A Marxist History of the Police, Part 4. Building the New Institutions of Class Rule – Crime and Imprisonment

By Stephen James Kerr

Today we are publishing the fourth part in a series “A Marxist History of the Police” which 

Part 1: Repression in the face of revolution, examined how the birth of the industrial working class and the tumult of the bourgeois revolutions drove the need for new forms of repression.

Part 2: Experimenting on the Irish, examined how the experiments towards a police force in Ireland by Sir Robert Peel, up to the infamous Peterloo Massacre in 1819.

Part 3: the crisis of the English Bourgeoisie, examines the relative positions of the aristocracy, bourgeoisie and working class in British society after Peterloo in relation to why the police were necessary.

Introduction

It’s received wisdom today that ‘police exist to fight crime.’ But before police existed, crime was fought. But by the early 19th century, traditional definitions of crime and the way they were prosecuted had been rendered outdated and inefficient by the growth of new means of production – the factory system. Before the police were created to control the working class, the legal and punitive framework for such control was firmly established. The police came later. Thus the emergence of the legal framework in which police could operate effectively deserves careful study. Surprising relationships are revealed.

Rationalizing the Law – the better to ensnare the working class

Much is made by some historians of Peel’s sweeping legal reforms of the 1820s. Many have taken them as marking an era of ‘liberalization’ – a word which they lift out of context to imply some sort of socially beneficial progress. There is certainly progressive content in ending the death penalty for petty crimes, for example. But that’s not the whole story. We need to critically examine the reasons which the legal reformists themselves gave for their own campaigns. They are not what one would expect.

The early 19th century legal reformists such as Romilly and Peel speak very plainly about their aims. The English bourgeoisie was with these legal reforms simply acting in its own class interests, creating a legal framework for its rule under a new, industrial system, to which the old ‘bloody code’ constituted just one more fetter on the accumulation of capital. There was absolutely nothing beneficent about it. Rather, the bourgeoisie was further refining its own particular barbarism, just as the factory had refined it, just as the steam engine had magnified it.

Capital crimes during the early phase of bourgeois rule

From the year 1688 to 1800, English law increased the number of capital crimes from 50 odd to more than 200. This period also coincides exactly with the period which we have identified as the ‘primitive’ form of the rule of the bourgeois class. The material basis of this rule was handicraft production under a capitalist system. The political basis of this rule remained under the traditional constitution and the landed gentry. The legal basis of this rule was accumulated ancient precedent. The punitive basis became the death penalty.

The spirit of Puritanism is evident in of some of the crimes for which the death penalty was mandated prior to 1823 – ‘being in the company of gypsies for more than one month’ and ‘strong evidence of malice in a child aged 7-14.’ Surely such moral corruption could not be countenanced to live.

But most capital crimes punished theft of the property of the rich by the poor. In 1723, after the collapse of the South Sea Bubble, Parliament passed “An Act for the more effectual punishing wicked and evil disposed Persons going armed in Disguise and doing Injuries and Violence to the Persons and Properties of His Majesty’s Subject, and for the more speedy bringing the Offenders to Justice.” This became known as the ‘Black Act’, as it was ostensibly drawn up to combat a campaign of game poaching by displaced peasants who blackened their faces with soot to escape identification. The Act added 50 new capital crimes to the statute books.

Portrait of Jeremiah Brandreth, one of the “Petntrich Martyrs” and one of last men in England sentenced to be hanged, drawn, and quartered for treason.

Most infamous among all of the capital offenses was that of ‘Grand Larceny’ which at that time referred to any theft of an item worth more than 12 pence – a shilling, which was a trifling amount. This was the average price of two loaves of bread during the 1700s. [i]

In 1823 the death penalty was removed for various offenses of theft, after a failed attempt in 1810 motivated by Romilly in the House, but which did not pass The Lords. The 1823 reform gave judges discretion as to how to apply the death penalty. It remained mandatory for the offences of treason, murder, counterfeiting, and setting fire to the property of the British Navy.

Readers new to this material might rightly ask – if in 1823 the British government was reacting to various uprisings, conspiracies to assassinate the Cabinet, and the constant threat of a revolution a la Francaise breaking out, how did have time, and why was it inclined to reduce the number of capital crimes? Should it not have increased them instead?

Traditional Loopholes

The key to understanding lies in the traditional practices by which these extreme laws were actually executed. Between 1780 and 1820 there were approximately 33,000 death penalty convictions, but only 7000 executions. Juries and judges found all kinds of ways to either avoid or else commute a death sentence. For an example of avoidance, in cases of Grand Larceny the Jury might demur as to the actual value of the stolen property. A value of 11 pence as opposed to 12 would secure clemency, and save the judge from having to pronounce the death sentence, which could easily spark a riot if the public were outraged by it.

One legal device to grant clemency was something called ‘benefit of clergy.’ This ancient concept exempted clergymen from the rule of secular courts and the common law, in favour of their judgement in ecclesiastical courts under canon law. It dated from the Middle Ages. But as the ecclesiastical courts declined it evolved into a legal loop hole by which first time offenders under threat of the death penalty could be let off in the secular courts. It was widely applied.

The abolition of the ancient and outdated punishments as well as the traditional loopholes was NOT an attempt to make English laws more lenient, but only to make them more efficient and rational, in the service of a new mode of production, and on its emergent system of class rule, which were dependent upon reason, and not upon tradition. The intent of the reforms was not to ‘spare the rod’ but that the laws which actually remained in the books should in fact be applied uniformly, and with all due severity. The bourgeoisie simply required a new and improved rod, as the old one had been broken upon the backsides of the working class over the centuries, and it no longer stung.

Efficiency in punishment

And so we read in the Hansard of 17 February 1813, in which the early attempt at legal reforms of 1810 were being debated. Sir Samuel Romilly stated: (note that in Hansard convention, the recorder describes the speaker in the third person as ‘he.’)

“It would be in the recollection of the House, that in 1810; he had proposed to bring in three Bills; one of which was to repeal the act of king William, which rendered it a capital offence to steal property to the amount of five shillings privately in a shop; another to repeal the act of queen Anne, which pronounced it a capital offence to steal to the value of 40s. in a dwelling-house; and the third, to repeal the act of George II, rendering it a capital offence to steal property to the same amount, from on board a vessel on a navigable river…. he alluded to that which related to stealing property of the value of 5s. in a dwelling-house: and the principle upon which he should propose to introduce this Bill was precisely the same as that which he had before stated, namely, the inexpediency of penal laws existing, which were not intended to be executed…. During these few years it appeared, that the number of individuals committed for this offence, amounted to 188, of whom 18 only had been convicted, and of these not one had been executed. This he trusted would be admitted as a pretty accurate criterion to shew that it was not intended to carry the law into effect against individuals who were found guilty under this statute. The consequence of the law not being executed, as was already stated, was, that where some punishment was deserved, no punishment was at all inflicted, and the offender escaped altogether with impunity. This was an evil which could not exist if the laws were less severe, and a certain but mild, although effective punishment, was substituted.” [ii]

by Sir Thomas Lawrence,painting,circa 1806-1810

The debate in the house moved on to the question of the punishment for high treason, which consisted of “that the criminal shall be drawn upon a hurdle to the place of execution, that he shall be hanged by the neck, and being alive shall be cut down, that his entrails shall be taken out of his body, and, he living, the same shall be burnt before his eyes, that his head shall be cut off, his body be divided into four quarters, and head and quarters shall be disposed of at the pleasure of the king.” It was noted that though this was indeed the official punishment, it had only rarely been carried out to the letter in recent times, with the usual practice simply being that the victim was hung up by the neck until dead, and the corpse was decapitated, as were the Cato Street Conspirators. The law dictated one thing – tradition quite another. Such a brutal execution to the letter of the law was last applied in 1782, to a Scottish republican rebel. It led to a mob scene in which the victim’s ‘quarters’ were themselves hacked to bits by an enraged crowd, a shocking act of barbarism.

The drawing and quartering of François Ravaillac, the assassin of Henry IV of France, 1610.

The Solicitor General, rising to respond to the Honourable Member, stated, quite revealingly,

“…if the obligation of strictly interpreting and literally enforcing the provision of the criminal law were imposed on the judges, no one man would accept an office which would convert the assizes (courts) into shambles.” [iii]

Here we have the bourgeoisie fighting, not for any kind of justice except the justice of their particular class.

The accumulated legal dross of 700 years, and also its ancient barbarism stood in the way of the efficient and effective dispensation of bourgeois justice, which required a rational system which could be universally applied in all cases. Human sensibilities had long shrunk from the application of the grotesque penalties prescribed in the ‘Bloody Code.’ The bourgeoisie longed to rationalize the beheading of their class enemies, even as they feigned horror at the memory of the execution of King Louis of France. This basic schema has informed their political position on most every subject ever since.

In the Parliamentary debate of May 24, 1830 on the subject of the repeal of the death penalty for the crime of forgery, Peel, speaking against the repeal, declared that he “…had endeavoured first to simplify the law, with a view to its mitigation afterwards.” [iv]

Further, he gave an account of the relationship between his legal reforms and the resulting decline in executions which is revealing.

“He found that in the seven years previous to 1822, when he came into office, the number of executions, in England and Wales, was 731, while the number of executions since 1822—that is up to December, 1829—was 433, showing a considerable diminution. The number of executions in London and Middlesex in the former seven years, was 192; in the latter seven years, or during the period that he had been in office, it was 120, showing a diminution of seventy-two. He was afraid that this diminution could not be laid to the account of the diminution of capital offences, as they had been rather on the increase. Perhaps, indeed, the mitigation of the severity of the laws might have encouraged and facilitated prosecutions, and so more capital crimes had been prosecuted, but he did not believe that the diminution of executions could be accounted for by the diminution of capital offences.” [v]

Brougham pointed out the reluctance of the general public to aid English prosecutors, out of revulsion at capital punishment. “One great difficulty was, to induce juries, under the existing law, to convict for Forgery. But the grand difficulty was, to prevail on prosecutors and witnesses to come forward. Even if prosecutors were callous themselves, which was rarely the case, they were surrounded by persons who were not so, and who would dissuade them from prosecuting, lest, in the event of a conviction, the Judge should happen to lean towards severity.” [vi]

The Rate of Capital Accumulation and the Rate of Punishment

The bourgeois class leaned quite heavily ‘towards severity.’ But it was a severity of an altogether novel type.

Fortunately for posterity, and for scientific socialism, the English bourgeoisie became suddenly enamoured with statistics and measurement in the first decades of the 19th Century. It is in part to this new craze for statistical measurement that we owe the existence of documentary evidence for our thesis – that the foundation of the police was in fact, a novel institution of class rule, whose rise coincides with the ascendency of the English bourgeoisie to full enfranchisement and political power.

In 1815, Parliament passed An Act to procure Returns of Persons committed, tried, and convicted for Criminal Offenses and Misdemeanors. This Act required all prisons to submit annual surveys back to the Home Office. The first of these became available in 1818. It’s revealing that before this date, we don’t even know how many prisons there were in England, and neither did the Ministry, as they hadn’t a system to even count them!

The collective ‘Communicating with Prisoners’ has gathered a fascinating set of statistics documenting the ‘prevalence of punishment’ in 19th century Britain. The have measured the number of persons ‘absent in punishment’ in terms of number of persons so absent per 100,000 people, including those transported, imprisoned, and executed. They explain their methodology thus:

“Quantitatively analyzing the composition of punishment benefits from having an encompassing measure of persons absent in punishment. Persons in prison provides a direct, available measure of persons absent in that type of punishment. Executions convert to absence of persons by estimating that an execution creates personal absence for the person’s expected remaining life-years. Banishment (transportation) similarly converts to absence via the length of the sentence of banishment. Absence of persons can then be aggregated across imprisonment, execution, and banishment. The number of persons absent in punishment is larger and less volatile than the flow of persons (executed, banished, imprisoned) into positions of absence (dead, in exile, in prison).” [vii]

And so we can see using the collective’s data that the prevalence of punishment escalates dramatically just as the death penalty falls out of favour, and as British laws are rationalized. Transportation and incarceration rise dramatically, out of proportion to what one would expect if there had been simply a one to one exchange of the punishment of execution for transportation or imprisonment. If such were the case, transportation and incarceration would simply track execution proportionally. Instead, they skyrocket. Here we can see the results of the bourgeois policy of the 1820s and 30s to rationalize the law and the penal system to ensure more convictions, not fewer. The dramatic increase in the prevalence of punishment shows the bourgeoisie ‘flexing its new muscles’ against the rising working class below it – without a police force. This is what class warfare looks like.

Police in their modern form would not be widespread until the 1860s in England. And so we see that police are not some sort of a-historical social ‘requirement’ to prosecute crime, which was prosecuted extremely aggressively long before police were widespread in Britain. Quite the opposite in fact. As the police institution grows, the prevalence of punishment falls for 50 years until the outbreak of WWII. Why this is so we will explore in upcoming chapters.

Profits and Repression – mere coincidence, or coincident relation?

This tremendous rise in incarceration antedates the formation of the London Metropolitan Police, but it coincides directly with a dramatic increase in capital accumulation and the growth in inequality over the same period.

The rate of profit of British industry begins a dramatic rise at the beginning of the 19th century. This is directly attributable to the application of steam power to mechanized industry. But there is another factor at work which most economists do not examine – the enforcement of new relations of production – a political question. First the data:

[viii]

At the same time, labour’s share of GDP begins to fall, even though real wages are rising during the same period.

[ix]

[x]

Despite rising real wages, labour’s share of GDP fell during the same period, and the prevalence of punishment increased. During this period, mechanized production expanded dramatically in England, despite working class resistance.

Could the requirement for a new, more intensified capital accumulation by the capitalist ruling class, arising out of the availability of new techniques of production, also require as a general rule, intensified repression of the working class, by whatever means this could be implemented – to enforce those new techniques – police or no police? Could the requirement for the application of new, labour displacing technological innovations in the economy such as steam power, electrification of production or computerization / automation under capitalism also engender similar effects? Could the police institution constitute a kind of institutional buffer between the ruling class and the ruled, (which had prior to the development of the police been required to face each other directly) to both enforce the extraction of surplus value from the working class as a whole, while at times mitigating the effects of such extraction?

The comparison with US incarceration figures from the later 20th century into the 21st century is suggestive in this regard.

US Corporate Profits

To be clear, the coincidence of these two phenomena does NOT imply causation of one by the other. It would be absurd to claim, for example that mass incarceration is the cause of rising corporate profits, or that the steep rise in corporate profits are the cause of mass incarceration.

Rather both coincident tendencies point to something else. They are actually not causes but rather effects, which point to a third factor, which is more difficult to display as a single line on a graph – the class war waged by the ruling class on the working class, across multiple spheres. The class war is not the result of a mechanical process. It is above all a political struggle, and in the 19th century as today, it was waged by bourgeois politicians and industrial capitalists. The subjective factor – the political action of the bourgeoisie – was decisive. It remains so today.

This class warfare develops historically, acquiring different forms, based upon the development of the productive forces and the balance of class forces, the level of political development of the contending classes, on the specific cultures in which these forces play out, in each period and in each place. Straight line comparisons of conditions in 19th century England and late 21st century America require multiple qualifications. But a case can be made that similar phenomena are at work.

What we can say at this point is that in 1820s England, the emergent bourgeois class was able to generate a massive increase in its profits and also repress the working class – without a police force organized on a mass scale for the repression of the working class. But by late 20th century America, police forces had evolved into one of the primary means by which the working class was disciplined and repressed.

How do we explain the historical development of this phenomenon?

What we can say so far, definitively is this: police as a form of social organization, as a novel institution of class rule, arise historically. The police are not an a-historical phenomenon existing in all societies, above the historical process. Further, the role played by police forces in capitalist society has itself undergone a process of historical development. In 19th century England, the proliferation of police coincides with a 50 year reduction in the prevalence of punishment. Since police are charged with prosecuting crime, and because crime results in punishment, there must necessarily be some relationship between the spread of police forces, and the decline of punishment prevalence. We must therefore separate the fact of the existence of police from the fact of what they actually do, in a given historical and social context. Police roles have evolved, their effects in different historical periods vary, while the police as an institution remain. For example, the racist content of much of American policing today is less prevalent in other historical periods, and absent in many other locales. And yet today there is no shortage of commentators who are keen to tell us that the police constitute ‘a racist institution’ or are ‘founded upon racism.’ Historical materialist analysis refutes such claims as impressionistic and mostly counterfactual.

We have demonstrated that, in part, the social role played by police today was once played by very different people, and answerable to a different social class. Before the police, their ‘social role’ was assumed by various different groups, the yeoman, the night watch, and the army.

Likewise, we now observe that the effect which the police today have upon the working class, and upon the class struggle, was achieved in early 19th century England without the police. The question is how the police developed historically as an institution of class rule peculiar to modern capitalism, and now necessary to it, and of course, why they so developed.

We will explore the relationship between the prevalence of punishment, the class war, and the profitability of capitalist production further as we describe the evolution and development of the police institution in subsequent periods. Before that we need to describe additional measures the early English bourgeoisie was taking to deprive the working class of its traditional means of living. What use would police be without new crimes to prevent and detect?

Criminalizing the Poor

In his rationalization of British law, Peel devised new offences which his improved police would be able to prosecute. Such offenses could only be committed by the working class.

