Critical notes on the “Manifesto of the Initiative for Democratic Socialism” (MIDS)

This is a critique of the Manifesto of the Initiative for Democratic Socialism (Slovenia)

The ideological dominance of capitalism as the only feasible mode of production is coming to an end. In the second half of the 1970s, when rapid and stable economic growth came to a halt in the ‘developed’ world, the forces of capital intensified their attack on workers’ rights that has not ceased to this day. The foundation on which the ideological domination of capitalism was based had started to wither away, and the advocates of capitalism increasingly justified its existence by turning to the mere fact of its existence. The fact that unlike really existing socialisms, capitalism has not collapsed – although it had to be rescued by fascist gangs and military juntas many times – underpinned the claim that there simply is no alternative and that we must accept any sacrifice in the name of capital accumulation. If growing inequality, poverty of the majority of the world population, terror of dictators and devastation of nature are the price to be paid for capital to flourish, then so be it.

The passage above is well phrased in general, however it misses what has been a key ideological point of right wing argument since the 90s, that only capitalism is compatible with democracy, and that the spread of capitalism will lead to the spread of liberal democracy. Explicit support for military junta’s has been much less common since the 90s. So when confronting the post soviet ideology of the upper classes reference to military junta’s misses the main target.

Attempts to resolve the current crisis confirm that in capitalism the economy does not serve to enhance the quality of life, but quite the opposite, human life serves to expand capital accumulation.

That passage is good, but it goes on to delve into what is almost a conspiratorial view of the economy:

The crisis is not an exception in the functioning of capitalism; it is not a disturbance in the self-regulation of markets, or a consequence of a sudden proliferation of lazy, corrupt, insufficiently entrepreneurial and uncompetitive individuals. On the contrary, the crisis is a tool by which the capitalist economy reinforces its domination over humanity and nature.

To say that something is a tool implies that it is something under the deliberate control of a tool user. The crisis of 2008 onwards was not generally foreseen by either governments nor financial institutions. It came about due to contradictions in the mode of accumulation that had existed in the preceding period. As such it was an exception to the normal functioning of capitalism. One of the first symptoms of the crisis was the failure of the Northern Rock bank following the first run on a UK bank in 150 years. The collapse of Lehman Brothers was also exceptional. The the straw man put up in the text, ‘that it was not a disturbance in the self regulation of markets’, fails to target the much more common argument, that the crisis was due to the weak regulation of the financial markets. The second straw man, that it was caused by ‘a sudden proliferation of lazy, corrupt, insufficiently entrepreneurial and uncompetitive individuals’ is just silly. No politician or economic commentator claims that it was due to that.

What we are dealing with is not an economic crisis, but a period in which the normal functioning of the capitalist economy demands that the final remnants of democratic control, workers’ rights and public services be abolished for the sake of profit.

This style of rhetoric, not A but B, is unfortunately common in left propaganda, and allows the authors to confuse two utterly false statements together in meaningless mess. The first false statement is that there is not an economic crisis. By any reasonable measure, Europe and America have gone through a severe economic crisis which has raised unemployment, reduced output, and reduced living standards for large parts of the population. So we do have an economic crisis, no ifs or buts. So on to their but part: “the normal functioning of the capitalist economy demands that the final remnants of democratic control, workers’ rights and public services be abolished for the sake of profit”.

Is this true?

What does it mean?

Are they saying that capitalist economy is only possible without any democratic controls, public services or worker’s rights?

If so they are echoing the views of the of the propertied classes in America and perhaps in other countries¹. Page, et. al, found that a majority of wealthy Americans did not think that the government must see that no one is without food, clothing, or shelter. Nor did they think that the minimum wage should be high enough so that no family with a full-time worker falls below the official poverty line nor did they think that the government should provide a decent standard of living for the unemployed. It is also no surprise that they overwhelmingly disagreed with the idea that government should redistribute wealth by heavy taxes on the rich, which 52% of the general public agreed with.

