Workers' Liberty

A sign that Israeli Capital like Capital elsewhere has been facing a severe crisis? I don't think so. On the contrary the rate of profit is at the highest level at least in decades, taken gloablly possibly ever. For the last 8 years or so capitalism has been expanding at a frantic rate globally. In Britain there are more people working than ever before in history. As Trotsky pointed out it is in these condiotns where from a situation where workers are cowed because of a lengthy recession they see their numbers increasing see instead of lay-offs even just one etxra worker being set on that they gain in confidence, begin to lift their heads, and become more prpared to struggle.

Had israeli Capital really been facing a crisis it would have resisted signing union deals rather than acceding to them. Capital makes concessions when it has the ability to do so in its expansion phase not its crisis phase. Workers in Israel like workers elsewhere in the world are lifting their heads because of capitalist expansion not crisis. A temporary lull due to the current cyclical slowdown within the secular upturn will not diminsh that.

Arthur Bough

Admittledly, the article is a little over excited - e.g. Leon Trotsky the 'only defender' of socialism, what?! - but this is just not true:

Had israeli Capital really been facing a crisis it would have resisted signing union deals rather than acceding to them. Capital makes concessions when it has the ability to do so in its expansion phase not its crisis phase.

US. Early 1930s. First wave of contracts signed with CIO. New Deal. Etc.

But Tom,

are you saying that this was due to the strength of the working class in the US forcing those "concessions"? Clearly that was not true. To the extent these were concessions at all they were set in a background of the existence of a rapidly growing economy in the USSR, and against that despite the weakness of the US Labour Movement, fairly significant increases in membership of the CPUSA. The US also had a different growth path to other developed economies of the time. It was rather like China is today. After the recession of 1921 the US economy grew - again as China is doing today - rapidly on the back of exports in what was a cyclical upturn within the secular long wave downswing that began in 1914-20. On the back of relatively cheap labour, and low unit labour costs due to the introduction of Fordist techniques it was able to undercut other capitalist economies. In addition, this period saw the introduction in the US of consumer credit that allowed the US middle class to buy the huge volume of new consumer goods - a similar process occurred in China again. On the back of huge influxes of Gold to pay for these exports the US was forced by the Gold Standard to cut interest rates and icnrease money supply setting off the consumer boom of the Roaring 20's. In short the US economy was tsill out of synch with the world economy as Kondratiev had previously described. What you designate as "concessions" were in fact a fairly rational response through "Keynesian" policies to the economic crisis in the US. But compare that with the situation for example in Britain where Unemployment Benefit was cut, the LP split, and the Depression was used to slash wages and conditions.

That is not the case in Israel. What we see is that on the back of a very rapid icnrease in ecopnomic growth throughout the world over the last 8 years or so demand for labour has been rising - one of the reasons for large scale immigration - in those places where economic growth has been most rapid we have seen new labour Movements being created, and some of the most militant action - there has been a lot in China that we never get to see or hear about. As Trotsky set out in the "Curve of Capitalist Development", "Flood Tide" and other writings we only see big militant, and particularly revoluitonary actions at the conjunctures of these big long term cycles the points where for example a long period of upswing becomes a downswing. But once that downswing last for any length of time it demoralises and materially weakens the Labour Movement. When a long period of downswing ends it can take a short time before the effects are manifest in labour demand, it takes time for organisation to occur, for new leaders to emerge and so on, but the added confidence, the material condition of the class makes increased militancy possible. That is the stage we are at now. The downside is that during such periods because workers are able to gain cocnessions through industrial action, there tends to be an increase in syndicatlist and reformist ideas. Only when such easy gains once again stop are workers more encouraged to seek revolutionary solutions.

Moreover, the point is is Israeli Capital like world capital in crisis? No clearly its not. We are in a world economic boom with profit rates at their highest probably ever, with not a single economy in the world in recession - though the US MAY dip briefly into recession by the end of the next quarter.
Arthur Bough

are you saying that this was due to the strength of the working class in the US forcing those "concessions"?

