“The Russian bourgeois dreamed of an agrarian evolution on the French plan, or the Danish, or the American – anything you want, only not the Russian. He neglected, however, to supply himself in good season with a French history or an American social structure.” Trotsky—History of the Russian Revolution
The issue of “modified capitalism” or “a mix of systems” or “Scandinavian style capitalism” has been coming up a great deal on social media as the capitalist juggernaut crushes more and more people and the idea of revolution seems less far-fetched and therefore, to certain social layers, more terrifying. I’ve added a section to my sidebar post, “Answers to a Few Things I’m Tired of Hearing,” (point #20) , but it’s coming up so often now that I’ve decided to talk about it here. This is mostly a copy of what I put there, with some expansions.
Of course it is tempting to point and say, “They do it there, why can’t we do it here?” Like all easy answers to difficult questions, it makes intuitive sense, but falls apart upon examination. Before I get into methodological problems, let’s look at it historically for a moment.
There is no question that in certain countries the working class, through terrible struggle and through the creation of labor parties, was able to win significant and important concessions from capital that have made those societies far more humane. This was a product of the post WWII conditions, that is, a time when capitalism, having gone through this slaughter, and massive destruction of property, had given itself a certain amount of flexibility. At the same time, the bourgeoisie was absolutely terrified of the social revolutions that were threatening throughout Europe (and Asia). In general, expressing it in the form of an equation, we get something like this:
Flexibility in capitalism + fear of social revolution = the possibility of reform.
That is pretty much what happened in the Scandinavian countries (as well as England, Belgium, &c) after WW II. But then, what about the US? Alas, thanks above all to the betrayals of the Stalinists in the US Communist Party, the same upsurge in the US (1946-48 strike wave, see also the Progressive Party ), was not able to produce a political arm, which has crippled the ability of the US working class to win similar concessions (although it still did win some: see medicaid, medicare, &c). But here’s what I want to emphasize: The idea of doing so now, when capitalism has so little flexibility that it is taking away every tiny thing once gained, and is going so far as to turn police forces into militarized terrorist gangs, and is attacking democracy on every front, is utterly absurd. And if you believe the best way forward is to recreate those post-war conditions, in other words, to have a third world war (nuclear this time) merely so capitalism can continue its bloodbath while being a bit gentler in the more privileged countries, I’m going to have to fight you on that.
Moreover, capitalism is international. Financial exchanges, capital investments, and deals for new factories fly across borders that, after all, are only intended to keep the working class in place, not the elite, and certainly not the elite’s money. I won’t say that a butterfly in New Mexico can cause a hurricane in China, but we’ve seen that a bank failure in Thailand can cause a stock market crash in New York. And as these crises increase in frequency and severity, we know who is asked to pay for them. Hint: It isn’t the capitalists. Not here, not in Thailand, and not in Iceland.
Capitalism is rattling itself apart like a machine whose control mechanism has broken. Rather than the Scandinavian countries being a model for what the US should do, the US is a predictor of what will inevitably happen there. We can already see it in the virulent anti-immigrant stances that are more and more common there (and in Australia). Such reactionary positions are not independent of attacks on the working class domestically, but are part of the same process. In other words, the reformists in most of those countries have either lost power, or are moving sharply to the right. The others will follow because they must. If capitalism is to be preserved, it must be preserved on the backs of the working class; the working class, on the other hand, has no way to protect what it has won, or, in this country, to win basic human rights like healthcare, without a program that rejects the idea that capitalism has a right to exist. However much you’d rather it were otherwise, those are our choices: the needs of the masses, or the free market.
What I want to emphasize, though, is the method behind this confusion: in part, it comes from looking at surface phenomena and accepting them, without digging deeper into causes. But another part comes from the same methodological flaw that produces right Libertarianism: the idea that the way forward involves thinking up what sort of society you’d like to live in, then convincing enough people that this would be a good idea that it is (somehow) implemented. I hope and believe that, someday, this can happen—that humanity will achieve a level of cooperation and a height of intellectual power that we will be able to plan out our own future development. But we’re not there yet. Now we’re where history has placed us, and we have to move forward from here as best we can, and that means, among other things, a study of history, and an effort to learn its objective laws. That is where to begin, not with picturing an ideal society, but with where are we, how did we get here, what are our options, and what do we need? Turning the US into another Scandinavia is simply not on the table.
One last point, because it’s somewhat related: for those who claim the Scandinavian countries are socialist. Uh, no. They do not have public ownership of production, state power in the hands of the working class, or state monopoly on trade—and those are only the foundations upon which socialism can be built, not even addressing distribution. Socialism does not mean capitalism that isn’t quite as brutal as it is elsewhere. It is a sign of the poverty of political understanding in the US, and additionally a sign of the barbarity of the US ruling class, that anyone could look at those countries and consider them socialist. As a side note, I have yet to meet anyone from Sweden or Norway or Iceland or Denmark or Finland who claims to live in a socialist country.