The Vagrancy Act of 1824 criminalized the very existence of the poor and unemployed, or rather the material basis of the existence that the working class had enjoyed prior to industrialism. It is worth quoting at length.

“Every person committing any of the offences herein-before mentioned, after having been convicted as an idle and disorderly person; every person pretending or professing to tell fortunes, or using any subtle craft, means, or device, by palmistry or otherwise, to deceive and impose on any of his Majesty’s subjects; every person wandering abroad and lodging in any barn or outhouse, or in any deserted or unoccupied building, or in the open air, or under a tent, or in any cart or wagon, not having any visible means of subsistence and not giving a good account of himself or herself;every person willfully exposing to view, in any street, road, highway, or public place, any obscene print, picture, or other indecent exhibition; every person willfully openly, lewdly, and obscenely exposing his person in any street, road, or public highway, or in the view thereof, or in any place of public resort, with intent to insult any female; every person wandering abroad, and endeavouring by the exposure of wounds or deformities to obtain or gather alms; every person going about as a gatherer or collector of alms, or endeavouring to procure charitable contributions of any nature or kind, under any false or fraudulent pretence ; every person being found in or upon any dwelling house, warehouse, coach-house, stable, or outhouse, or in any enclosed yard, garden, or area, for any unlawful purpose; every suspected person or reputed thief, frequenting any river, canal, or navigable stream, dock, or basin, or any quay, wharf, or warehouse near or adjoining thereto, or any street, highway, or avenue leading thereto, or any place of public resort, or any avenue leading thereto, or any street, or any highway or any place adjacent to a street or highwy; with intent to commit an arrestable offence; and every person apprehended as an idle and disorderly person, and violently resisting any constable, or other peace officer so apprehending him or her, and being subsequently convicted of the offence for which he or she shall have been so apprehended; shall be deemed a rogue and vagabond…” [xi]

The law was a legal catch-all with which to ensnare and criminalize anyone from whom surplus value could not be extracted. Workers would be dragooned into the factories, or later into the workhouse.

This Act, as quoted above, remains in force of law in England and has been used for 180 years to oppress the poor, gays and lesbians, prostitutes, artists, actors and political protestors. Any person just “milling about” on the street without being able to “give a good account of himself” in the opinion of a police officer risked and still risks arrest as a criminal, or at the very least a body search and interrogation. It’s difficult for moderns, accustomed to being watched, accustomed to obeying authority, to comprehend how oppressive and offensive was this Act to early 19th century English sentiments. It was considered an outrage.  

In 1827 the Malicious Trespass Act created a new class of criminal in “trespassers.” Under English common law, trespass could not be punishable by imprisonment. The 1827 Act changed that. The Act was used to prosecute for damages caused by peasants who strayed onto enclosed lands and knocked down fences to permit their herds to pass through closes between common lands. [xii]

‘An Object of Real Terror’

Transportation to New South Wales and then to Van Diemen’s Land begins to rise exponentially with the return home of soldiers from the Napoleonic Wars. These were founded as penal colonies, instead of prisons for British convicts. This punishment separated workers from their friends and family forever in most cases. Prisoners were first warehoused in ‘the hulks’ rotting ships in harbors where conditions were horrific and unsanitary. Conditions on the transport ships were little better. Many died en route. Once in Australia, the sentenced became indentured servants, first of the government, and then of private landowners. The character of transportation as punishment changed markedly in 1822, with the Report on the Conditions of the Colony of New South Wales by John Thomas Bigge.

Before 1822, Transportees lived better than did the English working class in many instances. They could own property, land, and were free to work for a wage or else for themselves after their ‘government hours.’ Word of this got back to Great Britain, where Lord Bathurst instructed the civil servant Bigge in his commission.  Bathurst: ‘transportation to New South Wales is intended as a severe punishment, applied to various crimes; and as such must be rendered an object of real terror to all classes of the community’.

Bigge set about designing the architecture of such a terror. His report resulted in the sacking of the pervious Governor, Macquarie, whom the British judged to have ‘gone native.’ He was replaced by Brisbane, who implemented all of Bigge’s recommendations. From 1822 to 1834, when slavery was finally abolished in the British Empire, transportees were let out by the government to private farmers as indentured labour. They were no longer allowed to work for themselves. Harsh physical punishments such as flogging and solitary confinement were introduced. And in addition to this, a system of internal transportation was developed. Convicts who could not be pacified were re-transported to penal colonies even further afield, at Moreton Bay or Norfolk Island.

A ‘Salutary terror’

It was during this time of the repeal of the death penalty that some of the most offensive and degrading punishments were devised in English prisons. The traditional punishments were gruesome enough.

Women picking oakum in an English workhouse

One such was ‘picking oakum’ or ‘picking junk.’ The punishment arose in the British Navy, and it was also the work of the poor in seaside villages. Oakum consists of the broken-up fiber of old hemp ropes mixed with tar. ‘Picking oakum’ involved beating these old ropes with a wooden mallet, and then unravelling the twisted rope fibers, embedded in tar, with the bare fingers, and then with the fingernails. It was tedious, dirty work which resulted in bloody fingers, tendonitis, bursitis and repetitive strain injuries. The toll on mental health was also immense. The oakum was used as waterproofing in wooden ships, and as the world’s first naval and seaborne commercial empire, Britain needed a lot of waterproofing. Prison labour provided much of this material.

By the 1820s, oakum picking in prisons began to be supplanted by mechanized punishments, modelled on factory labour.

Primary among these was the tread-wheel. Prisoners were forced to drive a large fan, or rotate a drum, often to no useful purpose, though sometimes the tread-wheels became tread-mills, and prison labour was rented out to mill grain. The main purpose was to degrade and exhaust the prisoner. Many preferred to be flogged.

Sir Robert Peel was a keen supporter of both the tread-wheel and of corporal punishment. In the debate on the Gaol Laws Amendment Bill on Feb 19th, 1824, Peel declared that “I consider the treadmill as an admirable contrivance, and think that no system of labour could be devised so little liable to abuse.” On the subject of corporal punishment, Peel felt that it “produces a salutary terror” which deterred crime. [xiii]

Peel was yet done ‘deterring crime.’


[i] http://www.johnhearfield.com/History/Breadt.htm

[ii] UK Parliament. Debates. 17 February, 1813. In Hansard : https://api.parliament.uk/historic-hansard/commons/1813/feb/17/sir-samuel-romillys-criminal-law-bills

[iii] ibid

[iv] UK Parliament. Debates. 24 May, 1830. Forgeries Punishment Bill . In Hansard. https://api.parliament.uk/historic-hansard/commons/1830/may/24/forgeries-punishment-bill#S2V0024P0_18300524_HOC_91

[v] Ibid.

[vi] Op. Cit. Brougham, speaking the same debate.

[vii] https://www.acrosswalls.org/section/gender-imprisonment/punishment-sex-ratio/punishment-trends/

[viii] Allen, Robert C. Capital Accumulation, Technological Change, and the Distribution of Income

during the British Industrial Revolution, Nuffield College New Road, Oxford OX1 1NF

Department of Economics Oxford University, 2005. https://ora.ox.ac.uk/objects/uuid:ee5e13de-74db-44ce-adca-9f760e5fe266

[ix] Allen, Robert C. Capital Accumulation, Technological Change, and the Distribution of Income during the British Industrial Revolution, Nuffield College New Road, Oxford OX1 1NF

Department of Economics Oxford University, 2005. https://ora.ox.ac.uk/objects/uuid:ee5e13de-74db-44ce-adca-9f760e5fe266

[x] Allen, Robert C. Capital Accumulation, Technological Change, and the Distribution of Income during the British Industrial Revolution, Nuffield College New Road, Oxford OX1 1NF

Department of Economics Oxford University, 2005. https://ora.ox.ac.uk/objects/uuid:ee5e13de-74db-44ce-adca-9f760e5fe266

[xi] http://www.statutelaw.gov.uk/content.aspx?activeTextDocId=1029462

[xii] Cases in the King’s Bench, Looker vs. Halcomb, 1827.

[xiii]  The Opinions of Sir Robert Peel, Expressed in Parliament and in Public, page 287.




A Marxist History of the Police, Part Three: the crisis of the English Bourgeoisie

By Stephen James Kerr, 14th September 2020

Today we are publishing the third part in a series “A Marxist History of the Police” which examines the balance of class forces in 1820 Britain. To understand the emergence of the police, an appraisal of the relative positions of the working aristocracy, bourgeoisie and working class in British society after Peterloo is necessary.

Part 1: Repression in the face of revolution, examined how the birth of the industrial working class and the tumult of the bourgeois revolutions drove the need for new forms of repression.

Part 2: Experimenting on the Irish, examined how the experiments towards a police force in Ireland by Sir Robert Peel, up to the infamous Peterloo Massacre in 1819.

“I have never seen a class so deeply demoralised, so incurably debased by selfishness, so corroded within, so incapable of progress, as the English bourgeoisie. and I mean by this, especially the bourgeoisie proper, particularly the Liberal, Corn Law repealing bourgeoisie.”

FRIEDRICH ENGELS

“Such were the difficulties of the bourgeoisie, even at the beginning of its career; it needed the people yet feared them, and wanted to keep the Monarchy as a check against democracy…”

CHRISTOPHER HILL

The Aristocracy – A Portrait of a Rotten Class

England. 1820. “The King is dead. Long live the King.”

George III, mad, bad and unable to rule since 1795 has finally passed away and left the Crown to his eldest son. George IV is fat, gluttonous, a lecher, drug addicted, and deeply unpopular. He inherits an unstable political situation smoldering with insurrection. He will expire ten years later on the eve of a social and political revolution like the social class he led— bloated, blind and broken.

A Voluptuary Under the Horrors of Digestion 1792: Jame’s Gillray’s brutal caricature of George, Prince of Wales encapsulates the effects of uncontrolled self-indulgence upon the heir to the British throne.

Immediately beneath the corpulent King rested a mostly idle aristocratic layer of inherited rank. The aristocracy could sense that it’s once unquestionable social position was now socially questionable. Its once immense wealth was now less immense. Its former potency was declining into limp impotence. Where once the country rang out with cries of ‘Church and King’ it now rang out with ‘Equal Representation.’ Where once its thousand-acre estates were the finest in the county, some were now dwarfed by a merchant’s tacky pile. Where once the peasants and workers had bowed down, they now rose up. This reality was too much to bare.

It was thus in the 1820s that the British aristocracy slowly began its retreat from life, which continues to the present day, into a senescent fantasy world, cultivating its own specially accented English, refining its already fine manners to sharp points only to be cut by them, gazing at its self-inflicted wounds with innocent astonishment. Yet, the aristocrats still clung to their arrogance, as it floated, suspended in mid-air. It held them up, above the real world which was thriving, but dirty.

While the merchant classes could read, invest the money of the landed aristos in their joint stock companies and return fat profits, the bourgeois would never be able to speak properly. And so, in the 1820s, the landed gentry began to float away, above society, powered by elongated vowels, crisp consonants, and daddy’s money. Yet this dead social class maintained its grip upon Parliament, the Lords, the Church, the growing bureaucracy, and upon political legitimacy.

Beneath this old crust of ‘old corruption’ there was not one, but two vital, powerful social forces rising up. The first of these was the bourgeoisie.

The Unfinished Bourgeois Revolution

The fraud of social position allocated by birthright had been debunked by Thomas Paine‘s “The Rights of Man” two generations previously. But the hereditarian lie was being written into history by the bourgeois class itself. Through their subordination of the emergent working classes in the factories, the capitalists ‘created’ the new wealth of the industrial revolution. At least they controlled it. Britain had become the world’s first capitalist empire, even if most capitalists had no vote in 1820. But they lacked complete control of the statewhose traditional forms of organization were no longer suited to advancing the growth and productivity of the new industrial system. This is the key to understanding the emergence of the police as a social institution of modern bourgeois rule.

English Civil War recruitment wooden print

The initial, primitive forms of the rule of the English bourgeoisie had been established after the English Revolution of the 17th century. For a time, the institutions established by this first revolution, occupying the space created by the smashing of the old institutions, permitted the emergent capitalist class to expand its wealth, power and influence. It’s important to note that the economic transformations which gave birth to the first English bourgeois revolution and the Civil War, were “changes in land ownership, and in the volume of production rather than in the technique of production. So the changes had no revolutionary effect on society as a whole.” [i] It was the expansion of trade and industry “within a given system of technical equipment” [ii] which first propelled the English bourgeoisie towards political power in 1642. But it could not go all the way. The bourgeois revolution was unfinished, to the extent that the economic basis for the bourgeoisie as a politically independent social class was only then emergent. Production was limited by technique to the level of handicrafts. The low level of the productive forces at this time necessitated that the English bourgeoisie make a political accommodation with the traditional ruling class, which it did when it invited Charles II to return as King. The results of this accommodation remain with us to this day.

It was the industrial revolution of the 1700s which formed the material basis for the rule of the bourgeoisie as a politically independent social class, which required new institutions of class rule. These new institutions would serve the ends of the bourgeoisie – the accumulation of capital and maximization of profits.

There were many obstacles in the way of the most optimal social conditions for the maximization of industrial profits. These took the form of various ‘traditions.’ Workers and peasants had too many traditional holidays, and these varied regionally. The enclosure of the common lands was still incomplete, though ongoing. By 1820, the rapidly growing government bureaucracies were traditionally run and staffed based on a patronage system; and responsible variously to the King, to local gentry, or else to a government Minister. Local customs and traditions meant that methods applied to managing the same task in one county, might be completely alien to those applied in the next. The traditional allocation of seats in Parliament meant that industrial towns producing much of Britain’s wealth had no representation. The wealthy shopkeeper or factory owner had no vote. In terms of police functions, the local yeomanry traditionally assigned the task of keeping the peasants and workers in line owed their allegiance to the local squires who were their landlords, though by 1820 the Yeomanry in the industrial towns were shopkeepers. But the shopkeepers made poor horsemen compared to the landed aristos. The military regiments tasked with repressing riots owed their allegiance exclusively to the Crown. This leant policing a local, particular, and simultaneously political character.

In contrast to this traditionalist localism, industrialism in production cut across all traditions, creating social and economic conditions of a universal character. The universal signifier of value was now money. The universal arbiters of technique in production were now the laws of physics and chemistry. It is absurd to consider ‘local tradition’ in the smelting of iron, or the spinning of cotton, or the manufacture of pins, for example. The scientific rationalization of production, combined with the price mechanisms of the market, destroyed the material basis for all such local, irrational practices; and this market rationalism destroyed the practices themselves. Anyone who stuck to ‘the traditional means of manufacturing pins’ for tradition’s sake, was destined to be stuck on the pin of economic ruin.

Despite their inefficiency, forms of social and political organization conducted outside of the industrial process, hung on ‘long past their sell-by date.’ It was the escalating conflict between the drive for bourgeois profits, and the dead weight of the traditional political / social organization, which shaped class conflict of late Regency England, to the Great Reform of 1832 and still later. The systems of political organization which had liberated the emergent capitalist class in 1640, had by 1820 come to be known by the epithet, ‘Old Corruption.’ They were no longer suited to a new economy that produced not only a mountain of new wealth, but a novel social class with its own emerging set of interests—the working class. The Bourgeois were themselves driven to create their own novel institutions of class rule because there was a new and powerful force rising up below their feet, and they wished to suppress and control its power. The profitable accumulation of their own capital depended upon it.

The Working Class emerges: into the ‘dark satanic mills”

Lancashire Cotton Mill 1835

Imagine the sheer horror that the first displaced cotton weavers must have felt when they entered Noah Arkwright’s steam powered industrial cotton mill in 1790.

They would have been formerly semi-independent producers, working in the relative comfort and security of their own home under the ‘putting out’ system, where a tradesman supplied them with the raw material to spin and weave into cloth, for which he then paid them on a piece rate basis. Having at least a measure of control over the terms of their own labour, they would have felt relatively secure in their small cottage, perhaps cultivating a garden on lands held in common. They had once taken pride in their craft, the work of their own hands, over which they had control and of how and when to deploy their skills. They occupied a relatively secure, although low social position, the same one occupied by their ancestors. People so situated could feel themselves to have a ‘stake in the country’ and were not motivated to question the established order, of which they felt themselves a part.

Potato Planters by Jean-Francois Millet

But no more. New machinery combined with capitalism and steam power to put an end to that way of life by rendering its economic basis obsolete.

Crossing the factory gates, once proud people were reduced instantly to the condition of slaves. What ‘pride’ could they feel in the work of standing at a machine loom for 12 to 14 hours per day, repeating a single step in the production process fifty thousand times? How horrifying was the dark, dusty and dangerous factory, where one could lose a finger, a hand or be burned to death by steam? The constant anxiety of the industrial worker of 1790 can scarce be imagined.

And yet the factory was also the worker’s only means of subsistence. Hell was also salvation. Outside the factory gates lay starvation, and there was in 1820 a lot of starvation. A surplus of workers waited to take the place of anyone injured or dismissed from factory labour. When we try to imagine this reality we get some sense of one of the meanings of the English word ‘reduced.’ One is reduced from something else to the status of a ‘worker.’ One is transformed from a feeling human being into an interchangeable cog in an immense and impersonal machine which spat out not only immense amounts of cotton, iron and other goods, but fabulous monetary profits. The whole purpose of their work and thus their life had been transformed. People could be set to work at anything at all on this new basis.  Cotton cloth, iron or ceramics – the very things in which the workers once took pride – were likewise reduced. They became just the ‘thing in the middle’ of a mechanical process that converted a small pile of money into a far larger pile of money. They now labored to produce not cotton cloth, not pig iron, not coal, not ceramics but only money – for the industrial capitalist. The skills of their hands were useless. They experienced raw alienation.