But why should we take the political views of the wealthy to be the truth?

The claim made in MIDS is that the most conservative elements of the wealthy are right, the continued existence of a capitalist economy requires a reduction in democracy, a cut back on public social services and a reduction in worker’s rights. But the wealthy thought this way back at the start of the 20th century before the welfare state came into existence, but we know that the capitalist economy in Europe grew well during the mid 20th century when worker’s rights and welfare rights were being extended. What has happened since then to make this impossible?

What changes have occured in Europe that mean that the interests of the propertied classes can now have such a dominant effect on all social policy?

Unless they can concretely identify these changes they will not be able to come up with policies that would succeed in altering the political and economic direction.

these mystical forces inhabiting in financial and other markets draw their strength solely from human labour in a specific system of social production. Due to the nature of this system, which alienates individuals from each other as well as from the products of their labour, these products assume a life of their own and confront individuals as a foreign, incomprehensible and untameable force haunting us now in the form of financial derivatives, now in the form of yields on government bonds.

No, derivatives or the yields on government bonds are not ‘products of human labour’. This is a half understood regurgitation of Marx’s theory of commodity fetishism applied to a quite different phenomenon. Marx’s fetishism theory was an analysis of commodities and how they appear to the people who buy and sell them. Cars, shoes, flour and other physical commodities are products of human labour. They have a value determined by the amount of labour required to make them. Government bonds and derivatives are neither commodities, nor products of human labour, they are financial instruments. They are sheets of paper bearing promises to carry out payments at some time in the future, their strength does not depend on human labour but upon a whole complex of superstructural relations: property law, government tax raising powers, central bank policy for bond yields and on things like the amplitude of historical market fluctuations (for derivatives).

The development of science and education has provided us with technological possibilities to abolish poverty, shorten the workday and achieve sustainable development. Yet these technological possibilities are bound to remain just that, mere possibilities, as long as social forces remain deadlocked in a competitive struggle and subordinated to the blind dictate of profit maximisation.

What are these ‘social forces’? Do the authors refer to the competitive struggle of firms, or do social forces refer to social classes and are they thus referring to the struggle between the employing and working classes.

It is time to outline a different path of development, one where a democratically planned economy will serve as a means of achieving social goals, and not the other way around, where development will be based on solidarity, not competitiveness.

Well and good if what they propose is a description of a democratically planned economy, or still better, a description plus a programme to get there. They start out by giving a very general account of what they mean by democratic socialism:

For us democratic socialism is not a utopian vision of a distant future, but the process of overcoming capitalism by democratic means.

Well words can be given specific meanings provided you are explicit enough about it. They do not mean by socialism a system of economy that is distinctly different from capitalism, they mean a political process taking place within contemporary society. This is fair enough and corresponds to an accepted use of the term socialism, especially by previous tendancies that have identified themselves as social democrats or democratic socialists. I don’t want to get hung up on their use of words. The question I want to ask is whether the strategy they outline is fit for purpose. They say:

This democratic overcoming of capitalism will take place:

• ON THE POLITICAL LEVEL, by creating and implementing forms of community participation in matters of public interest, such as participatory budget and direct democracy on the local level (citizens assemblies and public meetings), and replacing the representational system with direct participation in decision-making and by a system of delegates;

As a tactic to develop a culture of participatory democracy, these proposals for community involvement and participatory democracy at a local level are a good idea. But it suffers from severe limitations if that is to be your main political strategy. Local politics can be a basis for a political party to initially grow its basis of support, and as such should not be neglected. But as a means of ‘democratically overcoming capitalism’, local government is a very weak instrument. It lacks the constitutional power to change property rights, it has, in most cases, very limited tax raising powers, and it can not issue its own currency. Local government lacks the constitutional power to change the system of representation in use. A socialist party controlling a local government could institute a system of ‘advisory’ participatory democracy on budgeting and other issues. It could hope, that by setting a precedent of obeying ‘advisory’ plebiscites that it would morally oblige other parties to do likewise if they won the election. But establishing a system of delegated representatives is more questionable as a strategy.

