How we all lost when Thatcher won - article by Billy Bragg

There is a bitter irony in the fact that the Bank of England chose the 25th anniversary of the beginning of the miners’ strike to fire off its weapon of last resort in an attempt to damp down the conflagration currently sweeping through global capitalism. The wry smile that passes across the lips of those who opposed the naked selfishness at the heart of the Thatcherite experiment will be mirrored by the disconcerted frowns of those who, having wholeheartedly embraced the free market, never thought that it would lead to this. Like Frankenstein’s monster, Thatcherism has turned on its creators.

Is there anybody out there willing to stand up – on this, of all days – and raise a toast to the wilful destruction of our manufacturing industry and its replacement by the financial services sector? Yes, there were unions who were resistant to change, but whoever came up with the idea that the solution to this problem was to import cars rather than make them ourselves sacrificed more than just the entire engineering skills base.

The forces that Margaret Thatcher unleashed in order to defeat the NUM destroyed whole communities before leeching into our society. Untamed by successive governments, these same forces now threaten to devour us all.

The housing bubble that has been source of so many of our recent difficulties, was kickstarted by Thatcher. Selling off council houses to their owners was a popular idea at the time, but by refusing to allow councils to build more stock, it ultimately forced up prices as demand rose. When the Tories slashed the state pension and people started looking around for a way of ensuring financial security in their old age, bricks and mortar seemed like a sound investment.

Without powerful unions to protect them, the wages of ordinary workers were held in check while the cost of housing began to spiral upwards. As it became increasingly difficult for first-time buyers to get on the property ladder, a newly deregulated banking sector began offering ever more “attractive” loans. And we all know where that led.

Would any of this have been different if Thatcher had lost that titanic struggle in 1984?

She would have still been in power for another three years, but she would not have tasted blood. A chastened Conservative party might have realised sooner, rather than later, that the ultimate price of Thatcherism would be the brutalisation of society.

This article was first published in the Guardian newspaper’s Comment is Free section, Thursday 5 March 2009.

Transformers - more than meets the eye?

nb: what follows is a post by Justin George - a supporter a 'Left Focus', Znet contributor, and Participatory Economics advocate... The contribution is a critique of the recent 'Transformers' movie...

For those familiar with the movie “Transformers: Revenge of the Fallen” - Optimus Prime and the US military appear to be allies in arms. That means they’re the good guys right? In reality, though, there’s more than meets the eye behind the new movie blockbuster: such that we might as well throw those assumptions out the window.

Along with racist stereotyping and sexism, the new Transformers film's glorification and sanitization of the US military is disturbing. This appears all the more so when the film is set to be one of the biggest earners of all time, earning half a billion dollars in its opening week, marketed to children and young adults through a range of merchandising to ensure maximum profits for the corporate studios.

One of the sequel's many flaws is the overt display of military power, specifically US military power. I would hazard a guess that a good portion of the film's budget was supplemented by the US military in exchange for the free commercial the film provides it.

Deals like this are common in Hollywood- the filmmakers get to film military hardware which would otherwise be expensive to hire privately or unavailable (or create it over 18 months or more via computer graphics) in exchange for military advisers input/approval of the script (to ensure it doesn't look bad) and (much like Hasbro) glossy looking shots that sell the 'toys' and 'adventure' of the military to a worldwide audience of millions.

As a recent Variety fluff piece states, "A film like "Transformers" gets much of the access, expertise and equipment for a fraction of what it would cost to arrange through private sources, with the production on the hook only for those expenses the government encounters as a direct consequence of supporting the film (such as transporting all that megabucks equipment to the set from the nearest military base)."

http://www.variety.com/article/VR1118005186.html?categoryid=1019&cs=1

In the film the hardware is given numerous 'hero' shots, scored with rousing music as the US military comes to the aid of the titular heroes. Throughout the second half of the movie it was hard to discern if the footage was military commercial stock or had actually been filmed by the director. The pervasiveness of the US military is on display- aircraft carriers and submarines patrol the oceans, surveillance and communication aircraft relay orders, satellites peer into happenings across the globe. The US military's own destructive 'robot' the Predator drone is also one display, along with tanks, guns, massive hovercrafts and other displays of might.

It is ironic that for entertainment we watch the US military rushing into the Middle East (in the film its Egypt) to stop an unreasoning evil from unleashing a weapon of mass destruction, while the horrible reality is largely absent from our screens and newspapers. Perhaps the film is an allegory on behalf of the writers but it's unlikely.

Another sad mockery in the film is that the secret military facility of the Transformers, alien refugees, in the film is located on Diego Garcia. This little island’s citizens were removed by the British in the 1960s, at the request of the United States, so it could establish a military base on the tropical island. The Chagosians live like refugees in squalid conditions in Mauritius where they were dumped 40+ years ago, fighting to return to their homes on the archipelago.

The military base at Diego Garcia is reportedly used for flights as part of CIA kidnappings, the extraordinary renditions, of the 'War on Terror' - where people are taken from their home countries and flown to a range of bases before being sent off for torture in another country or to the hell of Guantanamo Bay. Author and Journalist John Pilger has covered the continued injustice suffered by the Chagos islanders-

http://www.informationclearinghouse.info/video1027.htm

The base is also used to support the wars on Iraq and Afghanistan where millions have suffered from violence or due to the destruction of essential facilities. Diego Garcia is just one of the many bases that form a network of military installations the USA has covered the globe with-

http://www.zcommunications.org/znet/viewArticle/21896

But like much of mainstream media, whether its news or entertainment, the United States and its allies- fiction and non fiction alike- are presented as a force for good.

