Eurozone endgame

The following is taken from the October edition of Socialism Today issue 152


After a year and a half, the Greek debt crisis is far from resolved. In fact, with Greece on the verge of a social explosion, a default and exit from the euro appears almost inevitable. The eurozone is threatened by an interlocking sovereign debt and banking crisis, compounded by near-zero growth. Capitalist leaders are in complete disarray. Competing national interests are a barrier to cooperative measures. LYNN WALSH analyses the latest twists and turns of the eurozone crisis.

ON 21 JULY, the eurozone leaders proclaimed at their summit that they had agreed on a package to stabilise the Greek debt crisis. This, they claimed, would avert the threat of a Greek default and precipitous exit from the euro. There would be a further €109 billion (following the 2010 €110bn package), while the role of the European Financial Stability Facility (EFSF – with proposed €440bn funds) would be extended to allow intervention to support governments and banks. There would, moreover, be a bond exchange that would involve a 21% ‘haircut’ for the holders of Greek bonds.

This package, however, was more a promise of future salvation than an immediate, practical solution. The whole deal is dependent on the approval of the 17 eurozone governments or parliaments, and this is not likely to happen until the end of September or the beginning of October. The 20% ‘haircut’ for Greek bonds will provide very minimal debt relief for the Greek government – Greek government bonds are already trading at less than 50% of their nominal value on the secondary bond markets. If the bond exchange goes through (it requires the agreement of 90% of the bondholders) it will be a good deal for the banks and a raw deal for the Greek people. In fact, it would require a ‘haircut’ of at least 50-60% to make any real difference to the debt mountain weighing down the Greek economy.

There is no guarantee whatsoever that all 17 governments will agree on an increase in the funds available to the EFSF or to increased powers of intervention. The eurozone leaders are reportedly arguing in tense, behind the scenes negotiations about where the EFSF funds will come from. Some leaders are proposing that they would mainly come from the European Central Bank (ECB). This would be, in effect, another form of ‘quantitative easing’, printing money in order to bail out governments and banks through the EFSF. This is strongly opposed both from within the ECB and by a number of governments, such as Germany and Netherlands, who see it as a road to escalating inflation. Regarding the €109 billion loans package, the government of Finland is demanding collateral (security) for its share of the loan. Other governments, such as Slovakia and Austria, are likely to make similar demands. These governments are demanding that a slice of government revenue or physical assets, such as land or buildings, should be allocated to them as security. This is reminiscent of the demands for reparations made on Germany after the first world war.

The wrangle over this new package demonstrates once again the way national interests stand in the way of common agreement. The 17-strong eurozone is an alliance of national states, not a confederation with a unified governing body.

Soon after the July summit, moreover, there were precipitous falls in the shares of major French banks, reflecting fears about the repercussions of a Greek default. At the same time, European banks were finding it increasingly difficult to borrow dollars from US banks to finance their current business. The ECB, which under Jean-Claude Trichet had been extremely reluctant to intervene, was forced to step in to offer unlimited dollar loans to eurozone banks. The ECB also started buying the bonds of the Italian and Spanish governments in order to prevent a precipitous rise in the borrowing costs of Italy and Spain.

Meanwhile, growth in all the major eurozone economies slowed to near zero, indicating a renewal of the recession that began at the end of 2007. The British economy also slipped into stagnation. This renewed slowdown is partly the result of fears about a sovereign debt meltdown and banking crisis, but more especially the result of austerity measures that have cut demand and reinforced the spiral of weak demand, falling investment, and rising unemployment. This in turn reduces government tax revenues, and actually leads to bigger deficits.

Piling the pressure on Greece

AT THE EUROZONE summit on 17 September, the troika – the European Council, International Monetary Fund (IMF) and ECB – who police the austerity measures imposed on Greece, postponed payment of the latest €8 billion loan due under the 2010 package on the grounds that Greece has not carried out sufficient cuts in state employment, spending, etc. Georgios Papandreou, the Greek prime minister, duly scurried back to Athens in order to carry out the troika’s orders.

The package of additional austerity measures includes a property tax, together with more public-sector job losses – on top of the plan to sack around 150,000 civil servants (20% of the total) by 2014 – and draconian wage cuts. If implemented, the accumulated measures will mean an economic and social catastrophe. The troika is "holding a knife to the throat of the Greek government", as one Greek minister put it, partly to enforce deeper and more rapid cuts and partly as a warning to other governments like Portugal and Ireland to keep to their austerity packages. This is a very dangerous game, however, and could detonate a political explosion in Greece, propelling the country towards default and exit from the euro.

Economically, there is no way these measures will provide a way out of the ever deepening slump. In fact, further austerity measures will only push the Greek economy even deeper into slump, pushing up the outstanding debt and making it even harder for Greece to pay it off. After falling 4.5% last year, GDP will fall by at least 5% this year (second-quarter growth was 7.3% down over last year). Unemployment is officially 16%, but more realistically is over 20% nationally (with over 900,000 unemployed). The northern region of western Macedonia, where an estimated 20% of small businesses have shut down during the recession, has an official unemployment rate of 22%. Health, education and other public services are collapsing. There is a process of social disintegration.

Angela Merkel and other eurozone leaders have repeatedly denied that they are seeking to provoke a default on Greece’s debt or force Greece out of the eurozone. Other leaders, however, appear to contradict this line. For instance, Wolfgang Schäuble, the German finance minister, has threatened that if Greece does not meet the conditions set by the troika, payments will stop (regardless of the fact that Greece urgently needs cash to pay its bills and refinance debts in October). "Then Greece has to see how it gets access to financial markets without help from the eurozone", said Schäuble. "That’s Greece’s problem".

The Netherlands prime minister, Mark Rutte, went even further: "Countries which are not prepared to be placed under administratorship can choose to use the possibility to leave the eurozone". (International Herald Tribune, 9 September)

It may be that some of the eurozone leaders are bluffing, and their statements are intended to maximise the austerity measures implemented in Greece. However, they are playing an extremely dangerous game. Christine Lagarde, the head of the IMF, has recently warned about the rise of social tensions as a result of austerity measures. Massive strikes, demonstrations and other protests have continued unabated in Greece – and, at a certain point, will result in a social explosion.

Debt default and eurozone exit

PUSHING FOR EVEN greater austerity measures, eurozone leaders are ignoring the reality that Greece’s debts are absolutely unsustainable. While political leaders are repeatedly stating their determination to defend the eurozone and avoid a breakup, strategists closer to the investment banks and other financial institutions are quite clear that, sooner or later, there will be a Greek default. That would mean a Greek exit from the eurozone.

For instance, Nouriel Roubini, who has a far more realistic view than most commentators, argues that Greece will never resolve its debt problem within the straitjacket of the euro. In order to stimulate economic growth, the precondition of debt reduction, Greece would have to be able to devalue its currency in order to boost exports. Clearly, this would mean abandoning the euro and returning to the drachma. The drachma would undoubtedly sharply fall in value against the euro. This would enormously increase the foreign debt, in drachma values, of the Greek government, banks and businesses. In reality, Greece would (like Argentina in 2001) have to write off a significant part of these debts by revaluing the debt in drachma terms. Greece would undoubtedly become a pariah on financial markets, unable for a time to borrow from European and international banks. As in Argentina (comments Roubini), the situation would mean ‘bank holidays’ (denying or limiting savers access to their accounts) and capital controls to prevent a flight of capital out of the country.

Roubini argues that an orderly default and exit from the euro, although inevitably imposing extreme hardships on the Greek working class for a period, would be preferable to the "slow disorderly implosion of the Greek economy and society". He argues that there should be international, coordinated action to recapitalise the banks and other financial institutions suffering losses on their Greek loans. Moreover, international banks should step in to recapitalise the Greek banks, which would also suffer massive losses on Greek government bonds.

In theory, an approach along these lines, based on a coordinated, international intervention to mitigate the problem of unsustainable debt in Greece, would be preferable to blundering into an explosive collapse of the Greek economy and all the uncontrolled repercussions this would have in Europe and beyond. However, the capitalist markets do not function in an ‘orderly’ way, and recent events demonstrate the complete lack of policy coordination between the leaders of the advanced capitalist countries.

Default on the country’s debt and exit from the eurozone would not, in themselves, provide a solution for the working class of Greece. As in Argentina 1999-2002, the Greek ruling class would attempt to throw the burden of crisis onto working people. In time, the return to the drachma and devaluation would boost exports and possibly see a return to growth. In the short term, however, this would be on the basis of low wages, shortages of food, fuel and other essentials, and a degradation of public services.

To protect the interests of the working class it would be necessary to nationalise the banks and cancel the debt held by foreign big business and financial institutions, while protecting the savings of working people. It would also be necessary to take over the commanding heights of the economy (with minimum compensation on the basis of need) to ensure the supply of essential goods and services. Priority should be given to reconstructing public services such as health, education, etc. Control of the economy should be through bodies of democratically elected representatives from the trade unions, community organisations, and the wider public. On a capitalist basis there is no easy way out.
Eurozone banking crisis

THE EUROZONE SOVEREIGN debt crisis is interlinked with a Europe-wide banking crisis. In 2008, eurozone governments intervened to bail out a number of shaky banks. But they did not carry out the kind of large-scale recapitalisation of banks that took place in the US under the Troubled Asset Relief Programme. Only eight eurozone banks out of 91 failed the recent ‘stress tests’, a theoretical test to determine whether banks can withstand another financial crisis. The big investors and speculators, however, are not convinced that all the banks are healthy. In fact there was recently a leaked IMF report which said that eurozone banks need €273.2 billion of additional capital. Lagarde commented that the eurozone crisis was entering "a dangerous new phase" and called for part of the EFSF funds to be used to recapitalise banks. This provoked strong opposition, some from political leaders who object to EFSF funds being used to prop up banks, and some from the banks themselves which deny that they are in trouble.

