Is Socialism a Dead End?
It looks like Keir Starmer’s Labour Party will probably win the next election. The EU want Starmer as Prime Minister and he recently flew to the Economic Forum at Davos saying that British capitalism under a Labour government would welcome and encourage investment. The capitalist class are already embracing shadow government ministers in Labour’s “prawn cocktail” offensive to charm the City and property developers. And soon media barons like Rupert Murdoch will want to ingratiate themselves with Starmer and promise to support him at the next election.
Starmer is seen as the new Tony Blair; malleable, a firm believer in capitalism and the private ownership of the means of production and distribution to the exclusion of the majority of society. Capitalism, it is believed, is safe in Starmer’s hands.
Already Murdoch’s SUNDAY TIMES has published salacious stories about Boris Johnson and Party Gate to damage his chances of becoming prime Minister again. And it has stuck the political knife into him again when revealing that Richard Aitkin and Tory donor helped Johnson secure a loan guarantee of £800k, weeks before the then -PM recommended him for the role of Director General of the BBC. The SUN ON SUNDAY has highlighted details about Nadhim Zahawi tax problems with the HMRC regarding offshore trust funds. In February 2022 the reactionary THE WALL STREET JOURNAL, owned by Rupert Murdoch heaped praise on Starmer for his political direction in celebrating the use of market reforms for the problems thrown up by capitalism.
Now we haveTHE TIMES leading journalist Daniel Finkelstein telling its readers that they have nothing to fear from Keir Starmer (Starmer can see that socialism is a dead end (Jan 18, 2023).
Finkelstein gives us a history lesson about one of Labour’s many general election defeats. This time it is the election of 1950 which saw them lose their majority. At a weekend meeting at Beatrice Webb’s house in Dorking, Surrey, the Labour Cabinet and National Executive Committee met to deal with the loss of their majority. Herbert Morrison suggested dropping all the proposals for nationalisation which he misleadingly associated with socialism and to redefine “socialism” as some vague language about social responsibility. Nationalisation was a dead end. It no longer bought working class votes sufficient to defeat the Tories.
Starmer is liked by the Murdoch press because he agrees with privatising the NHS and no longer wants to nationalise the utilities. What these policies have to do with socialism Finkelstein does not tell us. The debate about privatisation or nationalisation has, of course, nothing to do with socialism.
Finkelstein says that Starmer has clearly decided “socialism as an idea and an economic organising principle doesn’t have much to offer him” adding “And in this he is surely right”.
Finkelstein, as you would expect from a paid defender of the capitalist class, asserts that socialism “is a gigantic intellectual error”. He further states that its adoption by the Labour Party, and here he is thinking of the infamous Clause 4 drawn up by the Webb’s, was “a gigantic political error”.
Finkelstein believes that an entirely different social system to capitalism is impossible. He cannot imagine a coherent and rational social system that does away with private ownership, capitalists and the profit motive. Conveniently, according to Finkelstein, capitalism is not located within a historical context. It is just there with no history.
Finkelstein goes on to say:
“There is no workable and sensible alternative to market exchange in the allocation of goods and services. There is no answer to the production of consumer goods, or where people might usefully work, or how to respond to basic needs, that doesn’t involve private endeavour in response to initiatives”.
Finkelstein says nothing about market failure, periodic trade depressions, the global warming crisis, needs being unmet because people cannot afford decent housing and tens of thousands forced to use food banks. Capitalism only allocates to buying customers, most employment is “bullshit” as the late David Graeber put in his book BULLSHIT JOBS: A THEORY (2018). Graeber argues that there are millions of people across the world — clerical workers, administrators, consultants, telemarketers, corporate lawyers, service personnel, and many others — who are toiling away in meaningless, unnecessary jobs which would include a large part of the commercial media.
And why cannot there be initiative in a socialist society? In meeting human needs in socialism, individuals and groups would solve social problems just as they do right now. It is a positive aspect of human behaviour. Would not a socialist society freed from artificial political boundaries and competing class interests use its initiative to solve the global warming crisis or to feed and house millions of desperate men, women and children? It is sheer arrogance to think otherwise.
“In more than 100 years, the idea of a socialist alternative has produced only misery and dictatorship wherever it has been tried. Its only concrete model -state ownership of pretty much anything – is completely incompatible with prosperity, freedom and democracy. And all the alternatives to this are either obviously flaws (co-operative models that don’t account for anyone starting a new business or rest on unbelievably abstract language about fraternity that doesn’t amount to much”.
Finkelstein makes several errors. His biggest error is to associate the word socialism (which he never defines) with the Labour Party. The Labour Party has never been, is not and will never be a socialist party. It does not exist for that purpose. When in government it exists to administer capitalism, the interests of the capitalist class and the profit motive. Social reforms come and go. Reforms get enacted and either fail, cannot be afforded or are repealed by the Tories when they get into power. What remains after the end of every Labour administration is unmet needs and the pursuit of war somewhere around the world. The Labour Party offers the working class nothing.
Finkelstein clearly does not understand the basic economic workings of the capitalist system. Capitalism is a global and interrelated social system based on class exploitation which developed after industrialisation was established in the eighteenth century. It had a beginning and a potential end for, as history shows, no social system lasts forever. Capitalism is the social system which now exists in all countries of the world. Under this system, the means for producing and distributing goods (the land, factories, technology, transport system etc) are owned by a small minority of people – known collectively as the capitalist class. This is the capitalist class, the class who employ the likes of Lord Finkelstein to defend its interests.
