Diagnosing where things have gone wrong and what we can do about it
As we survey the current state of affairs, it’s hard not to get somewhat demoralised.
Despite a massive market failure, a brief flurry of rhetoric about the demise of neo-liberalism, the occupy movement and at least some outward dismay at a system where the financiers are entirely untouchable, we’ve taken nearly as many steps backwards as forwards.
There has not been a growth of a powerful oppositional movement. Occupy has dwindled. The unions are still in decline. The parties in 2012 are still largely the same sorts of parties as existed before 2007. Perhaps some of the luster has come off of capitalism as a world economic system, but it is no less pervasive than it was before (in fact it has expanded), and certainly it hasn’t any apparently viable challengers which can be seen with the naked eye.
It’s easy to blame such features on apathy, the advance of post-modernism, or a perennial favourite, the betrayal of leadership in which you can insert the Democrats, Labour party, your least favourite trade union, or whoever you’re currently keen on hating.
However, the methodology of historical materialism suggests a different approach. Instead of merely looking at the ideologies which currently exist (and there are indeed a great number of them ranging from truly expansive and powerful, to fringe and totally irrelevant) it might prove useful to look at the manner in which these ideologies find support and reinforcement in the structure of relations in society.
One of the greater contributions of Marx as a theoretician, was to take this approach to ideas of how socialism could become a powerful force in society. The idea, in a nutshell, was that the newly created subaltern class in capitalism, the proletariat, would be unlike the class of peasants which had proceeded it.
The peasant class had spent centuries, even millennia, in periodic insurrection against the lords. Sometimes nobility would be suppressed, slaughtered en masse, and even a few times peasant republics sprung up. But on the whole, history was unkind to the peasant. The surplus required to support the machinery and training for warfare, which was necessary to hold territory, was generally out of the reach of peasants leaving them open to the expansion of new lords into territories where the old ones had been abolished.
Unlike the peasants, this new class, the proletariat, had a dynamics which would propel it forward, overturning the capitalist class, and at last, to power. This would be done not in the manner of the peasants, but in the manner in which the bourgeoisie were forcing themselves to be the main driving power of the 19th century (and later, the 20th century).
This new class was without the means of subsistence, leading it to be much less conservative than the peasants. Famously, the communist manifesto states:
The proletarians have nothing to lose but their chains.
It would become a homogeneous dispossessed mass, who at the same time controlled the bulk of the productive machinery of the economy. As the 19th century closed, unions were beginning to be a real force, and socialists could see a general trend towards a powerful movement in opposition to the owning classes of society.
As time progressed this thesis seemed to be taking on ever greater force. The aristocracy had been widely discredited by the bourgeois revolutions themselves, modernism was rife, and new ideas could find purchase in this newly developed class which was just starting to organise itself in its own interests. The bourgeoisie had not yet learned the need to convince the proletariat of anything, and indeed attempted to rule them much in the way that the peasants had been ruled under feudalism. As we enter the 20th century the unions acquire quite impressive power and mass socialist parties such as the SPD rise to enormous prominence.
However, already at the turn of the century, theorists such as Bernstein noticed problems with Marx’s thesis. Germany was one of the most developed capitalist countries at the time, and contrary to the idea that the proletariat would become more homogeneous, it appeared to be generating ever more strata. As some workers would acquire better skills and obtain higher wages they would see themselves as differentiated. These various strata began to diverge in their identifications with each-other, making it harder to find common interests. Some trade unions began pursuing more sectional interests. Further, slowly but surely, other types of mass parties began developing, to counter the “socialist threat”.
Of course we know something about how the story goes as we certainly aren’t living in a world where the capitalists have been introduced to the dustbin of history. However, we should not be too harsh on the original thesis. Firstly, it was a fairly falsifiable thesis, which is always both brave, since you can be wrong, and useful, since it’s not much use having a theory which you can’t tell apart from fantasy.
Too few people are willing to put forward theories of this type, and modern historical materialism, which seems often to drift into hermeneutics, really doesn’t have the greatest record on this basis (but neither do more popular theories of history try much on this basis either). Further the theory was very plausible. It provided a mechanism for which the thesis could be true, and indeed came near enough to coming true and there is no doubt that mass socialist parties and syndicalism had a huge impact on society as this new class became a major feature of the economy.
But if we are to zoom forward to today, we’re faced with a puzzle. How can one take a materialist view of history and look on the last 30 years and claim that the proletariat is just about to rise to prominence through the trade unions and mass parties organising in their class interests1? The thesis looks positively ludicrous, and is rightly dismissed by most people who hear it, whether they are progressive, interested in alleviating human suffering or not.
In fact the working class power which had become such a tremendous force, has been systemically undermining itself. We can see that in areas where the class formed some of the most powerful organisations, such as the longshoreman, investors found that using automation to completely eliminate the vast majority of workers was the most fruitful option. Powerful class organisation begets better wages which increases the value of automation. Since cheap labour will become increasingly difficult to find in places like China and automation is falling in cost, it would be betting on the long odds to expect this trend of increasing automation to halt. The proletarian class, instead of eliminating the bourgeoisie, is eliminating itself to the extent it is able to express its class power.