Nevertheless, there are clear indications of a new crisis building up in the eurozone banking sector. For a start, banks are refusing to lend to one another, preferring to park their cash in the ECB, even if this earns them a lower interest rate. A more startling recent development is the fact that Siemens, the giant German engineering firm, has deposited almost half its cash reserves (€6bn) with the ECB, rather than with commercial banks. Eurozone banks have also had difficulty in securing dollar loans from US banks, vital funding to conduct their US and global business. The ECB was forced to step in and offer eurozone banks unlimited dollar funds on the basis of three-month loans (though this will cost the banks more than loans from the commercial money markets, which have begun to dry up).

In mid-August the focus turned to the French banks. A rumour circulated that Société Générale was in trouble, and there was a massive fall in its share price (with a 50-60% fall between June and September). Société Générale shares were worth €52.7 in February, while by early September they had fallen to €21.19. Société Générale holds €2 billion of Greek bonds, while BNP Paribas holds €4 billion and Crédit Agricole holds €800 million. Big investors and speculators fear that a Greek government default on its debts would precipitate a deep crisis for these three major French banks, which play a key role in the French economy. French government ministers assert that the fears about these banks are ‘irrational’. Any short-term liquidity problem (ie a shortage of funds to cover current business) would be covered by intervention by the ECB. They deny that there is a basic solvency problem, asserting that these banks have enough capital reserves to survive a Greek default and other shocks. French ministers have furiously rejected the idea that they are discussing plans to nationalise these banks. This is reminiscent of the position of Gordon Brown and Alistair Darling at the time of the Northern Rock bank crisis in 2007/08.

Lagarde, however, let the cat out of the bag. When she was previously French finance minister, she claimed there was no problem with the French banks. Since taking over as head of the IMF, however, she has called for a recapitalisation of the major French banks and other banks in trouble using the EFSF funds. There has been a furious reaction against this. On the one hand, any such bailout would confirm that these banks have a solvency problem, and could actually exacerbate their situation. On the other, existing shareholders are up in arms because a government bailout (which would involve the government buying shares in the banks) would effectively dilute the value of shares of existing shareholders.

Eurozone leaders’ disarray

UNDER THE IMPACT of the economic crisis there has been a sharpening of national tensions within the eurozone. There are also divisions within the leadership of the German government, the key power in the eurozone. Merkel has faced growing opposition from leaders of the Bavarian Christian Social Union (CSU) and the Free Democratic Party (FDP), the Christian Democrats’ coalition partners. These leaders have been playing the euro-sceptic card, reflecting the growing opposition in Germany to bailing out Greece and other so-called peripheral states.

The lack of decisive action at eurozone summits shows that the eurozone leaders are in complete disarray. Each time they proclaim everything will be fine, Greece will not be allowed to default or be pushed out of the eurozone. The big investors in financial markets, however, do not take these reassurances seriously. Most of the strategists who speak for investment banks, etc, now believe that a Greek default is inevitable and will result in an exit from the eurozone.

The leadership of the ECB is also divided. While buying Greek, Portuguese and Irish government bonds in order to keep down interest rates for their respective governments, Trichet and other ECB leaders repeatedly stated that they were against large-scale intervention to support other eurozone governments. However, the speculation against bonds of the Italian and Spanish governments, which was forcing up their interest rates at the beginning of September, forced the ECB to intervene with large-scale purchases of these bonds. This provoked the resignation of the German representative, Jürgen Stark. There is now an intense battle between those ECB leaders who believe that an even bigger intervention is required. They argue that unlimited support for the bonds of threatened governments would stave off a sovereign debt crisis. However, other ECB leaders are still intransigently opposed to this kind of intervention. They believe that the ECB’s role should be strictly limited to monetary policy, ie setting interest rates and regulating the money supply.

There is also a growing difference between capitalist leaders over economic policy. The prevailing policy, upheld by Merkel and other eurozone leaders, is that ‘fiscal consolidation’ is imperative to reduce deficits. This means severe austerity policies. However, this has produced a new downturn in the European economy and, as Timothy Geithner, the US Treasury secretary, has warned, now threatens the whole global economy. The fall in government spending and massive cuts in public-sector jobs have set in motion a downward spiral: declining consumer spending, weak investment, higher unemployment, and a decline in tax revenues that can result in even bigger deficits.

The ultimate stress test

A WARNING WAS recently sounded by Lagarde. While advocating continued austerity for countries like Greece, she is – without naming names – calling on the major European economies to adopt short-term stimulus measures, while maintaining the aim of fiscal consolidation in the longer run. She warned: "A vicious circle [of weak growth and weak government balance sheets] is gaining momentum in Europe and the US". "Political dysfunction" was feeding policy indecision in a "dangerous new phase of the crisis". "Social strains", she warned, "are evident in many parts of the world, not just in the countries undergoing severe [fiscal] adjustment". (IMF, 15 September)

Since then, the IMF has published its latest economic outlook. This forecasts global growth for 2011 to be 4%, but warns that, unless there is concerted action to revamp economic policies, there is a strong possibility of growth falling below 2%. In the US and Europe, growth will certainly be under 2% and is likely to be virtually stagnant, while there is zero growth in Japan. But, as the Wall Street Journal comments (21 September): "It is unlikely that either the IMF or the G20 will manage to produce a cooperative plan of action this weekend, given the sharp political discord within the US and Europe".

However, it may be too late for the major capitalist economies to avoid a prolonged stagnation or a further downturn. The ruthless pressure on Greece to intensify the austerity measures can detonate an explosion in that country, which in turn would detonate a meltdown of the eurozone. It is hard to imagine that Greece could default on its debt and remain in the eurozone. That would undermine the credibility of the whole eurozone. In any case, the only way Greek capitalism could escape from its crisis would be through readopting the drachma and devaluation. And if Greece takes this path, why should others stick with the pain of eurozone austerity measures?

On the basis of the relatively strong growth of the world economy since 2000, the eurozone appeared to become a success. But the growth was based on huge volumes of debt, which are now at the heart of the current crisis. Since the financial meltdown and economic recession of 2007-09, the eurozone is being subjected to a severe stress test – from which it will not emerge intact. At a certain point it will break up; but how long the process will take and through what permutations it will twist and turn cannot be predicted. The eurozone has entered its endgame, only the moves and timescale are uncertain

A marxist look at current class contiousness

According to Marxist theory, a socialist revolution requires a class conscious working class. Consequently, most socialist political activity is directed one way or another to raising workers' consciousness.

Making a Marxist inquiry into the class-consciousness of today's workers on the other hand, requires that we bring the whole of this notion into focus. For this, we must clarify the nature of class and the consciousness of a class in Marxist theory. To begin with the latter, "consciousness" in the expression "class consciousness" does not mean the same thing as it does in the expression "individual consciousness." It is not just a matter of individuals being conscious, or having a certain understanding, of their class. Rather, class is the subject, and consequently, consciousness is not just a larger version of individual consciousness. What is it then? Before answering we must shift our attention to class.

We find that defining "class"—or indeed any other important notion in Marxism—proceeds from the whole to the part (class, in this case) rather than from still smaller parts (individuals) to class, viewed as some larger composite notion. According to Marx, "the subject, society, must always be envisaged as the precondition of comprehension" This whole, this society, is capitalism, or more specifically, Marx's analysis of capitalism, which captures both its distinctive character as a social formation and the unique dynamics, or "law of motion," that has transformed it from its beginnings in feudalism to and through the present to whatever future awaits it. Before we can offer more precision on Marx's notion of class, we need to have a better idea of the whole in which it plays such a crucial role.

Capitalism is not a perpetual motion machine destined to last forever and a day. But if it isn't, what is it about the way this system works and develops that will eventually bring on its destruction? Marx believed he found the answer to this question in the process of accumulation and centralization of capital (or wealth producing wealth), especially when view in connection with the limited purchasing power of the workers. This relationship is often expressed as the contradiction between social production and private appropriation. Production and consumption follow two different logics. The former is determined by profit maximization; the capitalists invest in order to make and maximize profits. While what gets bought and consumed is determined by what people, most of whom are workers, can afford. And, as the capitalist never return as much wealth to workers (in the form of wages) as the workers produce (in the form of commodities), there is a constant pressure on the system to find alternative buyers for this surplus.

This contradiction intensifies as the gap between the amount of wealth produced (and producible) and the amount returned to the workers as wages grows, as it invariably does, chiefly through advances in science and technology. Increases in the workers' real wages, which can occur from time to time and from place to place does not seriously impede this process. Every decade or so for the past 150 years this contradiction has resulted in a crisis of overproduction (or, viewed from the perspective of the workers, of underconsumption), with the accompanying destruction and wastage of factories, machines, goods and workers. Eventually the need to rebuild what has been destroyed or left to wear out together with the appearance of new markets makes investment more profitable. There is a renewed burst of accumulation, and the cycle starts over. The new beginning takes place on a higher level; more is invested, more people, tasks, and area are involved all around the world; more is at stake. Capitalism has been saved, but only at the cost of increasing the scale of risk in the next crisis. In Marx's estimation, capitalism is a little like a drunk who drinks in order to steady his nerves until the time that... And that time always comes. Marx's prediction of the downfall of capitalism is not to be read as the prediction of the arrival of a comet on such and such a day, but as the projection of the most likely outcome of a worsening impasse, whose development one can see and study in the past and present.



