Round one.

The last three decades of hegemony by neo-liberal economists and their political allies have seen the ruthless devastation of the organised working class and the virtual annihilation of the small business class – in all advanced capitalist countries. The once large-scale trade union movement of skilled and unskilled workers, attacked by economic rationalisation and the capitalist state, has been shrunk to a fraction of its pre- and post-Second World War numbers. Its political and social influence has consequently also been radically reduced.

Running almost parallel with this deliberate onslaught against the working class has been the less direct, but no less thorough impoverishment and demise of the small business section of the middle-class. Part of this sector (retail) has been replaced by mega super-markets and internet shopping. Another part (component supply) has been largely replaced by small to middle businesses based in foreign ‘export processing zones‘ (EPZ‘s). A final segment was devastated by bank miss-selling of interest rate swaps and other financial instruments. This continual culling of its members along with their economic base has also reduced the social and political influence of the small business section of the middle-class.

These 20th century developments were the first stage in an ongoing process of assault on the middle and white-collar classes. We are now witnessing a second stage in the culling of the middle-class section of capitalism. The logic of pre-2008 and post-2008 stages of the capitalist mode of production was, and is, to find ways to invest the increasing amounts of surplus finance-capital created by the economic process. Enormous amounts of money-capital could not, and still cannot find direct or indirect investment opportunities in existing industrial and commercial projects. An alternative source of investment was needed and under capitalism, it still is.

That was the primary economic motive for the privatisation of state assets begun under Thatcher in the UK. However, a further consequence of the 20th century privatisations was the reduction of the numbers and salaries of the middle ranks of management and workforce. Now, in the 21st century, austerity measures have accelerated the process of ‘shaking out‘ this particular ‘state-employed’ section of the middle class. The planned further reductions of public spending and further privatisations will continue this process.

Round two.

Neo-liberalism represents the political and economic domination of society by the big-business, banking and bond-holder sections of capitalism. However, as a minority, they do not act alone. It is the political class and the armed forces of the state, which act as the willing agents of these financial sections. It is the politicians and their intellectual servants in universities and think-tanks who must devise means of achieving the economic and financial interests of finance-capital. It is these pro-capitalist intellectuals who also invent the justifications and rationalisations to present these sectional interests as being for the general good.

Hence the latest plans to introduce the ‘mutualisation’ of more state assets. Mutualisation is privatisation with a fig-leaf to cover up the more offensive parts. Those workers who manage to keep their jobs after mutualisation, will be given some ‘shares‘ in the private company. Shares which in the continuing crisis will probably be worth next to nothing. Hence also the constant mantra of there being ‘no alternatives’ to the current model of UK and European crisis-solving. We are told there are no alternatives to austerity, low interest rates and quantitative easing (printing money). This is despite the obvious fact that there is a clear example of an alternative.

Iceland, a finance-dominated country, for example, found the only way to temporarily save its capitalist base – as a whole – from the current capitalist crisis. It did so by repudiating the sovereign and bank debt, jailing the bankers and officials who caused it and legally restricting the freedom of banks to do the same again. Of course, the Iceland example is not an alternative which will ultimately benefit present and future generations of blue and white-collar workers, the poor and the unemployed. Nor is it an alternative which will overcome the fundamental contradictions of the capitalist mode of production.

However, it is an alternative which protects the non-financial sections of the capitalist class, larger numbers of its middle-class supporters and does not require a home grown scapegoat. The failure to even suggest such a course of action for the countries of Europe, the UK and the US, demonstrates the allegiance of the right-wing political class to the finance sector of capital. This failure also highlights the poverty of political thinking within traditional left-leaning political elites in Europe. No ‘left’ politician has even hinted at such a possibility. Even Syriza in Greece, has not promoted such radical measures as the Icelandic pro-capitalists have already implemented.

The ‘Poverty of Politics’.

In Europe, UK and North America none of the mainstream political parties seem to have accepted that the present crisis requires radical solutions. Unlike the Icelandic pro-capitalists which recognised radical measures were necessary and swiftly took them, the political elite in the UK and elsewhere are stuck in a reformist time-warp. Their current policy debates reflect an entrenched neo-liberal orthodoxy together with a compromise mentality, both of which matured during an earlier relative affluent period of capitalist expansion.

Their talk of the need for ‘economic growth’ in a situation of global warming and general over-production of commodities, waste, pollution and skill sets, is an indication of being unable or unwilling to think out of the box. They individually and collectively demonstrate a paucity of imagination and a scarcity of rigour. As the saying goes; ‘they have as yet to wake up and smell the coffee‘. Over nineteen million (19.2m) unemployed in Europe with approaching 60% for those below 25 are clearly not enough human sufferers to galvanise them into some form of radicalism.