The very limited powers of local governments means that turnout even for local elections is low, how many people would actually turn out to neighbourhood meetings to mandate their delegates?
Poor turnouts combined with mandatory powers are almost a recipe for allowing religious fundamentalist groups to dominate these meetings and gain control of local politics. One only has to look at the influence of fundamentalist religious groups on poorly attended local school boards in the US to get an idea of what might happen.

But the big thing that is lacking is any proposal for what to do at higher levels of government: national and EU levels in Europe, state and federal levels in places in places like India or the US. These are the levels that have the power to change property rights and to introduce new taxes.
In different ways both the EU and the US have constitutional structures that make it very hard for a socialist movement to exercise power to alter property relations in a fundamental way.

In Europe the division of powers between national and EU authorities, and the very limited democratic powers of the European Parliament( no legislative initiative, no independent tax raising powers) mean that neither the nation states nor the EU itself can act as a forum for classical democratic socialism in the sense of either the French Socialists under Mitterand or the British Labour party under Wilson.

By focusing exclusively on local democracy the manifesto completely avoids the hard questions like:

• Should socialists advocate that countries leave the EU and re-establish sovereign national parliaments and sovereign currencies?
• If they should stay in the EU what increase in the powers of the European parliament would be necessary to allow democratic socialist politics to operate?
• What sort of election/selection process should be used to chose representatives at whatever is the sovereign assembly?
• What forms of direct democracy should operate at national or continental levels?

The MIDS goes on to specify an overall economic strategy:

• ON THE MICROECONOMIC LEVEL, by implementing forms of economic democracy such as employee ownership, self-government and self-management, and co-operatives;
• ON THE MACROECONOMIC LEVEL, by abolishing the market and competition as social mechanisms, which are causes of constant crises in capitalism, and by forming alternative modes of coordinating the production and distribution of goods, for example cooperation between production units instead of competition, and democratic planning instead of ‘blind’ market production;
• IN RELATION TO QUESTIONS OF CLASS AND IDENTITIES, by abolishing class differences between labour and capital and all other social forms of inequality and subordination, particularly discrimination based on race, gender, sexual orientation, national or ethnical origin and handicap

This is a mixture of complete nonsense like “abolishing class differences between labour and capital”; labour and capital are not classes. You can not even abolish the class differences between the working class and the capitalist class – since this assumes that the two classes continue to exist. What they presumably want to say, but dare not, is that they aim to liquidate the capitalists as a class by abolishing the capital/labour relationship. Their microeconomic programme is a confused list that avoids the hard questions. How does employee ownership differ from workers cooperatives?

If they are the same thing, why mention them twice. If they mean instead, the ownership of shares in privates companies by workers, how are the workers to get these shares?

What is to stop them simply selling them off?

A cooperative can be self managed, but what happens to existing companies that are currently owned by shareholders?

Why no mention of publicly owned economic organisations?

Abolishing the market and competition: what does this actually mean?

Does it mean that firms would go on selling things but at prices that were no longer determined by the market, but by a cartel of producers cooperating with one another to fix prices?

If so, would this be a good thing?

Or do they mean something more radical like the phasing out of money and commodity production?

If so, what do they intend to replace it with?

In the 21st century, after the long history of 20th century socialism and 20th century social democracy, this degree of vagueness is simply no longer politically plausible.