The factory owner – the first cop on the beat?

Acceptance of these new, unimaginable conditions of work, also required the application of force against the workers in the factory itself. The first generation of industrial workers were accustomed to a far more leisurely pace of work in handicrafts or in the fields. The old habits were sometimes literally beaten out of them by overseers. Failure to follow ‘the rules’ could result in instant dismissal and impoverishment. There was always another starving wretch eager  to step in to take their place. Thus were formerly peaceful people set at war against each other, and against their own will.

It was also the participation of the workers in the new work process itself which transformed their consciousness. The discipline of the machines set the pace of work for each worker. If a single individual were to stop work or slow their pace, the whole line of production might be stopped. The machines might ‘jam up.’ Workers thus became the servants of machines, which were the first targets of their outrage. The penalty for ‘machine breaking’ was death.

The other aspect of this process was that early individual capitalists became the direct enforcers of ‘timed labour discipline.’ The standardization and rationalization of the worker’s labour time was entirely novel, and fiercely resisted, and so required that the workers be supervised and watched over at every turn. The first ‘cop’ in history was thus not one of the Bow Street Runners, nor was he a Yeoman. The first real beat cop was a bourgeois factory owner, walking the rows between machines with his eyes peeled for any delinquency.

In this sense the bourgeois factory owner or his overseers directly took on a policing role of every aspect of the worker’s productive life: what time they arrived and what time they left, if they spoke or not, if they took a break, how they moved and performed their tasks. Where previously, labour hours had been under the craftsman’s own control, now their behavior was dictated to them on a timed schedule.

For the first time, working people came face to face with their ‘rulers’ on a near constant basis. Previously the craftsman only rarely, if ever, had to endure face to face dealings with the nobility, who would never have dreamt of standing over the worker, telling him or her how to do their job.

Cartoon by Robert Cruikshank of children being beaten entitled “English factory slaves: Their daily employment”.

As the social bonds of tradition and locale were broken, new bonds were forged. A factory might employ hundreds of people from many different counties, speaking with different local dialects. People who would never have met or related to each other before now shared a common social experience of extreme exploitation, brutality and oppression.

A working class movement with bourgeois demands

This shared experience of industrial production in the ‘Satanic Mills’ transformed what had once been groups of strangers from the verdant hills of different counties, and later from different countries, into a single social class. But this process took many decades. By 1820 the differentiation of the workers as a social class was still in its development. The working class was not yet truly advancing its own demands.

The Peterloo demonstration was powered by the anger of the emergent working class, but mostly took up the political demands of the bourgeoisie. The demonstration was supposed to take the form of the mock election of Henry Hunt as MP for Manchester, a borough unrepresented in Parliament. A successful farmer turned orator and an advocate of radical democratic reform during the Napoleonic Wars, Hunt was a talented speaker who regularly appealed for annual parliaments, universal suffrage, and the reform of parliament’s ‘rotten boroughs.’ In all of these demands, the specific interests of the working class were submerged. The efforts of the demonstration’s organizers to keep the action within the bounds of the existing laws – the law they were protesting – was famously noted.

Samuel Bamford, one of the organizers, wrote,

“On the bank of an open field on our left I perceived a gentleman observing us attentively. He beckoned me, and I went to him. He was one of my late employers. He took my hand, and rather concernedly, but kindly, said he hoped no harm was intended by all those people who were coming in. I said “I would pledge my life for their entire peaceableness.” I asked him to notice them, “did they look like persons wishing to outrage the law? were they not, on the contrary, evidently heads of decent working families? or members of such families?” “No, no,” I said, “my dear sir, and old respected master, if any wrong or violence take place, they will be committed by men of a different stamp from these.”” [iii]

Immediately after the Peterloo Massacre, middle-class Radicals circulated a petition to display solidarity with the protestors. The petition publicly declared that the protest was peaceful and condemned the violence exercised by the yeomanry. After collecting the signatures the petition was printed in this pamphlet form, shown here, in 1820.

Despite the many outrages of industrialism, the unfinished nature of the bourgeois political revolution had the effect of keeping working class demands confined to the fulfilment of that revolution. It would not remain so.

The crisis of the bourgeoisie – caught in a vice between two classes

The bourgeois of 1820 understood his own situation more clearly than did the worker. With the benefit of a classical education, and an historical perspective informed by a reading of the scholarship of antiquity, the bourgeois factory owner judged even a little democracy to be a very dangerous thing indeed. Cicero, Thucydides and Plato all agreed: Plebeian power had been the destruction of Athens and Rome. So the English bourgeoise was placed in the grip of a political vise. Faced with a more powerful social class aspiring to power beneath it, and a decadent social class above it, the English bourgeoisie joined forces with the landed aristocracy. This was a social layer with whom the bourgeois had longstanding, deep economic relationships. Thus the English bourgeoisie took its place as the managerial head of the English mixed constitution, leaving in place the superstitious majesty of ‘The Crown’, all the better to befuddle the workers.

And so we read in a history of British Conservatism that, “The predominant Conservative strategy since the Revolutionary Wars may be characterized as ‘Peelite’ – that is to say a cautious adaptation to change, an eschewance of hard reaction…” [iv]  Why the seeming ‘eschewance of hard reaction’? It is because the bourgeoisie transformed ‘hard reaction’ into a permanent social institution in civil disguise.

 We call that institutionalization of ‘hard reaction’ the police.

 While the class standing at the head of production in 1820 found itself still politically disabled, a new class was rising below it, demanding its own power. The class standing at the head of the state was no longer the economically productive class. Such a situation could not be long maintained.

 The rising British capitalist class was not driven to overthrow and smash the old aristocracy of blood, as the far less developed French bourgeoisie had done. Whereas the French bourgeoisie was compelled to overthrow the absolutist order which excluded it from access to state power, the English bourgeoisie became the vital aspect of the traditional state, over a period of 200 years. It is this crisis of the English bourgeoisie which leads directly to the development of the police.

 The bourgeoisie was politically dependent upon the aristocrats, but economically dependent upon the labour of workers. The workers were accustomed to riot in the streets in defense of their economic and political rights. They were accustomed to far friendlier conditions of life. The aristocrats were accustomed to cut the workers down in the street with swords if they rebelled. The bourgeoisie had no direct control over the means of repression of the new working class outside of the factory system, where they exercised total control. Further, the kind of worker they required – disciplined, and devoted to their employer’s betterment, was a rare commodity. Real human beings with unpredictable, inconvenient needs and wants got in the way of the production of profits. These would have to be disciplined into the kinds of workers the bourgeois class required to produce profits. Finally, the constant agitation of the working class for equal representation such as American and French workers enjoyed, threatened to erupt into revolt which could displace the bourgeoisie from its position. This had to be stopped.

 As a result of this economic, political and social crisis, the English bourgeoisie thus came to require a novel institution of class rule – police.

 Peterloo had put the whole problem of how to manage the rising working class into stark relief.

1819 print depicting the Peterloo Massacre

The traditional means of violent repression had backfired, creating mass outrage, which threatened not only the peaceful accumulation of profits, but the constitutional political order which facilitated such accumulation.

 The traditional means of organizing such repression was not responsible to the bourgeois class. The traditional means reported to the aristocratic land-owning class and the King.

 The traditional means of repression were also a patchwork beyond the control of any central agency, unlike a factory, in which all means were directed towards a single end and by a single owner.

 Finally, the bourgeois owner needed a social institution to discipline the worker outside of the factory gate, in a manner similar in form, if lesser in degree and frequency, to that power which disciplined his own workers inside of those gates. They needed not just to create new piles of money, but also new piles of men; men who would be perfectly suited to creating new piles of money.

 The bourgeoisie found its fortune in the factory by rationalizing craft skills on a scientific basis into a system of mechanized production, thus creating a universal pattern which could be replicated elsewhere. It took a similar approach to the creation of its institutions of class rule.

 The bourgeoisie wanted to create a means of social organization and class rule that could be replicated based upon formulas analogous to the plans for an industrial machine. They sought to create new institutions of class rule which could be assembled from a set of plans, just like a machine, in order to pump out the norms of bourgeois class rule anywhere on earth, like filthy water sprayed out of a hose. A combination of laws, both representational administrative and punitive, were developed with one aim – to solidify the rule of the English bourgeoisie. But this class rule would function within the political framework of the traditional constitution, which stood by, mostly harmless and neutral, above the real action. This was ‘hard reaction’ institutionalized with a civil veneer.

 This form of class rule would also have a profoundly conservatizing effect on the political orientation of the English working class, to the advantage of the bourgeoisie.

 The bourgeoisie was faced with a political and organizational question – how to maintain their rule, once they assumed their proper place as the co-managers of the English mixed constitution? What social institutions would need to be established that would give bourgeois rule over the workers full expression? More than any other single figure, Sir Robert Peel set about creating the institutions of bourgeois rule in the United Kingdom. These included various legal reforms, Catholic emancipation, reform of the bureaucracy, a reformed Parliament which granted the vote to the bourgeoisie, and the creation of the police. All of these will be explored in the next chapter.

And finally, one further thought….

 This analysis has political implications for our own age. The English bourgeoisie had staged an abortive revolution in the English Civil War. The economic accomplishments of that revolution were realized in the war and subsequently, while the political conquest of the English state by the bourgeoisie took another two centuries to realize. We must now ask, what are the political implications following from the economic transition from the outmoded nation-state system to that of a globally integrated social production driven by the coordinated labour power of working people? What political and historical tasks are yet to be realized? The answer is all of them. The potential leap forward in social development by the political realization of the existing economic power of the working class on a world scale is staggering to imagine.

It is our task to complete the revolution.




Support the Leon Trotsky House Museum Appeal

8th September 2020

An appeal for funds has been made by Leon Trotsky’s grandson, Estaban Volkov, to support the Leon Trotsky House Museum. The Museum requires urgent funds because it has been closed to the public since March because of measures taken to limit the spread of Cov-19.

A significant part of the museum’s income (from ticket sales, the cafeteria and the giftshop) has dried up, putting a large strain on its ability to remain open.

Esteban in an audio message stated:

Comrades and friends, warm greetings from the Museums general director, Esteban Volkov. We’re going through difficult times with Covid-19, and we need the support of all our comrades and friends, to preserve this valuable historical site where 80 years ago the great Marxist Lev Davidovich Bronstein was struck down in the revolutionary struggle. Luckily, many comrades continue to carry forward his valuable teachings and ideas, which are today more alive than ever.

The Leon Trotsky House Museum is a unique institution dedicated to preserving the legacy of the great Russian revolutionary in the house where he lived and worked, with his wife Natalia and his grandson Esteban until his assassination in 1940.

The appeal is being conducted through the International Marxist Tendency (IMT) who launched the “Support the Trotsky House Museum!” appeal on August 21st on their “In Defence of Marxism” website. A week later they published an update “Great Success for the Trotsky Museum Appeal” stating over seven thousand euro’s had been raised but more funds were needed to ensure the ongoing survival of the museum.

Both Stalinist and capitalist forces have been united in their desire to obliterate Leon Trotsky’s ideas and political legacy from the consciousness of the working class, through a combination of slander and omission for almost a century. This appeal is part of the ongoing efforts of Marxists to ensure that not only is Trotsky’s Museum House preserved but that the living struggle of Trotskyism is maintained. Trotskyism is indeed the Marxism of the 21st Century! Classconscious.org is proud to do what we can to support this important appeal.

Donate to the appeal at the IMT website here.




A Marxist history of the police : Part 1 – Repression in the face of revolution

by Stephen James Kerr, 10th August 2020

Today we are publishing the first part in a series “A Marxist History of the Police”. Part 1 will examine how the birth of the industrial working class and the tumult of the bourgeois revolutions drove the need for new forms of repression.

Part 2 will deal with experiments towards a police force in Ireland by Sir Robert Peel, up to the infamous Peterloo Massacre in 1819.

Part 3 will examine the growing movement for the vote in the aftermath of Peterloo, and reveal how the demands of the workers for suffrage was bound up with the creation of the police. 

Introduction: The “mailed fist” and the “velvet glove”.

A global movement has sprung up in the wake of the police murder of George Floyd in Minneapolis. This multi-racial movement has brought millions of people into the streets with various demands, ranging from reforming police forces to disarming and defunding them. Black Lives Matter (BLM) has framed the problem of the police exclusively in terms of racism. For BLM, the police exist simply to impose ‘white supremacy’. For BLM, police violence expresses the pervasive ‘structural racism’ embedded within the entire white population, across all social and class lines. Such a view of the police serves to minimalize their actual repressive function, and divides society along a racial rather than class basis.  If we are to see how this system of divide and rule works, we must be especially wary of racialist ‘solutions’ to the problem of police violence. The notion that police forces can be reformed to be ‘non-racist’ isn’t only non-workable, it drives a wedge where the ruling class wants it- between black and white workers. If some black workers and the black middle class can be appeased by sensitivity training programs, more black officers, or merging police forces with social welfare agencies – all of which have been proposed – and, if white workers come to believe that they must shoulder the burden of guilt for the racist violence of white cops, then it will be very difficult for black and white workers to come together and question the very existence of police as an institution, and almost impossible to call into question the continued existence of capitalism, the source of both racism and of police violence. This is precisely the outcome the ruling class wants, and therefore the one we must prevent at all costs. 

If we examine the history of police forces and how they were first created, we begin to see a different picture than that painted by BLM. Modern society was not always policed as it is today. When we consider the history of how police forces were created, a more complex picture emerges. In fact, there were no centralized police agencies in the English-speaking world prior to 1829. First invented in England, they were exported to Canada, the US, and throughout the British Empire. Why they were invented, and how they came to exist in their present form aren’t mere historical curiosities, but rather constitute crucial political questions of contemporary relevance. 

The British capitalist class responded to the great bourgeois-democratic revolutions in America and France and to the rise of the industrial working class in two ways. On the one hand the British elite developed centrally controlled, uniformed police forces, while offering limited, piecemeal reforms to the middle class on the other. While the police were to be deployed against the most militant section of the workers, the better-off sections of workers and the middle class were presented with reforms the better to bind their interests with those of the existing system of class rule. 

If the police are the ‘mailed fist’ of the capitalist state, reform is the ‘velveteen glove’. Both means are deployed with one aim: to split the working class, and prevent its political unification. The more privileged sections of the working class must be convinced they share the same interests as their class oppressors, while the other sections can be ignored, or violently repressed as needed. To be  ‘legitimate’, these processes must bear the imprimatur of democratic consent. For policing to work, the public must permit itself to be policed

This is the story of how and why that permission was obtained. 

The ruling class didn’t suddenly weave this strategy out of whole cloth. It was arrived at by trial and error, and in the face of massive internal and external resistance. In the long run, the combination of mailed fist and velvet glove has proved extremely effective for our rulers. If we, the working class majority, are to unite to destroy the system of class rule once and for all, we need to understand how this system operates to maintain itself.

 This introduction to the history of ‘the police’ will deal with how the English ruling class and the working classes responded to the American and French Revolutions and English policing in the half century from 1749 until 1800.

The industrial revolution and the birth of the working class.

 18th century England was covered by a patchwork of localized ‘police’ institutions, with varying standards and responsibilities, and no accountability to any centralized authority. Each town or parish organized its own ‘night watch’ comprised of local volunteers. These were mainly concerned with thieving, which was then a capital offence. Otherwise it was the responsibility of an aggrieved party to privately use the courts to bring alleged criminals to public justice. The night watchmen could be variably corrupt, lazy or otherwise incompetent. 

In times of civil unrest, the state called upon either the army or the ‘yeomanry’ – small landowners, or minor gentry, who owned horses to form ad hoc mounted, armed brigades- which could be called upon to impose force on insurgents, usually peasants, but later workers and tradespeople. It was common for rebels to be cut down with swords or shot. Treason was punished with being hung, disemboweled, and then cut into four pieces while alive. Petty theft was a capital crime. There was little due process of law for any but the wealthy. It was a brutal society.

Bow St Runners – circa 1800

 Henry Fielding, author of the novel Tom Jones, established London’s first private police force, the ‘Bow Street Runners’ in 1749. Operating out of the Bow Street magistrate’s office, Fielding’s was a private agency of eight men, who also received payments from the government. Their primary day-to-day activities consisted of pursuing thieves. They were also involved in monitoring political opposition.

The material basis of growing political opposition to the British government was the growth of the immense new productive forces of industrialism, and the extraction and accumulation of unheard-of surpluses from colonial plunder in India, the Caribbean, Africa and North America. Prior to the period of mercantilism and rising industrialism, peasant farmers and small trades people had produced the vast majority of wealth in England on the land with the surplus appropriated by wealthy landowners. This formed the basis of the wealth of the landed gentry, who sat atop a political system that justified and preserved their place. 