STATEMENTS SUCH as "the working class has disappeared" or "the barriers between the classes no longer exist" have been repeated for many years. This is often backed up by pointing to the de-industrialisation of Britain especially over the last two or three decades.

In fact there are still around four million workers in manufacturing industry in the UK. It is true that increased globalisation of the world economy has meant a large number of manufacturing jobs being transferred to areas such as Eastern Europe and China. But manufacturing jobs lost in the west have often been replaced by low-paid jobs in the service sector, for example in retail, finance and tourism. The fastest growing job sector in Britain is those who clean, shop, child-mind, garden etc for others.

In "white collar" jobs, measures such as performance related pay, imposed targets and casualisation have been increasingly introduced. Public and Commercial Services union (PCS) members in Revenue and Customs for example, have been fighting the introduction of 'lean processing' which breaks down tasks into small repetitive parts to create assembly line type work. Civil servants organised in the PCS have been one of the most militant sections of the working class in recent years and have elected a left union leadership.

New Labour and tory politicians and academics tend to talk of the poor being the 'underclass' living off benefits on council estates, or about 'social exclusion', thereby trying to separate the unemployed off from the rest of the working class. Effectively they repeat the old Victorian idea of the 'undeserving poor' and want people to be 'encouraged' into work by the threat of benefit cuts,
It is a strange solution to poverty - to cut the income of the poorest! And by forcing people into low paid work, they do not eliminate poverty. Millions are now described as the 'working poor'.

Capitalist definitions of class confuse the issue. The term "middle class" is often used very broadly, from a white collar worker on low pay in local government or the civil service to a rich businessman.

Official classifications also obscure the real class divide. The highest category according to the Office for National Statistics is 'professional and managerial' which includes people such as teachers and nurses. These certainly do not constitute the ruling class!

Marxists however say that the main class divide in society is between the ruling class - big businessmen and financiers who own "the means of production" on the one hand, and those who have to work for a boss to earn a living and actually create the wealth (value) on the other.

In the past, the average worker sold their "labour power" in a factory. Today, in addition to the millions who still do this there are others working in different fields who also produce new value. Others again, such as many public sector workers, do not strictly fit into this category but are part of the working class because of their social outlook and economic situation. The working class is not homogenous; far from it, there are many sections and layers. There are also middle layers in between the working class and ruling (capitalist) class, what Marx called the petit-bourgeoisie, particularly the self-employed, including small farmers, shopkeepers etc - altogether a wide and varied range of people. Many of them however are in debt to the big banks and have much in common with "workers".

In dealing with the possibility of socialist revolution in the present however, whether Marx's present or our own, it is not enough to treat people as embodiments of social-economic functions. As much as this helps us understand their conditions, the pressures they are under, and their options and opportunities, the people involved must still respond to these influences in ways that make what is possible actual. In Marxist terminology, they must become class conscious. To study whether this can actually occur here and now, or at least soon, we must add a subjective, people-oriented, more directly and narrowly human element and focus to the objective, system-oriented view of class that has been presented so far. In short, in analyzing history and political economy, Marx could operate with an essentially functionalist conception of class derived from the place of a function within the system. Class here is something to which recognizable individuals are attached. In this way, incidentally, it is possible for an individual who serves more than one function (managers and wage-earning professionals, for example) to belong to more than one class. But in analyzing the present state of the class struggle and in developing political strategy, this view has to be supplemented, not replaced, by a conception of class that gives priority to the actual people who occupy this place and perform this function. Sharing a social space and functions, they also tend to acquire over time other common characteristics as regards income, life-style, political consciousness, and organization that become, in turn, further evidence for membership in their class and subsidiary criteria for determining when to use the class label. Here, class is a quality that is attached to people, who posses other qualities—such as nationality, race or sex, for example—that reduce and may even nullify the influence on thinking and action that comes from their membership in the class. Conceived as a complex social relation, in line with Marx's dialectical outlook on the world, class invites analysis as both a function and a group, that is to say, from different sides of this relation.

Exploitation and inequality are built into the system. To get rid of them, capitalism needs to be removed and replaced with a socialist society. The multinational companies owned by the rich need to become publicly owned.

An end to the chaos of the market and the introduction of socialist planning would mean an overall increase in the real wealth of society, not just a redistribution of the wealth that already exists.

IN THE last 30 odd years, there has been a relative lull in trade union struggle in Britain. In the wake of the collapse of Stalinism in the USSR and eastern Europe, there was a shift of former working-class based parties such as the Labour Party, towards being openly bosses" parties with a full acceptance of the market. This, together with the effects of a long period of modest economic growth, led to a drop in consciousness of socialist ideas.

Despite this, there is still clear recognition of the existence of classes. Surveys have consistently shown that the majority of people in Britain describe themselves as working class. The latest British Social Attitudes survey shows 57% of people consider themselves working class.

The report authors call this 'remarkable' considering that only 31% of the workforce is in traditional "blue collar" sectors. In reality it gives the lie to the idea that class politics is no longer relevant. How much more sharpened will class-consciousness be in the future when big workers' struggles take place and when economic downturn has an impact on millions of people

Even those who see themselves as middle class, or who are on relatively comfortable incomes, have plenty of reasons to oppose the capitalist system, run for the benefit of big business.

Many problems created by capitalism affect them. The rising cost of university tuition fees for example, or the cutbacks in public services such as the NHS. For the vast majority of people who have private health insurance, it is very limited, only covering routine things.

For socialists it is not just that the working class is exploited under capitalism and therefore has good reason to end it, but also that it has the power to do it. Through struggles to defend and extend their own livelihoods, working-class people develop a greater class-consciousness. On a mass scale this can go together with a growth in socialist ideas.

But in particular, workers have the power to change things because of their role in society - their position in relation to the functioning of the economy and the "means of production". Even small groups of workers taking strike action, especially in an era of high technology, can have a massive effect. This power will be decisive when the working class moves together.

The removal of capitalism, led by the working class and with the support of most of the middle layers of society, can create the beginnings of conditions for a genuinely classless society.

This would be a socialist society where, for example, you would not have a higher chance of dying early simply because of where you were born, and where the resources of society would be democratically planned and used for the benefit of all.


Studying class consciousness has something in common with trying to catch a wave at the moment when it breaks. All movement toward this point is treated as development, as preliminary, as the unfolding of a potential. Everything that either contributes to or helps it movement is equally the object of study, but the constant point of repair, the perspective from which the whole process is viewed and interpreted, the event that gives everything that proceeded it its distinctive meaning, is the moment at which the wave breaks. Naturally, there is the assumption, derived from a Marxist analysis of capitalism, that the waves will almost certainly break, that sooner or later the worsening problems of the system, together with the reduction and eventual disappearance of system-approved alternatives for dealing with them, will drive most workers to embody the consciousness of their class.

Time to Defend abortion rights again

Shona McCulloch, Brighton Socialist Party
The 1967 Abortion Act legalised abortion in Britain and went a long way in freeing working class women from dangerous and often deadly 'backstreet' abortion techniques - but not in Northern Ireland where the act has never been implemented.

The 1967 Act, combined with other advances such as the introduction of the contraceptive pill, was a huge step forward for women, giving them some control over their own fertility for the first time. Unfortunately, just like all other victories won under capitalism, we have to fight to maintain them.

Recent weeks have seen an escalation of reactionary attacks on the gains won by women during the last century. The most visible of these has been the avalanche of deeply offensive rape-victim-blaming, with some politicians and police falling over each other to suggest that women (and even children) who have experienced sexual abuse were somehow 'asking for it'.

These same politicians, most notably reactionary Tory MP Nadine Dorries, have also been plotting policies to roll back the clock on women's rights. For example, Dorries is pushing for abstinence education for girls in schools and abortion rights are again under attack.

The Con-Dems' new Sex and Relationship Advisory council includes groups, some religious, which advocate abstinence-only sex education, are explicitly anti-choice, and discriminate against Lesbian Gay Bisexual and Trans (LGBT) people and single parents.

The new council includes the anti-choice group Life, which opposes abortion even in cases of rape or incest. Notable in its exclusion from the council is the highly reputable British Pregnancy Advisory Service (BPas), an independent organisation which provides both counselling (after which, 20% of women decide against termination) and abortion services.

In an attempt to destroy women's access to services like BPAS, Dorries has teamed up with Labour MP Frank Field and proposed an amendment to the government's now infamous Health and Social Care Bill (itself intended to tear up and privatise the NHS).

The proposals will make counselling compulsory rather than elective for any woman seeking a termination and also ensure that no provider of abortion services can provide counselling services.

This is an attempt to subject women to forced counselling from anti-choice organisations like Life before being granted access to abortion services. Right wing politicians have tried to justify the move as supposedly ensuring that no "conflict of interest" arose - this from a government who invited McDonalds and PepsiCo to advise on nutrition!

The Department of Health has recently issued an ambiguous statement implying that the Con-Dems may try to implement these anti-choice measures without a vote, stating "we do not believe it is necessary to set out this requirement in primary legislation". We must not stand for these attacks, even if a majority of MPs vote for them.