Further, the parties are less working class than they’ve ever been. The traditional labour parties are essentially neo-liberal parties, and the neo-liberal parties have in many cases just slid off the right into outright lunacy. The material explanation for this is fairly clear. As mass media has been increasingly important in defining peoples perception of parties and the ruling class has managed to capture an increasing share of the wealth over the last 30 years, the parties have become ever more captured by monetary interests 2.
Of course, socialists of all stripes know most of these things are true, but often when it is pointed out I hear an indignant: “yeah, but” which goes something like “don’t you care that capitalism is destroying the world, consigning millions to poverty, corrupting democracy and generally killing kittens”. Of course the answer to all of those things is an unequivocal “yes”. However, being annoyed with it is not a sufficient basis for believing anything will be done about it.
The question should really be: is it possible to turn the movement back on? And if so, how? What would be the motive force behind a movement which could make a real stab at solving the problems inherent in a system whose only goal is profit, regardless of what outcomes it has.
Well, here is at least one possible theory, which I’ll raise now, as I believe it has some air of plausibility to it. The corporation will be the motive force of a history which dispossess the capitalist class. That’s right, you heard me. Corporations. Of course I could have said cooperatives, but I figured I’d get the indignation out of the way.
The corporation is a collective body which holds property by way of some governance structure. While most people think of corporations as market entities, they are only market entities at the boundary. Internally the relations are driven by a different social logic.
Now, it’s true that the structure of corporations is not entirely free from encumbrance from legal snares which are structured to prefer that power is vested in a board of directors culminating with a CEO – however there are probably technical ways to deal with this fact. Further, it’s true that the logic of a corporate entity is such that in order to keep existing it needs to break even at least, and to be safe, obtain profit, and so the internal dynamics will be driven to some extent by the same logic of other corporations in capitalism. Certainly for the approach to become dominant it would have to be making a handsome surplus.
However, we may be able to overcome these weaknesses. First, any approach to socialism is going to have to find social relations that allow both some level of surplus and further are driven democratically by the broad mass of society. If we can master the techniques in actual practice then the transition will be vastly simpler. The experience of both syndicalism and state expropriation of enterprises has shown several times that the transfer of management is no simple task. A management already on egalitarian lines is in a much better condition to transition.
Further, the relationships between federations of corporations can be favoured to allow non-profit making exchanges internally which increases the potential for profit at the boundary (of sales outside the corporation).
Further, wages can be suppressed in ways that are generally the exclusive province of the upper management. Goods can be obtained in kind. Food, housing, transportation and entertainment can be obtained without paying actual money wages. Further, the removal of absurdly elevated payment given persons like CEOs can increase profitability. This improves the outlook for an egalitarian corporation as relative to a more traditional one.
There are other potential benefits as well. Planning is now widely used in large corporations; contrary to free market rhetoric, large corporations generally do not use the market internally, but rather use techniques of planning. Walmart does not simply source it’s products at prices, it commands prices. Delivery organisations like FedEx use advanced planning techniques to optimise distribution of goods. Much of the trucking industry in the US has now been amalgamated into large planned operations such as Swift transport which use computerised models to optimise outcomes. Corporations offer new possibilities for the use of planning across federations. They could eventually make possible Marx’s vision of the association of producers.
Perhaps most importantly, the ability to garner surplus directly gives us a powerful economic tool in the fight for a fair world. Currently, with the decline of the unions, our most important collective organisation for pooling resources appears on life support. It can not simply be replaced with force of will. We need some ways of obtaining the funds necessary for a fight. Further, we need to be able to fund parties that have a snowballs chance in hell of competing with the bourgeois parties. As it stands, with membership dues of members to parties, the mass parties are completely unable to occupy even the same general ballpark as the mainstream parties.
So, why haven’t we already seen a rise of the egalitarian corporation? The answer to this is a bit more complicated.
First, is that we actually have seen their rise, but it has not been noticed. Cooperatives comprise a very large percentage of a large number of economies in Europe. For instance, Migros, the largest supermarket in Switzerland has about 2 million of the country’s 7.2 million population as members. In Italy there are 7,100 social cooperatives with around 223,000 employees. There are nearly 6,000 cooperatives in the UK. The Mondragón cooperative employs 83,869 alone.
Second, socialists have largely abandoned the idea of cooperatives as irrelevant to the task of changing society, favouring instead unions or mass parties at their expense. Indeed it is part of the legacy of the Syndicalist era and 1917 that the cooperative was relegated to a more minor position and in places like Italy, the mantle was instead taken up by Christian Democrats. Without a real long term vision of how cooperatives could be used to restructure society, what the economic pitfalls are, and how we might overcome them, it’s not any wonder at all if many of them have succumbed to a small proprietorship mentality.
It is precisely the opposite approach which needs to be taken for the corporation to be truly captured as an emancipatory organ. We need to be thinking of the corporation in terms of its ability to cooperatively amalgamate and grow. How to provide its own infrastructure for its membership in terms of their most important needs. How to provide well structured organs of finance that can cope with investment in an egalitarian and democratic way and yet are not amenable to capture by sectional interests. It doesn’t take a clairvoyant to see that the corporation will be one of the most central institutions of the 21st century. The question we should ask ourselves is: can we make them ours?