In addition to these present numbers, the higher education establishments in all countries are massively over-producing graduates relative to the number of jobs available to them under the capitalist system. This fact alone, if none of the others, should have disturbed the numerous slow-firing neurons in the brains of the capitalist political and economic elites. For it amounts to a mammoth social problem which faces current and future generations. Where are these educated white-collar workers; lawyers, doctors, accountants, economists, computer specialists, teachers etc., to find employment under a capitalist system that doesn’t need or want that many?

Already many graduates, as with large numbers of skilled white and blue-collar workers, are having to accept low-paid, mind-numbing jobs, stacking shelves or chasing non-existing jobs. We can see, if we care to, that it is not just an economic, financial and ecological crises which now faces humanity. It is also a large-scale cultural crisis – which raises questions of what societies are for and how they should be governed. Furthermore it is a crisis which cannot be solved on the basis of the present economic system nor with the current poverty of political thinking.

A further indication of the deficiency of political thinking among the pro-capitalist elite is demonstrated by recent comments by Conservatives in the UK. Ken Clarke announced that those who join or vote for UKIP (a new right-wing political party in the UK) are stupid and racist. William Hague considered them ‘clown-like’. Their fellow Tory conservative Boris Johnson argued that UKIP and Conservative voters think exactly on the same lines, whilst Conservative Norman Tebbit says he doesn‘t blame Tory voters if they vote UKIP.

Boris Johnson and Norman Tebbit are probably correct, but calling people ‘clown-like’ and stupid say’s more about the persons who use such terms than it does of those so described. Many 20th century European commentators thought the strutting Hitler and Mussolini clown-like, but they turned out to be much more astute and dangerous than that. And of course, even extreme right-wing voters are not stupid, when they vote for the Tories or UKIP. They and others less extreme are voting for measures they think will produce the best results for themselves. Their decision may be selfish, or in some cases based upon insufficient knowledge or understanding, but they are not stupid – and they may not all be racist.

It should be obvious that many people in the advanced countries, already acknowledge, in one way or another, that there is a radical problem with the present economic and social system. I suggest they are also aware that radical problems require radical solutions. In the UK, for example, there is a general recognition that Cameron, Clegg and Miliband are weak-knee’d dilettantes who exist primarily to please the bond-holding money markets. And this negative perception extends to many of their traditional supporters. In France it is estimated that up to 75% of the population have a similar view of the self-styled ‘socialist’ Francois Hollande. A comparable case can be made for the existence of a general dissatisfaction with mainstream politicians in the rest of Europe and North America. As ex Vice President, Al Gore in the US declared on Wednesday May 1st;

“The Congress is incapable of doing what the American people want.“

The reason? Gore put it down to – ‘the influence of big money’! In the circumstances of such wide-spread dissatisfaction, it cannot be surprising that changes in voting and thinking habits will start to occur. It is to be expected that the ongoing crisis will cause an erratic yet increasingly radical shake up of all politics and political forms. This is the reason for the growth in support for parties such as UKIP, and other right-wing parties as well as the loss of support for the mainstream parties of self-serving political posturing. This is also the reason for the currently unsuccessful campaigns (with the exception of Syriza in Greece) to create radical parties of the ‘left’ in the UK and elsewhere.

People who pursue radical solutions are not stupid. They may be basing their decisions on flawed criteria and understandings or have mistaken the symptoms for the cause. However, in doing so they are not alone. Indeed, dealing with the symptom and overlooking the cause, is a commonly wielded intellectual and cultural inheritance, derived as it is from bourgeois modes of thinking. For this reason, the present crisis-fed radical and erratic ferment, represents a challenge for anti-capitalists. The challenge is to articulate alternative criteria and reasoned arguments. It is simply not good enough to write people off on the basis that if they don’t yet agree with us – they must be racist, stupid or both.

And this propensity for politically-driven intellectual poverty is not just applicable to the right-wing, but can regularly infuse the political left’s psychology. The example of the ‘party-building Stalinists in the 1930’s refusing to support non-communists in opposing the Fascists comes eerily to mind in this regard. But almost identical political poverty exists in the contemporary UK phenomena of several separate defensive campaigns against the cuts. A number of alliance groups have been set up by competing sectarian groups, who have then distanced themselves from those they don’t control – each sect considering the other as beyond the pale.

The ‘Politics of Poverty’.

It is the above-noted ‘poverty of politics’ which also gives rise to it’s mirror image – the ‘politics of poverty‘. The politics of poverty began with subtly and systematically blaming the victims of the capitalist mode of production. Because not all citizens of each country can be successfully exploited by the capitalist system it leaves many citizens unemployed or under-employed. This (first cause), has led – in the ex-imperialist countries – to the introduction of welfare benefit systems. Under the pro-capitalist ‘politics-of-poverty’ speak, these victims have been transformed from a symptom, into a cause and are now labelled – ‘scroungers‘. In other countries the same capitalist lack of employment dynamic has given rise to a second and related symptom – unemployed working people seeking employment in countries other than their own. So these two sets of victims of the global capitalist system have become cast as the scapegoats for the systems own failure.

