The Left has often been accused of not understanding economics properly. So it’s been no small pleasure over the last year to see the guardians of neo-liberal orthodoxy thrashing around helplessly in a bid to explain the financial meltdown, while radical critics like David Harvey and Robert Brenner have provided by far the best guide to the origins of the global crisis.
Unfortunately, the fact that Thatcherite economics have been completely discredited by events won’t be enough to guarantee their eclipse: the neo-liberal project has never let inconvenient facts get in the way of the single-minded defence of class interests. It takes about five minutes to show that the analysis of Ireland’s economic crash being touted by right-wing economists like Jim Power and Moore McDowell is pure bull, but the chancers in question still have a stranglehold over debate in the Irish media. Breaking that stranglehold will require more than a sound analysis of neo-liberal capitalism: radical ideas only begin to command attention when they have the weight of political movements behind them.
Leo Panitch has stood out in recent years as one of the socialist intellectuals most fully engaged with political questions, analysing the problems faced by left-wing parties, trade unions and other social movements with great clarity. The Canadian academic has followed in the tradition of Ralph Miliband, whose work made the case for a non-Communist radical left that would avoid the mistakes of social democracy. Panitch and Colin Leys took over as editors of the Socialist Register after Miliband’s death, and extended his critique of the British Labour Party in an essential book, The End of Parliamentary Socialism (published in the immediate wake of Blair’s 1997 triumph, it should be the first port of call for anyone bewildered by the collapse of the New Labour project).
Globalisation and the Left
Renewing Socialism engages with many of the key strategic questions that any revived left-wing project will have to face. Panitch takes issue with claims that globalisation has made the nation-state irrelevant as a political actor: “If we are going to confront the international operations of capital, we can only do so by changing class and state structures at the national level since the international institutions (including multi-national corporations) remain embedded in those national structures.” There may be a global capitalist economy, but there is no world government and the main focus of political life remains national – even in the European Union, where integration between nation-states has gone further than anywhere else on the planet.
A fine chapter on globalisation and left strategies looks at the experience of the North American Free Trade Agreement (NAFTA), and notes that the Mexican and Canadian states were not coerced into joining NAFTA by the power of global capitalism: the political leaders in Ottawa and Mexico City were happy to join Washington’s sphere of influence, given the enthusiasm of their capitalist classes for greater economic integration. In order to face the challenge of globalisation, the Left must come to terms with the nature of the domestic power system, and the relations between political and economic elites:
“There is no way of honestly posing an alternative to neo-liberal globalisation that avoids the central issue of the political source of capitalist power, globally and locally: the state’s guarantee of control of the major means of production, distribution and exchange by private, inherently undemocratic banks and corporations. It is inconceivable that there can be any exit from today’s crisis without a planned reorientation and redistribution of resources and production on a massive scale … this does not mean attempting to take over the state as it is presently organised and structured and trying to impose controls over capital with these inappropriate instruments. Nor does it mean trying to coordinate such controls internationally while resting on the same state structures. The point must be to restructure the hierarchy of state apparatuses and reorganise their modus operandi so as it develop radically different material and ideological capacities.”
The same chapter, based on an essay first published in the 1990s, contains a striking prediction: “Even the technical feasibility for short-term capital controls is an open question today. Yet the instability of the world financial system is such that we are likely to see the ‘discovery’ of means of control and regulation, to cope with international financial collapse.”
Beyond social democracy
While he is a stern critic of the European social-democratic parties, Panitch is not the sort of radical who thinks it enough to chant “one solution, revolution!” In fact he rejects the idea that socialists must choose between revolution and reform. The problem with social democracy was not that it was “reformist”, but that its reforms did not go far enough in tackling the roots of capitalist power (Panitch’s analysis is so comprehensive and succinct that it’s worth quoting at length):
“In saying these reforms did not go far enough, this does not just mean in a quantitative sense: more universal rights; more progressive taxation and social benefits; more regulation of capital, of its products, of the labour process and of labour markets; more public ownership. It means that the reforms that were introduced always qualitatively fell short of their promise. The rights to education were always compromised by a hierarchy in education, by restricted access to quality education and by the content of education that reflected the class society in which education was embedded. The laws which granted and sustained freedom of association for workers also always policed trade union behaviour and limited the range and scope of industrial struggle. What was given in the form of progressive taxation was taken away in incomes policies, sales taxes, and the absence of price controls even on basic necessities. The social benefits were administered in such a bureaucratic fashion that even those most dependent on them could hardly feel that the ‘welfare state’ was theirs to influence, let alone control.
“Unemployment insurance was usually just that: insurance which reproduced the labour market even as it regulated and subsidised its vagaries. (That is, to get it, in most cases, you needed to have been employed; you then needed to be fired or laid off; you then needed to be actively looking for work; and you then lasted on it only as long as your previous payment of ‘stamps’ allowed.) The regulation of capital and of production and of products was always compromised by the close intermeshing of the regulators and the regulated when it came to the bourgeoisie – and by the distance from the regulators when it came to workers or consumers. The public ownership was state ownership, with economic democracy being outlawed (or, in a few instances, trivialised) to such an extent that few workers or consumers could feel they were losing something that belonged to them even when privatisation threatened their livelihood or quality of service.”
The “Nordic model” of social democracy has often been held up by centre-left forces elsewhere as a blueprint for their reforming ambitions. Panitch points out that this idealisation of countries like Sweden usually ignores the regressive trend of recent decades as the Swedish bourgeoisie took its cue from the Thatcher / Reagan “revolution” of the 1980s and demanded greater freedom from constraint. Worse, those yearning for a more “Scandinavian” society have tended to assume that this or that policy can be borrowed from the Swedes or the Danes and applied by centre-left governments in a technocratic manner: “They forgot that the dense institutional organisation of the working-class and co-operative movements which nurtured and sustained such policies emerged out of a cultural and political matrix, and a half-century of struggle and confrontation, which could only be now replicated elsewhere in the West with something very like a revolution.”
