.

This explicit and fundamental change in aims in the world’s largest and most influential Social Democratic Party led to a separation of meanings of the terms social democracy and socialism. But it must be acknowledged that strong residues of old-style thinking persisted, in the SPD and in social-democratic parties in other countries.

The acid test

There is a simple test to distinguish a socialist from a social democrat, according to currently prevalent meanings of those words.

To be a social democrat it is not enough to accept markets and a mixed economy, as Jeremy Corbyn, John McDonnell and the Democratic Socialists of America have done. After all, a mixed economy could be accepted as a temporary staging post in the transition to full-blooded socialism, as Vladimir Lenin did with his New Economic Policy in 1921.

A modern social democrat must go further. He or she must make a clear and positive case why markets, competition and a private sector are more than a temporary expedient. It must be argued that these things are indispensable, both for economic efficiency and the preservation of freedom. This is the acid test. The SPD in 1959 understood this point and it passed the test.

As far as I am aware, neither Corbyn, McDonnell, Sanders nor Ocasio-Cortez have made such a positive case for a permanent private sector. If I am right, then they are socialists, not social democrats. Despite their protestations, they are closer to traditional communism than to modern social democracy, as practiced in the Nordic countries and elsewhere. I would be delighted if they can prove me wrong.

Large-scale socialism is outdated, extreme and demonstrably incompatible with democracy. At least if these declared socialists want to win parliamentary majorities and form governments, then they have to change their terminology, and dispose with outdated and unfeasible ideas.

But while Nordic social democracy remains remarkably successful (as I show in my book Is Socialism Feasible?) the social-democratic brand throughout Europe has declined in electoral support. Although re-naming is necessary, much more than renaming is required. The abandonment of the socialist label is but a first step. But that is another story.

17 July 2019

References

Attlee, Clement R. (1937) The Labour Party in Perspective (London: Gollancz).

Blair, Tony (1994) Socialism, Fabian Pamphlet 565 (London: Fabian Society).

Crosland, C. Anthony R. (1956) The Future of Socialism (London: Jonathan Cape).

Democratic Socialists of America (1995) ‘Where We Stand: Building the Next Left’, DSA: Democratic Socialists of America. https://www.dsausa.org/where_we_stand.

Griffiths, Dan (ed.) (1924) What is Socialism? A Symposium (London, Richards).

Jay, Douglas (1937) The Socialist Case, 1st edn. (London: Faber and Faber).

Hodgson, Geoffrey M. (2019) Is Socialism Feasible? Towards an Alternative Future (Cheltenham UK and Northampton MA: Edward Elgar).

Owen, Robert (1991) A New View of Society and Other Writings, edited with an introduction by Gregory Claeys (Harmondsworth: Penguin).

Shaw, George Bernard (1890) What Socialism Is, Fabian Tract No. 13 (London: Fabian Society).

Posted in Bernie Sanders, Common ownership, Democracy, Donald Trump, George Bernard Shaw, Jeremy Corbyn, Karl Marx, Labour Party, Left politics, Lenin, Liberalism, Markets, Private enterprise, Property, Robert Owen, Socialism, Soviet Union, Tony Blair, Venezuela

May 6th, 2019 by geoffhodgson1946

When vital words lose their meaning, then democracy will die

Geoffrey M. Hodgson

Theresa May once told us that “Brexit means Brexit”. We were not made any wiser.

In George’s Orwell’s famous book 1984, the all-powerful Party has the slogans “War is Peace”, “Freedom is Slavery”, “Ignorance is Strength.” We are much closer to that Orwellian World of doublethink now.

In the local elections on 2 May 2019 there was a surge in the vote for the remain parties – Liberal Democrats, Greens, Scottish Nationalists and Plaid Cymru – who do not want Britain to leave the European Union. In a campaign with “Stop Brexit” as their by-line, the Liberal Democrats gained over 700 council seats, their all-time best performance.

Meanwhile, the two main parties who “respect” the illegally-gained referendum result and who are trying to get some kind of Brexit deal, suffered badly. Labour failed to make net gains against the worst government in more than a century, and the Tories themselves lost heavily.

The following day, Prime Minister Theresa May, Jeremy Corbyn and other leading Labour politicians all admitted that their results could have been better. They were seen as evidence not simply of voter discontent. They drew the remarkable conclusion that the surge in the Remain vote meant that the people want them to “sort” or “get on with” Brexit.

Hence voting for Remain means voting for Brexit. The Orwellian world of doublethink has finally arrived, 35 years after the book predicted. Remarkably few media interviewers or presenters, including from the corrupted BBC and the populist ITV, have challenged this interpretation of the election results. Ignorance is strength. Remain means Brexit.

Brexit means Remain

But in this Orwellian world, Brexit means Remain too. We are now into double doublethink.

On 22 April 2019 we saw the popular TV presenter Richard Madeley hosting the popular ITV programme Good Morning Britain. Madely insisted on the programme that if the UK remained in a customs union, then that meant that the UK was still a member of the EU.

The brilliant and indefatigable Femi Oluwole tried to put Madeley right. Femi is an expert in EU law. But it was to no avail. The idea that remaining in a customs union means remaining in the EU prevailed on a popular ITV programme, which boasts about 700,000 viewers daily.

It got even worse. On 4 May 2019 the Tory MP Mark Francois was interviewed by Femi. First Francois claimed that any customs union with the EU mean that the UK would still be “in the EU”, then “in effect” still be in EU, then he switched back to “in the EU”.

Francois is an opportunist, pandering to the ultra-Brexiteers who dominate his party. It is possible that, unlike the poorly-briefed Madeley, he knows the truth. Hence the wily use of the “in effect” fig-leaf here and there.

I did some polling myself. I did my best to get Leavers to participate, but any Twitter poll of mine will have a sample bias toward Remainers. The poll has a relatively small sample of a few hundred responses, and the results have to be used with caution.

Amazingly, despite the likely Remainer bias, 22 per cent on my poll thought that the statement “If UK is in a customs union with the EU, then it is still a member of the EU” is true. 73 per cent thought it was false. 5 per cent of respondents did not know.

Overall, that means that over a quarter of respondents did not know that it is possible to be in a customs union with the EU and not be in the EU. If it were possible to compensate for the likely Remainer bias, then this figure would probably be higher.

Turkey – already in the EU?

Turkey has a well-established customs union with the EU. This means that its trade tariffs and duties must match those of the EU. It also means that Turkey is heavily embroiled with EU agreements and EU regulations. But Turkey is not a member of the EU.

An EU member state is subject to the privileges and obligations of membership. The member states of the EU are subjected to binding EU laws in exchange for representation within the common legislative and judicial institutions. Turkey has no representation in the European Parliament, and no seat in the Council of the European Union or the European Council. Other than via op-in agreements, it is not bound by EU laws.

But, according to my poll, something around 20 per cent of the British adult population seem to believe that being in a customs union means being a member of the EU. According to them, Turkey must be a member of the EU.

So why did Boris Johnson and Vote Leave tried to scare people during the 2016 referendum by say that Turkey was “to join” the EU? If a customs union means EU membership then Turkey was already a member. But Vote Leave itself implicitly denied this.

According to the mistaken 20 per cent, if the UK stays in a customs union after declaring it has achieved Brexit, then Brexit has not truly happened. This particular Brexit means Remain. Many people, including some politicians and TV presenters, seem to believe this.

A threat to democracy

Whether these misunderstandings result from deceit or ignorance, they are fatal for rational discourse in a democracy. If different groups of people are using the same words to mean very different things, then meaningful conversation is impossible.

Consequently, it cannot be claimed that the meaning of Brexit is generally clear, and it is “the will of the people”. It is no longer reasonable to say that the 2016 vote in favour of Brexit must be “respected” when there is inadequate agreement on what Brexit means, and at least one-fifth of the population misunderstand the basic facts of what being a member or non-member of the EU means. To many people, some Brexits mean Remain.

If our parliamentary system ever regains a measure of sanity, then one of its first acts of legislation should be to place constitutional voting thresholds in the use of referendums, especially those that could lead to major constitutional changes or the removal of our rights. Even a 60 per cent threshold may be unsafe as a basis for legislation, especially when over one-fifth may not understand what the proposition in the referendum means. A super-majority of over 60 per cent must vote for a proposition for it to have any advisory or compelling force.

Television channels such as the BBC, ITV and Channel Four have a public service broadcasting obligation as a condition for the licence to broadcast. This system has clearly failed us. They have a duty put out the facts, even if the public or the politicians do not want to hear them.

Television presenters that put out falsehoods such as “being in a customs union with the EU means being a member of the EU” should be reprimanded or sacked. A schoolteacher or lecturer that repeated similar falsehoods would be deemed incompetent and would face a similar fate. There can be no short measures here. Our democracy is in severe danger.

Driven to extremes

The level of public misunderstanding over what Brexit or Remain mean puts the Tory government and its current Labour opposition in great difficulty. To move toward Brexit, they need to agree to the “backstop” conditions, involving a customs union with the EU, so as to avoid a hard border between Ireland and Northern Ireland. The alternative is a no-deal Brexit that would put the UK economy into recession, destroy the Good Friday Agreement and threaten peace in Ireland and even on the British mainland.

Both the Labour and the Tory leaderships have edged toward a Brexit that avoids a no-deal outcome and keeps a soft border in Ireland. A group of Labour MPs led by Stephen Kinnock want to go even further: they are pushing for Norway-style status after Brexit.

But the current level of misunderstanding over the meaning of Brexit and Remain puts all these Brexit solutions into great difficulty. Any Brexit deal involving a customs union or Norway-style membership of the Single Market, will be seen by around one fifth of the population as not Brexit but Remain.

Given this confusion, many Labour and Tory voters who support Brexit will see their parties as betraying the referendum results that the party leaders themselves have urged everyone to “respect”. Meanwhile, Labour and Tory voters who support Remain will see the enabling of Brexit as contrary to the national interest and a removal of individual rights.

Any deal-bound Brexit has now become extremely difficult and potentially unpopular. Any deal with the EU must involve some kind of customs union with the EU. But such solutions will alienate large numbers of Brexiters and even more Remainers. The Brexit discourse has polarised, with supports of Remain on one side, and advocates of “no deal” on the other.

Nigel Farage understands this. Before the 2016 referendum he advocated a Norway-style Brexit model. He now says that any customs union is a betrayal and he is pushing for no deal. Thanks to his frequent appearances on the pro-Brexit BBC and ITV, he is piling up his electoral support and pulling over large chunks of Tory voters.

Labour is suffering badly. For three years they have played the duplicitous game of trying to look pro-Remain and pro-Brexit at the same time. But when politics moves to extremes no-one wants to buy fudge. As the Labour MP Ben Bradshaw put it on Twitter shortly after the May 2019 local elections:

“This was the first Electoral test of our policy of ‘constructive’ ambiguity on Tory #brexitshambles. It showed that when you cower in the middle of the road on the biggest existential crisis facing Britain for generations you get squashed.”

As a result, as Bradshaw admitted, lifelong Labour voters were deserting to the Liberal Democrats.

The battle now is between those that are campaigning for Remain, including the Liberal Democrats, the Green party and Change UK, on the one side, and those campaigning for the most extreme and damaging of all possible Brexits, on the other. The Conservatives and Labour are piggies in the middle. They will be the losers.

Over two thousand years before Orwell, the great Chinese philosopher Confucius wrote:

“If names are not right, words are misused. When words are misused, affairs go wrong. When affairs go wrong, courtesy and music droop, law and justice fail. And when law and justice fail them, a people can move neither hand nor foot.”

Today, words have been misused. Law and justice have failed. Politicians are immobilized. A catastrophe is brewing. We must avert it.

Double doublethink – where both Remain and Brexit are given their opposite meanings – is making meaningful dialogue impossible in a divided country. Unlike we act firmly and quickly, our democracy could be disabled. Difficult and dangerous times are ahead.

6 May 2019

Posted in Brexit, Democracy, Green Party, Jeremy Corbyn, Labour Party, Politics, Populism

April 20th, 2019 by geoffhodgson1946

Geoffrey M. Hodgson

In a recent New York Times interview, the Nobel economist Joseph Stiglitz declared that Bernie Sanders, “a self-described democratic socialist, wasn’t actually a socialist”. Unfortunately, Sanders shows no sign of dropping the s-word description or of making a clear case for an enduring private sector in a mixed economy. Then Stiglitz went on the say that “socialism … was never the same as communism”. But he failed to define either term.