Unhindered access to abortion, free at the point of delivery, is a basic freedom for women which must be defended. However, freedom of choice depends in all cases on the material conditions an individual finds themselves in.

Even if we defeat Dorries and Field and secure free access to abortion, a woman in Britain today may not feel free to carry a pregnancy to term as she sees the NHS, pregnancy and child benefit, EMA, welfare, schools, jobs, housing and access to higher education being cut back viciously.

The choice over when and whether to have children will only be truly free when everyone can be confident that they and their children have secure access to a good standard of living and when high quality, evidence-based sex and relationships education is given from a young age.

To enable women to have a real choice in when and whether to have children we demand:
No cuts; scrap the Health and Social Care bill
Free abortion on request; end the need for two doctors' agreement
For a fully funded, democratically controlled National Health Service, no privatisation
Access to free fertility treatment on the NHS for all those who need it
Public ownership of the pharmaceutical industry
Access to free, safe contraception including emergency contraception; a reversal of the cuts in family planning services and a massive investment into sympathetic youth advisory centres
Improved sex education in all schools
Information campaigns on contraception
A decent living minimum wage and investment in job creation
A network of publicly funded, good quality, flexible childcare facilities
Maternity and child benefit to reflect the real cost of pregnancy, childbirth and bringing up a child
The right to adequate parental leave
A massive increase in spending on housing, education and other public services
A democratically run socialist society, planned to meet social needs rather than the profits of a few

revolutionary ideas

This was a excellent article in issue 147 of socialism today a monthly in depth look at socialist oand trade union matters and matters the world over. This last month Peter Taaffe looks at Eric Hobsbawm recent publications and looks to set the record straight in terms of marxism and socialist ideas.
Marxism as we all know has sadly been rubbished and made out to be something it is not. Hopefully Peter in this article makes it clearer to people what marxism is and what we stand for as marxists. The capitalists have tried to rub the name through the mud but true socialists will know its true meaning even till this day. It is our job to reintroduce those ideas to the mass's.


The relevance of the ideas of Karl Marx, Friedrich Engels, Vladimir Lenin and Leon Trotsky has been underlined by recent events. Financial crisis, economic recession, savage austerity and waves of revolution are sparking new interest in socialism and Marxism. Left-wing intellectuals are keen to ride this wave. However, as PETER TAAFFE explains in this review, their writings often fall far short of providing real answers to the question, how to change the world?

How to Change the World
By Eric Hobsbawm
Little, Brown, 2011, £25
ERIC HOBSBAWM IS enjoying a revival of interest in his ideas, particularly through this book in which he sets out to ‘change the world’. This, he freely admits, arises from a growing inquisitiveness in the ideas of Karl Marx. It is a pity, however, that his book could be the first introduction to Marx’s ideas for many. Its subtitle is ‘Tales of Marx and Marxism’. They are indeed tales, because the book’s contents bear very little relationship to what Marx really stood for and how Marxism can change the world in the modern era.

Hobsbawm has a long pedigree as a Marxist academic and theoretician. He appears to recant his former position of slavish support for Stalinism, but he has not yet fully broken with its baleful heritage. He remained within the British Communist Party even after the Stalinist obscenities of the suppression of the Hungarian political revolution in 1956 and the crushing of the Prague Spring in 1968.

Even in this book, he continues to employ the term ‘socialist’ in relation to the former Stalinist regimes of Russia and Eastern Europe, etc. In reality, these regimes were much closer to capitalism than the ideas of Marx, Engels, Lenin and Trotsky as to what constituted genuine socialism – even though they did possess the vital elements of a planned economy based on the nationalisation of the main productive forces and, therefore, were relatively progressive. To continue to describe one-party totalitarian regimes as ‘socialist’ will further the aims of bourgeois ideologists in discrediting socialism, in the eyes of the new generation in particular.

It is quite incredible that Hobsbawm relegates Leon Trotsky and Trotskyism to a minor historical role. As Terry Eagleton points out, Hobsbawm consigns "one of the most fertile currents of modern Marxism – Trotskyism – to a few casual asides". (London Review of Books, March 2011) Yet it is absolutely impossible to begin to understand the phenomenon of Stalinism without reading and understanding the works of Trotsky and the Russian and International Left Opposition on this issue. Moreover, it is not possible to approach the struggle for socialism today without clearing out of the way any apology or connection with Stalinism or totalitarian and authoritarian regimes, which are still used as scarecrows by capitalist ideologists to frighten the working class away from real democratic socialism.

This is underlined by bourgeois reviewers of Hobsbawm’s book. While praising him for his erudition, they remorselessly mention his Stalinist past. Hobsbawm "has never convincingly dispelled accusations of being an apologist for the Soviet Union [read Stalinism]", writes Dominic Sandbrook in The Sunday Times. (9 January 2011) Geoffrey Goodman, former industrial correspondent of the Daily Mirror, argues, quite mistakenly, that Hobsbawm "offers neither illusions nor excuses for the failure of Soviet communism". (Camden New Journal, 10 February 2011) But even if this were true, he offers no real explanation as to why Stalinism triumphed and effectively strangled all the ideals of the October revolution: workers’ democracy and the international goal of world socialism.

There is no mystery as to why Hobsbawm fails to do this. A rigorous examination, from the Marxist point of view, would lead him back to the analysis and conclusions advocated by Trotsky: that a political revolution against the one-party totalitarian Stalinist regimes could have saved the planned economies and re-established genuine workers’ democracy. The continuation of Stalinism, which Hobsbawm did not do anything to defeat, led to the collapse of the bureaucratic regimes and the liquidation of the planned economies, which was a massive ideological victory for world capitalism.

A revival of interest
IN THE FIRST chapter, Hobsbawm records the revival of interest in ‘Marxism’ in the recent period. Even hedge fund billionaire George Soros has praised Marx. There is no surprise in this; it is connected intimately with the current economic crisis, one of the greatest to affect the system that Soros supports, world capitalism. The capitalists, however, are more interested in Marx now because of his diagnosis of the maladies of their system rather than the remedy he recommends, socialism.

There have been times in history when the bourgeois have similarly sought to use Marx for their own ends. For instance, in pre-revolutionary Russia, bourgeois ideologists attempted to use Marx’s ideas to argue for the ‘inevitability’ of a stage of capitalism to replace tsarism. In this, they garnered the support of the Mensheviks – in the early part of the 20th century, the minority in the Russian workers’ movement – to argue that socialism was the music of the future. Vladimir Lenin and particularly Trotsky, in his famous theory of the permanent revolution, opposed this and argued that the bourgeois-democratic revolution could only be carried through by an alliance of the working class and the peasantry. Once having come to power, this alliance would be compelled to pass over to the socialist stage of nationalising industry, the land, etc. This, in turn, would provoke the international socialist revolution. This is what actually happened in the aftermath of the first world war and the 1917 October workers’ revolution.

But for the betrayal of the social democratic leaders, a European socialist democratic revolution would have resulted. This would have transformed the objective situation in Russia itself and eradicated the backwardness from which Stalinism was a later outgrowth. All of this is absent in Hobsbawm’s analysis.

Hobsbawm, in seeking to account for the renewed interest in Marxism, asserts that there are two reasons for this: "The first is that the end of the official Marxism of the USSR liberated Marx from public identification with Leninism in theory and with the Leninist regimes in practice". Thrown overboard in a single phrase is the colossal contribution made by Lenin, who created and led the Bolshevik party – the most democratic mass workers’ party in history – supplying the necessary ‘subjective factor’ to carry through the greatest single event in history, the Russian revolution. It is a gross bourgeois and Stalinist slander to link Lenin with the subsequent bureaucratic degeneration of the revolution. Lenin and Trotsky stood for socialism – creating the basis for this in the planned economy in Russia – and workers’ democracy.

There is also an airy dismissal of the "official Marxism of the USSR", with which Hobsbawm was identified for a very long time. Again, there is an evasion of any historical analysis of this "official Marxism" which, to give it its real name, was a Stalinist distortion of genuine democratic socialism and the ideas of Marxism. So long as Hobsbawm is imprisoned in this ideological straitjacket he will continue to make some of the political mistakes evident in this book.

Take his remarks on the economic foundations of the Soviet Union: "The claim that socialism was superior to capitalism as a way to ensure the most rapid development of the forces of production could hardly have been made by Marx". This is a quite astonishing admission of this ‘scholar’s’ lack of awareness of the historical schemas traced out by Marx, and developed by the Bolsheviks of Lenin and Trotsky and their work in the October revolution and subsequently.

Socialism remains a utopian dream unless it can develop a higher productivity of labour, and is able to develop the productive forces – science, the organisation of labour and technique – onto a higher level. This is necessary, argued Marx, in the very first period of socialism, its lowest level. Its starting point should be on a higher level than the most advanced capitalist economy, for instance, the USA today. Marx summed up this idea in one of his first works, German Ideology. He wrote that, unless the productive forces could develop in a new socialist society, "want would be generalised and all the old crap would reappear". What he meant is that classes, the state, as well as the bureaucratic remnants of the old society, inequality and the rest, would exist and even grow to some extent in the ‘new society’ unless it possessed a higher economic level and productive capacity.