The industrial revolution of the middle 1700s created new classes of wealthy merchants and then wealthy industrialists. These developments also created an immense new social class – the working class, out of peasants and craftsmen displaced by these new inventions, and who had no means to live but by the sale of their labour power. 

 In his introduction to ‘The Condition of the Working Class in England,’ Engels noted:

With these inventions… the victory of machine-work over hand-work in the chief branches of English industry was won; and the history of the latter from that time forward simply relates how the hand-workers have been driven by machinery from one position after another. The consequences of this were, on the one hand, a rapid fall in price of all manufactured commodities, prosperity of commerce and manufacture, the conquest of nearly all the unprotected foreign markets, the sudden multiplication of capital and national wealth; on the other hand, a still more rapid multiplication of the proletariat, the destruction of all property-holding and of all security of employment for the working-class, demoralization, political excitement.” 

England’s 50 years of riots

Though they created much of 18th century England’s wealth, the emergent social forces were barred from participating in official political life. The vote was restricted to the landed gentry. But the common people reserved to themselves the right to comment on politics. Expression of popular opinion was very important in 18thcentury England, with the proliferation of newspapers and political cartoons. The people also reserved to themselves the right to riot in the streets. 

Without an official channel to express their opinions, violent riots involving masses of people were the only real means for the common folk to make their views known. Street unrest was far more common in 18th century England than today. 

A newspaper account from The London Gazette of October 8, 1763 describes how traditional journeymen silk weavers “and a great number of other evil minded persons, masked and disguised, and armed with Cutlasses and other dangerous Weapons, assembled at different Hours of the Day, and also in the Night-time, about the Houses of several other journeyman silk weavers… and in a most outrageous and riotous manner, broke open said Houses, and cut and destroyed the silk works in the looms…” Workers without the vote did not bother their MP. They took the streets, and often, over many issues, not only such labour actions. 

The political system in Britain was unsuited to respond to the displacements of industrialism. It remains to this day a relic, which had been pieced together over the previous 800 years. The Glorious Revolution of 1688 had, to a certain extent, subordinated the King to Parliament, resulting in what Blackstone refers to as a ‘mixed constitution’ containing elements of monarchy, aristocracy and democracy embodied in the institutions of ‘King, Lords and Commons.’ This notion had a pedigree going all the way back to Aristotle and Cicero, but it was fitted to a static, agrarian society which industrialism was beginning to tear apart. 

A political explosion – the American and French Revolution

The American and later the French revolutions exploded the happy slumber of England’s mixed constitution. The mass sympathy which the American revolution evoked in the English common people first caused the British aristocracy and wealthy classes to react, and to contemplate the formation of a centralized police force. 

Historian Tom Mackaman summarizes the intellectual ferment:

 “The American Revolution was a product of the Enlightenment—that period of discovery emerging from the darkness of the medieval world-view that had seen in all that existed the unchanging work of God. Defying the wrath of the church, natural philosophers—scientists such as Copernicus, Galileo and Bruno—began to question the natural world. Simultaneously, political philosophers such as Hobbes, Spinoza, Locke, Voltaire and Montesquieu began to ask questions about the social order. What was the nature of sovereignty? Why do Kings and parliaments rule? Or, as Rousseau put it, why is it “that man is born free, and yet everywhere is in chains?” 

The Declaration of Independence and the book, Common Sense by Thomas Paine posed that question squarely to the embryonic English working class. These caused an immediate ferment in Europe, and sparked immediate sympathy with workers across Europe.

It’s worthwhile to quote briefly from the Declaration, whose most crucial, revolutionary passage is known to billions of people today:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

The notion that the ‘consent of the governed’ was required for any government to be considered legitimate was a radical new idea in 1776. Still more radical, was the claim that the people have the right to ‘alter or abolish’ governments with which they disagree. But it was an idea that was increasingly appealing to the British merchant class and the then embryonic working class, which had already been in political sympathy with the plight of the colonies for years.

“The merchants of the City of London and of other expanding citiesof the new middle class in England identified their own interests closely with those of the colonists. The London press, almost without exception, was the voice of this class. With the introduction of the tax on the colonists’ trade in molasses and sugar in 1764, the London Chronicle at once reported from the west coast port of Bristol, which dependedon the American trade, that “the principal merchants of the city intend to support with all their interest the independent free trade of the American colonies.” 

The Gordon Riots by John Seymour Lucas

In 1780, at the height of the US War of Independence, unrest broke out in London and the government lost control of the streets for several days. The ‘Gordon Riots’ erupted out of a cacophony of demands of the poor, for political representation, much of it couched in anti-Catholic prejudice in this instance. Their targets were not the Catholic poor but rather ‘persons of high station.’ Regiments of the British Army put down these riots, with several hundred rioters killed. In the immediate aftermath of these riots, bills were brought forth to establish a system of centralized policing on the French model which was notorious in England for its repressiveness. Still even an apprehended insurrection at home and the loss of the colonies in North America could not forge enough support in the Commons to pass such measures. But demands for the vote were growing, inspired by the revolt of the Colonies. 

The storming of the Bastille July 14th 1789

The years 1789 to 1791 were crucial for the further development of English radicalism. The French Revolution, and the execution of the Bourbon King, threw up yet another question mark over the English Constitution. The French Revolution offered a universal Declaration of the Rights of Man, which consciously reached beyond the borders of France, as a challenge to every single crowned head of Europe. It is worth quoting from:

1. “Men are born and remain free and equal in rights. Social distinctions may be founded only upon the general good. 

2. The aim of all political association is the preservation of the natural and imprescriptible rights of man. These rights are liberty, property, security, and resistance to oppression. 

3. The principle of all sovereignty resides essentially in the nation. No body nor individual may exercise any authority which does not proceed directly from the nation. 

4. Liberty consists in the freedom to do everything, which injures no one else; hence the exercise of the natural rights of each man has no limits except those which assure to the other members of the society the enjoyment of the same rights. These limits can only be determined by law. 

5. Law can only prohibit such actions as are hurtful to society. Nothing may be prevented which is not forbidden by law, and no one may be forced to do anything not provided for by law. 

6. Law is the expression of the general will. Every citizen has a right to participate personally, or through his representative, in its foundation. It must be the same for all, whether it protects or punishes. All citizens, being equal in the eyes of the law, are equally eligible to all dignities and to all public positions and occupations, according to their abilities, and without distinction except that of their virtues and talents. 

This went far beyond the American Revolution. The English ruling class was horrified. Following on from the French Revolution, the slave uprising in Sainte Domingue (now Haiti) in 1791 further threatened British imperial conquests in the Caribbean by disrupting markets for sugar and slaves, and drew political sympathy in the English working and middle classes for the insurgents. The movement to abolish slavery in England was at its height. 

Revenge taken by the Black Army for the Cruelties practised on them by the French”. Illustration by British soldier and self-admitted “admirer of Toussaint L’Ouverture” Marcus Rainsford

The Haitian revolution radicalized the anti-slavery movement in England, lending it a decidedly republican character, and caused the British government to cool on ending the slave trade. The publication of The Rights of Man by Thomas Paine that year sent further shockwaves through British society, as Paine called upon the British to rise up and establish a democracy as had just been done in France. As republican political clubs formed in London, Paine’s works, printed in cheap penny editions became the most widely read books after the Bible. 

Response to revolution – The velvet glove of reform

The British ruling class also established a ‘respectable’ society to advocate for very limited parliamentary reforms, ‘The Society of Friends of the People’ led by Sir Charles Grey and Sir Charles Fox. Here we begin to see the strategy of co-optation emerging. This was not a popular organization, but a private gentlemen’s debating club. Membership cost the not insubstantial sum of two gold Guineas per year,, and one could only become a member by being nominated by other members. Unsurprisingly, this society disavowed any support for republicanism. 

Fired by Paine’s writing, and inspired by the quickening of the French Revolution, the London Corresponding Society was established in 1792 to agitate for parliamentary reform, and the extension of suffrage to all working people, including women. Its membership and activities spread rapidly across the country. This was a indeed a popular movement. 

Membership in the LCS was open to all who agreed with the statement that “…the welfare of these kingdoms require that every adult person, in possession of his reason, and not incapacitated by crimes, should have a vote for a Member of Parliament.” Its members were tailors, glaziers, hatters, carpenters and other craftsmen, or to Edmund Burke “the lowest vulgar.” 

Where Paine’s ideas promised liberty and bread for the working classes and independent tradespeople, Edmund Burke prescribed that “Patience, labour, sobriety, frugality and religion should be recommended to them; all the rest is downright fraud.” 

The LCS in contrast, according to Burke “audaciously assumed the task of watching over the transactions of Parliament, and of limiting the boundaries to its powers, threatening destruction if it dared to transgress them…. The Corresponding Society had laid before the Constitutional Society a scheme for calling together a convention of the people, manifestly for the purpose of dissolving the government and lodging the supreme power in their own hands.” 

Response to revolution – the “mailed fist” of the hired mob

Still wedded to traditional modes of thinking, the British aristocracy set about forming ad-hoc associations to repress the new revolutionary ferment – riot vs riot. 

The Association for Protecting Liberty and Property Against Republicans and Levelers was formed late 1792, and quickly spread across the country, mobilizing violent mobs in support of ‘Church and King.’ A dictionary definition from 1795 openly suggests there was a direct link between the Associations and the British Government. “Mob – Church and King, – a species of regular militia, kept in pay by the Ministry, for the protection of property against Levelers and Republicans.” This was the alternative to police. 

According to E.P. Thompson, “a mob was a very useful supplement to the magistrates in a nation that was scarcely policed.” The mobs persecuted reformists and their supporters. In one instance, a “leading Jacobin was ‘tied in the saddle of a dragoon’s horse, whilst the mad and bigoted populace stuck pins in his legs.” And in another, “houses of reformers were broken open and persons dragged out, halters were put on their necks, and they were plunged into the muddy waters at the side of town.” 

 According to the Association’s pamphlets, “The press daily produced malevolent writings, in which the Constitution was calumniated, and every sanction of Society was attacked; all ranks, but especially the lower, were inflamed by insinuations of grievances, the soldiers and seamen were tempted from their duty, the artisans and labourers were made dissatisfied with their fate of honest industry… All were instructed to regard the present Establishment as an oppression, and excited to follow the example of France in setting up Equality of Ranks and Liberty without any bounds.” 

 
Ruling class panic at the execution of Louis leads to the suspension of civil rights in England

Inspired by the progress of the revolution in France, in 1792 and ‘93 republicans organized ‘The British Convention’, to which Burke referred above. It held two meetings, both in Scotland where mild proposals for parliamentary reform were put forward, and greetings to the group were read out from the United Irishmen, and also from republicans in Wales. The meetings had been infiltrated by agents of the British government, which was panicked by the execution of King Louis on 21 January 1793 by the National Convention of France.

Prime Minister, Sir William Pitt, suspended Habeas Corpus and charged  leading members of the LCS with sedition and treason. The traditional punishment for this crime underlines the panic of the Pitt government.

E.P Thompson relates how the penalty for Treason was “that he should be hanged by the neck, cut down while still alive, disemboweled (and his entrails burned before his face) and then be beheaded and quartered” and how, unable to stomach the penalty, the jury acquitted the LCS leaders to the jubilation of the London citizenry, if not His Majesty’s government.

While the government made use of terrorism and violent unreason in the streets, it made full use of violent reason in the Commons and the Courts. The Terror of the French Revolution has been mythologized in direct proportion to the extent the terror of the English counter-revolution has been buried. Consider the various repressive measures undertaken by the British government against its own people:

Mass meeting of 100,00 at Copenhagen House – satarical cartoon by Gilray

Habeas Corpus was suspended in 1794 in order to effectively suppress the movement for a Constitutional Convention of the “swinish multitude.” This did not stop the agitation. Demonstrations for the vote continued to mount. On October 26th, 1795 (after a very poor harvest which resulted in famine) a demonstration of more than 100,000 assembled at Copenhagen Fields where it was proposed to organize “the whole nation… combined in one grand Political Association.” Thompson relates how, “A remonstrance was addressed to the King. ‘Whenceforth in the midst of apparent plenty, are we thus compelled to starve? Why, when we incessantly toil and labour, must we pine in misery and want?” 

Three days later King George’s carriage was stoned on its way to the opening of Parliament. The government responded with two Acts that made such demands and demonstrations illegal. The Treasonable Practices Act made it high treason to “within the realm or without compass, imagine, invent, devise or intend death or destruction, or any bodily harm tending to death or destruction, maim or wounding, imprisonment or restraint, of the person of … the King.” This act set English liberties back to the Dark Ages before Magna Carta.

Stoning of the King’s carriage as depicted by James Gilray (1795)

The Seditious Meetings Act restricted public meetings to no more than 50 people. To hold a meeting of any size on a political topic, permission from a magistrate had to be obtained. In 1798 the Newspaper Publication Act restricted the printing of newspapers. In that same year, the Bow Street Runners were expanded. Finally, in 1799 the government passed the Combinations Act, which forbade groups of working people from organizing together in trade unions to improve conditions and made strikes illegal. The Seditious Societies Act forbade political institutions organized on a national basis, directly targeting any future growth of corresponding societies. 

 Thus by 1800 the English ruling class by the stroke of their pens had destroyed the popular freedoms, out of fear of the English people themselves. This situation could not last forever. The following 30 years would see even greater social upheavals leading to the first parliamentary reforms, and the formation of ‘the police’ to contain any further democratic aspirations of the people. 

It is only through and open and robust discussion scientific socialism, ie Marxism has developed. Classconscious.org would like to play its role in developing such a culture again. We are attempting to foster debate by publishing articles that may not fully align with the position of our editorial collective.




Marx’s Theory of Crisis and the Current Economic Crash

by Robert Montgomery 14th July 2020

“Why is the world financial system in crisis? First in 2008 and now in 2020 we have seen the world plunge into the worst financial crisis since the Great Depression with incalculable economic and political consequences. Marx’s work has a theory of economic crisis that explains why capitalism is inevitably convulsed by the boom and bust cycle and all the chaos that entails. This article aims to provide a brief introduction to Marx’s crisis theory. It begins with a brief overview, before examining Marx’s view that crises arise from the drive for an ever higher productivity of labor, which leads to a crisis of profitability. The tendency to crisis is rooted in the exploitation of living labor which is the lifeblood of capitalism. This article attempts to summarize Marx’s theory of the economic cycle and why periodic crises happen.”

General Overview

For Marx the process of capital accumulation leads eventually to an overaccumulation, or overproduction of capital. More capital accumulates in the hands of the ruling class than can be reinvested to yield a sufficient mass and rate of profit. This decreased profitability gives rise to a financial crisis. The circuit of capital is interrupted at many points. Creditors call in loans, hike interest rates, and choke off credit. The financial crisis leads to the devaluation of capital in many forms: writing off existing loans, lowering share values, allowing currencies to fall in value, business closings, unemployment, falling wages, and an overproduction of commodities.

We will start with a review of Marx’s theory of value, survey some objections to Marx’s claim, and then apply the theory in a more concrete way to describe how crises actually happen.

The Theory of Value

Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish. Every child knows, too, that the masses of products corresponding to the different needs require different and quantitatively determined masses of the total labor of society….  Science consists precisely in demonstrating how the law of value asserts itself.”  Marx to Kugelmann 1868

To understand crisis we have to start with the labor theory of value. In Capital v.1, Marx argues that the commodity has a dual nature— it is both a use value and an exchange value. If a commodity had no use for us, there wouldn’t be a demand for it. Because use values are qualitatively distinct, they lack a measurable relation to each other that would allow them to exchange in any proportion. Nevertheless, every useful commodity must be exchanged for other commodities. Exchange implies a common component that is quantitatively measurable, or commensurable. This common component is labor time. The value of commodities is determined by the average labor time expended in their production. Marx called this the labor time socially necessary to produce something at a given time and working at the level of skill and technology in use. Commodities exchange on average at this value.

This holds true for labor power, the only commodity owned and sold by the working class. Different from all other commodities, labor-power is the only one that adds new value to the material it works with. When labor-power is applied to other commodities— machinery and raw materials for example— it adds labor-time to them, which is the measure of value. If labor power is the only commodity that the mass of the working class owns and sells, then what is its value? Like other commodities, the value of labor power is determined by the labor time necessary for its production. For labor power this is the value of the basket of consumption goods needed to keep the worker alive and able to return to work the next day, and to live at the level of culture achieved by the working class in a given country. An expectation of what is needed to keep a worker going differs from one society to another. The expectations and requirements to reproduce the labor of a worker in Detroit and a worker in Mumbai are different. The value of labor power is therefore lower in some countries than others. The value of labor power is governed by the cost of reproducing the laborer, not by the value of the product itself.

We can think of the working day as divided into two parts. The first part is necessary labor time, the period during which the worker produces value equivalent to the cost of reproducing his or her labor power. This labor time is less than the length of the working day. The other part of the working day is surplus labor time. This is the unpaid part of the working day in which surplus value is produced. Surplus value is the source of profit.