IN RELATION TO THE NATURAL ENVIRONMENT, by planning the scope of production in accordance with the regenerative capabilities of the environment, and by sustainable economic growth based on a redistribution of the existing wealth and on a simultaneous implementation of environmentally friendly technologies; accordingly, on a global level, each individual must be granted equal access to drinking water, farmland and other natural resources that enable a decent living;

Suddenly we are back to Chesterton or Chamberlain. Three acres and a cow – every individual to have access to an equal amount of farmland, A reversion not even to peasant family economy, but something even more individualist. Suddenly all talk of cooperatives, democratic planning goes out of the window along with industrial civilisation. We have at worst the individualist fantasies of American survivalists, and at best the paternalism of the 19th century liberal bourgeois Joseph Chamberlain.

As we are aware that these policies cannot be implemented in one nation-state alone, we are committed to internationalism. We strive for the abolishment of world capitalism and relate in this to the struggles of emancipatory movements and parties from all over the world. Our struggle is part of a global anti-capitalist movement as it is being waged by European Indignados, ¡Democracia Real YA, the Greek Syriza, the German Die Linke, the French Front de Gauche, the Spanish Izquierda Unida as well as the Zapatistas and Bolivarian revolutionaries in Latin America and the Egyptian union movements and Chinese workers’ movement.

Well given their stated objectives, things like establishing cooperatives, democratic economic planning, enhanced local democracy it is unclear why they claim this can only be achieved on a world scale. We know that historically most of these things have been achieved in nationstates. Yugoslavia had a worker owned economy, the USSR, China, the DDR etc had planned economies, the capitalist class was eliminated in the East European countries and even in little Cuba.

The programme then goes on to list a set of immediate objectives. They explicity say:

Our immediate demands are therefore reformist in nature. At the same time, however, we keep in mind that our ultimate goal is to abolish capitalism and put in its place a system based on solidarity, tolerance and sustainability. Our demands are not part of a utopian plan for a perfect society, but are rather based on the immediate concrete needs of the whole working class, that is, everyone who has to sell his or her own labour power in order to survive.

Well are their short term proposals ones that are capable of at least starting on the task of abolishing capitalism?

Our short term proposals are the following:

1. Further development of quality public services for all inhabitants. Healthcare, education, social security, public transport, cultural goods, legal assistance, and retirement and disability pensions must all be provided by public and not-for-profit organisations. These services must be publicly funded in full.
2. The introduction and development of consultative forms of direct political democracy,which will enable a patient decision–making process in common matters. Such consultative forms must be based on human rights and social justice, and should simultaneously strive towards the debureaucratisation of all institutions of political representation and of the welfare state. As only universal inclusion can allow institutions to perform services based on real needs, the community, employees and ‘users’ must be able to participate in the decision-making process.
3. The establishment of economic democracy. The right to self-management and the right to co-ownership of enterprises are fundamental democratic rights of the employees. Employees in both the public and private sector must have access to decision-making on all levels.
4. An economic policy that will strive for full employment as well as socially and environmentally sustainable development taking into account the social and environmental conditions of production. Development of economic branches of renewable energy sources, energy efficiency, strategic natural sources (such as wood, water, seeds, cropland), and food self-sufficiency must be a priority of economic policy; at the same time, progressive green tax policies must be introduced.
5. Full employment and a shorter workday. Advances in productivity and automation of production have made the forty-hour workweek outdated; it is one of the main causes of unemployment. We advocate a shortening of the workday to the level that enables full employment.
6. Raising the minimum wage to 70 % of the average wage. The increasing growth of social inequalities must be reversed and a cap must be put on the difference between the highest and lowest incomes.
7. The transformation of banks of systemic importance into public services following the model of public education and healthcare. Banks must serve the public and not private interests.
8. Increasing progressivity of taxation to the level that enables the quality of public services described above. The taxation of the revenues of legal subjects should be raised; the same applies to the taxation of financial transactions as well as of land property and similar assets. This should be implemented consistently with regard to all owners of property (including religious communities) who exceed a certain income limit.

Point 1 , the provision of quality public services, public education etc do represent steps towards a socialist economy. The phrase about being publicly funded is a bit ambiguous, they should perhaps have been more explicit that these services should be provided free.