Stiglitz is wrong. The persistent vagueness and misuse of such words sows confusion. In fact, socialism has an enduring meaning that is virtually identical to that of communism. In this blog I explain why.

The origins of the words socialism and communism

The word socialism appeared in November 1827 in the Co-operative Magazine, published by followers of Robert Owen, where a writer referred to “Communionists or Socialists”. It was used in the Poor Man’s Guardian in 1833 and moved into more frequent usage thereafter. As J. F. C. Harrison noted: “By 1840 socialism was virtually synonymous with Owenism”.

Robert Owen

For Owen and his followers, socialism meant the abolition of private property. It also acquired the broader ideological connotation of cooperation, in opposition to selfish or competitive individualism. Communal property was seen as its defining institutional foundation. As Owen argued in 1840, “virtue and happiness could never be attained’ in “any system in which private property was admitted”. He aimed to secure “an equality of wealth and rank, by merging all private into public property”.

In 1840 in Paris, the word communiste appeared in an article by Étienne Cabet and in a pamphlet by Théodore Dezamy and Jean-Jacques Pillot. Influenced by Owen, Cabet was a Christian advocate of utopian communist communities.

Carrying a letter of introduction from Owen, John Goodwyn Barmby went to Paris in 1840 to meet the advocates of le communisme. On his return, Barmby founded the London Communist Propaganda Society in 1841 and established the Communist Chronicle newspaper. Despite his close working links with the Owenites, Barmby criticised socialism because “it wants religious faith, it is too commercial, too full of the spirit of this world, and therefore is rightly damned”. Communism for him was less materialistic and more divine.

With the investment of these idiosyncratic spiritual connotations, Barmby imported the word communism into English. It spread in the UK and the US, where the term socialist was already prominent. The word Kommunist had appeared in German by 1842, when Marx noted its usage.

In 1843 Engels reported to the Owenite journal The New Moral World that there were “more than half a million Communists in France” and that “Communist associations” and individuals describing themselves as communists were plentiful in Germany, Italy, Switzerland and elsewhere. Engels addressed his Owenite readers as “English socialists” and saw them as having very similar aims to the Continental communists.

In the second (1849) and later editions of his Principles of Political Economy, John Stuart Mill noted another early difference of meaning between socialism and communism. For followers of Saint-Simon or of Fourier in France, communism meant “the entire abolition of private property”, whereas socialism was “any system which requires that the land and the instruments of production should be property, not of individuals, but of communities or associations, or of the government.” Unlike communism, this meaning of socialism would allow for individual ownership of personal possessions. Hence Mill described Owenism as communism, because it upheld the abolition of all private property. But this particular distinction in meaning between the two words was forgotten after the Owenite and other utopian experiments faltered.

Perhaps more influentially, the 1848 edition of Webster’s American Dictionary defined socialism as a “social state in which there is a community of property among all the citizens”, and defined communism as “a new French word, nearly synonymous with … socialism”.

Hence both socialism and communism referred to the abolition of (most or all) private property and the establishment of common ownership of the means of production. Henceforth the two terms became entwined within Marxism, there to perform an entirely different dance of meaning.

Marxism, communism and socialism

Marx and Engels often treated the terms socialism and communism as interchangeable. But occasionally they gave them different nuances. In 1845 they adopted the new word communism as their label for their movement: “Communism is not for us a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things.” When they henceforth started setting up political organizations they adopted and promoted the term communist rather than socialist. But their ultimate goals were the same as most socialists at the time.

Frederick Engels

In 1888 Engels explained why he and Marx had chosen the word Communist for theirfamous Manifesto of 1848. Engels claimed that the word socialism was then too ‘respectable’ and too ‘middle class’. He wrote:

“Yet, when it was written, we could not have called it a ‘Socialist’ manifesto. By ‘socialists’, in 1847, were understood, on the one hand, the adherents of the various utopian systems: Owenites in England, Fourierists in France, both of them already reduced to the position of mere sects, and gradually dying out; on the other hand, the most multifarious social quacks … in both cases men outside the working-class movement … Whatever portion of the working class had … proclaimed the necessity of a total change, that portion then called itself communist. … Thus, socialism was, in 1847 a middle-class movement, communism a working-class movement.”

Engels omitted to note that the self-described communists in the 1840s also had more than their fair share of middle-class devotees, quacks, bizarre utopians and radical clerics.

It is possible that Marx and Engels adopted the term communist partly because it had become more popular in a Continental Europe on the eve of the 1848 revolutions. While socialism remained more widespread in Britain, the Owenite movement, with which it was largely associated, had already passed its peak by 1847. While the younger term communism had already attracted several oddballs in the seven years of its use, socialism had the additional negative legacy of numerous failed utopian experiments in the 1820s and 1830s, in the UK and the US.

Instead of small-scale utopian experiments, Marx and Engels favoured a global insurrectionary strategy. As Engels observed in 1843, the French communists understood the need for “meeting force by force … having at present no other means”. Marx and Engels chose the word communism in the 1840s, not because their goal was different from socialism, but partly because many self-described communists in Continental Europe promoted armed insurrection. The penultimate section of the Communist Manifesto attacks various strands of socialism, not for their collectivist goals, but for their impractical strategies and their failure to countenance the use of force. The final paragraph of the whole work drives the point home: “The Communists … openly declare that their ends can only be attained by the forceful overthrow of all existing conditions.”

But a few decades later, the word socialism was again in the ascendant. In 1880 Engels published Socialisme utopique et socialisme scientifique in the French Revue socialiste: notably he put socialisme rather than communisme in the title. By 1890 a number of parties describing themselves as socialist or social-democratic had taken root in Germany, France and elsewhere. In 1895, Engels wrote approvingly of “the one great international army of Socialists, marching irresistibly on and growing daily in number”. The earlier emphasis on physical force was also reduced: the possibility of achieving their goal by democratic means, rather than by insurrection, seemed greater than before. One of the major reasons for using the term communism rather than socialism had disappeared.

William Morris was an artist, craftsman and writer, and one of the first English intellectuals to embrace Marxism. Writing in a 1903 Fabian Tract, he saw socialism and communism as virtual synonyms: “between complete Socialism and Communism there is no difference whatever in my mind”. They assert that the means of production and the resources of nature “should not be owned in severalty, but by the whole community”.

Whether they used the term socialism or capitalism, their fundamental aim was clear. In the Communist Manifesto, Marx and Engels echoed Owen and called for the “abolition of private property.” They proclaimed an economic order in which “capital is converted into common property, into the property of all members of society.” Engels repeated in 1847: “The abolition of private ownership is the most succinct and characteristic summary of the transformation of the entire social system … and … is rightly put forward by the Communists are their main demand.” In 1850 Marx and Engels again declared: “Our concern cannot simply be to modify private property, but to abolish it”.

This meant the complete abolition of markets. They wanted an end to the “free selling and buying” of commodities. As Marx wrote in 1875: “Within the cooperative society based on common ownership of the means of production, the producers do not exchange their products”. Engels argued in 1884 that “no society can permanently retain the mastery of its own production … unless it abolishes exchange between individuals.” The abolition of markets was seen as necessary for social control.

By emphasizing national ownership, Marx and Engels went much further than Owen and most other early socialists or communists. Marx and Engels welcomed efforts “to centralize all instruments of production in the hands of the state” and looked forward to a time when “all production has been concentrated in the hands of a vast association of the whole nation”. Described as either communism or socialism, this utopia of national ownership and “social” control persisted in their writings.

Phases of communism

In his Critique of the Gotha Programme of 1875, Marx used the term communism to describe his goal. He considered “the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society.” Eventually a new order would follow:

“In a more advanced phase of communist society, when the enslaving subjugation of individuals to the division of labour, … when the all-around development of individuals has also increased their productive powers and all the springs of cooperative wealth flow more abundantly – only then can society … inscribe on its banner: From each according to his abilities, to each according to his needs!”

Hence Marx considered a “first phase” and then a “more advanced phase” of communism. Writing in his State and Revolution in August 1917, Lenin referred to this passage from Marx’s Critique of the Gotha Programme but introduced a different usage. He wanted to defend the planned Bolshevik seizure of power against the criticism that Russia was insufficiently developed economically for a radical Marxist revolution.

Lenin amended the Marxist dictionary and renamed Marx’s “first phase of communist society” as socialism. Under this socialism the means of production would be in public ownership but there would still be a struggle against bourgeois ideas and material shortages. When that struggle was completed, and after the subjugation of ‘capitalist habits’, full communism would be established. “The whole of society will have become a single office and a single factory with equality of labour and pay.”

In contrast, Marx and Engels never distinguished the terms socialism and communism in this way. For them, socialism and communism both meant the abolition of the private ownership of the means of production. They wrote of lower and higher “phases” but did not use different nouns to distinguish them.

The Socialist International (also known as the Second International) was a global association of socialist parties, formed in 1889. In 1919, Lenin and the Bolsheviks broke from the Socialist International and formed the Communist International (also known as the Third International). The difference between the Communist and Socialist Internationals was not stated in terms of ultimate objectives. Instead the Communist International was formed because several parties in the Socialist International had supported their national governments in the First World War. There was no declared amendment of final goals, although leaders of the Second International were accused of de facto abandoning socialism.

As I show in my book Is Socialism Feasible? the original meaning of socialism persisted even in the relatively moderate UK Labour Party. It was endorsed by leading members such as Sidney Webb, Beatrice Webb, George Bernard Shaw, Clement Attlee and Aneurin Bevan.

The failure of revisionism

Especially since the Second World War, there have been a number of attempts to change the meaning of socialism, including by Tony Crosland and Tony Blair. But the resilience of the original meaning is testified by the endurance of the UK Labour Party’s original version of Clause Four from 1918 to 1995. This original version calls for complete “common ownership of the means of production, distribution and exchange” and offers no defence of markets or a private sector. Labour leader Jeremy Corbyn is among those that would like to return to the 1918 formulation.

Jeremy Corbyn

Some writers obfuscate the issues, but the undying commitment on the left to common ownership and the left’s widespread agoraphobia (fear of markets) testify that socialism has not changed much in meaning. Although some communists may differ from some socialists in terms of strategy, in general there is little if any difference in terms of goals.

By contrast, the term social democracy has successfully changed its meaning. It now contrasts with socialism, especially in terms of its advocacy of a mixed, market economy. In 1959 the (West) German Social Democratic Party committed itself to a “social market economy” involving “as much competition as possible – as much planning as necessary.”

This was very different from the enduring meanings of the words socialism and communism. Politicians like Sanders need to make clear where they stand.

20 April 2019

 

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Marx, Karl and Engels, Frederick (1962) Selected Works in Two Volumes (London: Lawrence and Wishart).

Marx, Karl and Engels, Frederick (1975) Karl Marx and Frederick Engels, Collected Works, Vol. 3, Marx and Engels: 1843-1844 (London: Lawrence and Wishart).

Mill, John Stuart (1909) Principles of Political Economy with Some of their Applications to Social Philosophy, 7th edn. (London: Longman, Green, Reader and Dyer).

Morris, William (1973) Political Writings of William Morris (London: Lawrence and Wishart).

Owen, Robert (1991) A New View of Society and Other Writings, edited with an introduction by Gregory Claeys (Harmondsworth: Penguin).

Posted in Bernie Sanders, Common ownership, George Bernard Shaw, Jeremy Corbyn, Karl Marx, Labour Party, Left politics, Lenin, Markets, Marxism, Nationalization, Robert Owen, Socialism, Tony Blair

August 25th, 2018 by geoffhodgson1946

 

Geoffrey M. Hodgson

 

When it was used by Robert Owen and his followers from the 1830s, the word socialism meant “the abolition of private property” and the adoption of widespread common ownership. That same meaning was accepted by Karl Marx and Frederick Engels. It was used in the twentieth century to describe Marxist regimes in Russia, China, Cuba and elsewhere. The goal of widespread common ownership was inscribed in the aims and values of the UK Labour Party from 1918 to 1995.

 

The socialist algorithm has eight steps, arranged in a loop:

Step 1: Critique. Point to all the dreadful things that have happened under capitalism, including war, famine, oppression, exploitation, economic inequality and environmental degradation.