Films like Transformers reinforce such narratives, using the military both in the story and behind the scenes to create such an image. What it does is hide the ugly truth of US foreign policy: of what the real machines, those powerful war machines, actually do. The military's true function is to inflict violence. When it comes to the US military and Hollywood there indeed is more than meets the eye.

Wages decision a ‘kick in the guts’ for the most vulnerable workers

above: Sharan Burrow - employer claims "nonsense and insulting"...

The other day – on July 7^th – the final act of Australia’s so-called ‘Fair Pay Commission has left a bitter aftertaste for many.

The Commission has decided not to raise the minimum wage rate above its current level of just under $544 a week (an hourly rate at $14.31) : with a consequence that – with inflation – the value of wages has fallen in real terms.

According to the ACTU, “the average award worker will lose about $16 a week until the next wage decision is due in July 2010.”

ABC News has reported that “around 1.3 million” will be affected, and that both unions and the government were “disappointed”. http://www.abc.net.au/news/stories/2009/07/07/2619147.htm?WT.mc_id=newsmail

Employers had argued that a “$3-a-week increase in disposable incomes through… proposed tax cut[s]” would compensate workers for the wage freeze. ACTU President Sharan Burrow, responded by labelling such claims "nonsense and insulting" .

Continuing, Burrow argued that the shift would “certainly cost jobs if [we] see wage deflation in Australia.” http://www.abc.net.au/news/stories/2009/07/07/2619147.htm?WT.mc_id=newsmail

Burrow, here, is arguing on solid ground. Wage cuts which attack the disposable income of workers are bound to have a negative impact on aggregate demand and consumer confidence. This in turn would certainly cost jobs.

Meanwhile, Frank Quinlan of Catholic Services Australia's has identified the reasoning of the Fair Pay Commission as being inconsistent and hypocritical:

"On the one hand they have argued that when there is inflationary pressure, low paid workers wages need to be controlled," he said.

"On the other hand they have argued that when there is recessionary pressure, low paid workers wages need to be controlled.

"So it is very difficult for me to understand the circumstances under which this Fair Pay Commission would actually deem it fair to increase low paid workers wages." http://www.abc.net.au/news/stories/2009/07/08/2619641.htm?WT.mc_id=newsmail

Australia’s most vulnerable workers ought not be made to ‘bear the burden’ in responding to the recession. Here we refer to cleaners, child care workers, retail workers, hospitality workers, call centre workers and others.

Arguments for suppressing these peoples wages are just another take on the discredited idea that labour markets ought always be flexible downwards in order to ‘clear’.

While wages here are frozen, ACTU Secretary Jeff Lawrence has indicated that:

“The costs of rent, food, medicines, education and utilities have all risen in the past year and families need a pay rise to keep up."http://www.actu.asn.au/Media/Mediareleases/WorkingAustralianstosufferasWorkChoiceserapaycommissionsavesitsworstforlast.aspx

Unions will be hoping that the new “Fair Work Australia” body will restore some measure of wage justice when it rules on minimum wages in 2010.

A ‘wait and hope for the best’ approach, though, is not sufficient in times such as these. Not only do unions need to campaign in earnest for a restoration in real wages: the times also demand immediate action from the government to support the disadvantaged.

In the interim period between now and the next decision on minimum wages, the Federal Government ought again provide stimulus in the form of cash supplements: only this time for the most vulnerable workers.

Such stimulus ought compensate these workers in full for the real wage losses that are flowing from this final act of bastardry by the Howard-era ‘Fair Work Commission’..

But for workers there remains the need to work – in some ways – independently of the Government.

Under pressure as a consequence of anti-union populism – beat up for years by the conservatives and their allies in the business establishment – Labor has failed to provide for the right of workers to withdraw their labour except under the strictest of conditions.

There is no recognised right for pattern bargaining: and there is no recognised right for political strike action. Further, from the Hawke era, there is no right to ‘secondary boycott’ industrial action in solidarity with workers who may not be as organised or positioned to enjoy bargaining power or leverage in their own right.

If the Australian Labor Party (especially the Federal Government) continually fails to respond sufficiently to the labour movement mobilisation that led to the defeat of the Howard regime, then clearly workers and their representatives need to ‘keep their options open’. If this means support for the Greens, and other progressive political forces who are less equivocal in their support for worker’s rights,then at least these might provide pressure on a Labor Party which takes the support of workers for granted.

But if Labor values its relationship with the union movement, immediate stimulus payments to compensate the 1.3 million who are suffering as a consequence of this cut in real wages – are a very good way to start. Such measures could further be enhanced by a restructuring of the broader tax system in favour of low-paid workers.

On these issues, the ACTU and organised labour more broadly, need to remain on the front foot. Workers must organise in the immediate term for compensation in regard to this cut in real wages. And over the longer-term we must all stand up for a rise in the real wages of vulnerable workers – not only as tied to productivity – but as a matter of distributive justice.