In other words both these categories of victims of the capitalist system have become transformed by all the mainstream politicians and media into the reasons for some or all of the problem of the capitalist mode of production. This pro-capitalist ‘politics of poverty’ is everywhere producing an atmosphere of nationalism and racism, directed against the poor and unemployed victims of capitalist economic practices. This nationalist and racist atmosphere, which arises as any other such divisive odour from the putrid economic base of the capitalist mode of production, is the gaseous fuel which drives the machinery of mainstream politics – including UKIP and the other far right political groupings.

Yet preventing or reducing immigration as all political parties now suggest doing, will not cure the problems of unemployment, of over-production, of speculative financial crises, of tax-avoidance, of obscene bonus payments, of taxing bank accounts, of pollution and of ecological destruction. Nor will leaving the EEC ease the problems for the UK, as UKIP suggests. UKIP and the far right politicians in all countries of the world, including the Islamist political parties, are all advocates of capitalism and trying to deal with the symptoms of capitalism will not prevent or cure the problems. The predicament which faces those who intend to vote for them, but are not racists or extreme nationalists, is that they will be just helping to make things worse, not better.

To repeat the reasons for such a conclusion! Capitalism cannot profitably employ all the citizens of any country of the world. Historically, it never was able to and it was unable to do so before EEC immigration policies were introduced. For this reason capitalism cannot even remove absolute poverty let alone relative poverty. Under the capitalist mode of production poverty, pollution and ecological destruction will always be with us. And the capitalist elite will do their best during this crisis to ensure that ordinary people bear the most severe burdens. That way also, more of us will sooner or later become victims and then by the ‘politics of poverty’ – if it is not seriously challenged, – it will become our turn to be blamed for becoming a burden.

Creating a humane alternative.

From a revolutionary-humanist perspective, each country needs to employ all its people, without over-producing commodities, or causing pollution and ecological destruction. Employing all citizens of working age at radically reduced working hours and an equalisation of the wealth produced have become an existential necessity for the welfare of the planet and the majority of its inhabitants. The ‘economic growth’ so beloved of the current batch of politicians and economists is not something the planet can sustain – under any system – without catastrophic consequences. Under the capitalist mode of production that is exactly what will happen whilst large numbers of the world‘s population continue to exist in absolute or relative poverty and conflict. The system needs changing in favour of a more humane post-capitalist alternative.

The last time the capitalist system collapsed to the extent it is currently heading toward, the working classes, marched, demonstrated, rebelled and begged. The middle-classes however, played a reactionary role. The small-business and shop-keeper mentality along with the petite-bourgeois prejudices of the professional classes allied itself to nationalist and racist agenda’s. They either stood aside, joined or voted for those fascist parties which flourished on political programs of blaming the victims. These were political program’s which in turn were harnessed to the needs of 20th century capital for armed expansion.

The consequent world war (the 2nd) essentially for the control of world markets and raw material resources, witnessed the mass execution of large sections of humanity distributed as they were on two competing amalgamations of capital. The ‘Allied Powers’ of UK, France and the US and the ‘Axis Powers’ of Germany, Italy and Japan – all dominated by the need for capital augmentation. The 20th century crisis of capitalism and the poverty it engendered was resolved by wholesale destruction, not of the capitalist system, but of large swathes of humanities poor and oppressed. Upwards of 60 million. That is how the last great episode of the politics of poverty was played out.

In the 21st century however, the ingredients and social composition of the middle-classes is different. Many of them have been and currently are, employed in non-profit-making industries and services before their salaries and pensions have been raided. Others – the young graduates – were heading for such employment only to have their aspirations dashed not by the machinations of immigrants or ‘foreign’ cultures, but by those of the capitalist elite. This double-mugging and subsequent culling of the middle-classes, the white and blue-collar workers and their collective offspring is a logical economic consequence of the capitalist mode of production. It therefore has radicalising implications and consequences.

The supporters of all these erratic and unstable radicalising groups need confronting with the history and the economic reality of the capitalist mode of production, not with contemptuous taunts of being ‘stupid‘ or ‘racist‘. The majority of these citizens are better educated and more culturally integrated than their 20th century counterparts and they have the benefit of hindsight. All of which creates the possibility of them becoming revolutionary rather than reactionary. They need to be won to the anti-capitalist struggle by rational argument and appropriate examples of solidarity not impatiently written off before the struggle has seriously begun.

[see also ‘The five fold crisis of capitalism‘ and ‘Crisis: so what else can we do’. ]

Roy Ratcliffe (May 2013.)

This entry was posted in Critique, Economics, Politics and tagged , , , , , , , , . Bookmark the permalink.


  1. Iyobosa says:

    Fantastic piece. You raise some excellent points and its refreshing to hear such an articulate and thought provoking argument.
    I discuss similar issues on my blog, check this out. Its a piece about privatisation under Thatcher and the effects it is having on today’s society. Let me know what you think.

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