Step 2: Dream. Propose a non-existent, imaginary socialism that is highly democratic, peaceful, egalitarian and non-discriminatory. Say that it includes widespread state ownership but avoid going into details on how a large-scale complex system would work, or about the institutional and administrative mechanisms involved, or how ultra-democracy would operate in practice.

Step 3: Ignore. Discount claims by leading economists, political scientists and historians that such a system could not work fairly and humanely, at least unless major roles were retained within the system for markets and private property. Press on regardless to the next step.

Step 4: Solidarise. Choose some regimes in the past that started on the socialist road, such as Russia, China or Cuba. If a new explicitly socialist regime – Venezuela for example – pops up and carries out some policies you like, such as reducing poverty and illiteracy, then give it your support for a while.

Step 5: Blame. When things go wrong with the nominated socialist regimes in Step 4 – including war, famine, oppression, exploitation, economic inequality or environmental degradation – blame foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries. Don’t blame the issues ignored in Step 3.

Step 6: Deny. When it proves difficult to blame everything that goes wrong on foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries, then deny the scale or even the existence of the problems.

Step 7: Rename. At the point where the socialist regimes nominated in Step 4 become so dreadful – with war, famine, oppression, exploitation, economic inequality or environmental degradation – to the point where blame or denial (Steps 5 and 6) are no longer plausible, then declare that these regimes were not, or are no longer, socialist.

Step 8: Return. Collect £200 and go back to Step 1.

 

This algorithm has variant criteria, particularly over those used to decide what regimes are described as socialist under Step 4. This leads to endless controversies among socialists over the criteria and outcomes of such choices.

The personal determination to deny facts in Step 6 may also waver among some less-hardened comrades.

Further controversy exists among socialists on the criteria deployed in step 7, which trigger the abandonment of the socialist label in particular cases.

The Russian Revolution

The Russian Revolution instigated the socialist algorithm and led to countless runs of the program. It has also illustrated numerous variants.

Some say that it never was “proper socialism” in the first place, for some reason, such as the failure to establish worker control of the factories, or the dissolution of democratic government. These purists move rapidly to Step 7, collect their £200, and move back to Step 1.

Bertrand Russell quickly collected his £200. He visited Russia in 1920 in a Labour Party delegation, where among others he met Lenin. Russell wrote in 1924: “Socialism … means the common ownership of land and capital, together with a democratic form of government.”

Hence, for him, Bolshevik Russia was never socialist. But Russell did not consider the possibility that any concentration of ownership and economic power in the hands of the state would always undermine political democracy. (Step 3.)

Or you may say that the Bolshevik regime was socialist up to the restoration of some private ownership and markets with the New Economic Policy in 1921. Or you could say that socialism ended in Russia with Stalin’s consolidation of power in 1928. Die-hard forgivers of Stalinism would say that it ended in 1991.

To survive, the die-hards need a good dose of denial (Step 6). For example, in 1990 Corbyn’s future aide Seumas Milne suggested that estimates of deaths under Stalin by Robert Conquest and others were too high. This was quickly contradicted when more evidence became available in 1991 showing that earlier estimates, particularly by Conquest, were in the right ball park.

Socialist Scrabble

Imagine the consternation and debate caused in Marxist circles over these problems. The neatest solution is to avoid any proclamation of socialism and describe all Soviet-style regimes as “state capitalist”. This is the ingenious solution of Tony Cliff and others. Cliff was the founder of what eventually became the Socialist Workers Party.

The trouble with this solution is that the definition of capitalism becomes so flattened and widened that it bears less resemblance to Marx’s analysis in Capital. This disparity becomes more severe when the importance for capitalism of financial markets is taken into account, as highlighted by Joseph Schumpeter and others. Competitive financial markets played no more than a marginal role in Russia from 1917 to 1991.

Leon Trotsky

Leon Trotsky was more subtle. He introduced the concept of “degenerated workers state”. This term signalled that the working class had gained power, but the system had become corrupted by an over-bearing bureaucracy. For Trotsky, Soviet Russia was neither capitalist nor socialist.

But true to his Marxist credentials, Trotsky had to argue that a system where a rising class was neither in nor out of power had to be unstable – it could only last a few years.

Trotsky was murdered in 1940, so he left that problem to his followers. This unstable “transitional” regime lasted for well over half a century, defying Trotsky’s analysis.

And so it goes on. There are numerous variants, and many moves on the socialist scrabble board – playing with labels or names.

Socialist Venezuela

The drama in Venezuela is playing out before us. Many – but not all – socialists hailed the election the radical socialist Hugo Chávez in 1998.

In 2004 a number of intellectuals and politicians signed a “manifesto” declaring that they would vote for Chávez if they were Venezuelans. The signatories included Tariq Ali, Perry Anderson, Tony Benn, George Galloway, Eric Hobsbawm, Ken Livingstone, Naomi Klein, Ken Loach, John Pilger and Harold Pinter.

Jeremy Corbyn and Hugo Chávez

Jeremy Corbyn’s loyalty to Venezuelan socialism endured and survived the death of Chávez in 2013. He attended a vigil following the death of Chávez, hailing him as an “inspiration to all of us fighting back against austerity and neo-liberal economics in Europe”.

As late as 2015, when Venezuela was in ever-deepening crisis and human rights violations were abundant, Corbyn’s enthusiasm for the regime was undiminished. He remarked:

we celebrate, and it is a cause for celebration, the achievements of Venezuela, in jobs, in housing, in health, in education, but above all its role in the whole world … we recognise what they have achieved.

Similarly in 2014, John McDonnell (who is now Shadow Chancellor of the Exchequer under the Labour opposition led by Corbyn) praised the Venezuelan regime: “Here you had the contrast between capitalism in crisis and socialism in action.

Blame then rename

As the problems with the regime of Chávez grew in intensity, Step 5 (Blame) came into force. There may have been involvement by the CIA, particularly in the brief coup that overthrew Chávez for a few days in 2002. But hostilities from outside were relatively mild, particularly compared with Civil War that followed the Bolshevik Revolution in 1917. Venezuela continues to sell oil to the US and several other countries. Venezuela buys arms and military equipment from the UK, as well as from Russia and China.

Neither external nor internal opposition can adequately explain the unfolding catastrophe in Venezuela. In fact, the problems started the beginning. Chávez manipulated electoral mandates to undermine democratic checks and balances, to increase executive power, to neuter the Supreme Court, to make criticism of his government illegal and to increase censorship.

The outcome after 2013 was the disastrous regime of Nicolás Maduro. Venezuela saw famine, oppression, exploitation, economic inequality and environmental degradation.

By 2018 there was hyper-inflation of around a million per cent per annum, and about three million Venezuelans – about 10 per cent of the population – had emigrated.

Despite his 2014 declaration of support quoted above, John McDonnell has now moved to Step 7, helped by a little more denial on the way. On 20 May 2018 he declared “I don’t think it [Venezuela] was a socialist country”. McDonnell has collected his £200 and returned to Step 1.

Conclusion: back to the beginning

Obviously, it all starts with Step 1. Let us pause here for a while. There is a lot wrong with capitalism. But let us distinguish between capitalist democracies and autocracies.

Democracy is a key variable. The Biblical Four Horsemen of the Apocalypse are conflict, war, famine and death. As I have outlined in my book Wrong Turnings, from historical experience the antidote is clear: the chances of war, famine and premature death can be greatly diminished through a society with democratic institutions that defends +universal human rights.

Many of the horrors of capitalism occurred under undemocratic regimes. Wars between democracies are relatively rare. Famines are much less common under capitalist democracies. Consequently, the reduction of death and misery from famine and war is best pursued by opposition to all forms of despotism, whether capitalist or Communist.

This does not mean that capitalist democracies are always peaceful and unoppressive. Far from it. What it means is that there is plentiful evidence that democracy reduces the chances of famine, environmental degradation, premature death and war. And, for explicable reasons, no socialist country has lasted as a democracy.

Dreaming (Step 2) is fine. But we have to practical and realistic. Rather than ignoring in Step 3, we need to understand. One of the major problems with socialism – at least in its statist and non-market versions – is that a concentration of economic power in the hands of the state leads unavoidably to a dangerous and undemocratic concentration of political power.

“There’s no food”

In the Venezuelan case, the concentration of political power, which was designed to achieve statist control of the economy, had adverse effects well before wholesale public ownership was achieved.

Either way, attempts to move toward socialism weaken the economic sources of countervailing power and undermine the socio-economic foundations of democracy. Despite pronouncements to the contrary, the centralizing mission of statist socialism always leads to the destruction of necessary checks and balances.

In history there has been no exception to this outcome. We may dream of socialist democracy, but in the end we must learn from history and from analysts who show the dangers or impracticalities of socialist solutions to the problems in the world. In short, statist socialism cannot co-exist with democracy and with the protection of human rights.

 

25 August 2018

Minor edits – 26 August 2018.

 

Published by University of Chicago Press

 

Bibliography

Cliff, Tony (1955) Stalinist Russia: A Marxist Analysis (London: Michael Kidron).

Conquest, Robert (1968) The Great Terror (London: Macmillan).

Conquest, Robert (1986) The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine (Oxford: Oxford University Press).

Griffiths, Dan (ed.) (1924) What is Socialism? A Symposium (London, Richards).

Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press).

Schumpeter, Joseph A. (1942) Capitalism, Socialism and Democracy (London: George Allen and Unwin).

Trotsky, Leon D. (1937) The Revolution Betrayed: What is the Soviet Union and Where is it Going? (London: Faber and Faber).

Posted in Bertrand Russell, Common ownership, Democracy, Jeremy Corbyn, Karl Marx, Labour Party, Left politics, Lenin, Liberalism, Markets, Nationalization, Private enterprise, Property, Robert Owen, Socialism, Soviet Union

July 9th, 2018 by geoffhodgson1946

 

Despite their declared support for free trade, Tory libertarians like David Davis and Jacob Rees-Mogg are acting as if there were still a British Empire.

 

Geoffrey M. Hodgson

 

The Brexiteers in the Tory Party do not understand the mechanics of modern trade and have no viable blueprint for Brexit.

Substantial harmonization of standards and regulations is required when trade crosses international borders. The EU Single Market enables massive gains from trade within a harmonized system of regulation. EU member states have a say in the development of those regulations, within a common system.

Outside the EU, the UK would have to replace a huge apparatus of EU-wide regulation that has grown up since 1973 when it joined. This regulatory legislation would be an even more formidable burden than any increased tariff levels that would be adopted if the UK leaves the EU Customs Union and Single Market.

This problem creates a dilemma for libertarians who distrust all state machines – especially large ones outside their national comfort zone. Hence, alongside nationalists and hard left socialists, libertarians were in the intellectual forefront of the 2016 Brexit vote in the UK, chiming in with overblown complaints about Brussels bureaucracy, made more strident because this bureaucracy spans national boundaries and is staffed by foreigners.

Some of these libertarians are atomistic individualists, unable to accept that markets consist of more than individuals in isolation. These libertarians are seemingly unaware that all trade and markets must involve commonly accepted rules, as well as the wills and assets of individuals. Markets, in short, are social institutions.

Entering or leaving markets requires dealing with systems of rules. In practice, exit from the EU Single Market means either that regulations have to be developed independently, thus reducing trade possibilities, or that EU regulations have to be accepted for future trade, while having little say in their formation.

The libertarian dilemma

Minimal-state libertarians are thus caught in a dilemma. They have either to accept the adjudications of a foreign court, thus dramatically violating their characteristic anti-state position, by accepting not only state legal system but one outside their homeland, or they have to curtail their cherished ideological ambitions for free trade and markets across national boundaries.

More generally, any contract between sellers and buyers across international boundaries requires agreement on the means of adjudication, if a dispute arises over its terms or fulfilment. Typically it is agreed that disputes will be resolved in the courts of one nominated country. The European Court of Justice was set up to deal with contractual disputes within the EU, and between EU traders and contracting businesses located outside the EU.

Regulatory harmonization and trade dispute adjudication create problems for libertarians. Just as big socialists believe in a fantasy world where the state can do everything, some libertarians believe in the obverse fantasy of a minimal state, where trade somehow operates without an extensive state legal infrastructure. As Jamie Peck put it, these “neoliberals” espouse “a self-contradictory form of regulation-in-denial”.

Nevertheless, when faced with the real world of business and contract, these libertarians acquiesce with the state machine and its legal system within their own national boundaries. Their nationalism means that they can live with that outcome.