Depends what you mean by strength? It's certainly the case that militancy among the unemployed and certain sections of industrial labour dramatically increased during that time, were instrumental in producing concessions, and subsided afterward, whereupon concessions were rolled back. And secondly, even if I wasn't saying that, it would still be a counterexample to your claim, since you didn't say 'Capital makes concessions due to the strength of the working class when it has the ability to do so in its expansion phase not its crisis phase.'

Just because a policy is a 'rational response' doesn't mean it's not a 'concession'. Or what do you mean by 'concession'? Can you give examples? I mean, clearly US capital resisted the labour movement and the unemployed movement for a long, long tim in the period I descrine. They then conceded to grant a few of its demands, such as those I indicated. In any normal usage these are concessions. They are also, if you like, 'fixes'.

I agree with you that the article is hyperbolic and obviously neither Israeli capital, now world capital in general, is in recession, nor is the global working class strong. But I said that already in my first post, so I don't know what you're adding with all that Kondratiev business.

I believe my point stands.

I think you are wrong. The Kondratiev business actually was the "Trotsky" business. The point I was making was that in the 1920's the US economy was not like say Britain, France or Germany experiencing a period of downturn. As Trotsky pointed out the European sequence was something like this. From the late 1880's early 90's until 1914 a period of rapid economic growth, which coincides with Kondratiev's analysis. Corresponds to a period of rapid growth of the labour movement and militancy, growth of Second International. End of that period finds at the conjuncture War and Revolution. In the after war period there is a cyclical upswing, but a recession in 1921. Europe remains in a period of recession or slow growth. The US does not. Its economy grows quite rapidly on the back of the conditions I set out above. To suggest that the US labour Movement was subdued as a result of recession during this period is, therefore wrong. So its conjuncture the point at which economic growth swtitches quickly to crisis is delayed. It is not inconsistent then to see militancy at that conjuncture, especially given the other factors I outlined.

The fact that you point to an exception does not make it the rule. I have sometimes seen things go up when they are dropped - due to air currents. That doesn't invalidate the law of gravity. But in any case I don't think for the reasons outlined above it is an exception. It follows the pattern.

The height of the Depression in the US was in 1933. Roosevelt was elected in 1932. His policies were Corporatist they were similar in some ways to those adopted by Hitler and Mussolini. Were the policies of Hitler and Mussolini that benefitted workers also concessions? In what sense is a policy that is aimed at stabilising capitalist economy a "concession", just because workers benefit from it as a side-effect? Why did the US adopt this strategy when Britain and other European countries didn't? Because of the position of US capital vis a vis European Capital.

Actually, you didn't say initially that you accepted that Israel and the World economy is not in crisis, you said the article was over-excited, gave the example of Trotsky. As the AWL World Economy document, amazingly, DOES say we are in recession I thought it necessary to challenge that perpsective.

Arthur Bough

the 1920's

But I said 1930s. I don't know why you are talking about the 1920s.

The fact that you point to an exception does not make it the rule

True. Here's another one. Late 60s, early 70s, most industrialised countries.

The height of the Depression in the US was in 1933. Roosevelt was elected in 1934. His policies were Corporatist they were similar in some ways to those adopted by Hitler and Mussolini. Were the policies of Hitler and Mussolini that benefitted workers also concessions?

'Some ways'? Would you like to expand on that? This is a silly point. You think that Roosevelt's economic policies were like Hitler and Mussolini's?! They might both, just about, be covered under the word 'corporatist', but they aren't similar. Crucially, Roosevelt made the unions a partner in a tripartite national corporatism - the fascists set up an essentially bi-partite arrangement with government and big industrial capital.

In what sense is a policy that is aimed at stabilising capitalist economy a "concession", just because workers benefit from it as a side-effect?

Well we'll only know when you get round to defining 'concession'. I think it's when someone concedes something - i.e. both (a) gives something, which they (b) do not want to give, and which (hence it is highly likely that) (c) they have only given because of the actions of another. Capital has political hegemony under capitalism. Of course everything they do is aimed at stabilising the capitalist economy. That is why they give concessions - I mean, why else do you think they ever do, because they have pangs of guilt? This is why disruption is a socialist strategy short of revolution.