Necessary labor time is only one part of the working day. If I work until I produce enough value to equal my wages, I could clock out at noon. Capitalists purchase labor to make a profit. If I only earn the value of my wages, the employer has no reason to hire me. So the value of labor power is less than the value the worker adds to the mass of products produced. The remainder is surplus value the capitalist accumulates as profit. Labor power generates surplus value because a portion of the worker’s labor time is unpaid. In the course of accumulating capital, competition forces capitalists to increase the productivity of labor, enabling more to be produced in less time. The most obvious way of doing this is by introducing new and more advanced machinery. This reduces the time needed for the worker to produce a commodity. The average labor time needed to make a product lessens, and the value of the commodity falls. The first capitalist to introduce a newer technique makes a windfall profit as the more cheaply produced commodities sell on the market either at the previous price, or below it. As more products are produced in a given time, less time is needed for the worker to generate enough value to cover his or her cost of living. Therefore, the part of the working day that makes up the necessary labor time is reduced. While the necessary labor time falls, the surplus labor time expended during a working day rises proportionately, and the capitalist’s profit increases.

Capitalism therefore has an intrinsic drive to increase labor productivity by raising the level of technology used in production. In Marx’s terms, there is a drive to raise the proportion of constant capital (machinery and raw materials) to variable capital (living labor). This boosts the share of profits of the more productive capitalist. To stay in business, competing capitalists in the same branch of production must introduce the same innovation, removing the short-term advantage gained in the market by the first capitalist. But at the same time, something very important has happened. The proportion of capital invested in living labor has fallen relative to the proportion spent on machinery and raw materials. So the constant capital has risen in proportion to the variable capital. Marx calls this an increase in the organic composition of capital, or simply c/v.

Long term trend of increase in the Organic Composition of Capital

This tendency has important consequences for the system of profit generation. Marx established that the source of profit is surplus value, the unpaid labor-time of the worker. Since only the worker produces surplus value, it is only the investment in variable capital that generates profit. The constant capital— machinery, buildings, raw materials and semi-finished goods used — are themselves products of wage labor. A capitalist earlier in the production chain has already pocketed the profit from the surplus labor expended in their production. The constant capital does not add extra value to products that did not exist before; it just transfers stored value to the new product as its value slowly depreciates with each cycle of production. It is only variable capital, representing human labor power that creates new value.

Imagine a Foxconn factory producing smartphones. By increasing the productivity of labor, new technology allows the same labor force to make more smartphones per hour. As the socially necessary labor time embodied in each item falls, the value of each smartphone decreases relative to the value of the competitor’s phones, and Foxconn makes a more profit than its competitors. The new technology appears to have increased value generation, but it has simply transferred the value created by the original labor used to make the new machines. As time goes by, the new machinery keeps transferring its value to new products, and slowly depreciates in value itself. Because it merely transfers the value stored in it to new commodities, Marx called this constant capital because its value remains unchanged. The process recurs as a continual drive to increase labor productivity by introducing new technology, or expressed in value terms, by increasing the constant capital employed in production. However, this process does not simply occur in a single smartphone factory but across all capitalist production, including in the factory that made the machine, which increased Foxconn’s productivity in the first place. This expresses a general tendency in capitalism for constant capital to increase in proportion to the variable capital, although the variable capital is the sole factor creating new value.

Overaccumulation of Capital and the Falling Rate of Profit

 Law of the tendency of the rate of profit to fall

In every respect the most important law of modern political economy and the most essential for understanding the most difficult relations. It is the most important law from the historical standpoint. It is a law, which despite its simplicity, has never before been grasped and even less consciously articulated.” Marx, Grundrisse

At the most abstract level capital is self-expanding value. In the process of self-expansion capital goes through a series of different forms. The general formula is M-C-M:

Money buys commodities in the form of means of production and labor power
● Means of production and labor power combine to produce commodities for exchange in the market, which when sold yield profit
● Profit appears in the form of an expanded sum of money that is then re-invested to return even more profits.

In the process value has expanded. To accumulate the additional value as profit, capital appropriates unpaid labor (surplus value or “s”), the only source of profit. It’s essential to keep in mind that this process occurs through the exchange of commodities in the competitive market. Competition drives capitalists to constantly invest in more productive technology in order to appropriate more surplus value than competing capitalists. The effect of constantly rising productivity of labor under capitalism is the replacement of living labor by machines. Under capitalism this happens in a manner that intensifies the exploitation of the workers rather than abolishing it. As Marx explains in volume three of Das Kapital:

This mode of production produces a progressive relative decrease of the variable capital as compared to the constant capital, and consequently a continuously rising organic composition of the total capital. The immediate result of this is that the rate of surplus value, at the same, or even a rising, degree of labor exploitation, is represented by a continually falling general rate of profit. Later we will see why this fall does not manifest itself in an absolute form, but rather as a tendency toward a progressive fall. Therefore the progressive tendency of the general rate of profit to fall is just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labor. This is not to say that the rate of profit can’t fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production it is thereby proved a logical necessity established that in its development the general, average rate of surplus value must express itself in a falling general rate of profit. Since the mass of employed living labor is continually on the decline as compared to the mass of materialized labor set in motion by it, i.e. to the productively consumed means of production, it follows that the portion of living labor, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus value to the value of the invested total capital forms the rate of profit, this rate must constantly fall.”

Thus, as the proportion of capital invested in variable capital (living labor) falls in proportion to that invested in constant capital (dead labor), the proportion of total investment that generates a profit must decline. The build up of constant capital— fixed capital in machines, buildings, computer technology, software etc., as well as the circulating elements such as raw materials and semi-finished components— rises in proportion to living labor. The result is a tendency for the rate of profit to fall. The rate of profit is not the mass of profit generated in capitalist production, but the mass of profit relative to the level of investment. It is not the case that the mass of profit necessarily falls as the rate of profit falls. On the contrary, increased productivity boosts the mass of profit by expanding the scale of production. However, as productivity increases, capital becomes more centralized and concentrated, and dead labor increases relative to living labor. The worker now has more machinery at his or her elbow as the ratio of constant to variable capital constantly increases. So, as productivity rises, the organic composition of capital rises and the rate of profit falls. 

Graph showing the long term trend to falling rates of profit over last 150 years

The Boom- Bust Cycle

Capitalism is subject to periodic cycles of expansion and contraction. These are periods in which production and economic activity rise and fall. In the rising phase of the cycle profits increase, capital increases, and the rate of profit rises. But over the course of the cycle, capital starts to overaccumulate and the tendency for the rate of profit to fall kicks in. At a certain point in the boom phase of the business cycle, the next round of investment cannot generate a sufficient rate of profit to make it worthwhile to invest in new means of production. As the profit rate falls, investors withdraw their capital from a particular branch of production causing plant closures and lay offs. Or, they withdraw money capital from the financial system, causing a credit crunch. Or, they demand much higher interest for loans, causing bankruptcies and more credit problems. Or, they boost prices for fuel, food and other consumption goods. Wages are cut, unemployment increases, jobless workers put pressure on existing wage levels and workers’ standard of living falls everywhere.

This pressure on profit rates results from the overaccumulation of capital discussed previously. Because profit rates come under the most pressure in sectors with the highest organic composition of capital (those with the highest productivity, in which constant capital is highest in proportion to variable capital), the average rate of profit falls and new capital investment is deferred. The profitability crisis engenders a search for more profitable outlets for capital investment. Overaccumulation of capital at home drives the export of capital to less developed, lower wage countries where higher profit rates can be found because of lower levels of technology in use. It also drives capital into the financial markets to speculate in share values, or complex financial instruments like derivatives, credit default swaps, or into securitized investment vehicles like subprime mortgage bundles, or into commercial property speculation, and into the ever more reckless use of credit to keep the system afloat. Ultimately, it leads to the emergence of widespread forms of fictitious capital that are not related to the underlying value of real commodities.

There are factors that can offset the tendency for profit rates to decline. Marx called them “countervailing tendencies” acting to delay the tendency of the rate of profit to fall. In the absence of these counter tendencies capitalism would be in a permanent slump of ever falling profitability. David Harvey denies that the falling rate of profit causes crisis, arguing that the countervailing tendencies offset the general tendency. For Harvey, the tendency for profit rates to fall doesn’t cause crisis. On the other hand, the tendency suggests ways for capitalists to extract even more profit. In Capital v.3, Marx directly contradicts Harvey’s claim. And a growing body of empirical evidence presented by Marxists like Michael Roberts demonstrates that these tendencies cannot offset falling profit rates indefinitely. In the long run, the law asserts itself against the resistance of the counter factors. The tendency itself is the driving force while the counter tendencies are secondary attempts to restrain the law. Through the operation of these counter-tendencies, breakdown turns into temporary crisis, so that the accumulation process is not something continuous but takes the form of periodic cycles.

As noted above, due to the over-accumulation of capital and falling profitability, the boom phase of the business cycle turns into a bust phase. Falling investment results in recession:

● overproduction appears as monetary demand for commodities shrinks
● goods go unsold as inventories pile up
● production contracts causing a sharp rise in unemployment
● the weakest firms go under.

Money capital advanced on the assumption of yielding high returns is exposed as worth much less than anticipated. A credit crunch follows as bank loans and financial assets are revealed to be massively overvalued. The process of capital circulation comes to an abrupt halt, and the system seizes up as if gripped by a sudden heart attack. A traumatic process of devaluation of capital ensues. Different fractions of the capitalist class fight amongst themselves as to who will bear the costs. This does not take place in the abstract, or just on paper but across the world, affecting the lives and living conditions of millions.

A capitalist crisis is a violent and destructive process. Currencies are devalued, debts are called in, weaker countries have their credit lines frozen (i.e., Greece).  Both the rate and the mass of profit fall and employers frantically seek out “excess” capacity to dump. Eventually, as less competitive capital is devalued, and constant capital is bought up on the cheap by the dominant firms, the rate of profit recovers, capitalists begin to reinvest in cheaper plant, machinery and workers. A recovery begins and the cycle begins anew.

How robust the upturn will be, or how quickly crisis and recession recur, depends on how successful the dominant monopoly capitalists are in making both the weaker capitalist countries and the working class pay the price of the crisis. And there can be strong resistance to this. But the answer ultimately depends on how much capital is devalued over the course of the crisis.

No Recovery after Twelve Years?

Why has there has been no sustained recovery from the financial collapse of 2008? In the space available, only the most cursory answer can be given. The falling rate of profit and the increasing concentration and centralization of capital can help illuminate the failure to recover, as well as the cause of the crisis itself.

The world economy remains in the doldrums as levels of investment remain about 25% below pre-crisis predictions for the most advanced economies. Following the Second World War the average rate of profit was 15%; in 1980, it was 10%; and, today it is stuck at 5%. Even former Treasury Secretary, Larry Summers, refers to the period following the crash of 2008 as “secular stagnation.”

Over 50% of bonds in US market are now “junk bonds”.

Instead of clearing out dead capital, the system was put on life support. The government spent trillions of dollars bailing out banks and financial firms and purchasing toxic assets like corporate junk bonds and securitized sub-prime mortgages. Additional trillions of dollars were pumped into the central banks through quantitative easing policies, injecting a stream of ultra-cheap credit into the system. After all that we are now in another major depressive crisis, triggered by the COVID19 pandemic. This led to another multi-trillion dollar bailout of finance capital, and a half-trillion dollar handout to major corporations in the recent CARES Act. Official monetary policy is now “QE forever”!

Celebrations on Wall Street after CARES Act passed as stockmarket “feasts” on covid deaths.

A far greater devaluation of capital is required to pave the way to a new boom. The scale of capitalist firms, their interpenetration with the state and the financial system, and the transnational nature of capitalist finance, combine to render such a painful process more difficult than in past slumps. For example, 20% of non-financial US corporations are “zombie firms”, kept alive by continual infusions of new credit from banks at near zero interest rates. It must be stressed that we are not witnessing a final breakdown of capitalist production. It is still possible for areas of the world economy to expand, but it’s difficult to foresee a return of the high profit rate expansion of the ‘90s, to say nothing of a return to the sustained boom and 15% profit rates of the post-war “Golden Age.” In the years ahead we are likely to see either prolonged stagnation, or an even deeper economic crisis.

20% of non-financial US corporations are “zombie firms”, kept alive only by continual infusions of new credit from banks at near zero interest rates.

Another very real prospect is war. While the ruling class lacks the understanding of its own system to pursue war as a devaluation mechanism to destroy unprofitable capital, the imperialist world becomes more unstable and volatile. As the global crisis ratchets up tensions between rival powers, the nationally domiciled ruling classes vie to shift the burden of the crisis onto one another to garnish whatever share of the available surplus value they can. New economic powers like China have entered the world market demanding their own share.

The relative decline of US economic hegemony from 30% of global GDP in the post-war years to less than 20% today increases the danger of war. However, with over 35% of global arms spending, the US remains the most dangerous and predatory imperialist force in the world.

“Adam Tooze in his book “Crashed: How a Decade of Financial Crisis Changed the World” writes, the “financial and economic crisis of 2007-2012 morphed between 2013 and 2017 into a comprehensive political and geopolitical crisis of the post–cold war order”—one that helped put Donald Trump in the White House and brought right-wing nationalist parties to positions of power in many parts of Europe. “Things could be worse, of course,” Tooze notes.  “A ten-year anniversary of 1929 would have been published in 1939. We are not there, at least not yet. But this is undoubtedly a moment more uncomfortable and disconcerting than could have been imagined before the crisis began.” 

Conclusion

If we could imagine away the capitalist social relations of production, we could visualize what the dominant ideology obscures: improved technology and rising labor productivity should lead to a reduction of necessary working time. Mechanized production would free workers from the division of labor enforced by the law of value to become the planners of production, distribution and consumption. We would work as few or many hours as desired. But for this to happen the world working class would need to transfer ownership of the means of labor from the private property of a privileged few, to the social property of the vast majority of humanity. At the present moment of existential danger to which capitalism has brought humanity, it is fitting to end an article on his theory of crisis, by recalling Marx’s words on the historical tendency of capitalist accumulation in the 1st volume of Kapital:

Karl Marx 1861

One capitalist always kills many. Hand in hand with this centralization, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labor-process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labor into instruments of labor only usable in common, the economizing of all means of production by their use as means of production of combined, socialized labor, the entanglement of all peoples in the net of the world-market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working-class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.”

Glossary

Constant capital (c) = Means of production (fixed capital) and raw materials (circulating capital)

Variable capital (v)=  Cost to the capitalist to purchase labor power to produce the commodities paid in wages

Surplus value (s) = The value labor expends to produce commodities over and above its own value in wages paid

Rate of Surplus Value (s/v)= The ratio of the surplus labor time, which the producing class works without pay, to the necessary labor time they need to maintain their standard of living. Also called the rate of exploitation

 Organic Composition of Capital (c/v)= The “organic composition of capital” is ratio of the value of the materials and fixed costs (constant capital) embodied in production of a commodity to the value of the labor-power (variable capital) used in making it. Also called the ratio of dead to living labor

The Rate of Profit (s/c+v)= Profit as a percent of the total capital invested in production. ROP = S/C+V

It is only through and open and robust discussion scientific socialism, ie Marxism has developed. Classconscious.org would like to play its role in developing such a culture again. We are attempting to foster debate by publishing articles that may not fully align with the position of our editorial collective.




How did we get here? The threat of fascism in the US

History will not forget the US President striding out of the White House – waving a bible – after ordering the beating and gassing of peaceful protesters to clear his path. If the horror of watching George Floyd die was not enough, now we have seen the iron fist of the US ruling-class shoot, gas and brutalise tens of thousands of protesters across the entire country. The question we must answer is how did the US get here? How did we end up with a fascist in the White House overseeing the declaration of virtual martial law? The answer does not lie in the personality of Donald Trump, but in the crisis of capitalism.

The rotten door of US democracy

 In November 2016, US bourgeois-democracy was already a “rotten door” waiting to be kicked in. The rot was evident with the stolen election of 2000. Then came the 911 events; a US equivalent of the Reichstag fire. It justified the ‘War on Terror’ with the US Patriot Act, the invasions of Afghanistan and Iraq, the rendition and torture at Guantanamo, the war against whistleblowers like Julian Assange, NSA surveillance and Barack Obama’s “Terror Tuesdays” which decided who the US government should extra-judicially murder, including US citizens.  Meanwhile, in the name of stopping terrorism and protecting human rights abroad, the US escalated its interventionist rampage in the Middle East, Africa and Central and South America. Invasions, coups and sanctions overturned and subverted governments at the cost of millions of lives. These attacks on democratic norms were carried out with the support of both capitalist parties, Democrat and Republican.

President Obama watches a live stream of the execution of Osama bin Laden in 2011

That the gutting of the US constitution and the drive to authoritarianism in the US has been a bipartisan project points to the essential class forces at work. As US imperialism faces challenges to its global hegemony with its economy weakening, it is driven ever closer to policies of total war and dictatorship. As the Russian revolutionary, Leon Trotsky, warned in 1928, “In the period of crisis the hegemony of the United States will operate more completely, more openly, and more ruthlessly than in the period of boom.

However, the same class processes are driving the working class ever closer towards launching a struggle for revolutionary socialism. The ever-increasing gap between rich and poor, the daily struggle of the majority to survive, the growing threats from climate chaos and ecocide, increasing state/police violence, and the opposition to the growing threat of world war, all push the working class into struggle. The ruling class understands this objective process and is adopting ever more dictatorial forms of rule at home. Therefore, for both domestic and international reasons, the US ruling class is moving to throw off the shackles of democratic forms of rule. 