Is this not the reason why Stalinism developed in Russia and elsewhere? The October revolution took place under the signboard of democratic socialism, the abolition of inequality, and of a democratic workers’ state controlled by the masses with workers’ control and management. And this did exist to a great extent in the first immediate period after the October revolution – but in a ‘besieged fortress’. The Bolsheviks never perceived that this could be maintained, particularly in an economically and culturally backward society like Russia, unless the revolution spread to the west – particularly to Germany, which probably had the most industrially developed economic capacity in the world at that stage – and, ultimately, to the whole world. Therefore, all the old ‘crap’ was revived in the growth of the bureaucracy, reflected, unconsciously at first, by Stalin. The working class was elbowed aside and power concentrated in the hands of the greedy and inefficient bureaucracy. Hobsbawm seems to be ignorant of all this, leading him to discard the progressive elements of the planned economy which showed, in practice, what would be possible on the basis of a genuine workers’ democracy.

An eclectic mishmash
HOBSBAWM’S BOOK IS an eclectic mishmash, without a clear idea being pursued to the end. For instance, he states that "the traditional socialist vision of socialism [is of] essentially a non-market society, which probably Karl Marx also shared". There is no ‘probably’ about it. The idea that socialism was the answer to capitalism runs like a red thread throughout Marx’s works. What this comment really indicates is that Hobsbawm, in full flight from his previous, mistaken pro-Stalinist position, is discarding central features of Marx’s analysis, particularly relating to the goal of socialism.

This is not the first time he has engaged in such an exercise. He was the high priest of so-called ‘new realism’, which evolved from the Eurocommunist layer of the Communist Party of Great Britain, around the journal Marxism Today in the 1970s and 1980s. Neil Kinnock drew heavily on Hobsbawm’s ideas to shift the Labour Party towards the right, furnishing the basis for the expulsion of the Marxists around the Militant newspaper (now the Socialist Party) from the Labour Party. This was decisive in the emergence of Blairism, which transformed the Labour Party from a workers’ party at its base into a bourgeois formation.

Hobsbawm and the Eurocommunists saw in the decline of the industrial working class – a product of so-called ‘post-Fordism’ – an overall weakening of the labour movement, industrial militancy and class consciousness. Marxists opposed these ideas, amongst other things pointing to a growing industrial militancy of former ‘white-collar’ workers – teachers, post office workers, technical workers in offices, etc. The bourgeois were forced to attack these layers because of the economic crises of the 1970s and 1980s and the need to boost their profits and increase capitalist accumulation. In the process, they undermined their social reserves. The ideas of new realism were themselves products of the overall ideological offensive of neo-liberalism – individualism against so-called ‘statism’ (privatisation, etc) – which came to full fruition after the collapse of the former Soviet Union and the liquidation of the planned economies.

Hobsbawm, Kinnock and Blair were not apostles of a new ‘realistic’ adaptation to changing conditions. They represented the liquidation of the combative fighting spirit and programmatic class opposition of the labour movement to all aspects of pro-capitalist ideas and methods. Any real balance sheet of the failure of the ideas of ‘new realism’ is entirely absent from this work. Hobsbawm mentions the opportunist reconciliation of the German Social Democratic leader Eduard Bernstein to capitalism, during a boom period at the end of the 19th century. Yet he and those like him did exactly the same thing in the British labour movement in a similar period – the short economic boom in the 1980s. Moreover, they reconciled themselves to the more sustained boom of the ‘noughties’. We, on the other hand, never ceased to argue that the financialisation of world capitalism was creating massive bubbles, which would end in tears for capitalism. Our prognosis was borne out with the onset of the present devastating economic crisis, from which capitalism is finding great difficulty in extricating itself.

On almost every page, examples of praise for Marx can be found alongside thinly-veiled dismissals of some of his major conclusions. In the chapter ‘Marx Today’, on the one side Hobsbawm believes that Marx’s idea that capitalism would be superseded is "a prediction that still sounds plausible to me". In the next paragraph, he writes: "[Marx’s] prediction that industrialisation would produce populations largely employed as manual wage-workers, as was happening in England at the time… was correct enough as a middle-range prediction, but not, as we know, in the long term". On the contrary, while the industrial working class has declined in the formerly industrialised countries, given the industrialisation of China, India and Brazil, Marx’s ideas still retain their validity, from a world point of view. On a global scale, the industrial working class has probably grown in the past ten to 20 years in numbers as well as in specific weight in society.

Even if this was not the case, the proletarianisation of formerly ‘privileged’ layers means that, today, they form a substantial section of the working class who will be involved in the task of ‘expropriating the expropriators’, democratic socialism. Hobsbawm seeks to sanitise Marx’s more revolutionary conclusions, to make them more acceptable, perhaps to academia and bourgeois and petty-bourgeois public opinion. In the process, this blunts the message for workers, particularly young workers, who are engaged in a mighty struggle against capitalism.

This clearly comes out when Hobsbawm deals with the issue of the state: "The mature Marxian theory of the state was thus considerably more sophisticated than the simple equation: state equals coercive power equals class rule". Contained in these lines is the same opportunistic approach, beginning with the German Social Democratic reformists and their counterparts in Britain and France, etc, towards the problem of the capitalist state. As Hobsbawm concedes, Marx was quite clear that the working class could only take power if it were organised "as a ruling class" through "the dictatorship of the proletariat". This term did not denote, as the detractors of Marx argue, a kind of anticipation of one-party dictatorial Stalinism. Marx’s idea clearly meant what subsequently transpired in Russia in October 1917: a state organised as a ‘workers’ democracy’. For Marxists, this term is preferable today. We do not use the term ‘dictatorship’ because it conjures up visions of one-party totalitarian regimes synonymous with the idea of a socialist society.

Hobsbawm qualifies ‘his’ Marxist definition of the state: "The concept of the state as class power was modified, particularly in the light of the Bonapartism of Napoleon III in France and the other post-1848 regimes which could not simply be described as the rule of a revolutionary bourgeoisie". This is not a valid interpretation of Marx – certainly not a rounded-out one – let alone of Engels, Lenin and Trotsky on the state. Marx brilliantly described the phenomenon of Bonapartism where, because of the deadlock in the class struggle, the state is able to attain a relative independence and balance between the classes. Nevertheless, in the final analysis, it represents the "dominant economic class" which in France post-1848 was the bourgeoisie, who were not so ‘revolutionary’ at this stage. Hobsbawm seeks to water down the Marxist conception of the state in order to smuggle in the idea that the state can in some way be ‘reformed’. The struggle is seen by him as taking power away from the ruling class – the capitalists – and creating a new state. A rupture, a sharp break, is therefore not necessary to establish socialism.

Hiding behind Gramsci
THIS INFORMS HOBSBAWM’S whole approach. This is revealed in the chapter dealing with Antonio Gramsci, leader of the young Italian Communist Party (PCI) after the first world war, who was jailed by Mussolini and died in prison. Gramsci had many fine qualities. Trotsky, for instance, credits him with understanding the character of fascism – that after the victory of Mussolini in 1922, the working class, weakened and scattered, would be in for a lengthy struggle – earlier than others, including Trotsky himself. But Hobsbawm asserts that he was "the most original thinker produced in the west since 1917".

Gramsci, because of his imprisonment, was cut off from developments in Italy and internationally. Therefore, it was not possible for him to form a complete picture of the development of the workers’ movements and, particularly, of events in Russia with the rise of Stalinism. But it is no accident that Hobsbawm lights on the figure of Gramsci. He thinks he has found in some of his prison writings a theoretical explanation for both his own and the PCI’s adaptation to capitalism. Is it entirely incidental that the long-time PCI leader, Palmiro Togliatti, also used the alleged ideas of Gramsci to shift his party to the right? The net effect of Togliatti’s actions and those of his successors was to lead effectively to the disintegration of the once mighty PCI.

Hobsbawm’s attempts to single out the objective conditions of Italy to explain the unique character of the Italian labour movement and the figure of Gramsci are one-sided to say the least. He highlights the character of Italy combining features of backwardness and semi-feudal conditions with the elements of modernity, industry, factories in the north, etc. But Italy was not the only country, even in Europe, where the working class was a minority, with a rural population, the peasantry, together with the rest of the middle-class forming a majority. In Germany and France, the task of winning these intermediate layers to the side of the working class was also posed. Hobsbawm states that Gramsci "pioneered a Marxist theory of politics", regarding "politics as ‘an autonomous activity’." Hobsbawm invokes Gramsci to underline "the autonomous role of the superstructure in the social process, or even the simple fact that a politician of working class origin is not necessarily the same as a worker at the bench". Gramsci also sought to analyse the ideological role of "intellectuals".

Of course there is more than a grain of truth in these ideas. Politics is not an automatic reflection of the economic situation. If that was the case, the politics of the working class today would be clearly revolutionary given the devastating world economic crisis. Consciousness – which is a bedrock for a Marxist’s approach to ‘politics’ – is formed by events, together with the intervention of the organisations of the working class, and develops in a contradictory fashion. An economic crisis does not automatically lead to mass radicalisation and rising consciousness, no more than a boom lowers it. The Russian revolution of 1905-07 was followed by an economic crisis. This did not lead to a radicalisation of the masses because it came after the defeat of the revolution. On the other hand, the boom beginning in 1910, by economically strengthening the working class, laid the basis for a further upswing in the class struggle. Having said this, however, politics is not completely ‘autonomous’. Marxists are not crude reductionists. Politics, like the state itself, can retain a certain relative ‘autonomy’ for a time. But, ultimately, it is dependent on and reflects the economic fortunes of the ruling class and those of the middle class as well as the working class.