Tristan Ewins,

July 8^th 2009

nb: Leonie at "En Passant" also discusses the issue of wage justice. You can find it here:

http://enpassant.com.au/?p=3967

SERVANT of the REVOLUTION

above: Helene Demuth - servant and lover of Karl Marx

A play exploring a rarely discussed side of Karl Marx premieres in Brunswick (Melbourne) 21 July. Servant of the Revolution takes the point of view of Helene Demuth (Lenchen), the Marx family’s servant and mother of his illegitimate son, Freddy.

Marx’s collaborator Frederick Engels took responsibility for paternity so the truth was hidden during Marx’s life and long after his death, known only among inner circles.

Controversy surrounds his relationship with Lenchen, who lived with Marx after his wife, Jenny, died and outlived Marx. The three were buried in the same plot. Interpretations are complicated by Lenchen’s closeness to his wife and her proximity to Marx from adolescence.

Lenchen entered Jenny’s mother’s household as a servant when she was about 10 years old and Jenny more or less inherited her. The only time the three separated was for a couple of years after Marx and Jenny first married.

Jenny’s biographer HF Peters refers to Lenchen as Marx’s ‘second wife’. While volumes have been written by and about Marx and Engels, and his wife left us a modest autobiography, little is known about Lenchen.

At home Marx was affectionately called Moor, after Shakespeare’s Othello. He was charismatic, dominating and his intellect attracted people. But friend Wilhelm Liebknecht wrote that Lenchen was the domestic dictator.

It is a tantalizing state of affairs, inviting a work of creative non-fiction. Servant of the Revolution is written by Anitra Nelson, author of Marx’s Concept of Money: the god of commodities (Routledge 1999), an academic and occasional short-film maker.

Director Brenda Addie breathes a postmodern absurdist tone into this nineteenth century tale by drawing out the commedia dell’arte that lies in the characters Nelson has chosen to tell the story. Marx does not strut the stage, rather Lenchen (played by Julianne Donovan) and Engels (Ray Tiernan) dominate while the appearance of Marx’s youngest daughter Tussy (Clara Pagone) offers a clear insight into the Marx family neuroses.

Servant of the Revolution is a rare theatrical exploration of socialist and feminist contradictions. See it — you might not view Marx the same way again.

Servant of the Revolution plays at the Mechanics Institute Performing Arts Centre, Brunswick, 8pm Tuesday to Saturday 21–25 July and 28 July–1 August, and 6pm Sunday 26 July. Tickets: $25 (full), $15 (conc.), $20 (groups of 10+) Bookings: 0420 933 101 or servantrevolution@gmail.com

For more details, see — http://servantrevolution.blogspot.com

John Passant on the Revolutionary Party

above: In the tradition of Lenin, John Passant believes in the necessity of a revolutionary party...

nb: immediately below this is another contribution of Lev's on the subject of "revolutionary reformism'. Below that is another essay by Wes Bishop. Wes considers the question of reform or revolution from a liberal perspective. Both contributions are well worth the read.

One of Lenin's great contributions to humanity was to reclaim Marx's insight that the working class could not simply lay hold of the ready-made apparatus of the state machinery and wield it for its own purposes. It had to smash the capitalist state.

This was not through some top down revolution, but by revolution from below.

History supports me. Workers in struggle could and often do create their own democratic organs of rule that replace the dictatorship of capital over labour. Iran in 1979 was one example.

These two ideas were reflected in a third historic task - to build a revolutionary organisation to help achieve the goal of the working class in power, ruling through their own democratic institutions. As Marx said in the Communist Manifesto:

We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.

The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.

Lenin's ideas about a revolutionary party are relevant today. They have been the subject of incessant bourgeois derision, most of it historically incorrect. We have already published on this site a review by Mick Armstrong of Lars T Lih's book 'Lenin rediscovered: What is to be done in context. It's called Lenin, democracy and the way forward for the left.

In short this review encapsulates Lih's argument that 'What is to be done' is actually a reflection of the ideas of revolution from below (not conspiratorial approaches), that the workign class is capable of much more than trade unionism, and that the party it builds is the political expression of the 'vanguard' but that that vanguard can win the battle of ideas to become the political majority in the working class.

The battle is not linear but ongoing, and has ups and downs, in the main depending on the swings and roundabouts of the class struggle.

And of course the party is not separate from the class but part of it and learns from the class as it finds its voice over time, ie as the class becomes not only a class of itself but for itself.

Lenin's organisational approach actually reflects the Marxist idea of socialism from below, of, as Marx put it, the emancipation of the working class being the act of the working class, a movement of the vast majority in the interests of the vast majority.

The relationship of party and class is always complex but as Trotsky put it (or words to this effect), in a revolutionary situation the class is the steam that drives the pistons of the party.

The point is to build a party over the years of struggle that can succeed in that task.

That means years of slow recruitment and steady building based on ideas, with the inevitable upsurges in struggle momentarily destroying the facade of capitalist order and rule and providing further opportunities to influence and grow as history shows the value and worth in practice of revolutionary socialist ideas.

Apart from socialism from below socialism has another side - socialism from above (or perhaps now more accurately described as reform from above.)