Fascism – an international project for US imperialism

In 2014, the Obama government supported a right wing coup in Ukraine that installed a government which included neo-Nazis. This demonstrates how US imperialism is not just moving to the far right at home. It is consciously seeking to foster fascism and the far right abroad to advance its global aims.  Far right governments have been fostered notably in Brazil, Poland, Hungary and India. Manoeuvers to shift the Australian ruling class to the far right are evident in the parliamentary coup against Malcolm Turnbull in 2018. The Trump Administration’s support for Brexit can also be seen in this context. 

Trump and Modi at a “Howdy Modi” Rally, Texas 2019

Fostering a network of far right and fascist allies is part of US imperialism’s rearranging of the global cards – to ensure that when it does decide to move militarily against another ‘Great Power’ ie Russia or China, it will have the full support of allied powers ready to suppress their own working classes’ opposition to war. Though the Democrats have supported this process – with advisers like fascist geostrategist Steve Bannon, Trump has far more explicitly aimed to create an international “movement” of the far right in preparation for World War 3.

Fascism comes home to the US

By the time of the 2016 US election, a section of the US ruling class decided it wasn’t enough to foster a network of allied fascist powers – these tactics needed to be ‘brought home’. Billionaires such as Robert Mercer worked with forces like Bannon at Breitbart News to whip up fascist politics online in a movement known as the “alt-right”. Murdoch had Fox News spewing out his filth daily. The Koch brothers had their networks and money flowing into the project of shifting the Republicans ever farther to the right. Sheldon Adelson was looking for candidates to further his far-right, Zionist agenda. Intelligence connected forces like Betsy Devos’s brother, Erik Prince, were actively working in the background.

During the 2016 primaries, Trump blustered onto the scene guided by Nixon-era dirty trickster, Roger Stone. The proto-fascist MAGA movement quickly became their chosen instrument. It should be remembered that Mercer originally backed Ted Cruz in 2016, but switched to Trump. They had found their man.

On election night, November 2016, the rotten door of bourgeois rule hung by a thread as a fascist was installed as President. To those who question this notion, I ask which part of fascist ideology and perspective does Trump not fit? He is rabidly anti-socialist, openly supports fascist violence and paramilitaries, expresses the desire to rule for life, has contempt for the rule of law domestically and internationally, defines dissent as treason, has massively expanded the concentration camp system for immigrants (of course with the support of the Democrats), and uses Islamophobia and anti-semitism to animate his base and divide the working class. He has put fascists in key positions in the White House, such as Steve Miller and Steve Bannon.

However, having a fascist president does not transform the US into a fascist state instantly. The US wasn’t then, and isn’t now, under a fascist form of government. Trotsky wrote extensively on the threat of fascism in the 1930’s, and remains essential reading for anyone wishing to understand the threat of fascism. Fascism is more than just dictatorship, or even police terror. It is an authoritarian political system with a clear class aim.  Under fascism, not just the revolutionary left but all civil society and independent organizations, and all forms of working class organizations such as unions and social democratic parties are crushed. The working class must be forcefully atomised to head off the threat of socialist revolution. 

Trotsky wrote that a defining element of fascism is the development of a mass based movement based on “all the countless human beings whom finance capital itself has brought to desperation and frenzy.” In Italy, Mussolini used his Black Shirts, then in Germany Hitler used his Brown Shirts as a battering ram against the working class on the road to power. Once in power, Mussolini incorporated his Black Shirts into the Italian Army. Once in power, Hitler murdered the leaders of the plebeian Brown Shirts in the “Night of the Long Knives” in 1934. These forces were not needed once they had full control of the state apparatus of violence. 

Hitler greeting Brownshirts in Bavaria 1932

Trump has been attempting to follow the old fascist playbook, but rather than repeating itself, history rhymes. Trump has had an advantage over Mussolini and Hitler. He gained control of the executive at the very start of his political career. He has, therefore, been implementing a dual strategy of building a fascist base, both within and outside the executive office — before, during, and after the election itself.

Trump has worked to do this outside the executive through ongoing MAGA rallies, open support for Nazi and fascist militias, and by cultivating support among reactionary evangelicals ie. his recent ‘bible’ walk at the ‘President’s’ Church. The network of fascist far-right media outlets continues to build its ‘Fuhrer cult’. Whilst it is clear that these forces are very much in the minority in the US, they still number in the tens of millions. 

Trump at MAGA rally in 2016

Within the executive Trump openly appeals to fascist sentiments within ICE, the military, police and other armed bodies of men within the state. The police rampage across the US in response to the Black Lives Matter protests demonstrates the success that Trump has made in animating reactionary layers in the security forces. 

Sixteen year old Brad Levia Ayala shot in Austin by police while standing still on a hill

Fascism by a thousand cuts….

Even Germany did not become fascist overnight. The Weimar Republic eroded for years, as the economic crisis in Germany, and internationally developed. Just as the Democrats in the US have facilitated this process, the SPD (Social Democratic Party) in Germany played a thoroughly rotten role. The Enabling Act of 1933 was simply the death blow of Weimar.

Even after being handed the Chancellorship by President Hindenburg in 1933, Hitler had to move incrementally to institute a full fascist dictatorship. Likewise, Trump is not kicking in the “rotten door” in one go. He has continually tested the water to undermine constitutional rule by degrees. He overturned Congress’s ability to control funds with his national security decrees to fund the border wall which the World Socialist Web Site has described as a “Rubicon” moment. The 1st Amendment was shredded with the arrest of Assange on Espionage charges. He has sought to throw off all oversight of the Executive by the Legislature, claiming “executive privilege” to stop his administration giving evidence to both Congressional committees, as well as to the Impeachment process. His lawyers have  argued in court  that whatever actions the President takes are legal by definition. He has tried to assert full Presidential control over immigration by attempting an explicit ban on immigration from Muslim majority countries.

Truump at El Paso rally Feb 2019

However, Trump has now come up against the limits of expanding his current power constitutionally. Trotsky wrote that the bourgeoisie (the ruling class) as a whole has an ambivalent attitude to fascism: “The big bourgeoisie likes fascism as little as a man with aching molars likes to have his teeth pulled” eg an unpleasant but necessary process. Whilst the logic of the class crisis drives the bourgeoisie ever closer to needing the services of fascism, it holds out as long as possible before staking it’s last card on it. And it will not do so until social democracy and bourgeois-democratic forms of liberal rule have completely exhausted their capacity to sow illusions in the working class. Entrusting the “committee of management” of the capitalist state to the hands of an erratic, vulgarian, gangster fascist like Trump is risky. Recall that within a decade of the German ruling class handing power to Hitler, conservative generals were trying to blow him up!

Armed fascists on the steps of the Michigan State House

However, we see an emerging dynamic as Trump moves to deploy his incipient extra-Parliamentary movement, as well as his personal control of the Executive, as he comes up against constitutional limits. During April, Trump asserted an unconstitutional right to override state-based shutdowns to manage the COVID19 pandemic, but he received pushback from Democratic governors in places such as Michigan. Trump, on behalf of Wall Street’s homocidal “back to work” drive, and with the support of the capitalist press, was able to mobilize his lumpen, enraged petit-bourgeois base to bludgeon the Governors into line.

We have seen Trump come up against resistance to his unconstitutional assertion that he can override state governors and put the US military directly on the streets. This came in the form of push back from former Defense Secretary, “Mad Dog” Mattis, and a retired generals revolt. They were clearly articulating that a section of the ruling class do not think the time is right to “drown the working class in blood” and assert full fascist rule. Trump has been able to mobilise his fascist base in the police and other security forces to shoot protestors, but he has come up against definite limits. We shall see if, moving forward, Trump relies further on right wing terrorist violence from extra-parliamentary forces to overcome this resistance in the coming period in the run up to the November election.

Would a Democrat victory in 2016 made things different?

At this point, it’s worth entertaining a counterfactual exercise. Looking at the class forces that Trump and Clinton rest upon, how might Trump and Clinton have behaved if the election result in 2016 had been reversed? 

Then-Sec of State Hillary Clinton, and the -New York City Police Commissioner at New York Stock Exchange Sept 9, 2011, Justin Sullivan/Getty Images

Clinton was clearly the preferred candidate of a section of Wall St and the intelligence agencies. She would have continued their agenda of increasing social inequality at home and imperialist war abroad. She represented a faction which wanted to move aggressively against Russia before turning to China. Her government, in order to do this, would have had to continue the twenty year degradation of US liberal democracy in the form of militarizing police, surveillance and censorship. However, Clinton as a Democrat, doesn’t just rest upon Wall St and the intelligence agencies. The Democrats also rest upon a layer of the upper middle class, obsessed with their own privilege and identity politics. In addition the Democrats rely on trapping the working class within the parliamentary framework by pushing the ever more threadbare illusion that they are the “party of reform”. Whilst the Democrats are not, and have never been, a true social democratic party, they have functioned for a long time in the US as the “graveyard of social movements,” promoting illusions that they can be a vehicle for progressive change. The pathetic demise of the “Sanders revolution” is but the latest example. They also have the support of key unions, but not all, as some support Trump. Although union membership in the US is relatively low, their support for the Democrats can still be crucial, as seen for example in their effective reigning in of the teacher rebellions of recent years. So, would the drive to authoritarian rule and war have continued under Hillary?  Absolutely. But the Democrats’ working class social base prevents it from morphing into a full fascist movement.

What might Trump have done? It is important to note that Trump never expected to win in 2016. First hand accounts on election night have confirmed his shock at defeating Hillary. Trump’s game plan had been to use the MAGA movement to build a fascist base to continue his drive to power and to further the fascist agenda in the US. We can’t say with any certainty what would have happened, but it was obvious that Trump was not going away. Perhaps he would have had to follow a more traditional fascist path to power by building his extra-parliamentary forces until he was able to take power. A Clinton presidency’s reactionary policies and hostility to the working class would have served to feed the narrative that Trump was the man to “drain the swamp”, oppose regime change wars, restore jobs, and Make America Great Again.

But history is what it is— Trump won.

Chloroforming the working class?

It is vital that the working class be alerted to the existential threat of fascism, not just in the US but internationally, if Trump is able to consolidate his rule as dictator. We face the prospect of a fascist having full control over the largest military the world has ever seen, with bases in 180 countries and enough nuclear weapons to eliminate life on earth.  The US executive has surveillance and repressive capacities in the form of drones, the NSA and CIA at its disposal that the German Fuhrer could only dream of.

Marxists are rightfully keen to apply the fascist label only when it is scientifically sound. As I have stated, the US is not yet in the grip of fascism. But it is a deadly mistake to deny that Trump, the President of the United States, is a full blown fascist.

The World Socialist Web Site, a widely read Marxist publication, for example, has described Trump’s recent attempts to put troops on the ground in the US, as an attempted “coup d’etat”. They have stated that Trump is trying to set himself up as a “criminal”, “Gangster”, “personalist” dictator resting simply on the military and police.  Clearly, there are elements of truth in this, but it risks downplaying the real threat of fascism in the US. Seeing Trump as merely a dictatorial authoritarian overlooks both his fascist politics, and the volatile mix of class forces upon which he rests for his support.

Marxists must avoid the mistakes of the Stalinist Communist Party (KPD) in Germany in the 1930s. Trotsky addressed the problem with equating all reactionary capitalist parties with fascism in his 1931 pamphlet “For a United Front against Fascism” (Note: Bruning was the German Chancellor from 1930-32).:

There are seven keys in the musical scale. The question as to which of these keys is “better” – do, re, or sol – is a nonsensical question. But the musician must know when to strike and what keys to strike. The abstract question of who is the lesser evil – Brüning or Hitler – is just as nonsensical. It is necessary to know which of these keys to strike. Is that clear? For the feeble-minded let us cite another example. When one of my enemies sets before me small daily portions of poison and the second, on the other hand, is about to shoot straight at me, then I will first knock the revolver out of the hand of my second enemy, for this gives me an opportunity to get rid of my first enemy. But that does not at all mean that the poison is a “lesser evil” in comparison with the revolver.

Russian revolutionaries Vladimir Ilyich Lenin (1870 – 1924), and Leon Trotsky (1879 – 1940), , during the Bolshevik Revolution. (Photo by Keystone/Getty Images)


Revolution as the order of the day!

There are of course differences between the situation in Germany that Trotsky was writing about and the US today. In particular there are no longer massed based parties of the Left of either a socialist or social democratic character. The internet exists! Whilst the far right is using this tool to great effect, ultimately the internet is a weapon in the hands of the working class of truly historical proportions. I do not think it is an exaggeration to compare the internet to the printing press. The printing press was a key material development that undermined feudal forms of rule leading to their replacement with capitalism. I believe the internet may be playing the same role in the destruction of capitalism. The working class can now communicate, mobilise in real time on a global level. The recent uprising over the George Floyd murder is illustrative. A black man was horrifically murdered and his murder was uploaded to the internet where it was ‘witnessed’ by hundreds of millions. Social media has then been used to organise and amplify the ongoing rebellion which has been supported and even joined internationally as a whole generation of youth take a stand against the poison of racism and police brutality.

Justice for George Floyd and Michael Ramos protest, Austin, Texas, June 7th 2020 (Credit: League of the Fifth International)

However the internet does not resolve the crisis of leadership which is just as stark today as it was in 1938. Trotsky wrote in 1930 in ‘The Turn in the Communist International and the Situation in Germany’: 

the course of events in the very near future may resurrect in Germany, on a new historical plane, the old tragic contradiction between the maturity of a revolutionary situation on the one hand and the weakness and strategical impotence of the revolutionary party on the other. This must be said clearly, openly, and above all, in time.

We must keep arguing and discussing the nature of the fascist threat in the US and internationally and we must continue to find ways to think about what a “United Front” strategy for the working class might look like in today’s context. There is still a window of opportunity to stop fascism – class forces are still in flux and socialist revolution remains the order of the day!

GLOSSARY

The above article assume knowledge of a few key Marxist terms. If these terms are unfamiliar, I have provided a short glossary:

Working Class
In Marxist terms, the working class is everyone who has to survive by earning a wage eg by selling their labor. This is the vast majority of humanity who all share the same social interests of wanting access to good working conditions, healthcare, education and a clean environment. Marxists also call the working class the proletariat.  

The working class is not just “blue collar” or industrial workers but teachers, nurses, retail workers, people in the service industry etc but everyone who survives by earning a wage.

The working class however  is not uniform in terms of its wealth. What is commonly called the “middle class” is really just a layer of the working class that is more comfortable financially.

The unemployed, who are not currently earning a wage share the same interests as the working class

Ruling Class
The ruling class, or capitalist class, is the small percentage of society that makes their money not through earning a wage but from the profits from what they own eg their investments.. They own the “means of production” eg all the factories, banks, companies etc by which things are produced. Each country has its own ruling class which compete with each other. In Marxist theory the ruling class is also called the Bourgeoisie.

Petty bourgeois:
Small business owners are categorised as “petty bourgeois” as they are not waged workers, but neither are they part of the ruling class as they are not economically powerful and only own a small amount of capital.

The upper middle class is also classified by Marxists as petty-bourgeois. Although they earn a wage or salary, they are so privileged that as whole they see their interests as more aligned with the ruling class than the mass of the working class. This would include managers, union bureaucrats, well paid professionals etc

What is capitalism?
Capitalism is the current global economic system that dominates the globe. It is a system where the “means of production” is owned privately by individuals, the ruling or capitalist class. The aim of the production is to maximize profit or capital for the ruling class. Under capitalism, the world is divided up into competing nation states, each with its own ruling class.

What is socialism?
Socialism is a system where the “means of production” are owned and run for the benefit of all. All of the wealth and the productive capacities of humanity are organised for the common good not private profit. True socialism must be implemented internationally, not just in one country. You cannot have isolated socialist countries existing inside a global capitalist system. Although the task of overthrowing capitalism falls to the working class, the aim of socialism is not to replace domination of one class with another to work towards a society where class is abolished. Just as capitalism did not establish itself over night, nor will socialism. It will be the work of an historic period. However, it is becoming clearly by the day that humanity and the planet cannot survive unless we put an end to the profit system.

It is only through and open and robust discussion scientific socialism, ie Marxism has developed. Classconscious.org would like to play its role in developing such a culture again. We are attempting to foster debate by publishing articles that may not fully align with the position of our editorial collective.




ANZAC DAY – may one day no-one march there at all.

ANZAC Day, April 25th is here again and once again Australians are being asked to stand together and declare “Lest we forget”. Every year though, during the avalanche of militaristic imagery and words that marks this “celebration”, I reflect how it hasn’t always been like this in Australia. During my lifetime I have watched ANZAC day being changed from a fading historical relic to a day elevated to a virtual state religion, central to the mythic narrative of Australian nationalism.

This change is personified by my experiences singing in primary school as a ten year old. Once a week, the highlight of my primary school week was joining the whole class “Let’s sing”  session. The old radio would be turned on at the front of the class, we would take out our colorful song books and belt out an eclectic mix of songs together.  In 1983, the songbook contained a song that leave a deep impression on me, Eric Bogle’s  “And the band played Waltzing Matilda”.

The song is a haunting ballad of the journey of a young Australian man heading off to Gallipoli, cheered off by excited crowds, only to experience the hell of war and return maimed physically and emotionally. Written in 1971 at the height of the anti-Vietnam war movement, it strikes a powerful blow against war and the false “celebrations” of ANZAC day that are meant to sanctify this horror.