But when trade crosses international boundaries, the problems of regulatory harmonization and dispute adjudication compel these libertarians to accept – especially when trading with a larger economic bloc – that disputes may have to be resolved in courts outside their national boundaries.

For closet nationalists in libertarian clothing, accepting the judgments of a foreign court is a step too far. The lenience granted to their national courts is not granted to those of foreigners.

Bring back the British Empire – and other fantasies

British nationalists in libertarian clothing may then call up another fantasy from the past. They can imagine that Britain is still a great power, and that it has the capacity to compel that all trade disputes be resolved in British courts. In their imagination these libertarians bring back the British Empire. Imperial power makes everyone else a rule-taker. They may talk of that bygone world in the corridors of Eton, but it is far beyond the reality of global power today.

Across the Atlantic, American nationalists in libertarian clothing perform ideological gymnastics by allying themselves with politicians such as Donald Trump. He an economic nationalist rather than an advocate of international free trade. As long as these dubious libertarians can concentrate their gaze on the domestic US market and avoid the world beyond, then with some additional fantasising they might continue to believe in their myth of a minimal state.

Instead of the Empire, a US national fantasy is the Wild West. Historically, this was a short-lived zone, partly out of reach of the state and its system of law. Deals were done, aside the barrel of a gun. It is the US version of a mythological libertarian paradise. Global reality today, however, is very different.

A third fantasy is the idea of Jeremy Corbyn that Britain can leave the EU and build socialism. This is a mythical as the other fantasies. Corbyn does not understand markets and has no viable blueprint either – but that is the subject of other blogs. In the meantime, we note that all these efforts to leave the EU are based on fantasies that have little connection to the world in which we live today.

9 July 2018

Published by University of Chicago Press in January 2018

References

Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press).

Peck, Jamie (2010) Constructions of Neoliberal Reason (Oxford and New York: Oxford University Press). See p. xiii.

Posted in Brexit, Donald Trump, Jeremy Corbyn, Left politics, Liberalism, Markets, Neoliberalism, Populism, Property, Right politics, Socialism, Uncategorized

February 24th, 2018 by geoffhodgson1946

 

 

Geoffrey M. Hodgson

 

Bernie Sanders campaigned for the Democratic presidential nomination in the US in 2015-2016. In the primary elections he received over thirteen million votes. He won 23 primaries and caucuses and approximately 43 per cent of pledged delegates, compared to 55 per cent for Hillary Clinton.

Polls taken in 2017 have found Sanders to be the most popular politician in the US.

Sanders is a long-avowed “socialist”. What does he mean by this term? This is not an attack on the personality of Sanders, nor an attempt to smear him. Instead it is a search for the truth. What does he mean by “socialism” and what are his intellectual roots?

Does democracy imply socialism?

This is not a story about Russian spies. It is about Russian dolls. Sanders is the outer form of a Russian doll, with the slogan of Democracy across his chest. This slogan is used to promote socialism, typically with some vagueness about its meaning.

For Sanders, democracy implied socialism and substantial public ownership. In a 1987 interview he explained:

“Democracy means public ownership of the major means of production, it means decentralization, it means involving people in their work. Rather than having bosses and workers it means having democratic control over the factories and shops to as great a degree as you can.”

Nineteen years later, Sanders was still repeating this argument that extended democracy implied a greater role for government. But he then side-lined the question of public ownership. When asked in 2006 what democratic socialism meant, he responded:

“[The] government has got to play a very important role in making sure that as a right of citizenship, all of our people have health care; that as a right, all of our kids, regardless of income, have quality child care, are able to go to college without going deeply into debt; that it means we do not allow large corporations and moneyed interests to destroy our environment; that we create a government in which it is not dominated by big money interest. I mean, to me, it means democracy, frankly.”

Given his rising prominence in the US, among a population that has not normally been sympathetic to socialist ideas, it is understandable that Sanders played up democracy and played down public ownership. But there is no evidence that he has abandoned his support for widespread common ownership.

Sanders is not alone in sometimes hiding his socialism behind the word democracy. Michael Moore did it in his ironically-titled 2009 film Capitalism: A Love Story, where he argued that

“capitalism is an evil, and you cannot regulate evil. You have to eliminate it and replace it with something that is good for all people, and that something is democracy.”

But democracy is a system of government, and it is not in itself a type of economy.

Like Moore, Sanders in recent years has been economical with the truth. As we have entered the new millennium he has left the details of his socialism vague. He grants his audience the freedom to choose its meaning.

Socialism: A love story

They may impute its original radical meaning of widespread common ownership. Or they can infer that Sanders is promoting a version of social democracy, as found in Denmark, Norway or Sweden. Sanders said in 2015 that

“we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people.”

Lars Løkke Rasmussen

We certainly should learn from these Nordic countries, but we should not dupe people into believing that they are socialist. A few days after Sanders’ comment, the Danish Prime Minister Lars Løkke Rasmussen attacked the misconception that the Nordic model is a form of socialism:

“I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”

The Nordic countries mentioned by Sanders have relatively high levels of taxation and relatively low levels of economic inequality. They have strong welfare states. But they have not achieved anything close to socialism in its original sense. The private sector is still dominant. But by giving little guidance about what he means by socialism, Sanders can please a wider audience.

In a country where even minimal government involvement in the economy is habitually described by its opponents as socialist, Sanders has been opportunist. As he has come closer to power he has accepted the socialist label without much further explanation, knowing that for millions of Americans this is taken to mean even the mildest level of government economic intervention.

Sanders has allowed this inaccuracy to prevail, thus establishing a wide following among liberals, social democrats and radical socialists. He may have told the truth, but not the whole truth.

A mixed economy?

Jeremy Corbyn

As he has got closer to the pinnacles of power, Sanders has accepted a place for small-scale private enterprise. Similarly, the UK Labour Party Leader Jeremy Corbyn has acknowledged the reality of a mixed economy.

But crucially, neither Corbyn nor Sanders have elaborated a positive defence of the private sector.

Genuine advocacy of a mixture requires making the case for more than one type of ingredient. As well as their support for the public sector, they could have argued, for instance, that a substantial private sector is necessary for a viable civil society, to reap the benefits of competition, and to help sustain innovation and technological advance. Sanders and Corbyn have failed to make such arguments.

These arguments are rare among traditional socialists. The widespread absence of a defence of the private sector speaks as loudly as their calls for government intervention or common ownership. It suggests that a private sector is being reluctantly tolerated, and it would all be swept up into public territory if the opportunity arose. A mixed economy is to be accepted for now, as the system makes its transition toward full-blooded socialism and the abolition of all private enterprise.

Democratic socialism would take too many meetings

There is a further problem with the notion of democratic socialism that is adopted by Sanders and Corbyn. They promote a vague vision of extensive democratic control in the economy. Neither of them explain in detail how this extensive democratic decision-making is going to work. Would employees and consumers have a say on everything? How would they decide? How would the hierarchy of decision-making be structured?

The adjective democratic is kept as vague as the noun socialism. The details and feasibility of any such arrangement are simply ignored. If votes were held on every important question then the population would be overburdened with a myriad of decisions. Our lives would be taken up with meetings and voting.

It is impossible for anyone to gain expert knowledge on anything but a small number of technical and scientific issues. It would be counter-productive to put these technical issues to the vote. While many socialists have paid homage to some vague notion of “democratic control”, no-one has shown in theory or in practice how it would function in detail.

More Russian dolls inside

Let us go further into Sanders’ past. In the 1980s, when he was mayor of Burlington in Vermont, Sanders promoted a twinning programme with Yarolslavl in the USSR. He and his wife spent their honeymoon in the USSR in 1988.

This may be excused as an attempt to develop international understanding between varied communities, but this visit by an enduring, self-declared “socialist” to a “socialist” country under Communist Party rule would have been used to damage his presidential campaign in 2016, if he had won the nomination.

Going further back, as a young man in Chicago in the 1960s, Sanders was a member of the Young People’s Socialist League, which was the youth wing of the Socialist Party of America.

Founded in 1901, this party went through several splits and ruptures, but it was generally clear what it meant by socialism.

The following words appeared in its constitution:

“[The] Socialist Party is to bring about the social ownership and democratic control of all the necessary means of production – to eliminate profit, rent, and interest, and make it impossible for any to share the product without sharing the burden of labor – to change our class society into a society of equals, in which the interest of one will be the interest of all.”

This formulation – involving widespread common ownership of the means of production – is in line with the original vision of socialism, as promoted by Robert Owen, Karl Marx, Vladimir Lenin, Leon Trotsky and numerous other socialists.

Finding Lenin and Trotsky

Eugene V. Debs (1855-1926) was the most famous leader of the Socialist Party of America and four times its presidential candidate, peaking at 913,693 votes in his 1920 campaign. Adopting the Marxist language of militant class struggle, Debs supported the 1917 Bolshevik Revolution in Russia. He also praised the attempted 1919 armed insurrection led by Karl Liebknecht and Rosa Luxemburg against the new-born German Republic.

In 1977 Sanders made a 30-minute documentary about Debs and his ideas. Sanders never recanted the version of socialism promoted by Debs and the Socialist Party of America.

In 1980 Sanders served as an elector for the Socialist Workers’ Party (USA), in an attempt to put this Trotskyist group on the presidential ballot, although Sanders was never a member of that organization.

Although Sanders was hugely popular during the 2015-16 primaries, if he had become the Democratic presidential candidate, then his Republican opponents would have milked this information about his Trotskyist links and his Russian honeymoon.

Leninism and democracy

Sanders is too vague about his socialism and his links with past radical socialists to draw too many definite conclusions. But the links are there, all the way back to Trotskyism and Leninism. It is ironic to compare how Sanders tries to champion democracy today, with the treatment of democracy by his Leninist antecedents.

In August 1917 Lenin explained in his State and Revolution that the forthcoming seizure of power would be highly democratic for the working class.

In November 1917 the Bolsheviks overthrew the liberal-socialist government of Alexander Kerensky. By the end of 1918, in the midst of a vicious civil war, all parties except the Bolsheviks were banned, and Russia had become a one-party state.

The “immense expansion of democracy” that Lenin had promised in his State and Revolution was not delivered. It would not have been feasible, even under the most conducive of circumstances.

As it turned out in Russia, there was no possibility of organizing a political force to counter, criticize or modify Bolshevik policy. Without organized alternatives to the ruling elite, democracy becomes a sham.

When the exiled Kerensky spoke at a London meeting in 1921, someone there claimed that the Bolsheviks were democrats. Kerensky responded:

“If it is democracy to banish your opponents, to suppress all meetings and newspapers, and to lock up people who disagree with you without trial, by what signs do you ask me to recognise tyranny?”

Let’s be honest about socialism

Sanders has tapped into legitimate discontent about inequality and poverty in the US, but has failed to explain how his version of socialism will work. He has kept the meaning of the s-word vague, thus providing himself with radical appeal with limited long-term practical substance, other than the adoption of some measures of reform within a capitalist economy.

From its inception in 1827 and for much of the twentieth century, socialism had the radical meaning of widespread common ownership that both Sanders and Corbyn originally promoted. Subsequently, some thinkers tried to shift its meaning, but no consensus emerged on its new substance.

Socialists should stop hiding their socialism behind the word democracy. Many socialists believe in democracy, but democracy and socialism are not the same thing.

Real-world socialism has failed to sustain democracy. This is a problem for socialism and it should not be ignored.

The connection between claimed “democratic socialism” and socialism in its totalitarian incarnations is avoided by Sanders and Corbyn by comparing the ills of real-world capitalism with an imaginary, idealized socialism that is unfeasible as it is invisible.

Sanders and Corbyn do not compare the ills of real-world capitalism with the ills of real-world socialism. If they did this honestly, then they might reach different conclusions. Instead of chasing socialist unicorns they might seek for the best within capitalism and then try to improve it further.

 

24 February 2018

Published January 2018

Buy on Amazon.com or Amazon.co.uk

Bibliography                                                     

Clarke, Peter (1978) Liberals and Social Democrats (Cambridge: Cambridge University Press). The quote by Kerensky is found on p. 220.

Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press)

Posted in Bernie Sanders, Common ownership, Democracy, Jeremy Corbyn, Karl Marx, Labour Party, Left politics, Lenin, Liberalism, Markets, Nationalization, Politics, Private enterprise, Property, Robert Owen, Socialism, Soviet Union

February 18th, 2018 by geoffhodgson1946

But it does not deserve to be there

 

Geoffrey M. Hodgson

 

Despite the disastrous record of self-described “socialist” regimes, socialism (whatever it means) is remarkably popular.