Point 2. This is weak. They are only asking for consultative direct democracy, not sovereign direct democracy. This leaves it ambiguous whether the final decision making power will be in the hands of professional politicians or whether it is in the hands of the people. They should be explicit about what participatory democratic institutions they want. I would suggest that suitable objectives would be:

1. At least 50% of the members all legislative representative bodies to be selected by lot from the general population.
2. Non legislative administrative bodies (QUANGOs in UK terminology) should no longer be filled by appointment or nomination, but by a combination of lot and election.
   The right of citizen groups to propose legislation that would be subject to a binding vote of the adult population.
3. That major economic decisions about the forms of tax, the levels of tax, and broad headings of public expenditure should be subject to binding public votes.

Point 3 is vague. There already exists a right to co-owenership, workers can buy shares in companies they work for, but that right amounts to nothing if the workers do not have the money to buy shares. How are these shares going to be obtained?

How is ownership to be transferred from existing shareholders to employees?

This is a much weaker position than classical social democrat reformists of the 20th century, let alone the position of revolutionary social democrats ( Bolsheviks). The Swedish Social Democrats had the Meidner plan under which all firms would have to gradually issue free shares to workers trusts, so that after a couple of decades the majority of shares would be owned by such trusts.

The British and French socialist parties aimed at the progressive transfer of capital into public hands by the state nationalising one industry after another, swapping shares for state debt. Fairly rapid inflation of the currency would depreciate this debt and gradually expropriate the capitalist class.

More radically, one could envisage a law being passed that completely abolished capitalist exploitation, by giving employees as a group, legal title to all value added in the firm. This would obviate the need to buy out shares by simply removing the form of property right on which capitalist exploitation rests. The nearest historical equivalent would be the abolition of slavery which abolished the property right on which slave exploitation rested.

Point 4. This is a hodgepodge it advocates full employment and food self sufficiency. It is not clear that general food self sufficiency is either possible or desirable. Some countries are, due to density of population or climatic reasons, unlikely to be fully self sufficient in food.

Contrariwise, if all countries had to be self sufficient in food, countries that are currently major exporters of food would see their agriculture go into recession.

Point 5. This attributes unemployment to the length of the working day and to automation. Automation and mechanisation has been going on as long as capitalism has existed. It is the basis for the rising productivity of labour since the industrial revolution. In the main, this rise in labour productivity results in an increase in output and a rising level of consumption. Particular sectors, where demand is relatively inelastic like agriculture have seen big declines in employment, but this has in the main resulted in labour power being shifted into different activities where productivity grew more slowly : manufacturing and services. Unemployment is caused by inadequate levels of demand for consumption and investment goods, and this in turn is a consequence of the increase in the share of national income going to the rentier class and the consequent generally rising level of debt. So the major theme of a socialist full employment programme should be the elimination of this rentier income and the elimination of the debt burden.

A shortening of the working day should be justified on its own merits, that it gives people more time to relax and enjoy their lives rather than on a false theory about the causes of unemployment.

Point 6. The raising of the minimum wage is a good policy, but since they are explicit on the ratio of the minimum wage to the to the average wage, they should be explicit on what the ratio of the maximum wage to the average wage should be.

Point 7. They advocate that banks should become a public service, but what does this mean? Who is to own them? How is ownership to be transferred? What is to be the business function of banks? Are they still to operate on a fractional reserve basis? What is to happen to accounts currently held with the banks? What is to happen to the debts currently owed to banks?

Point 8. An increasingly progressive tax system is a progressive goal, but it avoids the hard problem is how to re-create a tax system that makes it hard for wealthy individuals and companies to avoid paying progressive taxes. What is to be done about the main modes of tax evasion: loading companies with debt, transfer of income abroad to tax havens, disguising profits under the headings of royalty payments, or accounting losses brought about by overcharging for components supplied by subsidiaries in other countries?

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