Wednesday, February 28, 2024

Capitalism and the Fallacy of Reform. Part One


Recently, Sir Keir Starmer announced his ambition for a ‘patriotic economy’ through the championing of home ownership and the building of new model towns. Evidently, the Labour leader is attempting to harness the middle ground, by blending Thatcher and Attlee. Many recall the faux revolution of ‘right to buy’ which, forty years on, has spawned a social housing crisis. Throw in the legacy of the 1946 New Towns Act, which sought to construct model towns in the aftermath of the Second World War, and you have yet another social democratic fudge to reform capitalism.

Sir Keir is not alone in seeking to reinvent the wheel. Every Labour leader has bound themselves to the yoke of the system. Ramsay Macdonald all too willingly succumbed to the protracted economic crisis of the interwar years, content at playing establishment bank manager in a period of decline. The Attlee Government, despite the strides made in welfarism, struck the rocks, and yielded to the rules of capitalism, laying the course for twenty-five years of Butskellism. Harold Wilson had us believe that a new Britain could be forged in the white heat of technology, but this fire burned in the hall of capitalism, prostrate by markets and a depreciating pound. James Callaghan surrendered what vestiges of leftism remained, implementing the kind of monetarism Thatcher later claimed as her own. Need anything be said of Tony Blair and Gordon Brown – the would-be heirs to the Iron Lady?

No, the British labour movement, like so many social democratic movements the world over, has always been a willing hostage to capitalism, engaging in a futile quest to reform it, rather than introduce socialism. In some respects, they cannot be blamed, for the boom-and-bust integral to the existence of capitalism has attracted many in vainglorious quests to improve it and acquire the eternal elixir of socioeconomic harmony. Many also point to the idea that capitalism has in fact undergone transformations as justification for reform, such as the shift from industrial capitalism to the information age. The rise of technology and globalisation has apparently altered the dynamics of production, trade, and employment. Some have also claimed the attainment of adaptation within capitalism – the Nordic model, exemplified by countries like Sweden, Norway, and Denmark, supposedly combines capitalist elements with a strong welfare state. This model allegedly seeks to prioritise social equality, education, and healthcare, challenging the notion that capitalism must follow a rigid, laissez-faire approach.

However, reformist approaches are an illusion and cannot ameliorate the structural antagonisms which provide the fundamental basis for capitalism. Even in the venerated Nordic economies high inflation and interest rates, youth unemployment and poverty persist. Finland is in recession while the Swedish economy is weakening. Norway, propped up by oil and gas exploitation faces fiscal challenges with high public spending. The message is clear: under capitalism, boom will always lead to bust.

The system requires inequality and the exploitation of workers, else there would be no profit or incentive to accumulate. Over the past hundred years, social democratic efforts to introduce welfarism and redistribution have failed to eradicate this inequality and exploitation. Today, the rich are richer and the poor poorer. The gap has widened, and reformism has served only to pacify the masses so that the top one per cent can acquire more.

Today, the poorest 50 per cent hold only 8 per cent of global wealth, while the richest 10 per cent earn over 50 per cent. The top 1 per cent alone owns 35 per cent of global wealth, takes 19 per cent of income, and emits 17 per cent of global carbon emissions.1 This has occurred despite the founding of welfare states in some countries, free healthcare, state education, social security, and the “redistribution” of capital.

It appears the capitalist system has assimilated social democracy and turned it into a weapon to perpetuate exploitation. Harold Macmillan once said of Britons in the 1950s that they had never had it so good – (hardly an accolade considering decades of economic instability and destructive war). In truth, any semblance of prosperity is nothing more than the offering of more crumbs off the capitalist plate. You may receive sustenance, but the people at the top still get a hearty meal. If anything is true of today it is that the rich have never had it so good.

Alas, social democrats have been hood-winked, in no small way thanks to the social democratic Marxist theorist Eduard Bernstein (1850-1932). In Evolutionary Socialism: A Criticism and Affirmation (1899) Bernstein did not believe in capitalism’s inevitable destruction; he accepted the strength of its capacity to adapt and advocated reform so that humanity could transition from capitalism to social democracy. He contended that as workers attained greater rights, their grievances would diminish, making revolution implausible. In this, he is perhaps accurate. The extension of rights and the offering of the ‘crumbs’ have pacified the masses and encouraged social democrats to continue a long the path of reformism. However, his call for reform contradicts his appraisal of capitalism’s adaptational strength. Everything promulgated within the system is consumed by the system. Nothing changes,

John Elliston

Continued at Part Two

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