Actually, you didn't say initially that you accepted that Israel and the World economy is not in crisis, you said the article was over-excited, gave the example of Trotsky.

oh alright...

1. US 1930's. The reason I quoted the 1920's was given in the explanation. Conscioussness does not switch mechanically. The 1920's saw militancy on the back of prosperity. That militancy does not stop on the dot as economic slowdown occurs. On the contrary its precisley the conjuncture such as 1917 which sees the most revolutionary struggles. The bosses faced with economic reality resist the workers still feel confident and fight back. But the New Deal could not be seen as resulting from such militancy.

2. 1960's/70's. Again proves the point. Most economists would argue that the last Kondratiev boom ended at that time signalled by the crisis of 1974. By the late 60's that boom was faltering. Bosses start to resist, but workers on the back of a long period of prosperity that built their confidence succesfully fight back. But note the difference between this and the acceptance for a long time of wage cuts under the Prices and incomes policy, note the ability of the Tories not only to win the election but to successfully defeat one group of workers after another, and to push through the most ideological programme in decades.

3. On Roosevelt and Corporatism are you REALLY suggesting that Roosevelt brought in the unions to this corporatist structure because he was forced to do so by workers militancy? I would want some convincing, just as I would want some convinicng that a similar policy in post war Germany of establishing Works Councils and Workers Directors was forced on German Capital rather than being a means of incorporation.

4. On Hitler and Mussolini the point stands. The carried through some policies that benefitted workers such as the policies on giving conttracts to firms that favoured the employment of Labour over capital, was this or was this not a concession to workers? No it clearly wasn't. Workers perhaps benefitted accidentally. Roosevelt introduced policies, encouraged union recognition that raised wages across the board to stimulate demand. It was Demand Management that accidentally benefitted workers.

5. On the basis of the definition of "concession" you give, and which I am happy to accept neither the "concessions" of Roosevelt, nor of Hitler, MUssolini or of german Capital in the postwar period were concessions. They were capitalist policies designed to stabilise Capitalism in a given period, and benefitrted workers as a by-product. They were NOT something forced on Capital by workers.

6. "Capital has political hegemony under capitalism. Of course everything they do is aimed at stabilising the capitalist economy. That is why they give concessions - I mean, why else do you think they ever do, because they have pangs of guilt? This is why disruption is a socialist strategy short of revolution."

Given the definition of concession you give up above this makes no sense at all.

a) If a concession is something they are forced to give when in fact they would have preferred to do something else then clearly "stabilising the economy" is NOT the reason for giving a concession, quite the opposite. If it were a REAL concession according to your definition i.e. something they are forced to do when they would otherwise have done something else then it is likely not to stabilise, but to DESTABILISE the economy, for example by reducing the rate of profit, requiring monetisation of wage increases that leads to inflation and so on. It is likely that a means of stabilising the economy they would choose could be to act as Reagan and Thatcher did, as MacDonald did and slash wages and conditions. The US followed a different path to European countries (Norway wa an exception it under a Social Democratic Government avoided most of the Depression through Keynesian policies) precisely because of the different situation of US Capitalism, the same reason that the US BENEFITTED from Protectionism during that period whereas Europe lost out significantly. Agreeing to do something they wouldn't ordinarily have done requires that either a)workers are strong enough to force that upon them, and or b) such a concession can be granted without threatening the system. Both Reagan and Thatcher abandoned their Misean economic stance that required a big reduction in Money Supply to curb inflation AFTER they had defeated the working class, and embarked on a Friedmanite monetary expansion to stabilise their economies that were suffering as part of the Long Wave downturn, and the deindustrialisation that was its concomitant. Why? Because having defeated the working class that monetary expansion could be udnertaken as a stabilisation method without risking it feeding through into higher wages, it could be used to bankroll Capital, and to bring about what Mises and Schumpeter describe as "forced saving" i.e. the raising of the rate of profit through falling real wages.