According to a 2017 survey of American adults, 37 per cent preferred (what they described as) socialism to capitalism. Among millennials (meaning those reaching adulthood in the early twenty-first century), 44 per cent preferred socialism over capitalism. This survey broadly confirmed previous American polls from about 2015, which showed a surge of support for socialism, especially among younger people.

Polling in the UK found that 39 per cent of adults have an unfavourable view of capitalism, while 33 per cent were favourable. Also in the UK, 36 per cent viewed socialism favourably, compared to 32 per cent negatively. Germans were reported as even more positive about socialism, with 45 per cent being favourable and 26 per cent unfavourable.

These polling figures are remarkable, especially when we take into account that regimes describing themselves as socialist led to over 90 million deaths in the twentieth century. Socialism has captured the ethical high ground, despite the poor record of socialist regimes in terms of human rights.

Somehow today’s socialists evade this legacy. They argue that these regimes were not really socialist. Or they were corrupted by bad leaders. Or they suffered largely because of antagonism from the capitalist West. All these arguments assume that a humane socialism is feasible and that there are not congenital flaws in socialism that lead it to dictatorship.

The word socialism has been in existence for almost 200 years and generally it has meant the promotion of common ownership and the abolition or limitation of markets and private property. There have been attempts to change this meaning but they have largely failed.

Love, care and cooperation

Socialism raises the moral flag because it claims to be the creed of love, care and cooperation. By contrast, it is argued, capitalism and markets encourage selfishness and greed.

Socialists point to defenders of capitalism such as Ayn Rand, who like the fictional Gordon Gekko in the 1987 movie Wall Street, promoted the view that that greed is good and altruism is evil.

Mainstream Economists are tainted too: they often favour markets and assume individual self-interest as an axiom. Socialism will subdue markets, private profits and other spurs to greed, and through common ownership create a system that encourages people to cooperate together and act unselfishly.

So the argument goes. But the evidence tells a different story. The socialists, the “greed is good” defenders of capitalism, and believers in our total selfishness are all wrong.

Theory and evidence, from Darwin onwards, show that evolution has provided humans with a mixture of selfish, cooperative and moral capacities, which can be stunted or developed according to different cultural and institutional settings.

There is also strong evidence that market or trading relationships can enhance sentiments of fairness and reciprocity. The notion that markets always make people greedy, selfish and amoral has been refuted. The moral high ground claimed by socialism is challenged not simply by the misdeeds of socialist dictators, but also by extensive evidence about human nature and how it is affected by markets or other institutional circumstances.

Small-scale societies have relied on sentiments of cooperation and moral solidarity that have evolved within groups over millions of years. Solidarity within tribes or bands helped them survive in competition over resources with their rivals. But unfortunately evolution has not disposed us to be nice to outsiders.

The modern world has built up citizen loyalty to nation states, but the downsides have been hostility to foreigners and belligerent nationalism. In the modern world, institutions are needed to encourage mutual understanding and reciprocity on a global scale.

Thomas Paine

One of these institutions is the market. There is impressive evidence that, on balance, international free trade can reduce the risks of war between nations. In larger-scale systems, despite market competition, trade can build bonds and reduce conflict.

While the complete commercialisation of family and community life could undermine trust and altruism, wider trade on a larger scale increases mutual interdependence. As Thomas Paine, Richard Cobden, John Hobson and several others argued, markets can help to build solidarity within and between nations.

Socialism as “obvious”

Yet, despite evidence to the contrary, socialism still clings to the high moral ground. For Jeremy Corbyn and many others, socialism is an “obvious” response, where caring for one another supersedes the greed and profit-seeking that is always fostered by capitalism. Little further detailed evidence is deemed necessary.

If socialism is “obvious”, then how do we explain the failure of other intelligent people to get on board? If they are not stupid, then they must be acting out of personal malice or greed. They must have sold out their principles in some way. Or they are just plain nasty.

When socialism is seen as “obvious”, its opponents are regarded as stupid or evil. Because the solution is “obvious” there can be no doubt. There is no need to look at evidence, to experiment, to seek wise counsel, or to listen to critics. Those that deny the obvious are deluded, corrupt, or in the pay of those that gain from the existing system.

Hence the claim that “socialism is obvious” encourages a remarkable intolerance of those that take a different view.

Modern economies are highly complex, and to pose any system or solution as “obvious” is a dangerous populist naivety. Precisely because something called socialism has now become popular, we are entitled to ask more precisely what it means.

Socialists compare an imaginary “obvious” world with the real world, with all its poverty, inequality and other problems. They simply assume that their imaginary world of love and cooperation will work. They assume that much can be decided democratically, ignoring the fact that it is impossible to make more than a small fraction of day-to-day decisions democratic. They ignore the problems of incentivizing work and innovation, and of ensuring functional autonomy without private property. All these problems became apparent in real-world socialist experiments in the past.

Socialism and dictatorship

A major problem with large-scale socialism is that a large concentration of political and economic power in the hands of the state undermines the economic foundations of countervailing power and empowers totalitarian forces and outcomes. These problems are illustrated by developments in Russia, China and Venezuela.

Such a centralization of economic power requires and promotes a strong executive, unburdened by checks and balances. When this concentration of economic power is achieved, it reinforces political centralization in the absence of countervailing interests and powers.

The argument that “good” leaders will avoid these pitfalls is spurious. Without checks and balances there are strong temptations to cut constitutional corners. Eventually a “good” leader will be succeeded by someone worse, who will have less scruples about abusing executive power.

The conclusion is that democracy and human rights require countervailing power and a market economy with a much smaller public sector. Countervailing interest groups, with their own access to resources and an ability to check or influence the state, are necessary to prevent democratic abuses and over-centralization.

Ignoring this powerful argument, in the face of extensive historical evidence in its support, is morally reprehensible. It betokens a moral irresponsibility in the light of ample evidence to the contrary. The socialist tenure of the moral high ground is illegitimate.

Conclusion

Instead, the moral high ground should be conceded to those who understand that:

– modern economic systems are highly complex and cannot be largely planned from the centre

– genuine autonomy requires rights to private ownership

– the existence of democracy and the protection of human rights require countervailing politico-economic power

– mixed economies have the best economic performance

– a welfare state is necessary to protect the poor and needy

– instead of chasing unicorns, we should follow the example of those capitalist countries that have the lowest levels of inequality.

 

18 February 2018

 

Published January 2018

 

Bibliography                                                     

Boehm, Christopher (2012) Moral Origins: The Evolution of Virtue, Altruism and Shame (New York: Basic Books).

Bowles, Samuel and Gintis, Herbert (2011) A Cooperative Species: Human Reciprocity and its Evolution (Princeton, NJ: Princeton University Press).

Courtois, Stéphane, Werth, Nicolas, Panné, Jean-Louis, Packowski, Andrzej, Bartošek, and Margolin, Jean-Louis (1999) The Black Book of Communism: Crimes, Terror, Repression (Cambridge MA: Harvard University Press).

Darwin, Charles R. (1871) The Descent of Man, and Selection in Relation to Sex, 2 vols (London: Murray and New York: Hill).

De Waal, Frans B. M. (2006) Primates and Philosophers: How Morality Evolved (Princeton: Princeton University Press).

Haidt, Jonathan (2012) The Righteous Mind: Why Good People are Divided by Politics and Religion (London: Penguin).

Henrich, Joseph, Boyd, Robert, Bowles, Samuel, Camerer, Colin, Fehr, Ernst, Gintis, Herbert and McElreath, Richard (2001) ‘In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies’, American Economic Review (Papers and Proceedings), 91(2), May, pp. 73-84.

Henrich, Joseph, Boyd, Robert, Bowles, Samuel, Camerer, Colin, Fehr, Ernst, and Gintis, Herbert (2004) Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies (Oxford and New York: Oxford University Press).

Henrich, Joseph, Jean Ensminger, Richard McElreath, Abigail Barr, Clark Barrett, Alexander Bolyanatz, Juan Camilo Cardenas, Michael Gurven, Edwins Gwako, Natalie Henrich, Carolyn Lesorogol, Frank Marlowe, David Tracer, and John Ziker, (2010) ‘Markets, Religion, Community Size, and the Evolution of Fairness and Punishment’, Science, 327 (5972), pp. 1480-84.

Hirschman, Albert O. (1982) ‘Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?’ Journal of Economic Literature, 20(4), December, pp. 1463-84.

Hodgson, Geoffrey M. (2013) From Pleasure Machines to Moral Communities: An Evolutionary Economics without Homo Economicus (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press).

McDonald, Patrick J. (2004) ‘Peace through Trade or Free Trade?’ Journal of Conflict Resolution, 48(4), August, pp. 211-22.

Sober, Elliott and Wilson, David Sloan (1998) Unto Others: The Evolution and Psychology of Unselfish Behavior (Cambridge, MA: Harvard University Press).

Posted in Common ownership, Democracy, Jeremy Corbyn, Labour Party, Left politics, Markets, Nationalization, Neoliberalism, Private enterprise, Property, Socialism, Soviet Union, Venezuela

January 11th, 2018 by geoffhodgson1946

 

Geoffrey M. Hodgson

 

Although education is not a public good, there are good reasons why the state should support education services.

 

As leader of the UK Labour Party, Jeremy Corbyn has opined that “education is a public good” and drawn the conclusion that it should all be provided by government and funded by taxation.

All three leaders of the UK Green Party since 2012 – Nathalie Bennett, Caroline Lucas and Jonathan Bartley – have repeated the phrase “education is a public good”. They too implied that all education should be free of charge to the user and paid for out of taxation.

Jeremy Corbyn and Caroline Lucas

Similarly, Shakira Martin, who was elected President of the UK National Union of Students in 2017, remarked: “Education is a public good and should be paid for through taxation.” These influential organizations are led by people who have not learned the lessons of Econ 101.

In addition, this inaccurate rendition of the meaning of public good is common among journalists, who also have a moral responsibility to use terms accurately.

What is a public good?

The economist and Nobel Laureate Paul Samuelson established the concept of a public good in an academic paper in 1954, although some of the basic ideas involved had been formulated previously by others.

John Stuart Mill, for example, had argued in his Principles of Political Economy that lighthouses should be built and financed by governments, because their widespread benefits could not readily be financed by passing ships, and no individual had the pecuniary incentive to construct them.

The established technical definition of a public good is a good or service that is non-rivalrous and non-excludable. Non-rivalrous means that its use or consumption by any actor does not significantly reduce the amount available for others.

Non-Rivalrous Consumption

Non-excludable means that potential users cannot practically be excluded from the use of the good or service. This definition can be confirmed by reading any reputable economics textbook.

Consider the example of street lighting. If a town council uses local tax revenues to set up and maintain lighting on its streets, then there are widespread benefits for everyone. But it is not possible to charge people individually, according to whether they benefit from the illumination.

So when elections to the town council occur, self-interested citizens will vote for candidates proposing lower taxes, assuming that they will benefit anyway from any public good provision. Why pay more taxes when the lighting is free at the point of use? Self-interested consumers will try to hitch a free-ride. The outcome is that the street lighting will be underfunded, while everyone would prefer streets that are well-lit.

Free Riders

Samuelson’s argument was popularized by John Kenneth Galbraith in his 1958 book The Affluent Society. Therein Galbraith argued that vital public goods would be under-provided in a market system: there could be the coexistence of “private opulence and public squalor”. The combined efforts of a revered mainstream economic theoretician and of an astute and inventive populariser of economic wisdom helped to pave the way for a wave of interventionist policies in the US and other developed economies.

Do public goods necessitate public provision?

After this action came the reaction. In a 1974 article Ronald Coase (another Nobel Laureate) argued that many early lighthouses in England were privately constructed and financed by tolls at the ports. In fact, an emblematic example of a public good had often been financed privately. Hence “economists should not use the lighthouse as an example of a service which could only be provided by government”.

Ronald Coase

This and other interventions led to a widespread reaction against the Samuelson-Galbraith view that public goods necessarily require public provision or public financing.

It has been pointed out that radio and TV broadcasts and open-source computer software are also public goods. Yet both are often provided by private companies. Private radio and TV broadcasters finance their broadcasts by advertising.