Hobsbawm betrays his real intentions in drawing on Gramsci’s alleged ideas: "Italy was a country in which, after 1917, several of the objective and even subjective conditions of social revolution appeared to exist – more so than in Britain and France and even, I suggest, than in Germany. Yet this revolution did not come off. On the contrary, fascism came to power. It was only natural that Italian Marxists should pioneer the analysis of why the Russian October revolution had failed to spread to western countries, and what the alternative strategy and tactics of the transition to socialism ought to be in such countries".

To paraphrase Trotsky, every word here is a mistake and some are two. Different objective conditions were not the primary reason that the revolution did not transpire in Europe – although there were different conditions in all the European countries, particularly compared to Russia. If anything, opportunities for revolution were greater because of the greater strength of the working class and the huge upheavals following the first world war. Nor did the failure of the revolutionary wave lie in the subjective consciousness of the working class who threw themselves against capitalism following the Russian revolution. It was entirely due to the perfidious role of the social-democratic leaders who betrayed the revolution. Hobsbawm indicates his pure Menshevism when he implies that Britain and France were not ready for revolution after 1917, ‘or even Germany’.

The German working-class movement was probably the strongest in the world outside of Russia at this stage. Between 1917-23 the German working class tried again and again to take power, throwing itself against capitalism in mighty mass movements. In 1923, the German workers, faced with a very favourable position, failed to take power because of the fatal prevarication of their leaders at a decisive moment. Hobsbawm does not even mention this. He looks for a different, easier, more ‘objective’ reason. How ironic that this book with this message is published against the background of the revolutions in the Middle East and North Africa! The Egyptian and Tunisian masses ignored the nostrums of their ‘Hobsbawms’ in their chosen methods to overthrow their dictators. In the circumstances that obtained, they could take no other road. The weak bourgeois forces in each country and the region had built a brick wall against all attempts to reform the system either from above or below

Hobsbawm’s pessimism
THE CONCLUSION FROM Hobsbawm’s interpretation of Gramsci is that the gradual transformation of the state, the conquering of ‘civil society’ and a kind of ‘long march’ towards ‘changing the world’, is the only possibility for the workers’ movement. This reformist approach, where it was tried, from Spain in the 1930s to Chile in the 1970s, broke its neck against counter-revolution, which is the chosen method of the bourgeois when all else fails. They have no recourse to such methods today because they are not being seriously challenged politically by mass organisations of the working class, which have either been ‘Blairised’ out of existence or, like the trade unions, have been effectively neutered up to now by cowardly and passive leaders.

One of the positive things in the book – few in number it must be confessed – is Hobsbawm’s reference to Engels’s demand for the independence of the working class and the creation of its own organisations: "Never mind how, so long as it is a separate workers’ party", wrote Engels. This is exactly the task which the Committee for a Workers’ International has set itself around the world, in order to politically rearm the working class in the stormy battles to come. One of the reasons why this task is necessary today, 150 years after Engels first made the call, is precisely because independent organisations of the working class disappeared in the ‘noughties’, partly helped by the likes of Hobsbawm, the theoretician of the gravediggers of the old Labour Party like Kinnock.

Gramsci wrote a great deal about the role of ‘intellectuals’. He was dealing primarily with this issue from the point of view of the development of consciousness, including the dominant consciousness or ideology of the bourgeois. This general idea, which has been misunderstood by his latter-day interpreters, is an important one. The labour movement, including the Marxists, wish to influence and win the intellectuals, the best of them at least, to their side. For instance, a struggle is necessary in the state to win over technicians, the middle class in general, and even managers.

Moreover, as the present situation in Britain indicates, savage attacks on state employees – including the police and armed forces – can radicalise layers who have never seen themselves as allies of the working class. Lawyers will protest against the cuts on 26 March. Faced with attacks on their rights and conditions, they can be drawn over to the side of the labour movement. But this will not be achieved by watering down the programme of struggle, solidarity and socialism.

It is only by offering a new vista, the idea of a change in society, that state employees, as well as intellectual ‘brain workers’, will be attracted to the labour movement and, even then, not just by propaganda but by struggle. This has been underlined in all the great social movements seen in Britain, from the poll tax to the miners’ strike, etc. A similar situation can now develop in the anti-cuts movement. It is emphasised by the revolution in the Middle East and North Africa. That part of the intellectuals and youth going through universities and colleges can also be attracted to the labour movement. A significant section can be influenced and won to Marxism.

Hobsbawm writes: "Granted that in Italy and most of the west there was not going to be an October revolution from the early 1920s on – and there was no realistic prospect of one – [Gramsci] obviously had to consider a strategy for the long haul". But Hobsbawm admits that Gramsci was not committed to just this one strategy. He did not rule out a ‘frontal attack’, that is revolution, in the classical sense of October 1917. He feared the ‘integration’ of the revolutionary movement into the capitalist system. He elaborated, in the manner of Machiavelli’s idea set out in The Prince – which, for Gramsci, meant the party – a programme for the working class to establish ‘hegemony’ over other classes in the struggle for power. Ironically, this idea of ‘hegemonism’ has been interpreted in exactly the opposite sense of what Gramsci intended. It is used as a criticism, usually by anti-Marxists, against any attempt to establish the primacy of the working class and its organisations or of Marxists striving in a principled political fashion to win a majority in the organisations of the working class.

Overall, despite the title of the book, Hobsbawm is pessimistic about how to change the world. Surely, the starting point today would be how to face up to the devastating economic crisis afflicting the whole world, the deepest since the 1930s? One indication of this is that, according to the International Monetary Fund, world capitalism lost a total of $50 trillion from 2008-10, through the loss of production and the devaluation of assets – equal to the total output of the world in goods and services in a single year! Yet, Hobsbawm comments: "The socialists, traditional brains-trust of labour, do not know any more than anyone else how to overcome the current crisis. Unlike in the 1930s, they can point to no examples of communist or social-democratic regimes immune to the crisis, nor have they realistic proposals for socialist change".

The collapse of his former idols, the Stalinist regimes of Eastern Europe and Russia, means for him that there is no traction in arguing for the socialist alternative. However, before the Russian revolution and the creation of the Soviet Union, socialists did argue, and quite effectively, for socialist change – without having a prepared model. Without this struggle over generations, the labour movement would not have been built and the subjective factor necessary for carrying through a revolution and social change would have been absent. There were many periods of disillusionment because booming capitalist economies appeared to be ‘doing the job’ – for instance, between 1896 and 1914. Then, reformists like Bernstein in Germany, Millerand in France and MacDonald in Britain sought to reconcile the labour movement to an inch-by-inch ‘march toward socialism’. The first world war, which signified the absolute impasse of the productive forces under capitalism, put paid to these ideas, although their advocates were not completely defeated politically within the labour movement.

True, the actual creation of a workers’ state in Russia was followed by the terrible historical fact of Stalinism. That is an obstacle to workers easily drawing socialist conclusions today. Stalinism has acted as a blot on the history and the reputation of the labour movement, introducing complications that did not exist prior to the first world war and the Russian revolution. But the only way to overcome this ‘contradiction’ is to have an honest and serious balance sheet of why the revolution in Russia degenerated and how this can be avoided in the future. Hobsbawm is incapable of doing this because of the tawdry political garments of the past he still clings to, the remnants of a much distorted ‘Marxism’ which has not come to terms with the phenomenon of Stalinism.

what is the future for socialism

I thought i'd relay this excellent article by Lynn Walsh from www.marxist.net as i have just read it and thought it was excellently put and highlights a lot of questions that i will tackle in the coming weeks and months.

LYNN WALSH, editor of Socialism Today, British monthly magazine of the Socialist Party argues that socialism, far from being 'finished', will once again become the idea that guides workers and youth in the struggle for a new society.
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From Socialism Today, issue one, September 1995

WHAT, TODAY, ARE the prospects for socialism? Many on the left, including figures previously identified with revolutionary Marxism, are now utterly pessimistic.

In 1968, for instance, Tariq Ali epitomised the mass student radicalisation in Britain. The other day, however, Tariq commented that the restoration of capitalism in Russia signified that "the game was up for another four or five decades..." (Guardian, 22 July). Capitalism, in other words, has been granted a new lease of life - revolution is off history's agenda for half a century!

Today, Tariq Ali epitomises a generation of one-time Marxist intellectuals who are now utterly disillusioned with the prospect of a socialist transformation of society within the foreseeable future. This change in outlook undoubtedly has a social basis - the rebels of '68 are now professors, film producers, business executives, etc.

Berlin Wall
More fundamentally this ideological shift reflects the momentous events of the last few years - above all, the collapse of the 'socialist' regimes of the Soviet Union and Eastern Europe (in reality, bureaucratised Stalinist states) and the international social and economic trends which have crystallised since the fall of the Berlin Wall in October 1989.

The disillusionment of the Marxistic left, moreover, parallels the abandonment of socialist objectives and the open acceptance of the capitalist market by all the main trends in the labour movement, from right-wing to ex-Stalinist reformists.

No one could deny that 1989 was a climactic year. The rapid disintegration of the Stalinist states - non-capitalist societies which acted as a check on world capitalism - was a momentous event. While these totalitarian regimes were a grotesque caricature of socialism, the destruction of the centrally planned economies on which they rested, despite the economic distortions imposed by bureaucracy, was objectively a defeat for the working class internationally.

Moreover, the collapse of Stalinism acted as a catalyst, turning the accumulating quantity of pre-1989 trends into the quality of a new relationship of political forces internationally.