As Hal Draper has written in his magnificent book The Two Souls of Socialism:

Throughout the history of socialist movements and ideas, the fundamental divide is between Socialism-from-Above and Socialism-from-Below.

What unites the many different forms of Socialism-from-Above is the conception that socialism (or a reasonable facsimile thereof) must be handed down to the grateful masses in one form or another, by a ruling elite which is not subject to their control in fact. The heart of Socialism-from-Below is its view that socialism can be realized only through the self-emancipation of activized masses in motion, reaching out for freedom with their own hands, mobilized "from below" in a struggle to take charge of their own destiny, as actors (not merely subjects) on the stage of history. "The emancipation of the working classes must be conquered by the working classes themselves": this is the first sentence in the Rules written for the First International by Marx, and this is the First Principle of his lifework.

It is the conception of Socialism-from-Above which accounts for the acceptance of Communist dictatorship as a form of "socialism." It is the conception of Socialism-from-Above which concentrates social-democratic attention on the parliamentary superstructure of society and on the manipulation of the "commanding heights" of the economy, and which makes them hostile to mass action from below. It is Socialism-from-Above which is the dominant tradition in the development of socialism.

Draper went on to say:

It was Marx who finally fettered the two ideas of Socialism and Democracy together because he developed a theory which made the synthesis possible for the first time. The heart of the theory is this proposition: that there is a social majority which has the interest and motivation to change the system, and that the aim of socialism can be the education and mobilization of this mass-majority. This is the exploited class, the working class, from which comes the eventual motive-force of revolution. Hence a socialism-from-below is possible, on the basis of a theory which sees the revolutionary potentialities in the broad masses, even if they seem backward at a given time and place. Capital, after all, is nothing but the demonstration of the economic basis of this proposition.

It is only some such theory of working-class socialism which makes possible the fusion of revolutionary socialism and revolutionary democracy. We are not arguing at this point our conviction that this faith is justified, but only insisting on the alternative: all socialists or would-be reformers who repudiate it must go over to some Socialism-from-Above, whether of the reformist, utopian, bureaucratic, Stalinist, Maoist or Castroite variety. And they do.

It is this conception of socialism from below that drives people like those of us associated with Socialist Alternative to build a revolutionary party, to win the battle to meld democracy and production for need.

There is no revolutionary party in Australia, let alone committed to socialism from below. Socialist Alternative is not a party but a small organisation.

At the moment it is in the battle of ideas that such an organisation can work and build for the future. The organisation will also involve itself in any actions which arise but in the main cannot initiate them or influence them given our small size.

All the time the goal remains socialism from below.

This means rejecting laborism as a false way forward for the working class.

Given the history of a hundred years of sellouts of Labor this is not that hard to do (except when discussing matters with the more dogmatic members of the various socialism from above groups.)

We need to be clear - the idea that capitalism can be reformed through Parliament into socialism is essentially a different political goal to the revolutionary one of liberation from below.

In the present epoch this socialism from above approach becomes reforms from above. This is at best the amelioration of the wage- capital relationship, not its overthrow. It presupposes and accepts the supremacy of the wage slave system, not its abolition.

At worst the Labor Party is a cover for pro-boss 'reforms' to better allow the exploitation of the working class.

The history of reformism in Australia supports this conclusion. The Labor Party, born of the defeats of strike action in the 1890s, substitutes a vote every three years for action to defend class interests.

In my view it is impossible to clean out the Aegean stables of capitalism by becoming its agent in its Parliament.

To take a living example, the Iranian revolution against the Ahmadinejad dictatorship appears to be pausing precisely because there is no revolutionary organisation with real influence in the Iranian working class able to put forward and lead the class conscious workers there in an appropriate direction with the aim of overthrowing the capitalist system and its Islamist overlay.

To end exploitation, to end oppression, the working class must first win the battle of democracy. It can only do that through its own organisation.

In the here and now reformism actually provides a cover for parliamentary cretinism to attack workers.

It disarms the working class and others who want to fight against Labor's attacks with a song that essentially promises workers pie in the sky when they vote.

As Labor's support for the Afghan war, the racist state of Israel, the Northern Territory intervention, cutting wages, the Australian Building and Construction Commission through its Workchoices Lite all show , reformism is, like religion, the opiate of the masses, the sigh of the oppressed.

Imagine if the thousands of members of Labor's left were to join with those campaigning on the streets and in the workplaces for real social change.

Instead of endless fights against the right and useless motions at Branch Conference, these thousands could join with us and others to mobilise tens or even hundreds of thousands in a real struggle against the reactionary ALP and create the conditions for strike action to defend working class interests and perhaps lead to the refounding of a militant section in the trade unions.

It will not happen because reformism's historic role is to destroy the possibility of any movement from below.

It fears the power of the working class as much as the reactionaries and will join with them in repressing workers when the struggle is really joined.

Me? I'll keep plugging away, attending demonstrations, selling Socialist Alternative, going to weekly Socialist Alternative meetings to help better educate myself about major issues, blogging on my site, arguing in my workplace for people to join the union and for the union to take action to defend jobs, wages and conditions and in these ways to help build Socialist Alternative into the revolutionary party Australia lacks at the moment.