Computer companies sometimes make software readily available to encourage use of their computers, for which the software was designed. The software is given away to help sell the hardware, or there is a charge for support services for software users.

Whether they are desirable or not, in principle there are many possibilities for private provision of public goods. In reality there are numerous cases where the state franchises out the provision of goods or services to private contractors. Such provision could include public goods. In these cases, public financing remains, but provision is private.

The claimed advantages of private franchising would include the introduction of an element of competition between potential franchisees, and the possibilities of efficiency gains through well-focused, relatively autonomous private providers. But here again the proof of the pudding is in the eating. Many public franchising operations have failed to deliver the promised gains. Others have been more successful.

Accordingly, we end up with a pragmatic rather than a doctrinaire conclusion. Economic systems are complex, with varied, interconnected components. Theory simplifies, and does not catch all the interactive effects. Theory has continuously to be appraised in the light of empirical experience. So far it is clear than the existence of a public good does not necessarily imply that it has to be provided by government, just as there is no compelling case that its private provision will also be superior.

Misunderstanding the meaning of a public good

Careful, rational discussion of the issues surrounding vital debates over public and private provision is not simply impeded by the prevalence of opposing ideological extremes. There is also a growing and prominent disrespect for the careful use of the terms that have been established by scholars in this area.

Combinations of sloppiness and ignorance threaten the utility of key terms. They engender ambiguity, degradation and ultimate uselessness. This has already happened with swear-words such as neoliberalism. It is hoped that it does not happen with cheer-words such as public good.

A prominent misunderstanding of “public good”, is that it means “a good that can only, or should only, be provided by government”. But this conflation of public good with public provision is mistaken.

Another, even cruder, misunderstanding is that “public good” means “good for the public”. While anyone who has taken Econ 101 should spot this error, it is nevertheless widespread. Speakers sometimes give their error away when they give relative stress the “good” in the phrase, as if “good” had the meaning of virtuous or worthwhile.

Yet in the correct definition of “public good” the second word takes another commonplace meaning, denoting a possession, or an item of commerce. This second meaning is found in the pledge “with all my worldly goods I thee endow” in the Book of Common Prayer or in “the goods train went through the station”. Bad things, like tobacco, heroin, cocaine, nuclear bombs and personnel mines, are also goods in this sense.

Is education a public good?

First assume that the claims of Corbyn, Lucas and others were true: education is “good for the public” and it should be funded out of taxation, and maybe even provided by a publicly-owned enterprise.

Many additional things are “good for the public”, including clothing, food and housing. By the same logic, these “goods” should all be funded out of general taxation as well, and distributed without further charge to their users. Influential politicians thus suggest that everything that serves basic needs should be financed, and possibly distributed, by the state. The market would simply be left for luxuries. Their logic implies a state-run economy of which Stalin and Mao would be envious.

Second, even if education were a public good (by the Econ 101 definition) then this would not imply that it should be paid for out of taxation. As noted above, free radio and TV broadcasting is generally a public good, but little of it is paid out of taxation, and it would be difficult to make the case that it should be (unless we fancy a totalitarian state that does all the broadcasting and curtails all private radio and TV stations).

Third, while observing the Econ 101 definition of a public good, note that education is generally a rivalrous rather than a non-rivalrous service. Education services require resources, including buildings, infrastructure, equipment and trained teachers. Additional students generally require additional resources. (Although in some cases the marginal cost is low, such as with mass-distributed online courses.) Consequently, education provision is generally rivalrous.

Fourth, again with an eye on the Econ 101 definition, note that education services are mostly (but not entirely) excludable. Schools and universities can readily prevent other people from attending, while it is much more difficult to prevent any passing mariner from observing the light from a lighthouse.

Technically, by the standard definition, most education services are private goods, because their provision is both excludable and rivalrous. But there is no necessary reason why all private goods should be privately provided. The Econ 101 distinction between public and private goods does not readily or directly correspond with public and private provision respectively.

The parts of an education system that are actually or virtually non-rivalrous, such as massive online courses, are technically club goods. Like radio and TV broadcasting they can be provided publicly or privately.

Positive externalities in education

When students receive their qualifications, they often have advantages over others on the jobs market. Hence they reap benefits. Nevertheless, with education there are strong positive spill-over effects.

Educated people help to raise the levels of public culture and discourse, and can pass on some of their skills to others. Educated people are also vital for a healthy democracy. But none of this undermines the general excludability of education services.

The spill-over effects are important, and relate to the question of public versus private provision. Another word for a spill-over is an externality: this is a cost or benefit that affects someone who did not choose to incur that cost or benefit.

Externalities can be positive or negative. Examples of negative externalities are pollution or congestion caused by motor cars. Because a driver will suffer only a fraction of the overall pollution and congestion costs of making a car journey, negative externalities impose costs on others without penalty for the car user. By standard assumptions, unless compensatory measures are taken, car use will be excessive and suboptimal.

Arthur Pigou

The theory of externalities was developed by Arthur Pigou, who argued that in the presence of negative externalities some public authority should intervene to impose taxes or subsidize superior alternatives. By such measures, motor car traffic could be reduced and pollution reduced. Inversely, services such as education with positive externalities should receive subsidies or be provided free, to encourage more extensive participation in these activities.

In a famous 1960 paper, Coase dramatically changed the terms of debate with his argument that if transaction costs were zero, then all the extra costs or benefits could be subject to contractual arrangements and the externalities would disappear. For example, if the owner of every dwelling near a road had property rights in the surrounding segment of the atmosphere, then the driver of a passing and polluting car could be sued for degradation of that property. The pollution externality would be internalized.

Coase’s intention was to underline the implications of transaction costs: the existence of externalities is dependent on positive transaction costs. Coase accepted that in many cases it would be impossible to avoid the transaction burden. For example, enforcing rights in the surrounding atmosphere to curb pollution may be too expensive.

Many pro-market zealots ignored or underestimated the transaction-cost aspect of Coase’s argument. Instead, their foremost claim was that Coase had undermined the case of public intervention based on externalities.

Consider the positive externalities of education. It would be impossible or socially destructive for every educated person to charge a fee to participants in an intellectual dinner conversation, or to invoice the government for making a well-informed choice when casting his or her vote in the ballot box. The internalization of these positive externalities by such means is impossible or undesirable.

The issue of missing markets is relevant here, as I discuss in my book Conceptualizing Capitalism. There are missing markets for future employment because to introduce such complete markets would be tantamount to slavery. The prohibition of slavery means that we cannot have complete futures markets for labour. This means not simply the existence of transaction costs but the enforced absence of transactions, which would be equivalent to making the transaction costs infinite.

Consequently, because of these missing markets, education and training will be undersupplied through markets under capitalism. There is a rationale for some kind of public intervention. Of course, government intervention has its problems too. We must experiment, and compare real-world cases, not idealized models.

Mixtures of public and private provision

There are mixtures of public and private provision of education in most countries. The majority of schools in most countries are run by local government. At the other extreme, most on-the-job training is done by private companies.

The US has a mixture of private and state universities, although both types receive substantial public funds. In the UK most universities receive public money for teaching and research, and in return they are obliged to conform to a myriad of government regulations. They also receive student fees and research grants from the private sector.

Technically all UK universities are private (corporate) entities: they have a legal status equivalent to charities (which are also not-for-profit private corporations). By contrast, in several major countries in Continental Europe and elsewhere, most universities are integrated into the state machinery and all their employees are civil servants. This is not the case in the US or the UK. This international diversity of models provides the opportunity to compare different systems and determine what works best, taking account of the different contexts in which they operate.

J’accuse: abetting Trumpism

A growing danger in world politics – including in the UK and US – is the wilful rejection of the ideas of experts, of the academic community and of science in general. Hence President Donald Trump denies the science of climate change and cries that it is a hoax. UK Cabinet Minister Michael Gove says we listen too much to experts.

This growing disrespect for science and expertise is moving democracies toward an extremely dangerous place, where the general public have increasing difficulty segregating lies from truth. This danger could be called Trumpism.

I do not put Jeremy Corbyn or Caroline Lucas in the same box as Trump. Far from it. For example, they share none of his obnoxious racism and sexism. But Corbyn and Lucas are disrespecting experts and ignoring bits of science nevertheless.

We need a well-informed public conversation concerning the best arrangements for the (public or private) provision of basic needs and services, including education, health, housing and transport. Such a debate is much more difficult if leading public figures, including the leaders of major political parties, promote incorrect and misleading versions of highly relevant analytical terms.

Donc, je les accuse – of abetting the Trumpist degeneration of public discourse with their false claim that “education is a public good”. They should acknowledge the error and make a correction.

 

11 January 2018

 Minor edits: 12-13 January 2018

 

Published January 2018

Appendix

Note 1: As with many such definitions, there are few, if any, pure cases. So a public good refers to a good or service where consumption by one person does not significantly reduce the amount available for others, and where potential users cannot practically or generally be excluded from the use of the good or service.

Note 2: There is a widespread assumption that actors act wholly out of self-interest. But from evidence with humans in laboratory experiments and elsewhere, we know now that this is untrue. People will often agree to pay for public goods, even if they know that they have the alternative of free-riding on the contributions of others. One can conjecture, however, that numbers of people are important. We know from the work of Nobel Laureate Elinor Ostrom (1990) and others that cooperation is possible over the use of non-excludable resources, even when usage is rivalrous and it can degrade the resource. (Non-excludable resources that have rivalrous usage are defined as common-pool resources: they are not public goods.) But Ostrom’s examples highlight the role of face-to-face interaction and the building of trust. But it is doubtful that these mechanisms can be expanded to large-scale societies, at least without additional systems of control and enforcement.

 

Bibliography                   

                              

Bennett, Nathalie (2017)) “#Nathalie4Sheffield – Issues: Young People”. https://www.natalie4sheffield.org/issues/young-people .

Coase, Ronald H. (1960) ‘The Problem of Social Cost’, Journal of Law and Economics, 3(1), October, pp. 1-44.

Coase, Ronald H. (1974) “The Lighthouse in Economics”, Journal of Law and Economics, 17(2), October, pp. 357-76.

Galbraith, John Kenneth (1958) The Affluent Society (London: Hamilton).

Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press).

Martin, Shakira (2017) “National Union of Students Responds to PM Review of Student Funding”, NUS Connect, 1 October. https://www.nusconnect.org.uk/articles/national-union-of-students-responds-to-pm-review-of-student-funding .

Mill, John Stuart (1871) Principles of Political Economy with Some of their Applications to Social Philosophy, 7th edn. (London: Longman, Green, Reader and Dyer).

Ostrom, Elinor (1990) Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press).

Pigou, Arthur C. (1920) The Economics of Welfare (London: Macmillan).

Rampen, Julia (2016) “Caroline Lucas and Jonathan Bartley: ‘The Greens can win over Ukip Voters too’“, New Statesman, 21 October. https://www.newstatesman.com/politics/staggers/2016/10/caroline-lucas-and-jonathan-bartley-greens-can-win-over-ukip-voters-too .

Samuelson, Paul A. (1954) “The Pure Theory of Public Expenditure”, Review of Economics and Statistics. 36(4), pp. 387-9.

Stretton, Hugh and Orchard, Lionel (1994) Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government (London and New York: Macmillan and St Martin’s Press).

Walker, Peter (2017) “Jeremy Corbyn: UK Firms Must Pay More Tax to Fund Better Education”, The Guardian, 6 July. https://www.theguardian.com/politics/2017/jul/06/jeremy-corbyn-uk-firms-must-pay-more-tax-to-fund-better-education .

 

Posted in Caroline Lucas, Common ownership, Donald Trump, Green Party, Jeremy Corbyn, Labour Party, Left politics, Liberalism, Markets, Nationalization, Neoliberalism, Politics, Private enterprise, Property, Right politics

October 11th, 2017 by geoffhodgson1946

 

Geoffrey M. Hodgson

 

If you wish to cultivate an image of being principled and politically pure, then avoidance of policy details, plus a good dose of historical ignorance, can be very useful. You may conjure up figures from past history and recruit them to the cause of your choice.

Perhaps unwittingly, Jeremy Corbyn acquired these methods from his mentor Tony Benn. Their shared cause, or course, is socialism. But its details must be kept vague and the statist pill must be sugared with ample use of the word “democratic”. Not too much thought must be applied to how the “democratic” bit works in practice.