b) I don't accept that what Roosevelt did in the 1930's, what McDonald did at the same time, or what Reagan and Thatcher did in the 1980's during either the Hayekian phase or the Friedmanite phase were concessions forced on them by workers. I beleive they were the polices chosen by them as the best to stabilise capitalism at the time, and udner the specific condiitons of each capitalism at that time. So I do not have to epxlain such "concessions" as either being forced on them by workers or a product of their good intentions.

c) Of course workers can force the capitalist state udner certain circumstances to grant concessions just as workers can force an employer to grant higher wages or better conditions. But the fact is that just as workers can obtain higher wages from an employer when its business is booming, but struggle to do so when it is laying workers off such is the case with the capitalist state and such concessions. Real concessions according to the definition you give above arise in times of prosperity, and when as a result workers have become stronger and more confident. Alternatively, they are granted as a last gasp under pre-revolutionary conditions. Neither Israel now, nor the US in the 1930's was in a pre-revolutionary state. The concessions granted by Israel are forced on it by a strengthening Labour Movement udner condiiotns of economic growth such that it can accede to them. The "concessions" of the US in the 1930's were not concessions at all in the sense of your definition. To the extent that real concessions were won for example by the auto workers this was on the back of the residual militancy developed during the 1920's. As I said above such militancy does not simply evaporate overnight. In fact those struggles were similar to those in Europe more than a decade earlier at the equivalent conjuncture. But a look at the struggles that took place during that period shows that far from them being about winning "concessions" from Capital they were almost all defensive struggles aimed at preventing Capital encroaching further on Labour. They were struggles for the right to belong to a union - which should be a basic bouregois demcoratic right not a concession - about opposing job losses and so on. Yet even these defensive struggles for basic rights required workers to engage in battles that were far more bitter than they would have been at any other time. Moreover, as I said above the 1930's had another factor. Whilst capitalism was in deep crisis the economy of the USSR was growing faster than any economy had ever grown before, and providing an altrenative for workers to look to. It acted as a counterbalance to some extent to the material condition of workers in capitalist economies because they could draw some strength and confidence from that development. It was part of the reason for a rapidly rising membership of the CP, which again no doubt played into the calculations of the capitalist state.

But as Marx pointed out although marxists support wage struggles our responsibility is to point out that any such success will be shortlived that it will be clawed back. Wages do not rise because of class struggle, except in the very short term for that reason, but rise due to the upward curve of capitalist developemnt - the "civilising mission" of Capital as marx described it in the Grundrisse. Our task as he pointed out in his letter to Ruge is to give such struggles an adequate reason for struggle i.e. abolition of the wages system. The same is true of concessions from the bouregois state. If workers engage in such a struggle we have to support it, but our task is to point out its inadequacy to point out that the bouregois state will claw it back - if its a REAL concession - and for that reason rather than relying on the bouregois state to provide such solutions workers have to instead rely on their own activity. That means in relation to workers and their enterprises that instead of seeking higher wages they seek to gain control of their means of production through the establishment of co-operatives. In relation to the bouregois state it means not calling on that state to act whether by nationalisation or other methods, but for the working class to act. That is the clear message that Marx set out in the Critique of the Gotha Programme.

So far from "This is why disruption is a socialist strategy short of revolution." being the case it is in fact either an anarchistic or esle an Opportunist strategy that misleads the working class and miseductaes it. It is as Marx put it a socialism which is only "skin deep."

There is a good account of the New Deal here which also has links to other Labour Movement history in the US. What is interesting is the comment that in the First New Deal almost every pressure group got something EXCEPT the socialists and Communists. What is also interesting is the fact that this demonstrates the difference between the gobvernmental/political power and the State power. Roosevelt as an elected politician and part of the political power has to build a coalition to get elected that involves a certain programmatic base, but it is clear that this conflicts with the interest of the state power, which represents the capitalist class, and for instance blocks through the Supreme Court certain aspects of Roosevelts policy.

Arthur Bough