Revolutionary Reformism

nb: immediately below this contribution of Lev's is another essay by Wes Bishop. Wes considers the question of reform or revolution from a liberal perspective. It's well worth the read.

Introduction to the problem

The debate of revolutionary or reformist approaches to social change have been argued through the ages and has become most pertinent since the bourgeoise revolutions and in particular with the development of democratic reforms during the latter half of the nineteenth and the first half of the twentieth century. The debate certainly gained prominence with the the unification of the revolutionary Social Democratic Workers' Party of Germany, led by Bebel and Liebknecht, and the reformist General German Workers' Association originally established by Lassalle. One of Marx's greatest works, Critique of the Gotha Programme (1875), in which he firmly established his 'third phase' (libertarian socialist) thinking, is a response to that unification. In the turn of the twentieth century the debate continued on one side of Eduard Bernstein's Evolutionary Socialism (1899) and Rosa Luxembourg's critique, the equally bluntly titled Reform or Revolution (1900).



To give a very simple summary, the revolutionary perspective argued that socialism can only be won through the forced overthrow of the ruling class, whereas the reformist perspective argues that socialism can develop over time with the gradual institutionalisation of more democratic rights. Related topics include political disposition of varying degrees of conservatism versus radicalism; debates over the psychological effects of State institutions, from insidiously corrupting to subtly influential; of political realism between principles and pragmatism; of class relations, conflict and the capacity of different classes to implement social change; in political organisation, between vanguard elites versus mass parties, and, on the highest level, the debate over the foundations of society itself whether natural, technological, institutional, relations, or ideas.

Of course, there is no suggestion that the following is anything but a brief sketch to the problem, a somewhat frustrated expression of personal experiences in both reformist and revolutionary politics, a discussion of the purpose of a revolutionary approach, and a conclusion that hopes to transcend some of the common problems through 'revolutionary reformism'. The notion of transcending, or overcoming, or even better still to use Hegel's phrase from the dialectical method Aufhebung is quite deliberate, in contrast to the erroneous assertion of a 'synthesis' through partial adaption of the thesis and antithesis. As much as Trotsky argued against "No common platform with the Social Democracy, or with the leaders of the German trade unions, no common publications, banners, placards!" from a revolutionary perspective he was also prepared to argue in favour of co-ordinated action "March separately, but strike together! Agree only how to strike, whom to strike, and when to strike!" ("For a Workers' United Front Against Fascism", 1931).

In decades of political involvement I am yet to see Trotsky's dictum seriously taken up by self-proclaimed revolutionary organisations in advanced capitalist states. Determined not to dirty their hands with actual governance, they are hopelessly split on relatively minimal differences and prone towards infiltrating social movements for the purpose of recruitment, rather than social change itself. The revolutionary assertions bring no comfort either; political programmes which are ill-considered and idealistic. By the same token, equal condemnation but of a different sort, can be levelled at reformist organisations. Highly institutionalised, they typically avoid involvement in extraparliamentary activism to engage in the byzantine labyrinth of State power for minimal and specific changes rather than seeking the systematic basis for the problems to begin with; as Henry David Thoreau remarked in Walden (1854): "There are a thousand hacking at the branches of evil to one who is striking at the root".

Revolution for What?

For all the discussion involved in the debate of revolution or reform, rarely is the meaning of revolution, the purpose of revolution, or the the causes of successful revolutions addressed. An exception to this is Hannah Arendt, whose classic study On Revolution (1963) is required reading. We understand, of course, the term revolution from its origins in astronomy but often the metaphor of a cyclical returning is avoided. This should not be the case, for the purpose of the cycle is a returning to fundamental values, the "organising principles of society" (to use Jurgen Habermas' term from Legitimation Crisis, 1973). Correctly identifying what these organising principles are should determine if change is essential and therefore determine, likewise, whether revolution is a necessity.

The usual Marxist-inspired evaluation of this question is that our society is a capitalist one, where the means of production are held in private hands and that this is the foundation of everything else that follows. Marx's famous distinction between the social relations of the economic base and the legal and political infrastructure (c.f., Contribution to A Critique of Political Economy, 1859) is the foundation of such an analysis. The argument is that regardless of varying degrees of liberalism in a society and modest victories by reformists, it is still fundamentally a capitalist one, which ultimately must be overthrown by revolution. Despite its merits and insights, there is fundamental problems with this analysis. The "economic base" is a conflation between the social relations of natural resources and those of human labour; an error in differentiating between the two results in a confusion of economic classes and, as a result, political economy.

This is no superior source to understanding political economy of course, than the classical school of economics who dedicated significant time to the question. The debate which ran from the French physiocrat Turgot, to Adam Smith and finally to Henry George was ultimately unambiguous; that individuals can belong to multiple economic classes that are workers, capitalist and landlord, their contribution to production is labour, capital and land, their receipt is wages, profit and rent. Moral justification was sought - and found - in the return to wages and profit, but not in the case of rent. Yet the conflation of land and capital into a single unit of analysis by both vulgar Marxists and the equally vulgar neoclassical economists blunted this insight in favour of revolution and war that dominated the first half of the twentieth century.