Tony Benn and Jeremy Corbyn

Ignorance of history is an asset. You find some radical heroes who have opposed injustice, inequality, and the status quo. Don’t go into too many details. It might prove embarrassing. Simply suggest that because of their radical energy these radicals must have been, or they were on the way to becoming, “democratic socialists”.

It’s even better if you can go back in history long before there was any movement calling itself socialist – long before the word was invented. Then you can do a bit of hand-waving with phrases like “their ideas were moving towards democratic socialism” or “what would they think today?” with less fear of contradiction.

After all, if they were true and principled radicals, then they must have been moving in that direction. Socialism is obvious. Isn’t it?

The English Civil War

The English Civil War of the 1640s is a good hunting ground for your heroes. In a book published in 1980, the veteran Labour Party MP Fenner Brockway declared the seventeenth-century Levellers and Diggers as Britain’s First Socialists. His friend Tony Benn had already located them there. Jeremy Corbyn followed their cue.

The English Civil War erupted in 1642, as a conflict of authority between the King and Parliament. King Charles I claimed to rule by divine right, deriving his sovereignty from religion. By contrast, Parliament professed to represent the will of the people. But only a small minority of males had the right to vote in parliamentary elections. Women had no vote.

Parliamentarians and Royalists warred throughout Britain until the defeat and execution of Charles I in 1649 and the installation of a republic under Oliver Cromwell.

The Civil War stimulated seminal debates concerning power and authority. There was a growth of dissident Protestant groups, who saw the established Protestant Church of England as too hierarchical and conservative.

These widening schisms forced the question of the legitimation of government authority onto the immediate agenda.

Political ideas of the Levellers

Prompted by debates over what to do with the monarchy and the King after his defeat, a major political movement developed within the Parliamentarian army. They were called Levellers.

Participants in the earlier anti-enclosure uprising in the Midlands in 1607 had been called “levellers” because they levelled hedges and fences.

The Levellers of the 1640s were given this nickname by their enemies, and they repeatedly repudiated the description. They often protested that they were not promoting the “levelling” of landed estates or any general redistribution of property.

The Levellers emphasized popular sovereignty, an extended male franchise, equality before the law, and religious tolerance. They believed in natural and inalienable rights, bestowed by God.

The inalienability of these rights put limits on the powers of any majority in Parliament, because democracy cannot stifle inalienable rights. But otherwise they were strong supporters of democracy.

While they defended private property, they railed against undemocratic tyranny. Hence their position was different from some modern libertarians who, while generally supporting liberty, argued on occasions that if private property rights were threatened, then democracy might justifiably be replaced by temporary dictatorship.

From 1647 to 1649 the Levellers published a series of manifestos entitled The Agreement of the People. The Levellers were the first political movement in Europe to call for the separation of church and state and for a secular republic.

Authority would be vested in the House of Commons rather than in the King or the House of Lords. Specified “native rights” were declared sacrosanct for all Englishmen: freedom of conscience, freedom of worship, freedom from impressment into the armed forces, and equality before the law.

The Levellers argued for a constitution based upon an extended manhood suffrage and biennial Parliaments. But they did not advocate female suffrage. And as C. B. Macpherson noted:

“the Levellers consistently excluded from their franchise proposals two substantial categories of men, namely, servants or wage-earners, and those in receipt of alms or beggars.”

Oliver Cromwell and the Levellers

The Levellers were influential in Cromwell’s army. At a rendezvous near Ware in Hertfordshire on 15 November 1647, two regiments carried copies of the Agreement of the People and stuck pieces of paper in their hat-bands with the Leveller slogan “England’s Freedom, Soldiers’ Rights”.

With swords drawn, Cromwell and some of his officers rode into their ranks and ordered them to take the papers from their hats. One of the soldiers was swiftly executed for mutiny.

Putney Debates 1647

Siding with the Levellers in the Putney Debates of 1647, the parliamentarian Colonel Thomas Rainsborough argued that both the rich and poor had a right to a decent life, and that “every man that is to live under a government ought first by his own consent to put himself under that government”.

Burford Churchyard Memorial

But in 1649, Rainsborough was killed, Leveller-led army mutinies in London and Oxfordshire were crushed, and Cromwell effectively destroyed the Levellers as a political force.

John Lilburne

John Lilburne, the Leveller leader, came from County Durham. He was originally a Puritan and he later converted to Quakerism. Arrested in 1637 for circulating unlicensed pamphlets, he was fined £500, whipped, pilloried, and imprisoned.

John Lilburne

During the Civil War, Lilburne served as an officer in the Parliamentarian army. For his agitation against the Cromwellian authorities he spent several more years in prison.

Lilburne coined the term “freeborn rights”, defining them as rights with which every human being is born, as opposed to rights bestowed by government or by its laws. He advocated an extended male suffrage, equality under the law and religious tolerance.

Asked in a 2015 interview with the New Statesman to identify the historical figure he most admired, Corbyn named John Lilburne. In a talk in the same month, Corbyn wrongly hinted that Lilburne was a socialist. In fact, Lilburne was a liberal, although that political term was not in use at the time.

Lilburne explained in 1647 that the term “Leveller” applied to him and his party, only in the sense of equality under the law, namely their “desire that all alike may be levelled to, and bound by the Law”.

But much later their socialist admirers assumed that they wished to “level” all property as well. There is no basis for this supposition in Leveller writings.

The Levellers and common ownership

The Levellers declared that rights to liberty and property were innate to every person. Individuals had rights over their thoughts and bodies, without molestation or coercion, and everyone had the natural right to own private property. The Levellers did not promote common ownership, except when it resulted from the voluntary pooling of the property of everyone involved.

Generally the Leveller leaders did not campaign against the enclosure of common lands. Instead they upheld legally-acquired rights of property. The Marxist historian Christopher Hill pointed out that the Levellers “sharply differentiated themselves from the Diggers who advocated a communist programme”.

A defence of private property and a rebuttal of “levelling” appears in the final, May 1649 version of the Leveller Agreement of the People, in a passage addressed to Members of Parliament:

“We therefore agree and declare, That it shall not be in the power of any Representative … [to] level men’s Estates, destroy Propriety, or make all things Common.”

Even if representatives in the legislature were democratically elected, they did not have the right to overturn individual rights to property.

Lilburne’s arguments against common ownership

Likewise, Lilburne was repeatedly obliged to rebut the charge that the Levellers desired to “level” all property. He wrote in 1652:

“In my opinion and judgment, this Conceit of Levelling of property … is so ridiculous and foolish an opinion, as no man of brains, reason, or ingenuity, can be imagined such a sot as to maintain such a principle, because it would, if practised destroy not only any industry in the world, but raze the very foundation of generation, and of subsistence or being of one man by another.”

Lilburne then explained why this was so:

“For as industry and valour by which the societies of mankind are maintained and preserved, who will take the pains for that which when he hath gotten is not his own, but must be equally shared in, by every lazy, simple, dronish sot? Or who will fight for that, wherein he hath no interest, but such as must be subject to the will and pleasure of another, yea of every coward and base low-spirited fellow, that in his sitting still must share in common with a valiant man in all his brave noble achievement?”

Lilburne concluded:

“… those men in England, that are most branded with the name of Levellers, are of all in that Nation, most free from any design of Levelling, in the sense we have spoken of.”

As well as rebutting the charge of “levelling”, Lilburne here defended the institution of private property in terms of its incentives for “industry” and maintaining “subsistence”. If everything were “equally shared”, then the “lazy” would benefit as much as those “who will take the pains”, thus diminishing incentives for individual effort. Incentives to work hard would be lessened.

The 1/n problem

With the above words, Lilburne pointed to the crucial problem of scale in all communistic ventures.

It is a version of what economists call “the free-rider problem”. As the size of the community increases, the free-rider problem can be exacerbated. If the number of people in a working community that shares its income is n, then individual incentives to contribute to community output are very roughly in proportion to 1/n.

As n increases, the extra effort of any single individual is rewarded less, because the output from extra effort is shared between n people. We may call this the 1/n problem. As far as I am aware, Lilburne was the first person to identify it.

Crucially, at low values of n, such as in a family or in a small cooperative, incentives to work hard can be enhanced by face-to-face mechanisms involving reciprocity, trust, commendation, satisfaction, shame, scorn or punishment.

These social mechanisms are effective because they have evolved in human tribes over millions of years. Elinor Ostrom’s case studies of the community management of common pool resources show what is feasible in more recent settings.

Elinor Ostrom

Hence some form of socialism may work on a small scale. But at higher levels of n these interpersonal mechanisms become relatively less effective. Other incentives, involving money and property, are required.

The Levellers on free trade and (state) monopolies

The Levellers advocated free trade. For them, the basic division in society was not between workers and owners of property: it was between the rich and influential – who profited from (state and other) monopolies and government favours – and the rest of the people. A clause in the May 1649 version of The Agreement of the People tells Parliament:

“That it shall not be in their power to continue or make any Laws to abridge or hinder any person or persons, from trading or merchandizing into any place beyond the Seas, where any of this Nation are free to trade.”

Leveller leaders Lilburne, Richard Overton and William Walwyn attributed the existence of low wages to monopolies, restrictions on trade, and excise taxes.

In 1652 Walwyn presented to the Parliamentary Committee for Trade and Foreign Affairs a defence of free trade against the Levant Company, urging the abolition of monopolies and trade restrictions. Walwyn saw free trade as a common right, conducive to common good.

The Levellers and Diggers contrasted

Yet the myth that the Levellers promoted common ownership persists. Tony Benn often mentioned the Levellers favourably, but he ignored their strong commitment to private ownership, and instead suggested that their arguments pointed to “common ownership and a classless society”.

An entertaining four-part television series set during the English Civil War entitled The Devil’s Whore (released in North America as The Devil’s Mistress) has Rainsborough speaking in favour of common ownership, without any objection from Lilburne.

There is no historical evidence to sustain such depictions. They are fantasies promoted by Benn, Brockway, Corbyn and others.

By contrast, the Diggers opposed private property. From 1649-1650 groups of Diggers squatted on several stretches of common land in southern England. They set up communes whose members worked together on the soil and shared its produce. The Digger leader Gerrard Winstanley published a series of pamphlets advocating common ownership of land.

The Diggers

Winstanley regarded the institution of property as a limitation of the freedom of others. Land was bestowed to all by God. Unlike the Levellers, Winstanley criticized trade, because it led to cheating and discontent. He envisioned an agrarian society, in which all goods would be communally owned, and all commerce and wage labour would be outlawed.

Hence the Levellers and Diggers had very different ideological positions. The Levellers advocated individual autonomy, private ownership and free trade. Although they appealed to religion, they saw democratic legitimation as the source of government authority. By contrast, the Diggers proposed a rigid, small-scale, religiously-inspired, agrarian communism.

Conclusion

The Levellers were political theorists as well as activists. They helped to develop the intellectual foundations of Enlightenment liberalism.

Unlike later liberals such as Thomas Paine, they did not advocate a welfare state. Unlike John Stuart Mill they did not call for female suffrage. Unlike twentieth century liberals such as John A. Hobson, John Maynard Keynes and William Beveridge they did not advocate substantial state regulation in a mixed capitalist economy.

But the Levellers were liberals and democrats nevertheless. Their arguments against large-scale socialism remain pertinent today.

 

11 October 2017

This book elaborates on some of the political issues raised in this blog:

Published by University of Chicago Press in January 2018

 

Bibliography                                                 

Benn, Tony (1976) ‘What would the Levellers do Today?’ 15 May. https://seagreensociety.wordpress.com/tag/levellers-day/.

Brailsford, H. N. (1961) The Levellers and the English Revolution (London: Cresset Press).

Brockway, Fenner (1980) Britain’s First Socialists: The Levellers, Agitators and Diggers of the English Revolution (London: Quartet).

Hampton, Christopher (ed.) (1984) A Radical Reader: The Struggle for Change in England, 1381-1914 (Harmondsworth: Penguin).

Hill, Christopher (1975) The World Turned Upside Down: Radical Ideas During the English Revolution (Harmondsworth: Penguin).

Hodgson, Geoffrey M. (2017) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press, forthcoming).

Macpherson, Crawford B. (1962) The Political Theory of Possessive Individualism: Hobbes to Locke (Oxford: Oxford University Press).

Manning, Brian (1976) The English People and the English Revolution, 1640-1649 (London: Heinemann).