Naturally, the capitalist leaders seized the opportunity to launch a 'Kulturkampf, an ideological campaign to prove that socialism is unworkable and that the capitalist market is the only viable way of managing society. The bourgeoisie experienced a resurgence of confidence as they continued to claw back the post-war gains of the working class - an onslaught which the traditional leaders of the labour movement had no policy or political will to resist.

Changes
But do these changes mean that the abolition of capitalism and the socialist reconstruction of society are postponed for fifty years? What are the arguments used to rationalise the mood of pessimism? The main components seem to be as follows:

The collapse of the 'really existing' model of 'socialism' in the Soviet Union, Eastern Europe, and elsewhere (Angola, Ethiopia, etc) has destroyed the claim that economic planning can replace the capitalist market. (Ironically, this argument is widely accepted despite the fact that the Trotskyist left and officially even the reformist left never accepted the Stalinist states as genuine models of socialism).

Capitalism, through developing new technology and greatly extending globalisation, has significantly strengthened its position internationally, enhancing its ability to ride out crises and gaining more room for manoeuvre against the working class.

The reformist leaders of the traditional Social Democratic and Labour parties and of the trade unions have abandoned any commitment to progressive reforms in favour of the working class and now accept the permanence of the capitalist market. The tendency towards the mutation of traditional reformist organisations into liberal-capitalist parties has dramatically undermined the credibility of socialist ideas. (Again, it is ironic that many former Marxists should be influenced by this shift, when Marxism never accepted that step-by-step reform of capitalism could provide a route to socialism).

As the combined result of these trends, the working class has been to some extent weakened economically, socially, and politically. Technological changes, new management methods and globalisation have undermined the strength of the unions, especially the 'heavy battalions' in industries like coal mining, steel making, engineering, etc.

At the same time, the openly pro-capitalist orientation of the social democratic leaders has politically disorientated large sections of the working class, who have largely been left leaderless in opposing the renewed capitalist offensive. On top of this, the collapse of Stalinism, the only existing model of 'socialism', has demoralised the politically active workers.

There is clearly more than a grain of truth in this presentation of recent events, which reflects real trends and processes.

But to conclude from them that socialism has been deferred for fifty years is a one-sided and completely false interpretation of these developments. The most important task of Socialism Today will be to refute this argument.

In our future issues we shall seek through factual and theoretical analysis to substantiate the case which we can only boldly outline in this, our inaugural issue. We will affirm the need for an anti-capitalist programme based on the ideas of Marxism and the perspective of a socialist transformation of society.

1989 was an historic turning point -not in our view, the beginning of a new era of flourishing capitalist development, but the end of an exceptional 'golden age' for the bourgeoisie in the advanced capitalist countries and the beginning of protracted economic depression, social polarisation and political upheaval in which the working class will reassert its role as the decisive force for social progress.

Far from being 'finished' (or even marginalised) for fifty years, the working class will, in the next period, engage in unprecedented struggles against capitalist oppression -and the workers' aims will once again be expressed in the language of socialism.

The collapse of Stalinism
THE COLLAPSE OF the Stalinist states does not prove the superiority of capitalism, that economic planning is unviable or that the market is the only effective means of running economies.

Instead it bears out the warnings made by Lenin and Trotsky in 1917: while the working class could begin the task of the socialist revolution, a socialist society could not be constructed within the frontiers of an economically and culturally backward society.

Socialism had to achieve a higher level of organisation than capitalism, which had already created a world market. Successful economic planning and workers' democracy, depended, therefore, on the spread of the revolution to a series of economically advanced countries with strong proletariats.

The collapse of the Stalinist regimes, moreover, confirmed the critique of Stalinism put forward by Trotsky in the 1930s. Trotsky argued that the development of a privileged bureaucracy, which under Stalin's dictatorial rule usurped the control of society by workers' representatives, would severely limit and eventually undermine the gains of a planned economy.

Trotsky warned that in the bureaucrats' greed for privileges and personal power lay the seeds of a future capitalist restoration. The way out lay through a political revolution in which the workers would overthrow the ruling elite, revive workers' democracy, and develop economic planning - on the basis of internationalist links with the workers of other countries.

Bureaucracy
Subsequently, although there were moves towards political revolution, for instance in Hungary in 1956, the bureaucracy managed to consolidate itself to a greater extent than envisaged by Trotsky. This was largely due to the weakness of the major capitalist states during the crisis period of the 1930s and the intra-capitalist conflicts of World War Two, when the western powers were obliged to lean on the Soviet Union against their fascist rivals.

Given the new balance of forces following the war, capitalism was forced to retreat, conceding Eastern Europe (and later China) to a strengthened Stalinism.

Economic planning, despite the enormous human cost under totalitarian control, proved some of its potential. The Soviet Union was transformed into a mighty industrial power, and later a nuclear superpower that rivalled US imperialism for a period. While workers notoriously lacked good quality consumer goods, in other respects living standards were immeasurably raised, with full employment, cheap housing, good education and health services, etc.

Nevertheless, as Trotsky predicted, the progress that could be made under a bureaucracy was strictly limited. The bureaucracy stifled every element of democracy, and established a rigid command structure that reflected the conditions under which it was formed: the political purges of the 1930s and the technical-industrial structure of the basic heavy industries, vintage 1940s.

While successive reformers, from Khrushchev to Gorbachev, tinkered with the system and achieved temporary improvements, the bureaucratic apparatus was ultimately incapable of adapting to new technology and the changed social conditions of a modern industrial society. Without the initiative of the workers being involved, planning began to be more and more undermined, with the market reappearing by the back door - through unofficial bartering between enterprises and a black market in food and consumer goods to fill the enormous gaps in the plan.

The mass movement of Solidarity in Poland in the early 1980s signalled that the 'game was up' for Stalinism. Shaken, the 'liberal' wing of the bureaucracy under Gorbachev desperately attempted to reform the system - only to trigger the disintegration of central planning and the collapse into market anarchy.

The collapse of economic planning arose from the internal contradictions of Stalinism, not from the superiority of the market. On the contrary, the return to the market represents a counter-revolutionary regression to private profit-seeking and anarchy, highlighted by the prominence of mafia elements in the economy of the former Soviet Union. Far from demonstrating its superiority, the advent of the market brought the biggest slump in modern times.

Stalinism was not a healthy experiment in socialist construction - it was an extremely contradictory detour which led to a cul-de-sac. But we cannot allow this historical experience to be buried by capitalist propaganda that socialism is dead, only capitalism works. We have to explain the concrete historical circumstances which determined the degeneration of the first workers' state, separating what was progressive from what was reactionary, and applying the lessons to the formulation of a socialist programme for the future.

A capitalist renaissance?
THE 'DEATH OF communism' after 1989 inspired an orgy of capitalist triumphalism.

Undoubtedly, after four decades of 'cold war' rivalry between US imperialism and the Soviet superpower, the implosion of Stalinism appeared as a victory for 'the West'. The US-led intervention against Iraq in the Gulf War, which took place under exceptionally favourable conditions for imperialism, reinforced the impression that the West was strengthened.

In the economic sphere, the fall of the Berlin Wall came when the capitalists internationally were buoyed up with confidence as a result of the super-profits (and reduced taxation) derived from the speculative boom of the late 1980s. This profits-ecstasy trip carried over to 1990-91, even though the world economy relapsed into a period of prolonged stagnation.

The capitalists consoled themselves with the remarkable growth spurt that was taking place in China, some areas of Asia, and some Latin American countries, where the imposing of 'structural reform programmes' following the 1980s debt crisis opened up highly profitable fields of speculative investment.

But had the conditions been established for a global capitalist renaissance? The answer, on any sober analysis, must clearly be no. The profits of big business and especially the big capitalist speculators have been restored to the high levels of the post-war upswing period (1950-73).

This has been achieved, however, mainly through intensified exploitation of the working class - lower pay levels, lower welfare spending, and harsher management regimes in the workplace.

Outside the advanced, high-tech sectors of the economy (micro-electronics, communications technology, biotechnology, pharmaceuticals, etc) the growth of production and productivity has been lower than during the upswing period. In the major industrial economies, notably the US and Japan, there has been a 'hollowing out' of industry, with the accelerated displacement of manufacturing industry by the service sector.

Far from a period of renaissance, capitalism has entered a period of chronic depression. The cycle of booms and slumps will continue (as we have already seen since 1990), but successive recovery periods will not eradicate the underlying causes of long-term decline -on the contrary, they will be accentuated all the more.

The boom of the 1980s in the advanced capitalist countries, the wave of speculative investment in certain Third World countries, and the rather weak recovery of the major economies in the last two or three years, have not in any way halted the erosion of the conditions of long-term growth which were established in the post-war period.

Within the advanced capitalist countries the capitalists have restored profitability by clawing back the concessions which they were obliged to make to the working class during the post-war upswing: full employment, relatively high wage levels, the welfare state etc.

Result
Faced with a decline in profitability after the late 1960s, the capitalist class began to draw the conclusion that it could no longer afford the overheads of the 'welfare state'. In the 1980s Thatcherism or Reaganomics became the order of the day, with the privatisation of state industries, cutbacks in state welfare spending, and an assault on established trade union strength.

The result, however, has been a drastic undermining of the market, which had underpinned the high investment and sustained profitability of the upswing period. The capitalists are caught in a contradiction.

Internationally, the end of the upswing at the time of the oil price crisis in 1973-74, led to a breakdown of the relatively stable framework of the capitalist world economy established in the immediate post-war period. There has, it is true, been an acceleration of the growth of world trade during the 1980s and early 1990s, but this has brought increased tensions between the major exporters. This is reflected in the formation of major trading blocs, the European Union and NAFTA, with a looser Asian bloc around Japan.