Ultimately, "social relations" are political rather economic. Economic systems rise from political systems rather than the other way around. In this sense, the liberal-bourgeois revolutions of the eighteenth century, specifically the French and American, provide insight to this question by looking at their results. Even considering the particular objective circumstances (the French republic surrounded by enemies, the American with but a modicum of local opposition), the relative success and failure of the two can be assessed in terms of their approach to liberty and the way they sought to establish a new society. In general, the more successful elements where those which ultimately provided the greatest respect to "negative freedom" and left firm foundations for the individual to engage in their own "pursuit of happiness" - such deliberate limitations on government and opportunity set as constitutio libertatis providing a novus ordo saeclorum (these being chapter headings from Arendt). Without this orientation, revolutions that impose a supposed 'general will' of society onto others by an elite inevitably end in disaster; "Thinkers prepare the revolution; bandits carry it out." (Mariano Azuela, The Flies, 1918). Unless the State, as Lenin pointed out in his 'almost anarchist' text State and Revolution (1917), begins to wither away from day one with its machinery smashed, the old diseases of control and authoritarianism will arise again (an unfortunate prediction with the Soviet Union).

Although those on the political left are often loathe to admit it, the most successful revolution of modernity has been that of the United States. When neo-conservative forces attempt to impose their will on the populous, they find that the constitution stands in their way. Sometimes they do have victories - such as the subversion of the Second Amendment, which was designed to minimise the influence of a standing army and imperialist wars. Often they must dig in their heels and make clearly ridiculous interpretations, such as the application of obscenity laws as a 'public health' issue over the First Amendment and, even more so, the Dredd Scott case where the courts determined - at least for a while, as it helped lead to the U.S. Civil War - that the Founding Fathers could not have possibly meant negroes were to be included in the opening of the Declaration of Independence ("We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness."). Undoubtedly one day there very well might be a U.S. government that so ignores the constitutional rights of the people that violent action may be needed to remove such an administration from office; but even the possibility of such an event does not deny the strength of the lasting institution of a constitution founded on the principle of liberty.

Liberty and Commonwealth

The purpose of political action is freedom, whether that is in the negative sense, reducing the ability of the State to interfere in the free and consensual relations of autonomous citizens, or in the positive sense, whereby the government provides freely available enabling infrastructure, both social and physical, to its citizenry. As fiscal policy, provision of the latter does not necessarily require the reduction of the former, although it is certainly the case at the moment. The abolition of the landlord class, and the socialisation of resource rents at a freely-determined market value can certainly provide positive freedom without the current (effective) corvée labour of workers and investor to the coffers of the State. It also provides the most workable incentive structures to ensure environmental sustainability.

Likewise, the purpose of all political organisations is to create the conditions where they are no longer needed. Justified cynicism may be given to Pitt The Younger's remark that one day parliament would complete all the laws necessary and thus dissolve itself, but as a task for political radicals the spirit of this intent is requisite, as the strength of liberty depends on the involvement of the public. 'Vanguardism' by a cadre elite, is insufficient to guarantee that a revolutionary spirit is not hijacked by authoritarian opportunists, regardless of perceived advantages in a division of labour. It is not therefore "the Party" that should seek to achieve power on behalf of the masses, but rather such political parties should be engaging in a constant campaign that they masses become their own vanguard, led by their own "organic intellectuals", to use Gramsci's phrase. Ideally, the Party should cease to exist after a revolution; if it has fulfilled its revolutionary potential, the people will know how to manage their own affairs.

In conclusion, with a interesting management and economics intepretation, Mario Ferrero's recent essay Revolution or Reform? Socialism's Dilemma as Rational Choice Problem (in the journal Homo Oeconomicus, 2004) is worthy of reference. It argues that the revolutionary party is a producer cooperative that requiress a parallel commercial reform sector to provide worker incentives and consumer trust. Success in the reform sector, along with a sorely lacking proper use of public democratic institutions (Georg Lukács's The Question of Parliamentarianism, 1919 is critical reasoning in this regard) creates loyalty and attachment to those more radical proposals not yet implemented. In a liberal-democratic state (and not dictatorships which do require revolutions), with their supposed organising principle based on personal freedom and social democracy, there is far greater opportunity for extending these principles to their logical conclusion.

Reform, Revolution, and Reflection

Below is a left-liberal critique from Wes Bishop on the theme of "reform versus revolution". Later tonight Lev Lafayette will be posting a radical/socialist response to that same theme. John Passant has also indicated an interest in replying by the end of the week. Please visit regularly to follow the debate... All readers on the broad left are welcome to contribute to the debate...

Recently Tristan e-mailed me with the request of taking part in a debate about the legitimacy of socialism and whether or not as a stated goal it should be achieved through the avenues of reform or the raging straits of revolution. Upon approaching the answering of this interrogative I came to several conclusions quite quickly, a process that is indispensable for a commentator. The first conclusion I drew was that I am not a socialist. Therefore, to answer the question of how best to achieve socialism is akin to asking the King of Saudi Arabia the best pathway to western style democracy. This first conclusion left me at somewhat of a loss of words, because how can an American capitalist be trusted with the answering of such a question?