The consequence of this inequitable system is that the majority have to sell their labour power, whether manual or skilled, to an employer (capitalist) to produce commodities which are then sold on the market for a profit. That profit is not secured for the workers’ benefit but for the employers’, because they own the products that the workers produce. The workers are remunerated by the employer, through wages or salary, with just enough to meet their minimum social needs. However, the necessary labour required to produce the goods or services is reached well within their contracted working hours. So, the rest of that contracted period is effectively free labour for the employer. This gives the employer surplus value expressed through the value of the additional goods produced. It is through this economic mechanism that workers produce what Marx called, ‘surplus value’ from which the unearned income of rent, interest and profit for their employers (capitalists) are derived. It follows, therefore, that the value of commodities is an expression of the necessary labour involved in producing them and not directly related to the ultimate price that they make in the market place. This cycle of exploitation is fundamental and the necessary basis of the capitalist system (see: VALUE, PRICE AND PROFIT ch V, Prices and Wages. K. Marx pbl 1898)
This is what we mean when we say there are two classes in society. It is a claim based upon simple facts about the society we live in today. This class division is the essential feature of capitalism. And it is class, class interest class struggle which is totally missing from Finkelstein’s defence of capitalism.
Finkelstein does mention the profit motive but plays down its consequences and how it effects for the majority of society. In capitalism, the motive for producing goods and services is to sell them for a profit, not to satisfy people’s needs. The commodities of capitalist production must find a buyer, of course, or they go bankrupt and production stops. but this is only incidental to the main aim of making a profit, of ending up with more capital than was originally invested. Production is started not by what consumers are prepared to pay for to satisfy their needs but by what the capitalists calculate can be sold at a profit. Those commodities may satisfy human needs, but those needs will not be met if people do not have sufficient money. Under capitalism most people do not have their needs met. Millions just starve and die.
The profit motive is not just the result of greed on behalf of individual capitalists. They do not have a choice about it. The need to make a profit is imposed on capitalists as a condition for not losing their investments and their position as capitalists. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to keep their means and methods of production up to date.
Unlike Finkelstein, socialists hold that it is the class division and profit motive of capitalism that is at the root of most of the world’s problems today, from starvation to war, to alienation and crime. Every aspect of our lives is subordinated to the worst excesses of the ruthless drive to make profit. In capitalist society, our real needs – decent housing, food, transport, education and health provision - will only ever come a poor second to the requirements of profit.
Nationalisation and State Capitalism
In his article Finkelstein assumes that capitalism means a free market economy. But it is possible to have capitalism without a free market. The systems that existed in the former Soviet Union and now exists in China, Vietnam, North Korea and Cuba demonstrates this fact. These class-divided societies are misleadingly called ‘socialist’ in the media. A cursory glance at what in fact exists there reveals that these countries are simply ‘state capitalist’, run by authoritative undemocratic regimes. State capitalism offers the workers nothing but class exploitation.
In supposedly ‘socialist’ Russia, (and earlier as the Soviet Union) for example, there still existed wage slavery, commodity production, buying, selling and exchange, with production only taking place when it was viable to do so. ‘Socialist’ Russia continued to trade under pain of competition according to the dictates of international capital and, like every other capitalist, state, was prepared to go to war to defend its economic interests.
The role of the Soviet state became simply to act as the functionary of capital in the exploitation of wage labour, setting targets for production and largely controlling what could or could not be produced. Socialists therefore feel justified in asserting that such countries had nothing to do with socialism as we define it. In fact, socialism as we define it could not exist in one country alone - like capitalism it must be a global system of society.
Finkelstein does not prove his assertions or conclusion that socialism is a “dead-end”. He does not understand capitalism and the profit system just as his caricature of socialism is deliberately misleading, as one would expect from a professional defender of the status quo. He is totally ignorant of the socialist case put forward by the Socialist Party of Great Britain since 1904.
So, what do we understand by socialism?
Socialism will be a global system in which the means of wealth production and distribution will be democratically controlled by society as a whole. The means of life – land, raw resources, communication and transport systems, factories and distribution points, will be owned in common by the entire community. All human beings will be social equals, freely able to co-operate in running social affairs. No wages or salaries, no banks, no money, no bartering. No such a system has never existed in the post industrialist world.
Finkelstein believes that only “entrepreneurs” can organise and “progress society”. This is an elitist belief. A fundamental principle of socialism is that workers already have the capability of designing, making and distributing what society needs without coercion, leaders or the capitalist class – they’re do this already. This also means that when a socialist majority holds in society, work can politically and democratically replace the profit system for the common ownership and democratic control of the means of production and distribution by all of society.
We are not obliged to draw up a detailed blueprint of socialism. We cannot impose our beliefs onto future generations. We do not know what problems a future society will face. Nor do we know where we are in the history of capitalism. All we do know that there are not enough socialists in the world at the moment.
Finkelstein believes that all “alternatives” to capitalism have been undemocratic but, as we have explained, there have been no ‘alternatives’ to capitalism as socialism can only exist as a worldwide system. It is only socialism that can only be democratic. In socialism there will be no classes. There will be social harmony and community of interest. There will be no coercive State ruling over people’s lives. Under capitalism there is no meaningful democracy because the means of production and distribution are owned as private property by a capitalist minority to the exclusion of the working-class majority.
Unlike capitalism, the purpose of socialist production will be simply and solely to satisfy human needs. “From each according to their ability, to each according to their need” is a defining and long-established socialist principle. It means what it says: that men and women will freely take part in social production to the best of their abilities, and freely take from the fruits of their common labour whatever these needs happen to be.
In erroneously believing socialism is a dead-end, Finkelstein did not consult with us.
Object and Declaration of Principles
The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.
Declaration of Principles
THE SOCIALIST PARTY OF GREAT BRITAIN HOLDS:
1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.
2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.
3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.
4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.
5. That this emancipation must be the work of the working class itself.
6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.
7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.
8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.