While Panitch may speak of “revolution”, he does not have in mind the prospect of armed insurrection against the status quo. In developed capitalist states with long-established systems of parliamentary democracy, that is not likely to be on the agenda in any foreseeable future. But Panitch (following in the footsteps of Ralph Miliband) insists that there can be a third way between the politics of “revolution-by-overthrow” and the timid gradualism of the social-democratic parties. Support has often been available for programmes of radical reform:
“It is worthwhile recalling that the 1980s opened with the programmes for socialist change figuring centrally on the political agenda in a good number of western countries: Miterrand’s and the Common Programme’s 1981 victory in France; the Wage Earners’ Fund proposals in Sweden; the short ‘march to power’ of PASOK in Greece; the strength of the socialist left in the Labour Party in Britain, with that Left occupying governmental office in Europe’s largest city.”
The defeat of those programmes owed more to the limitations of social democracy – and its failure to mobilise its supporters against the inevitable resistance to change mounted by conservative forces – than it did to the alleged unpopularity of radical ideas (Tory politician Norman Tebbit famously remarked, in reference to Ken Livingstone’s Greater London Council, that “this is the new, modern socialism, and we must kill it” – he clearly understood the potential of the GLC’s radical agenda better than the British Labour leader Neil Kinnock).
A new agenda
Throughout this book, Panitch offers suggestions for a new agenda around which a revived Left could begin to rally support. Radical-democratic reform of the state must be central, bringing the institutions that have so much influence over people’s lives under direct popular control. This should be combined with moves towards greater economic democracy, in which the socialisation of the financial system would play a crucial role:
“Democratically elected economic planning bodies at the ‘micro-regional’ level, invested with the statutory responsibility for engineering a return to full employment in their communities and funded through direct access to a portion of the surplus that presently is the prerogative of the private financial system to allocate, should be the first priority in a programme for an alternative state. This alternative could not be realised without at least some trade controls and certainly not without quite extensive controls over the flow of capital. (Indeed, it is improbable that such capital control can be realised without bringing the financial system within the public domain and radically reorganising it in terms of both its structure and function. This used to be known, when the Left was still innocent about its terminology, as the ‘nationalisation’ of the banks.) Of course, this would necessarily require inter-state co-operation to install managed trade (rather than autarky) and to make capital controls effective.”
Panitch contrasts this vision of progressive international co-operation with the existing trend that tends to reinforce neo-liberal economic policies (he places the economic dimension of the European Union firmly in this category). The regional partnerships formed by Latin American states under the leadership of the Venezuelan government to exchange resources and know-how are a promising step in the right direction, he argues: “I take more hope from these concrete articulations of ‘twenty-first century socialism than from the political changes, let alone in terms of the much more limited changes in social relations, that have so far taken place in Venezuela itself.”
Advancing this new agenda will require building an alternative to the traditional social-democratic parties:
“In socialist strategic terms, those parties have played themselves out historically … the Third Way project finally divested such parties of their roots in the labour movement – which at one time were real and profound. However much it is still the case that they may have institutional and financial links to unions, the way in which they once represented labour, albeit usually in a corporatist manner, has passed. A new generation of leaders in these parties has completely divested itself of the notion of being class representatives.”
The German Left Party is cited by Panitch as one example of the potential space for alternative forces (although he notes its participation in a dubious regional coalition with the Social Democrats in Berlin). He hopes that activists from the “Seattle generation”, while recognising the need to build parties with a coherent strategy and programme, will avoid the excessively dogmatic brands of Marxism on offer: “The very discourse of the Bolsheviks and the old Communist parties is simply no longer capable of mobilising people.” Socialist parties must be democratic, and they must recognise the diversity of the working class they seek to mobilise, taking account of issues related to gender or ethnicity that were often neglected in the past and winning the support of a broad range of social movements.
Panitch gives no quarter to those who claim that the working class is “dead” as a political actor. He argues that working-class parties and trade unions have never simply represented a class identity that had already been formed by the conditions of capitalist society: the whole process of building parties and movements is a necessary stage that has to be completed before workers with widely varying experiences will come to see themselves as part of a collective body of people with the same interests. The phase of movement-building in the late nineteenth and early twentieth century that produced mass socialist parties must now be repeated, taking account of the social and economic changes that have transformed the nature of the working class in every corner of the globe.
This updated edition of Renewing Socialism was completed before the global crisis had revealed its full extent. The repeated allusions made by Panitch to the instability of neo-liberal financial capitalism thus appear all the more prescient. So, too, do his warnings against “economic catastrophism” on the Left – the belief that a major economic crisis will, by itself, produce mass support for socialist alternatives (“what tends to be ignored is the very distinct possibility that crises are conjunctures when people are most frightened and least likely to have the confidence to act”). With luck, his cautiously-worded optimism will prove to be equally on the mark:
“My sense is that the confident bravura with which the neo-liberal globalisation project has been articulated by the ruling classes has now passed as a result of its own contradictions and the opposition it has provoked. To say this is not to deny that the neo-liberal project is still defining the nature of contemporary capitalism, but I think that the space is increasing for strategic thinking about going beyond a mere defence of the old social democratic reforms … space is opening up for thinking about what coming to state office might mean in terms of introducing a different kind of reform, one that has embedded in it a strategic conception of structural change within the state itself, in the state’s relationship to capital and to the working classes with their common as well as diverse needs and interests.”
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