As is typical with myself I put the dilemma on the backburner of my mind and let it ferment for a few days before returning. I was not disappointed. Returning to the question I remembered one of the wise lessons my former professor, Dr. Ralph Carbone, had taught me year ago. For two years I had the benefit of learning from this master of rhetoric (i.e. person who LOVED to argue). In his classes he had a fascinating way of educating people about an issue. Walking into the classroom he would announce loudly, “This side of the room your pro-[this], this side your pro-[that]!” It wouldn’t matter what subject, evolution, abortion, immigration, the nature of beauty, all of that was reduced to what side of the room you were sitting in at the time of his announcement. Quickly, people would scramble to get to the side of the room they most strongly agreed with and then the debate would be ready to begin. On several occasions I purposefully sat on the other side of the room, than that of the one I agreed with, because as I found out I could learn much more about an issue (and subsequently myself) by arguing a point I did not agree with. Time and again I would spend entire class sessions, passionately defending intelligent design (that was a treat) or the right of the state to regulate what women can do with their bodies. What astounded me the most was not the fact that I could effectively defend a view point I disagreed with but that movements and philosophies that I found and still find completely incompetent could have valid objections. This realization hit me full force when Dr. Carbone and I began going back and forth over the issue of evolution vs. intelligent design. Typically Dr. Carbone would raise a point, I would counter it, and then he would come back with another counterpoint that shut my argument down. Yet, on this occasion after Dr. Carbone had countered, I came back with another whole new point and effectively refuted his argument. Silence fell over the room as everyone turned to look at me, and Dr. Carbone contemplated for a moment, finally resorting to a fancy two step to avoid the point. I sat stunned with what I had just accomplished; I an upstart sophomore from south eastern Ohio had just shut down a fully fledged Ph.D.

The point of my inclusion of this trip down memory lane in this essay is this, although I do not agree with socialism attempting to argue its case (and how to achieve it in a society) taught me much about the movement and led me to an inevitable conclusion in answering the question, REFORM or REVOLUTION?

Put simply, revolution is not the answer, and reform is the path that should always be attempted, tirelessly and diligently. Now as an engaged reader the question naturally follows as to why this is the case? Why reform? Why not revolution? Is it not hypocritical for an American to condemn revolution, when the country all Americans belong too was born in the throes of revolt?

Again to answer it simply, no it is not hypocritical, and reform is the better path for many different reasons. First off it is not hypocritical because what the American founding fathers engaged in was a risky gambit that could have easily backfired and caused severe repercussions for generations and generations. Yet, the founding fathers were lucky, and more importantly pushed by the British to the point that revolution was the most viable solution for their people. In such a case revolution, unfortunately, was warranted, but as any quick survey of history will reveal, revolutions seldom end as well as America’s, with massive social upheavals and economic disparity being the norm instead of the exception.

Socialist that seek to enact their policies should remember this, as it is overly apparent in the western democracies that civic pathways are open to change. Granted this change can sometimes be frustratingly slow, but reform allows for something that revolution very seldom does. And that factor is the beneficial practice of clear reflection.

As the above story illustrates reflection allows for people to contemplate their situation, and their goals, learning about themselves and what they believe. Reform will allow for the enactors of policies to re-evaluate the course they have chosen, modifying it when necessary, and abandoning it when it is no longer fruitful. The members of my class that rushed quickly to their desired side of the classroom behaved much like revolutionaries. So sure where they of their paths that they felt that no further reflection was needed, no more contemplation warranted. A side was chosen, and that side was now to be defended until the end. Such is the case of revolution, for both parties involved.

For the actual merits of socialism, I will conclude with these parting thoughts-

Inside the United States today there is growing pressure to view our economic system (and the economic systems of the world) in a black and white fashion. This new dogma (or not so new dogma) reduces the world into the inaccurate description of pure capitalism, and pure socialism. In many ways this movement is a precursor to the revolutionary mentality, which pits one faction against another. Automatically, the culture of today is slapping labels on people and telling them, “Look, that person is the enemy, we need to oppose them.”

I speak on behalf of all common sense in America when I put forth the following claim, economics should never be a battleground of ideology, or politics. It should always be an objective approach to what is best for the people of a nation. There will be differences in opinion. There always are, but pretending that the States are teetering on the edge of Socialistic revolution is the same as believing that the U.S. is going to become an Islamic theocracy. Thankfully, many in my country have heeded the lesson of reform and have followed it.

Unfortunately, there are the red herring trumpeters who say Obama will make us socialist, because of the recent response to the economic crisis. However, let one thing be clear, although there is a lot of resentment in the U.S. for “socialism” in the financial and auto industries it should be remembered that the free markets asked for this government assistance. Washington did not storm the lobbies of Detroit and Wall Street; the free market came to the halls of Capital Hill seeking government aid and intervention. Socialism has won an important victory through patient reform on this occurrence because it is vindicated in the conviction that markets are incapable of regulating themselves, and that governments have a fundamental right to protect their citizenry. This tip of the hat to socialism would render from my fellow capitalist a quick condemnation that includes some benign comparison to Stalin. To this I say the following, criticizing socialism because of Stalin is paramount to denouncing democracy because of Iraq.

I stand after all of this an even more radical moderate in my economic philosophy. Although a capitalist, I am quick to denounce the drastic ramblings of Ayn Rand and state that to the contrary of what Objectivist teach, mixed economies are a sign of a viable nation and responsible government.