The song certainly left a powerful impression on me and I am always struck by the fact it is pretty much my only memory of engaging with ANZAC day from Primary school. The 80’s were a time when the “Vietnam Syndrome” still hung in the air. This “syndrome” is the ruling classes term for the lingering anti-war sentiment that existed in the mass of  the working class after that murderous war. They knew something had to be done and they got to work.

Since the Hawke Labor Government of the 1980’s, literally billions has been spent in Australia on constructing a virtual state religion around ANZAC Day. Hawke was the first Prime Minister to make the “pilgrimage” to Turkey on ANZAC Day in 1990. Since then we have had endless speeches, parades, expanded war memorials, documentaries and books. The education system has been flooded with “educational materials” to teach this curriculum including picture books about animals who “fought” for Australia for pre-schoolers! Even when I was teaching history over ten years ago, I would surreptitiously throw out the glossy pamphlets, DVD’s etc I was sent each year but now I believe teachers are forced to teach this curriculum.

Australian culture is now saturated annually with militiaristic imagery on ANZAC Day. Even this year, under conditions of pandemic, we are being encouraged to mark ANZAC Day by lighting candles in our driveway at dawn. Whilst for ordinary people, the phrase “Lest we forget” may contain some confused anti-war sentiments, the ruling class knows full well the purpose of cultivating this “celebration”. The ruling class has been working for decades to try and ensure that the next generation will be ready when called upon to “make the ultimate sacrifice” in US Imperialism’s next bloodbath could be another World War, this time with China and Russia. For the ruling class the phrase “Lest we forget” is not a phrase to mourn the death of soldiers past but to lay the groundwork for murdering more young people in the meat grinder of imperialist war.

How dated the following lines now seem from Eric Bogle’s classic:

And now every April I sit on my porch
And I watch the parade pass before me
I see my old comrades, how proudly they march
Reliving their dreams of past glory
I see the old men, all twisted and torn
The forgotten heroes of a forgotten war
And the young people ask me, “what are they
Marching for?”
And I ask myself the same question
And the band plays Waltzing Matilda
And the old men still answer to the call
But year after year their numbers get fewer
Some day no one will march there at all”

However, I remain grateful for being exposed to the truths of this song and the anti-imperialist and anti-war seeds it planted in my mind. One day, when the working class has overthrown capitalism and humanity has thrown off the shackles of mindless nationalism, we can again look back at ANZAC as a ritual from another time, a time when young people were forced to fight for “God and Country” and died in the mud. A time when trillions were wasted on war instead on fighting disease and hunger.

So I will mark ANZAC Day this year by once again listening to the Pogues’ haunting version of “And the band plays Waltzing Matilda” and look forward to a future April 25th, when no one will march there at all.

It is only through and open and robust discussion scientific socialism, ie Marxism has developed. Classconscious.org would like to play its role in developing such a culture again. We are attempting to foster debate by publishing articles that may not fully align with the position of our editorial collective.




China: Capitalist, Socialist, or “Weird Beast”?

by Robert Montgomery, 7th September 2019.

While there is growing interest in socialism today, there’s much confusion about its meaning. Among theoretically informed socialists there’s also confusion.  The word tends to be used impressionistically, a yardstick for classifying states where capitalism has been overturned.  Such states are said to be either socialist or capitalist, either x or not-x, either the one, or the other.  Cuba is either socialist or capitalist; China is either socialist or capitalist (or state capitalist.)  

In The Revolution Betrayed, Trotsky
listed criteria for evaluating post-revolutionary states.  The USSR was, “a contradictory society halfway
between capitalism and socialism”, plagued by material scarcity, and with a
level of productivity far too low to give state property a socialist character.
It was a country where socialist norms of production coexisted with bourgeois
norms of distribution; where conscious economic planning contested with the
market.  Based on a foundation of
socialized property relations expressed in nationalized means of production,
and centralized economic planning, the USSR was history’s first workers state.  An isolated island in a capitalist sea,
enmired in generalized want and scarcity, economic growth facilitated the
conversion of the state bureaucracy into a privileged bureaucratic caste. This
social caste parasitized on the body
of the healthy workers state to gain material privileges for itself. As this
stratum crystallized into a permanent social caste, the workers state degenerated. However, Trotsky insisted
that the revolution survived in the socialized property relations, nationalized
industry and central planning. Trotsky wrote, “It is the duty of revolutionists
to defend tooth and nail every position gained by the working class, whether it
involves democratic rights, wages scales, or so colossal a conquest of mankind
as the nationalization of the means of production and planned economy.” Like
Marx and Lenin, Trotsky argued that socialism could only exist internationally:
“The socialist revolution begins on the national level, unfolds on the
international, and is completed on the world scale.”

The Deformed Workers
States

 Preobrazhensky was the economic theorist of
the Left Opposition in the USSR. Since publication of his New Economics (1921), Trotskyists have viewed economically backward
countries like the USSR as transitional states between capitalism and socialism.
They are marked by a conflict between two different economic imperatives: one
determined by the law of value; the other by the social relations of a planned
economy. The law of value distributes resources in accordance with the laws of commodity
production. Planning distributes economic resources independently of the market
in accordance with socially necessary priorities.

A series of overturns of
capitalism followed the Second World War. In Yugoslavia, Eastern Europe and China
capitalism was ousted but without organs of working class struggle like the Russian
Soviets of 1917, or a party of the Bolshevik type.  After years of debate, the 4th International decided
that the establishment of nationalized property relations and economic planning
had resulted in new workers states. Since these states did not degenerate from proletarian
revolutions, they were deemed workers states, bureaucratically deformed from birth by Stalinism. In these states political power was monopolized by a
bureaucratic caste along the same lines as in the USSR. Deformed workers states
followed the “socialism in one country” dogma of the nationalist Stalinist
bureaucracy.

Mao and Stalin in Moscow, 1949

 The same criteria Trotsky used to characterize
the USSR revealed that these new states possessed the same contradictory and transitory
features. To understand the class character of China today this history must be
kept in mind.

The China Question

Aside from scattered sects and
the “Spartacist family” there are no Trotskyist tendencies that characterize
China as a deformed workers state today. Two examples suffice to represent the
consensus view among Trotskyists: Socialist Action, of the
Pabloite Unified Secretariat, and the orthodox Trotskyist, Socialist Equality
Party of the ICFI.

    1) Socialist Action ( S.A). — “China, built on a foundation of monopoly capitalism, is a major capital exporter that exploits workers at home and across the world. Its economy exhibits highly uneven development, with advanced and highly productive regions alongside impoverished and underdeveloped ones. Its military is increasingly advanced and is deployed to support the interests of Chinese capitalism worldwide. China is a major player in most theaters across the world today and is continually seeking to expand its already significant influence”. (China: A New Imperialist Power”, Dec 2018, convention resolution).

    2) Socialist Equality Party (SEP)- “Moreover, the social catastrophe which has engulfed China is the direct product of bureaucracy’s restorationist policies. Having repudiated central planning, the Chinese economy is at the mercy of the anarchic forces of the world capitalist market. The creation of innumerable private links between provincial enterprises and foreign capitalists has undermined what was considered the greatest single achievement of the 1949 revolution—the unification of China.” – World Socialist Website – Victory to the Political Revolution in China.

 Most accounts of capitalist restoration in
China like those above are based on a purported dominance of market relations
permeating the economy.  The question
then arises, if socialized property relations have been replaced by bourgeois
property, wouldn’t it have taken a counter-revolutionary struggle to restore
capitalism?  If we hold that capitalism
can be restored through the quantitative extension of market relations alone,
aren’t we repeating Bernstein’s claim that capitalism can become socialism through
the gradual expansion of the state into banking and industry?  By Trotsky’s criteria, such ‘market creep’
accounts of capitalist restoration lack explanatory power, and seem superficial
and unpersuasive.

There are plausible reasons for
holding that capitalism has been restored in China: the state owned enterprises
(SOEs) were reduced in size and pressured to become profitable; privatization
of industry has made major inroads; working class exploitation in factory
sweatshops is legend; social inequality now exceeds US levels and has produced
a billionaire stratum; and the workers in the state enterprises who should be
the bedrock of socialist consciousness have been forced on the defensive. Closer
examination of these ugly features of China’s economic reforms suggests that
the Chinese state has not undergone a qualitative transformation.

Market ‘Reforms’ & CCP Control

When the CCP began market
“reforms” in 1978 it had no intention of incubating a capitalist class or
undermining the SOEs. It hoped that market competition would make state firms
more efficient, boost exports, modernize production and transform China into an
economic “Super Power”.

But market logic didn’t meld easily with the Maoist system characterized by state ownership and central planning. As the Left Opposition argued, if the law of value is not suppressed when it conflicts with consciously determined priorities, the planning mechanism will be over-ridden and scarce investment resources will be directed by norms of profit maximization rather than by social and economic need. The laws of the market discipline workers and managers through the “law of value,” not by bureaucratic fiat. When labor power becomes too expensive, it is shed.  When firms cannot compete, they go bankrupt. The “efficiencies” of the capitalist market derive from the commodification of both labor power and the means of production.

Chinese market reforms brought significant
economic growth between 1978 and 1989. Yet growth was accompanied by large-scale
appropriations of state property, an enormous rise in social inequality, and severe
regional unevenness that threatened the unification of the country.  In 1989 the Tiananmen massacre brought this
contradiction to a head.  When Beijing’s
workers entered the mobilizations, the Deng leadership called on PLA divisions from
the provinces to drown the uprising in blood.  By 1992 the market-oriented faction in the CCP
was hegemonic. Hothouse marketization resulted in large-scale appropriations of
state property. This produced phenomena we generally associate with a social
counter-revolution: endemic corruption, environmental despoliation, mass
layoffs, increasing inter-regional unevenness, and the fracturing the social
safety net of the “iron rice bowl”.  While
indicative of the direction in which China was (and remains) headed, these
developments do not in themselves signify that capitalism has been restored.  While China’s capitalists limit themselves to
talk of “reforming,” rather than overthrowing the CCP, both the imperialists
and the indigenous capitalists anticipate the establishment of a bourgeois
multi-party democracy.

The banner in front of the Gate of Heavenly Peace, or Tiananmen, says “Beijing Workers’ Autonomous Federation,” the main group of worker protesters. CreditDavid Che

Privatization: How
Great?

How extensive is privatization?
Agriculture remains immensely significant as half the population (750 million
people) still works the land. Many leftists view Deng’s de-collectivization of
agriculture as de facto privatization. 
However, land remains state property, which has insulated poor peasant
families from the full impact of market shock. Legal prohibitions on farm
households using their land for non-agricultural purposes have limited
speculation and capitalist appropriation of land. Restrictions on land use have
proved to be a lifeline for the millions of migrant laborers now returning to
their home villages in the interior after being laid off by the export
industries of China’s east coast (China Leadership Monitor, Winter 2008)

China’s entry into the World
Trade Organization (WTO) in 2001 threatened peasants unable to compete against
the large-scale, mechanized production of imperialist agribusiness. While meeting
certain WTO obligations like lower tariffs, to avoid bankrupting millions of
poor peasant households, Beijing shielded small agricultural producers.  The CCP’s “new socialist countryside” program
eliminated tuition fees for primary and secondary schools, reduced agricultural
taxes, expanded infrastructure investments and increased funding for social
services, easing pressure on rural families.

 At the height of the pro-market reforms in the
late 1990s, the state owned enterprises (SOEs) in the industrial sector saw drastic
changes. 30 million workers were laid off, and tens of thousands of small and
medium-sized enterprises were privatized through issuing shares and entering
into joint ventures. These measures were pushed through as a form of “shock
therapy” in preparation for China’s WTO entry. The intention was to force the
largest SOEs to become internationally competitive while retaining state
ownership.  Due to state control of the
banking system, the large industrial SOEs survived regardless of their
profitability.

CC, part owned by the Beijing Municipal People’s Government

By 2003, SOEs accounted for some
70% of total fixed assets and 30% of non-agricultural production. The state
sector remained dominant in strategic industries, including heavy machinery,
steel, petroleum, non-ferrous metals, electricity, telecommunications and
transportation. Since the early 2000s privatization of larger SOEs has
virtually ceased. Subsidized by the state banking system just 10% of insolvent
SOEs filed for bankruptcy in 2007/2008. 
The insolvent SOEs were kept afloat by the state banks and local
officials concerned about losing access to government resources (Economist,
13 December 2008). But the weight of the private sector grew until very
recently.

The sheer dimensions and relative
weight of the state sector suggest that despite the inroads of private
property, the Chinese economy is still predominantly collectivized. The
increasing weight of capitalist enterprises strengthens the forces of
counterrevolution but does not resolve the fundamental issue of class rule. The
task of counterrevolution is the political conquest of state power by the
capitalist class. The continuing resistance of workers and peasants across
China to capitalist encroachment, while so far politically inchoate, is
evidence that the ultimate fate of the Chinese Revolution has yet to be
decided.

Nationalization as
Criteria

Deformed workers states cannot be
defined solely by the extent of state ownership. Many capitalist states have
resorted to extensive nationalizations to prop up enterprises in strategic
sectors unable to compete on the world market. Semi-colonial states have
nationalized oil and other natural resources for purposes of national capitalist
accumulation. None of these are anti-capitalist measures, but rather attempts
to strengthen the position of the national bourgeoisie as a whole. Many who see
China as capitalist see the nationalized property as functioning to accumulate
capital in order to strengthen the emerging bourgeoisie. They view the ruling
bureaucracy as simply an agent of foreign and domestic capitalism.

Challenging the Left
Consensus

For the viewpoint of Marxist economists it is worth examining Michael Roberts’ contributions on China.  A professional economist, Roberts writes a daily blog, has authored four books on Marxist economics and the causes of the current long depression. While he has some roots in the Trotskyist tradition, Roberts eschews the workers state terminology. A great merit of Roberts’ blog is his referenced documentation, and use of graphics to illustrate his analysis. In what follows I’ll try to summarize his view of China as expressed mainly in:
China workshop: challenging the misconceptions
Trading economics the Chinese way
China: a weird beast

 Like economists in general, Robert tends to
ignore politics, especially the role of class struggle in shaping economics and
confounding predictions. This is a shortcoming of his work, which he accepts as
a necessary evil of economic analysis.

Roberts refers to China as a
“weird beast.”  It is a non-capitalist
state with interactions between competing factions of the state bureaucracy,
with increasing conflict between the private and statist sectors, between the
now dominant working class and both the CCP bureaucracy and the domestic and
transnational capitalists.  He stresses
that it is capitalism’s drive for higher productivity, conflicting with the requirement
for increasing profitability that is the main force driving the falling rate of
profit of the global capitalist economy today. This contradiction is at the
root of the Long Depression, which has plagued the capitalist world since the
GFM of 2008. Growth rates in the advanced capitalist countries have yet to
return to pre-2008 levels.

Conch Cement, is the largest  cement  manufacturer in mainland China, majority owned by   Anhui Provincial People’s Government 

Explaining Chinese
Growth

While Chinese growth has also
fallen from previous highs, which doubled real living standards every 13 years,
economic growth has stayed high compared to the slumping capitalist countries. China’s
poverty rate fell from 88% in 1981 to 0.7% in 2015, as measured by the
percentage of people living on the equivalent of US $1.90 or less per day.
While the world capitalist economies remain mired in a deep slump since the 2008
GFM, the Chinese economy has continued robust growth reaching national output
second only to the US.

Source: Michael Roberts Blog

Roberts asks how to explain
China’s success in raising 850m people out of poverty, and reaching such
phenomenal growth on a capitalist basis?  According to World Bank figures, a
disproportionate share of this change has occurred over the last fifteen years.
 How can a purportedly ‘capitalist’ economy
have bucked the trend, when the record of all other capitalist economies can
show no such result?  How is this
exception possible if China is just another capitalist economy entangled in the
same web of global market relations as the dominant capitalist powers?  He answers that the accumulation of capital by
the state sector has been the major engine of growth:

–102 big conglomerates contributed 60% of China’s outbound investments by
the end of 2016.

–State-owned enterprises including China General Nuclear Power, and China National Nuclear have assimilated Western technologies and are now engaged in projects in Argentina, Kenya, Pakistan and the UK. 

Echoing Chinese economist Dic Lo,
Roberts asks, “How can it be possible, in our times, for a late-developing
nation to move up the world political-economic hierarchy to become imperialist?
Can anyone on the left answer this question?”  The majority view of leftist economists,
pioneered by Martin Hart-Landsberg, David Harvey and Minqi Li, as well as
nearly all Marxist political tendencies, is that China is a “neoliberal
capitalist” state, employing the so-called “Foxconn Model” of low-wage,
coercive, and brutal labor exploitation.  Most Marxist and mainstream
economists consider that China is capitalist, even imperialist. It is
commonplace for Marxists to assert that Chinese export of capital to invest in
projects abroad is driven by the need to absorb ‘surplus capital’, similar
to the export of capital by the capitalist economies before 1914 that Lenin
presented as a key feature of imperialism.  Does China invest abroad
through its state companies to export ‘excess capital’ or because the rate of
profit in state and capitalist enterprises has been falling?