Morton, A. L. (1975) Freedom in Arms: A Selection of Leveller Writings (London: Lawrence and Wishart).

Ostrom, Elinor (1990) Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press).

Otteson, James R. (ed.) (2003) The Levellers: Overton, Walwyn and Lilburne – Works by these and by other British Levellers (Bristol: Thoemme Press).

Robertson, D. B. (1951) The Religious Foundations of Leveller Democracy (New York: Kings Crown Press, Columbia University).

Woodhouse, A. S. P. (ed.) (1951) Puritanism and Liberty: Being the Army Debates of 1647-9 (Chicago: University of Chicago Press).

Posted in Common ownership, Democracy, Jeremy Corbyn, Left politics, Liberalism, Socialism, Tony Benn

October 1st, 2017 by geoffhodgson1946

 

Geoffrey M. Hodgson

 

Ken Loach was a prominent celebrity at the 2017 Labour Party conference, being photographed in the main conference hall and elsewhere in close proximity to Jeremy Corbyn. But it seems that Loach was not then a member of the Labour Party. Instead he was a recent founder of a rival political party – Left Unity – which was set up to oppose Labour.

This is not a personal attack on Loach. Generally, he is a dignified and caring person. He is entitled to his views, but they are dogmatic and impractical. The question is why Labour now welcomes with open arms a member of a rival political party, with views far more extreme than those that Labour has traditionally professed.

What does Loach’s invitation tell us about the state of the Labour Party today? We need to look at his political views. We need to understand the politics of a celebrity that Labour now chooses to put on public display.

Ken Loach’s contributions to film and to public debate

Loach is a brilliant film director and his work has rightly received global recognition. Two of his films received the Palme d’Or at the Cannes Film Festival. He has also received BAFTA awards.

His best work shows us in moving, dramatic detail how working class people can be trapped by the system, suffering poverty and the tragic loss of their human potential. Such were the personal and emotional stories in Cathy Come Home (1966), Poor Cow (1967), Kes (1969), Raining Stones (1993) I, Daniel Blake (2016) and other great films. Loach, with his gritty, realist style has awakened and re-awakened us over decades to the shamefully enduring problems of poverty, inequality, discrimination and exploitation.

Other projects by Loach are different in style. He was to direct Jim Allen’s controversial stage play, Perdition. Allen was a Trotskyist and a close friend of Loach, until his death in 1999. Presented as a courtroom drama, the play dealt with an allegation of collaboration between Hungarian Zionists and the Nazis during the Holocaust. This allegation has been strongly contested by historians.

The play was due to open at the Royal Court Theatre in January 1987, but it was cancelled 36 hours before the opening night. This same claim of Zionist-Nazi collaboration, citing the same contested sources, was repeated more recently by Ken Livingstone and it led to his suspension from the Labour Party.

From gritty realism to unrealistic politics

In contrast to the gritty realism of his working class dramas, Loach takes a less realistic line when it comes to history.

For example, Land and Freedom (1995) is set in the Spanish Civil War. The script was written by Allen. Scenes in Land and Freedom depict an ideological battle within the Republican camp. The Communist Party opposes others on the left, including anarchists and revolutionary socialists.

Against the Communist Party, Allen and Loach took the side of the revolutionary socialists calling for a socialist revolution and for the seizure of the land by the peasants. This unrealistic ultra-leftism mars the film. It brushes aside the argument that General Franco’s insurrectionary fascism would have been best fought by the broadest possible popular front, from liberals to communists.

A similar unrealism appears in The Wind That Shakes the Barley (2006). The script was written by Paul Laverty. The film is set in Ireland in the period 1919-1923. It depicts the struggle for independence and the subsequent civil war.

Again there is a sequence where key characters discuss their strategic options. Again full-blooded socialism is mooted as the only way of liberating the country, from poverty and from British tyranny.

But a socialist revolution in Ireland in 1919-23 was even less likely than one in the 1930s in Spain. Ireland was a country of small tenant farmers. It had little urban concentration or industrial development. The small urban working class was not as well organised as in Britain. Socialism had a tiny following.

A socialist revolution in these circumstances was a fantasy of the film’s director and its script writer. Again the insertion of unrealistic revolutionary socialist preaching spoils the film.

Left Unity

Left Unity founded in 2013 when film director Loach appealed for a new party to replace the Labour Party. In March 2014 Loach condemned Labour for following other parties by upholding “the importance of the market economy”. Like other governments, Labour “cuts back on public enterprise and prioritises the interests of big corporations and private companies”. Loach continued:

The demands of the competitive market are remorseless: reduce the cost of labour; privatise everything; remove protection from working people, and maintain a pool of unemployed to discipline those lucky enough to have a job. Trade unions are to be obstructed while the wealthy are courted in the hope that they will find a pliant, flexible workforce that is easy to exploit. … Labour’s … fundamental stance is limited by the same imperative: profit comes before all else. … The Labour party is part of the problem, not the solution.

Loach called on true socialists to abandon Labour and join Left Unity. More than 10,000 people supported Loach’s appeal. In 2014, the party had 2,000 members and 70 branches across Britain.

Left Unity put up ten candidates in the 2015 general election, to stand against prominent Labour figures including Andy Burnham and Harriet Harman. Left Unity also contested some local elections. There is an unintentional irony in the u-word in its name.

Rejecting social democracy

At the launch of his party’s manifesto, Loach said that Left Unity is “against the logic of the market” which he believed had “failed in every respect”.

Loach decisively rejected social democracy. Referring to Labour and other similar parties, he said that “they’re mainly social democrat parties that think you can manipulate the markets to the advantage of ordinary people”.

For Loach, such manipulation is impossible: “The market demands cheap labour, it demands labour that can be turned on and off like a tap, zero-hours contracts, short-term contracts, agency work.” For him, the market offers us no other option. Hence social-democratic reformism and Keynesian intervention are both fatally flawed.

Nationalising the supermarkets

The 2014 Constitution of Left Unity supported a mixed economy, as a transitional arrangement within an over-arching national plan. But in its 2015 General Election Manifesto, Left Unity took a much more extreme line, reflecting Loach’s absolutist anti-market views:

We need an economy run democratically … This means the principle of common ownership of all natural resources and means of producing wealth, and an end to the dominance of private financial interests such as the City of London over the economy. We stand for ‘from each according to their ability, to each according to their needs’. … We are for public ownership of the banking system, as well as all essential public utilities including transport, telecoms, energy and water companies, and the supermarkets.

Note here the common ownership of all “means of producing wealth”. There are no exceptions. Everything, from banks to supermarkets, would be publicly owned. Marx would have liked that.

Lenin would have also liked the suggestion that this fully planned economy should be run democratically. Lenin argued this in his State and Revolution in 1917. But as soon as his Bolsheviks came to power they had to abandon the idea. Such ultra-democracy is totally impractical.

A quick leap to the higher phase of communism

But Marx might have criticised the Labour Unity Manifesto’s conflation of long and short-term aims. In his Critique of the Gotha Programme, Marx wrote that “from each according to his ability, to each according to his needs” could apply only in

a higher phase of communist society, after the enslaving subordination of the individual to the division of labour … and … after labour has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly

By contrast, Loach and Left and Unity put “to each according to their needs” alongside immediate aims in an election manifesto. It seems that they wanted to leap to “a higher phase of communism” right away.

Loach and Left Unity now want to abolish all markets and all private ownership of the means of production. This went much further than Corbyn and his team, who have argued for a “mixed economy”. But Corbyn’s embrace of Loach and his views might suggest that they share the long-term view that all markets and private enterprise should be abolished.

Even in Marxist terms, the position of Loach and Left Unity on markets is rather crude. Markets have existed for thousands of years. Marx never saw them as the key defining feature of capitalism – instead, for him, it was the system of wage labour. Following Joseph Schumpeter, I would also stress the role of finance.

Resemblances with pro-market economics

But remarkably, the views of Loach and Left Unity replicate some arguments by extreme pro-market economists. Against a majority view, economists such as Ludwig von Mises and Friedrich Hayek argued that a mixed economy cannot work. As von Mises put it in 1949:

The market economy or capitalism, as it is usually called, and the socialist economy preclude one another. There is no mixture of the two systems possible or thinkable; there is no such thing as a mixed economy, a system that would be in part capitalist and in part socialist.

Left Unity seems to follow the same logic as these uncompromising, pro-market economists. By contrast, many economists accept that there is a case for some judicious state regulation and intervention in a market economy, to deal with problems such as externalities and market instability.

In my book Conceptualizing Capitalism I go further, to argue that the state is necessary to part-constitute the legal framework of a capitalist economy. Hence some state intervention in a market economy is unavoidable. Given this, the practical question for progressives is where and how it should intervene. The literature on varieties of capitalism shows that many different outcomes are possible within capitalism, and defects such as inequality can be significantly diminished.

In particular, Loach and Left Unity overlook the successes of social democracy, particularly in Northern Europe. During the twentieth century they have built up strong welfare states, redistributed some wealth and regulated markets.

Of course, there have been strong and sustained attempts to reverse these achievements. But it is much more realistic to defend social-democratic gains against the free-marketeers than to urge a quick leap to the higher phase of communism.

Against NATO – for a boycott of Israel

The foreign policy of Left Unity is “anti-imperialist”. Like Corbyn, it calls for Britain to quit NATO. But unlike Corbyn, Left Unity does not support Brexit.

Left Unity calls for “a campaign of boycott, divestment and sanctions against Israel until it complies with its obligations under international law”. It does not call for boycotts or sanctions against other countries that break international law, such as Russia and North Korea, among others.

Loach supports the boycott of Israel, calling it an “apartheid regime”. Before his election as leader, Corbyn also pushed for boycotts of Israel. This selective targeting of Israel now seems a widespread opinion among Labour members, but it is not official party policy.

Rather than accepting that anti-Semitism as a problem within Labour, Loach argues that the claims are false: those that raise the issue are trying to undermine Corbyn’s leadership.

Loach is also noted for his support of the controversial founder of Wikileaks, Julian Assange. It has been alleged that Wikileaks has received support from Russian agents, and that it acted to destabilise the candidacy of Hillary Clinton in the 2016 US presidential election.

Supporting ISIS

Another remarkable incident tells us not so much about Loach, but about some of the people who join Left Unity.

In a 2014 conference of Left Unity, a minority proposed support for the so-called Islamic State in Iraq and Syria (ISIS). True to their Leninist credentials, they argued that the left “has to acknowledge and accept the widespread call for a Caliphate among Muslims as valid and an authentic expression of their emancipatory, anti-imperialist aspirations.” They supported ISIS as a “stabilising force” with “progressive potential”.

The motion was heavily defeated. Supporting ISIS is not Left Unity policy. But the fact that anyone could make such a proposal, particularly while describing themselves as left and socialist, is deeply shocking. As Benjamin Jones argued: “this is just the latest flirtation in a long courtship between elements of the British far left and the Islamist far right.”

A warm welcome

In the 2015 General Election, Left Unity’s parliamentary candidates received a pitiful average of 288 votes – all losing their deposits. Later that year, after Corbyn’s election as Labour leader, Left Unity voted against affiliation to the Labour Party but resolved not to put up any more candidates against Labour.

Because of Corbyn’s leadership victory, several hundred members resigned from Left Unity and joined Labour. Left Unity is now a depleted party, without a viable independent strategy.

It seems that Labour is now welcoming their members, ignoring their extremist and unrealistic views and their fervent opposition to social-democratic reform. This is a suspicious unity of a dubious left.

 

1 October 2017

Minor edits – 3, 5 Oct 2017

 

This book elaborates on some of the political issues raised in this blog:
Published by University of Chicago Press in January 2018

 

Bibliography                                

Cohen, Nick (2007) What’s Left? How the Left Lost its Way (London and New York: Harper).

Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).

Hodgson, Geoffrey M. (2017) Wrong Turnings: How the Left Got Lost (Chicago: University of Chicago Press, forthcoming).

Mises, Ludwig von (1949) Human Action: A Treatise on Economics (London and New Haven: William Hodge and Yale University Press).

Rich, Dave (2016) The Left’s Jewish Problem: Jeremy Corbyn, Israel and Anti-Semitism (London: Biteback).

 

Posted in Common ownership, Democracy, Jeremy Corbyn, Karl Marx, Labour Party, Left politics, Markets, Nationalization, Private enterprise, Socialism, Tony Benn