I have reached these conclusions through reflection, which has been permitted because reform has ruled over revolution. If a young writer can benefit from this practice both now, and as a sophomore years ago, imagine what a world full of individuals could gain from the same feat.

-Wes Bishop

Debt for Development Makes Sense say 21 Prominent Australian Economists

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above: Prominent Australian economist, John Quiggin - one signatory to the statement below

Dear readers: we are reproducing this from the Australian Financial Review. It is critical in that it refutes - with authority - the hysteria and panic whipped up by the Conservatives over the Australian government's deficit expenditure. You are all welcome to discuss.

Nb: Later this week we will initiate an exchange regarding the old theme: 'Reform or Revolution'. We already have a couple of contributions ready to go - and we expect to have another couple by the end of the week.

Australian Financial Review, 3 June 2009

In Paul Krugman’s words, right now, “knowledge is our only defence against catastrophe”. A natural reaction would be to retreat into timidity. But that would repeat mistakes that exacerbated the Great Depression by giving in to our fears and phobias. IMF Chief Economist Olivier Blanchard has a similarly blunt message. “Above all, adopt clear policies and act decisively. Do too much rather than too little.”

Of course other things being equal it’s better for governments to be debt free. But as any homebuyer knows, debt can help us build assets now that we couldn’t otherwise afford, and repay the costs when the assets bear fruit. Australia entered this crisis relatively well placed to weather the storm. In addition to the recent mineral boom, for twenty five years Australian governments have consistently stressed fiscal responsibility and taken large political risks doing what they thought right for Australia, for instance with tax reform and fiscal austerity during the mid 1980s and again in the mid to late 1990s.

Many developed countries were already running cash deficits and had substantial public debt before the financial crisis. However all of them have accepted one lesson of the Great Depression – that during a downturn we should let the ‘automatic stabilisers’ work by loosening budgets temporarily as revenue falls and outlays on welfare relief increase.

Given Australia’s relatively stronger balance sheet, it’s been in a better position to engineer additional discretionary fiscal stimulus than most comparable countries. Cash handouts of nearly two percent of GDP are being paid to middle and lower income Australians. There is no more effective way to stimulate the economy quickly. The success of this measure can be seen in the relative strength of Australian retail sales compared with almost any of our peers. In addition the Government plans to spend many billions more on infrastructure.

All this has converted a sizable expected cash surplus next financial year into a deficit of nearly 5 percent of GDP. This compares with the average of our peers of nearly 9 percent. On current Treasury projections, which seem as plausible as any (though like all such forecasts, they are only ‘best guesses’), net debt will stay below 14 percent of GDP compared with an average of over five times this in comparable countries which nevertheless retain their creditworthiness in capital markets. Ultimately if other countries run weaker balance sheets than us, that’s no reason to relax our own standards. But the comparison does provide some context. It illustrates that even after the stimulus, we remain within a very healthy margin of safety in our Government’s reputation for economic prudence.

None of this is to suggest that Australia should rest on its laurels. There’s a fair chance (but no more than that) that our economy will recover strongly within two years. But just as we don’t know today how far or fast interest rates should be increased then, we don’t know today precisely how fast we should be returning towards budget surplus then. So these debates need to go on and there will come a time when we need to change direction, from supporting economic growth to restraining it, perhaps with great vigour. But that time is certainly not now.

Further, as Australia’s population and infrastructure needs grow, Australians must decide whether they prefer a balance sheet more suited to genteel decline or one that supports investment, dynamism and growth. In addition to building genuinely valuable assets in R&D and carbon abatement, our education, health and transport systems and housing stock, the stimulus will, in Treasury’s words keep up to 210,000 Australians in work who would otherwise be out of jobs. Major infrastructure projects should also pass independent and transparent benefit/cost assessment.

Deploying our strong balance sheet to use otherwise idle resources – or to put it more compellingly, deserted factories and unemployed workers – to build assets that improve our lives and our economy in the future, seems much more appealing; much more commonsensical than retreating into phobias.

Fred Argy, Former Head of EPAC.

Paul Binsted, Company Director and Economist

Tony Cole, Former Secretary to the Treasury

Max Corden, Emeritus Professor, Johns Hopkins University

Owen Covick, Associate Professor, Flinders University

Steve Dowrick, Professor of Economics, ANU

Saul Eslake, Chief Economist, ANZ Bank

John Foster, Professor of Economics, University of Queensland

Bernie Fraser, Former Governor of the Reserve Bank of Australia and Secretary to the Treasury

John Freebairn, Professor of Economics, University of Melbourne

Joshua Gans, Professor of Economics, Melbourne University

Paul J. Gollan, Associate Professor, Macquarie University

Roy Green, Professor, Dean, Faculty of Business, University of Technology, Sydney

Stephen Grenville, Former Deputy Governor, Reserve Bank of Australia

Nicholas Gruen, CEO, Lateral Economics

Tony Harris, Former Auditor General of NSW

Stephen Koukoulas, Global Strategist, TD Securities

Andrew Leigh, Professor of Economics, ANU

John Quiggin, Professor and ARC Federation Fellow, University of Qld

Mike Waller, Former Chief Economist, BHP Billiton

Glenn Withers, Adjunct Professor, Australian National University