But isn’t the drive to expand
global influence and to “extract the natural and technological resources” of
other countries a hallmark of imperialism?  Roberts responds that this would be the case
if its purpose were to export surplus capital in order to realize higher rates
of profit than are available in the home market. He contends that massive Chinese
overseas investments in infrastructural development projects are undertaken to
expand political influence and obtain resources needed to fuel domestic
investment by the state-owned sector. Consider the case of the “one belt, one
road,’ New Silk Road project for Central Asia for example. This major
undertaking to construct the infrastructure to link China with Russia and the
West is emblematic of Chinese transnational development projects: state
sponsored, high cost/low yield investment outlays to build forward linkages
which will drive future domestic accumulation of social capital.

Hambantota Port is a Sri Lankan Port part of the Belt and Road Project

This has nothing in common with imperialism, at least in the sense that
Lenin described.

  Certainly,
Roberts’ argument is open to question. But it does fit logically with his data
on the hybrid nature of the Chinese economy.  If his Preobrazhenskyist analysis of the
Chinese economy is correct, then China isn’t capitalist; and therefore, not
imperialist. It is a transitional state whose economy is driven by the
contradictory forces of the law of value and central planning.

The Gathering Storm:
Conflict with the U.S.

For Roberts the issue ahead is
the battle for global trade and investment between China and the US. The
US is out to curb and control China’s expansion as an economic power, and is
taking aggressive measures to isolate China, block its economic progress and
surround it militarily. But this policy of economic war is failing. What
really worries U.S imperialism is China’s progress in technology and its aim to
become the manufacturing center of the global economy within a generation.

Following Marx, Roberts starts
from two premises: a socialist society of freely collaborating individuals
where scarcity, toil, exploitation and class struggle have been eliminated is possible
with the technology of AI, robots, the modern logistics industry and the
internet; socialism cannot occur until the capitalism is no longer globally
dominant, and democratically planned economies under workers control integrate production
internationally. Like any other nationally based country, China cannot move
(even gradually) to socialism unless the power of imperialism in the world
market is ended. And though China may be the second-largest economy in the
world in dollar terms, its labor productivity is less than one-third that of
the US.

Limits to Chinese
Growth

China has been transformed since
the revolution of 1949 by overturning capitalist property relations and
replacing the profit system with state control of the commanding heights of
industry and agriculture. It is now applying the newest technology as a modern,
urbanized society.  As in the former USSR, the law of value asserts its
destructive force through foreign trade and capital inflows, as well as through
domestic markets for goods, services and funds. That’s not really
surprising since socialism cannot be built ‘ in one country’. There is no doubt
that the law of value under globalized production feeds through to the Chinese
economy.  But the impact is ‘distorted’, ‘curbed’, ‘blunted’ and blocked
by bureaucratic interference by the state and the party structure to the point
that it cannot yet dominate and direct the trajectory of the Chinese economy.

In fact, the capitalist sector in
the economy is growing. There are many more Chinese billionaires (285), and
inequality of income and wealth has risen as Chinese workers struggle against
exploitation in the workplace. When, on the advice of neoliberal elements in
the monetary institutions, China relaxed its capital controls the economy
suffered serious capital flight. But 80% of all banks are state-owned, with the
government directing their lending and deposit policies. There is no free flow
of foreign capital into and out of China. Capital controls are imposed and
enforced and the currency’s value is manipulated to set economic targets much
to the annoyance of US finance capital.

There is an ongoing struggle
within the Chinese political elite over which way to go – towards the Western
capitalist model, or to continue with “Socialism with Chinese characteristics”. 
After the GFM of’08 and the ensuing Long Depression in the West, the pro-capitalist
factions have been partially discredited.  Xi now promotes ‘Marxism’ and
says state control under CCP guidance is here to stay.  But the only way
to guarantee China’s progress, to reduce the growing inequalities, and to avoid
the risk of a future swing to capitalism is to establish working class control
over Chinese political and economic life, and adopt an international socialist policy. 
That is something that Xi and the current political elite will not do.

Stock Markets and Billionaires?

If production of commodities for
profit based on market relations is the motor force of capitalism, then China
is non-capitalist. Under capitalism the rate of profit on private capital
determines investment cycles and generates periodic economic crises.  This
does not apply in China.  Public ownership of the means of production and centralized
state planning remain dominant, with the CCP’s power firmly rooted in state
ownership.

But yet again, “socialism with
Chinese characteristics” is a weird beast. It is not socialism by any
Marxist definition of democratic workers control and socialist democracy. 
And there has been a significant expansion of privately owned companies, both
foreign and domestic over the last 30 years, with the establishment of a stock
market and other financial institutions.  But the vast majority of
employment and investment is undertaken by SOEs, or by institutions under the
direction and control of the CCP.  The
lion’s share of China’s industry is not foreign-owned multinationals, but
Chinese SOEs.  As for the stock market, which enterprises may be listed,
is strictly controlled by the state.  Since
the vast majority are SOEs, share markets don’t operate like the stock markets
of finance capitalism. Chinese enterprises raise their capital mostly through
the nationalized banking system, not by floating new stock through investment
banks. Less than 8% of the population operates in the stock market as “retail
investors” as opposed to institutional investors. Trading shares on the Chinese
casino stock markets is basically like betting on a horse; or better, it’s like
putting money on one’s favorite SOE. 

Brokers watching the stock price display on the Shenzhen Exchange

A report by the US-China Economic and Security Review found that “The state-owned and controlled portion of the Chinese economy is large. The SOEs and entities directly controlled by SOEs-accounted for more than 40% of China’s non-agricultural GDP. 

Chinese Industry and
the CCP

 The party/state machine infiltrates all levels of industry in China. There are party organizations within every corporation employing more than three party members. Each party fraction elects a secretary, and the party secretary is the lynchpin of the management system of each enterprise. This extends party control beyond the SOEs, partly privatized corporations and village or local government-owned enterprises and into the private sector.
(Capitalizing China, NBER Working Paper No. 17687)

The reality is that almost all
Chinese companies employing more than 100 people have an internal party
cell-based control system. The CCP is currently writing itself into the articles
of association of the country’s biggest companies, both public and private.
There are 102 key state enterprises with assets of 50 trillion Yuan that
include state oil companies, telecom operators, power generators and weapons
manufacturers.  Xiao Yaqing, director of the State-owned Assets
Supervision and Administration Commission of the State Council (SASAC), writing
in the Central Party School’s, Study Times, noted that when a state-owned
enterprise has a board of directors, its party boss tends to be the board
chairman. Communist Party members at state enterprises form the “the most solid
and reliable class foundation” for the Communist Party to rule.

Will
there be a Chinese Perestroika?

What guarantee is there that this
army of party functionaries won’t play the role that the enterprise managers
played in the restoration of capitalism in the USSR under perestroika?  Perestroika reforms in the USSR freed the
managerial strata to circumvent planning and assume greater personal control
over the means of production. Their appetite for ownership was whetted both by
perestroika as policy, and their own position as a privileged stratum managing
the productive forces directly. In China, by contrast, party cadres don’t
directly manage production but function as political functionaries under the
direct control of the Stalinist party.

Social Inequality
greater than in the U.S.

It’s true that inequality of wealth and income under China’s ‘socialism with Chinese characteristics’ is very high.  There are growing numbers of billionaires, many of whom are related to CCP leaders. China’s Gini coefficient, an index of income inequality, has risen from 0.30 in 1978 to a peak of 0.49 in 2003 (the U.S Gini index is .41).  Though wages in the factory sweatshops are leaving peasant incomes behind, when workers assembling Apple Ipads earn under $2 an hour, urban wages are brutally low. As urbanization has decelerated since the global recession and the growth rate has slowed, the inequality index has fallen back a little (Gini =.46). But it is also the result of the elite at the levers of power getting fat, while allowing some Chinese billionaires to flourish.

While the Chinese economy is
partially protected from the law of value and the world capitalist economy, the
threat of capitalist restoration remains high.  IMF data show that, while
public sector assets in China are still nearly twice the size of capitalist
sector assets, the gap is closing. The issue for China is whether the
capitalist sector of the economy will eventually override the planned public
sector, so that profitability will dominate over productivity and crises will
appear, leading to economic stagnation. For Roberts, that point has not yet
been reached in China.  The state sector and public investment through
one-party dictatorship still control investment, employment and production
decisions while the growing capitalist sector is still subject to that
control. Under Xi, the majority of the party elite will continue with an
economic model dominated by SOEs directed at all levels by CCP cadres. 
The currently hegemonic faction of the CCP elite understands that if the “capitalist
road” is taken and the law of value becomes dominant, it will expose China to chronic
economic instability, insecurity of employment and income, and greater
inequalities that can only lead to the threat of more social turbulence.

Ma Huateng is Chinese riches man worth $US 38 billion

On the other hand, Xi and the
party elite are united in opposing socialist democracy.  They wish to
preserve their autocratic rule and the privileges that flow from it.  The
working masses have yet to enter the stage and play a role.  They have
fought local battles over the environment in 2015, their villages, and their
jobs and wages.  But they have not fought for more democracy or economic
power since 1989. While opinion polls like that of the Pew Research Center show
passive support for the regime, worries about corruption and inequality abound.

What’s In a Name?

Is this debate over China just a sterile
hairsplitting exercise of little actual consequence? What real world difference
does it make if Marxists view China as capitalist, socialist, state capitalist,
some form of Bonapartism, or a deformed workers state?  As a matter of principle won’t Marxists defend
China against imperialism no matter what they call the state? Aside from the
most principled Trotskyists like the SEP, this is unlikely. How can we expect
that those who deem China a predatory imperialist power will defend it in a
conflict with the U.S.? And how can a movement against war be organized when both
sides are imperialist gangsters?  We are
more likely to see support for “pro-democracy” forces inside China as in the
waning days of the Soviet bloc, and as we see today with the knee jerk
cheerleading extended to the resurrected “Umbrella Revolution” in Hong Kong.
This time around, “Neither Beijing nor Washington!” will substitute for the 3rd
Camp slogan, “Neither Moscow nor Washington!”

Despite broad antiwar sentiment in the working class, soft support to
imperialism predominates on the “left.”  If
left to these forces, the material gains made by China’s workers and poor
peasants since the revolution will be left to the wolves of imperialism. We can
expect to see the pseudo-left swamp abandon the Chinese workers with the same
fecklessness with which it has betrayed Julian Assange. The broad antiwar
sentiment in the world’s working class will remain inchoate if the forces of
revolutionary Marxism aren’t capable of “calling things by their right name.”

With the US/China conflict
reaching white heat it makes a big difference if China is just the newest, big
kid on the capitalist block.  Threats may
fly over technology, intellectual property, trade imbalances, tariffs,
regulation of foreign corporations, and plans to make China the world’s leading
economic power within five years. These conflicts can’t be downplayed. Capitalist
powers fought two world wars in the 20th century to re-divide the world market.
 But when capitalist powers jostle over
relative global economic power, these conflicts may be negotiated short of
military conflict. (May, being the operative term).

U.S Pacific Fleet during “Valiant Shield” Operation 2018

On the other hand, if a
non-capitalist China tightens control over market access, and increases production
of media and other high value-added industries like semiconductor design and
production, cell phones, high-end machine tools, medical devices, and optics,
China will enter into direct competition with major US-based companies.  Should China be seen as choking off unfettered
penetration by foreign capital, the conflict will differ qualitatively from an inter-imperialist
struggle, dangerous as that may be. In the context of the long-term decline of
American capitalism, continuing long depression, the failure of the rate of
profit to recover after the GFM of 2008, and the looming prospect of a new
recession and financial collapse, China faces a definite prospect of war with
the US. If anything were to survive a nuclear exchange, or the Stalinists
capitulate short of war, imperialist capital will move to:


  • wrest control of the accumulated and natural resources of the world’s 2nd largest economy
  • open the 1.4 billion person market to its capital exports
  • seize the mineral and material wealth under its soil
  • and most importantly, exploit its massive working class for the surplus value so desperately needed to overcome its secular profitability crisis.


The stakes are high in either
case. But if China remains a post-capitalist, non-capitalist, deformed workers
state— call it what you will— a war fought with nuclear weapons will be more
than a horrible possibility.  It will be
a virtual certainty.

The venal Stalinist bureaucracy can’t be relied upon to defend the social gains made since 1949. Only the power of the massive Chinese working class can oust the Stalinist clique and defend the gains of the Chinese revolution. By uniting with their class brothers and sisters throughout the world, China’s workers can play a leading role in the fight against war, poverty, all forms of oppression, and for the socialist liberation of humanity. It will take the formation of a conscious revolutionary vanguard party of the Bolshevik type to give political form and leadership to such a movement.

Robert Montgomery is from Boston, he has been active in antiwar and labor struggles as for almost fifty years. He has functioned as an independent Trotskyist since leaving the SWP (US) in the 1970s. A historian he has published numerous articles on US labor history. A union activist he has served on numerous action committees and was local president of two different municipal library unions. He is a retired medical radiographer and P.A. (Physician Assistant).  He has contributed this article to classconscious.org as a guest contributor

It is only through and open and robust discussion scientific socialism, ie Marxism has developed. Classconscious.org would like to play its role in developing such a culture again. We are attempting to foster debate by publishing articles that may not fully align with the position of our editorial collective.




Lenin’s Embalmers by Ilya Zbarsky: book review

Lenin’s Embalmers is the autobiography of Ilya Zbarsky (1913-2007) a chemist in the Soviet Union working on the preservation and display of Lenin’s body in Red Square, Moscow. Reading like a history of the 20th century his autobiography charts the history of his family, first under Tsarism, through the Russian Revolution, the purges and mass terror, WW2, the death of Stalin, the period of glastnost and perestroika and finally capitalist restoration.

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His autobiography contains many interesting unique observations and anecdotes on political life in the Soviet Union, writing from a rare position as the son of a key figure in the bureaucracy, yet influenced by and sympathetic of the analysis of Trotsky and the Left Opposition. He had a insider’s view of life in the Soviet Union and was able to interpret events as he saw them. He never made his peace with Stalin, nor did he become an anti-communist, he was of the best layers in the Soviet Union.

Beginning with a prologue, he gives an excellent summation of the inner party debate around what to do with Lenin’s body after his death following a long period of incapacitation.

His autobiography then switches to his family history under Tsarism, the story of how his father come to be associated with the team at Lenin’s Mausoleum. His father, first persecuted for his ethnic and religious background, was unable to find regular employment despite his extensive formal education. He eventually obtained a position working in a large chemical plant through the idiosyncratic whim of the widow of a powerful industrialist. As he had an important position in Russia’s economy, he avoided conscription and the horrors of WW1. Following the October Revolution he took a position in an important biochemical institution in Moscow and eventually a role in the groundbreaking experimentation to permanently preserve and display Lenin’s body.

Zbarsky goes on to write his observations of boyhood on family life and growing up from absolute poverty to then live in relative affluence corresponding with his father’s new found success. Zbarsky attended a prestigious private school and later went on to study Chemical Biology at Moscow University.  He saw the bastardisation of the curriculum though the crude ‘proletarianisation’ of the university which saw the suppression of all independent and critical thought. Disgusted with his experiences there, he eventually left the university and joined his fathers team. Zbarsky then writes on number of interesting episodes with considerable insight; his commentary on the intricacies of the long term preservation of the body and scientific and academic life in the Soviet Union more generally are fascinating.

He lived through the mass terror, he witnessed the show trial of Rykov (successor of Lenin as the Chairman of the Council of People’s commissars) and Bukharin (Editor of Pravda and Novy Mir), both former family friends of Zbarsky!

Zbarsky survived WW2 as the work of Lenin’s Mausoleum was sent to Far East Siberia so as to not endanger Lenin’s body.

In the post war period Ilya was assigned to a team of Chemists responsible for the plunder of West Germany as its biochemistry labs were sacked of all useful chemicals and instruments before the region was handed over to the Allies.

The next period Zbarsky was tasked with the preservation of leading figures from other communist parties the world over, including those of Bulgaria and Mongolia.

It was around this time that his father fell under suspicion and was imprisoned. Though this was eventually overturned following the death of Stalin, Zbarsky too fell out of favour and was unable to find work for a long time.

Zbarsky is then forced to rely on the second hand observations of his contemporaries to conclude his story with the final chapter of the mausoleum lab. Following the collapse of the Soviet Union and Capitalist restoration in Russia, deprived of its massive state funding, the lab resorted to the preparation of the bodies of Russia’s burgeoning Mafioso figures who are renowned for having extensive lavish funerals.

Zbarsky was a very intelligent man and his analysis of contemporary life in Russia was informed by the perspectives of the Left Opposition. While on a scientific mission in France, he was able to read works that were banned inside the Soviet Union, Trotsky’ My Life among them. In addition, his father was a one time Social Revolutionary deputy, he once helped Trotsky cross the border from Austria to Russia while in exile. As such his biography is filled with a wealth of vignettes and anecdotes that correspond to the analysis made by Trotsky on the nature of the Soviet bureaucracy in his struggle against the grave digger of the revolution.

Zbarsky was uniquely situated to observe and document this phenomena and he excels in doing so. His book is engrossing, the information is very accessible and his acerbic wit means his observations are quite humorous in places. Zbarsky’s biography has many insightful comments and could act as a companion to any serious study of the Soviet Union and the degeneration of the Russian revolution.

Lenin’s Embalmers by Ilya Zbarsky and Samuel Hutchinson
Harvill press, 215 pages