Above all, however, the breakdown of world economic relations is reflected in the collapse of the relatively stable Bretton Woods money system after 1973, and the introduction of floating rates. Together with the deregulation of financial markets and the upsurge in global speculative investment (itself a signal of the capitalists turn away from development of the productive forces) this has introduced a major element of instability into the world economy.

'Globalisation' means, in reality, a return to the pro-1913 position, when there was previously the unfettered movement of capital on the world market. However, the position for capitalism is less favourable now. Then, the gold standard prevailed, which largely ruled out speculative flows based purely on changes in exchange rates and interest rates.

Moreover, there was greater freedom of movement for labour, which meant that workers were able to migrate from areas of mass unemployment (like the poorer countries of southern and eastern Europe) to expanding economies (such as the US, Latin America, Australasia, etc). Also government debts were much lower then than today's historically unprecedented levels.

It is the conditions of deep crisis, not sustained upswing, which are now being assembled in the world economy. While there is no mechanical, linear link between economic crisis and political struggle, the economic crisis which will unfold in the coming years will inevitably provoke mass struggles both in the advanced capitalist countries and in the semi- and under-developed countries.

The collapse of reformist socialism
THE IDEA THAT socialism has been finally eclipsed has been reinforced by the dramatic swing to the right by the leaders of the Social Democratic and Labour Parties, together with their allies in the trade unions.

Since the early 1980s the leaders of reformist socialism have abandoned their previous formal commitment to an alternative socialist society and even ditched their political commitment to progressive reforms in favour of the working class.

Many examples could be given. Even before the slump of 1979-81, which marked the turn of major capitalist governments towards 'free market' policies, the British Labour government of 1974-79 adopted deflationary monetarist policies. This spelt the end of reformism based on Keynesianism in Britain, and opened the era of reformism-without-reforms.

During the 1980s this counter-reformist trend was followed by social democratic leaders in other European countries -Gonzalez in Spain, Papendreou in Greece and Mitterrand in France, who after the Socialist Party victory in 1981 initially embarked upon a reformist policy, only to abandon it within a year.

The collapse of the Stalinist regimes enormously accelerated this development. Fundamentally, however, the process of political degeneration of the Labour leaders was rooted in the social trends of the preceding period.

The strength of the social democratic workers' organisations was based on the long post-war upswing. Given the balance of forces, with the strengthening of the working class during the period of full employment and the then economic needs of the capitalist class, it was in the interests of big business to concede higher wage levels, higher welfare spending, and to encourage full employment.

The electoral success of the social democratic leaders (which was, in any case, extremely patchy) was based, not on the appeal of their ideas, but on these social conditions. When in power there was scope for reformist parties to carry out reforms, thus securing them a basis of working class support. As these social-economic conditions were eroded, so was the electoral basis of the reformist parties generally undermined.

Paradox
After 1973 the capitalists were still obliged in many countries to make concessions to the workers, who at that stage still retained the trade union strength accumulated during the upswing. Reformist governments were still able, initially, to introduce some limited reforms - only for them to be rapidly wiped out by accelerating inflation and escalating unemployment, which helped discredit these parties electorally.

Paradoxically, many on the Marxist left internationally have been totally demoralised by the collapse of the reformist left. This is contradictory, because Marxism never accepted that step-by-step reforms within the framework of capitalism could produce a socialist society. What is true is that through their domination of the traditional mass workers' parties and the trade unions, the reformists have acted as an enormous political and organisational barrier to the defence of workers' interests against a capitalist assault.

There is not one of the traditional workers' organisations, however, which is not currently in a state of crisis. The reformist leaders no longer have a mass electoral base which they can take for granted. This is yet another aspect of the testing and erosion of the ideas and institutions which were strengthened during the post-war upswing. The weakening of the social democracy represents a weakening of one of the props on which capitalist stability rested during the upswing period. In the coming period of mass working class struggle what remains of these organisations will be put to the test. Sections of them will either be democratised and transformed into vehicles of struggle, or they will be swept aside to make way for new mass organisations and movements of the workers.

The role of the working class
BUT IS NOT the ideological swing to the right based on the defeat of the working class? Has not the balance of class forces within the advanced capitalist countries and internationally tipped decisively in favour of capitalism over the last 10 to 20 years?

After all, it may be argued, throughout the advanced capitalist countries mass unemployment has undermined the strength of organised workers. The state, especially in Britain but in other countries too, has been able to claw back trade union rights conceded in the past.

The 'big battalions' of organised workers have been seriously undermined by de-industrialisation and relocation. An ever-increasing section of workers are now forced to accept temporary, part-time, casual employment of various kinds, with low pay and very few rights.

These trends (together with the undermining of working class loyalty to the traditional workers' parties) have to be recognised. There is no justification, however, for drawing the conclusion that the working class is therefore finished as a force capable of a historic struggle against the capitalist system and for a new socialist order of society. There has been no defeat in the last two decades on the scale of the fascist counter-revolution in the 1930s.

What we have seen in the last period is not a smashing of the power of the organised labour movement, but a clawing back of some (and in some countries a substantial share) of the exceptional gains made by the working class during the period of post-war upswing. After the slump of 1974-75 the capitalists abandoned Keynesianism and turned to neo-liberalism - and a long-term policy of undermining the power of the organised working class.

There were massive struggles internationally against this capitalist offensive, in many cases limiting or delaying the retrenchment. However, the subjective factor, the lack of leaders with the necessary strategy and tactics, was decisive. The general capitalist offensive, based on changes in production methods and the world division of labour, could only be successfully resisted on the basis of a bold anti-capitalist programme - linking day-today demands to the perspective of socialist change. Yet the union leaders, following the social democratic leaders, in most cases accepted the logic of the market.

In the former Soviet Union and Eastern Europe there has, it is clear, been a devastating defeat for the working class. The legacy of totalitarian Stalinism, which allowed no element of independent working class democracy, is the atomisation of the working class.

The recovery of working class forces will take some time, especially in the former Soviet Union. Nevertheless, we can already see the signs of a renewal of the working class in recent industrial struggles in Poland, Czechoslovakia, and other East European countries.

In the advanced capitalist countries, however, the recent period has seen an almost continuous wave of struggle against the capitalist offensive on living standards and democratic rights. In both Italy and France for instance there is a glaring contradiction between the relationship of political forces, where right-wing parties have triumphed against the ideologically bankrupt parties of the left, and the balance of social forces, where mass workers' struggles have successfully resisted onslaughts by big business and the state.

In Mexico, the Zapatista uprising, which reflects profound discontent amongst a majority of the urban and rural proletariat, triggered a collapse of the Mexican 'economic miracle', which in turn sent shock waves around the world economy.

The working class remains the decisive force for change. They will not passively allow a worsening of conditions, of mass unemployment and impoverishment, which are clearly on the capitalists' agenda in the next period.

Moreover, the workers cannot resist these barbarous conditions without challenging the whole system. Far from seeing the end of the working class as a progressive force, we are experiencing the beginning of a new phase of struggle. The crisis within the traditional workers' parties is clearing the ground for a renewal of anti-capitalist, socialist struggle.

There will also be a process of democratisation and renewal within the trade unions. Far from being eclipsed by the 'new middle class', the working class will increasingly draw behind it wide sections of the middle strata of society, who are themselves being squeezed and in reality proletarianised by the capitalist crisis.

The programme of socialism
THE ATTRACTIVE POWER of socialist ideas, for reasons outlined, has undoubtedly been weakened in recent years. But this will be the transitory effect of a passing conjuncture.

Consciousness, especially of the newer generation of workers and youth, will be determined by current conditions and the events which will unfold.

As struggles develop, the more active workers and youth will be impelled to search for an anti-capitalist programme -which can only be formulated in socialist terms.

Paradoxically, today there is a level of social tension, political protest, and youth rebellion unprecedented in the post-war period. The fragmented character of the movements to which this gives rise is primarily due to the political bankruptcy of the traditional mass organisations.

But the struggles of different layers of workers, together with the phenomena of 'new social movements', are a response to the various symptoms of capitalist decline. It is impossible to defend living standards and democratic rights, to halt the devastation of the environment, let alone end the various bloody conflicts internationally, without confronting the power of the capitalist class.

Those who accept the market as an eternal form of social organisation are, in reality, condemning the majority of society to a future of increased social polarisation, mass impoverishment, and the reappearance of barbarous conditions of oppression and conflict.

Acceptance of the 'market' means acceptance of the domination of world production and trade by a small handful of big capitalist monopolies, the determination of social priorities by their drive for profits, and the 'organisation' of economic life by the anarchic market of capitalism.

The only viable alternative to this remains the socialist planned economy, not on the Stalinist model, but on the basis of international planning and democratic workers' management and control. On such a basis, science and technology could be applied to production in a balanced way, to meet human needs and for the harmonious development of society in the interests of the majority.

Only on this basis will the fundamental contradictions of capitalism - private ownership of the means of production and the division of the world economy into ultimately antagonistic national economies - be overcome, thus eliminating the fundamental roots of oppression and conflict.

Our task, through intervention in struggle and a dialogue with the workers and youth, is to elaborate a socialist programme which will effectively provide a guide to action and re-establish the authority of genuine Marxism. Unless we are to capitulate to a barbarous capitalism we must fight for a socialist future.