It isn’t worth arguing about whether we could have a free-market capitalist economy that would work well. What we have does not match up with capitalist theory, and it’s unlikely that we can get the political will to force the US government to force the national economy to fit that theory. So arguing that “real” capitalism might work, is as useless as arguing that “real” socialism could work. In the short run (which translates to “for the foreseeable future”) we will try to muddle through.
Whether or not the economy has evolved into an inevitable state along its developmental path which requires it to fall apart, there are external forces which tend to do that. Fossil fuels continue to take more resources to extract the same amounts. That says we are getting poorer on average. Maybe technological change can give us new kinds of riches that might seem to make up for what we are losing. Maybe you can have a cell phone with more computing power than the entire world had in 1980, that uses a tiny trickle of power. Regardless, corn, wheat, peanuts, lentils, and beef are getting more expensive. Salmon is getting much more expensive. There isn’t that much wild-caught salmon any more and farmed salmon hasn’t expanded enough and maybe can’t.
Fossil fuels are harder to come by. Climate change is having hard-to-predict results that are small but growing. Any system would have trouble dealing with this. Traditionally the USA played a game sort of like crack-the-whip — we could export our uncertainty. Things that caused a small price difference here would result in things very cheap or else unavailable in countries at the tail end. Now China exports their uncertainty to us. We are not at the head any more. And the whole thing has gotten more unstable.
The investors seem largely paralyzed here. Is it that there’s so much uncertainty? The techie stuff is changing so fast that investing in tech you can lose everything if you zig when somebody more successful zags. Until recently it was damn risky to invest in solar panels. China can dump them here and then yours don’t sell. I don’t know whether the announced tariffs will actually take effect, or how much good they’ll do.
It plain makes more sense to invest in China. Except they aren’t anything like a free market either. Their economists were trained as communists. They learned all the ways that capitalist systems can cheat people, and they are systematically trying all of them out. If you invest with them, at any time they might decide they have been infested enough and just take whatever they can grab. Serves you right, capitalist swine.
But if you invest in the USA, there’s a chance the USA will become an also-ran that is not worth investing in. Investors hesitate. They look for good straddles, they try for no-risk military contracts, they bet on what the politicians will do — anybody for private prisons? — but they don’t put much into the things that we will need if we hope to keep the economy going in the long run. It’s risky.
I don’t know what to expect when the status quo definitely fails. Possibly we will get a consensus about what to do and just do it. Maybe we will have a famine. I can’t predict.
Jonah, can you say more about the exportation of uncertainty and its food chain, or link me to resources (or even just Google search terms) I could use to explore that idea further? It seems obvious but also startling, and I would very much like to learn more about it.
I can’t give you links. It’s obvious, it’s folk wisdom. “When the USA catches cold, Mexico gets pneumonia.”
When we overproduce something (due to good weather or bad planning etc) we dump the rest on other countries cheap. (Though we have signed treaties promising we won’t do that.) When we underproduce we don’t ship much to them. Their prices go up and down much more than ours do. Local competitors and also businesses that use our exports to make their own products have trouble planning — they don’t know how much will be available or at what price.
The other difference between the US after WWII and everywhere else was that the US did really well out of the war. They hadn’t been invaded or bombed, and their industry had been charged up with huge amounts of government money over the previous few years. Now there wasn’t a war on, all of that surplus capacity could go towards things like cars and homes.
Pretty much everywhere else, by contrast, had either been invaded, or at least bombed, and was half-destroyed. The UK sustained less damage than mainland Europe, but the only money we had was borrowed from the US, and we’d lost so much in terms of manpower and resources.
Because of this, the US had no need to pander to the masses with ‘socialism lite’ policies, capitalism was delivering luxuries already.
Oh, and the phrase we use over here for Scandinavian politics is “social democracies”. A little bit socialist, but mainly vanilla democracy.
Puzz: Just to be clear, there was more to it than “delivering luxuries.” During the course of 1946, at some point, one out of every 4 US workers was on strike. The strike wave continued until 1948. That was, in many ways, the high point of industrial unionism in the US.
In the mode of we are where we are and what can we do to move forward, here are a few thoughts:
There are a number of actions that can be taken to make the US more of a democracy (one person, one vote) that do not require constitutional ammendments. Some of these are:
Ending gerrymandering.
Redoing the Apportionment Act of 1929 so that the number of Representatives is more reflective of the population.
Ending voter purging and other voter suppresion methods.
…
I think that the more actually representative of the population the elected government is, the more quickly things can be moved towards a government that actually reflects the needs and concerns of the people.
Education is very good. Education should be free to all who want it. This can obviously be done with no constitutional changes needed.
Changing the number of Senators requires a constitutional ammendment.
Changing the requirement of the Electoral college requires a constitutional ammendment, but changing its selection only requires state law changes.
Laws increasing the power of workers and curtailing the power of corporations and oligarchs can be passed.
…
So, there are a lot of things that could be done and should be done that move us away from the edge of oligarchic collapse that is really the third rail of history.
There’s a movement to make the EC irrelevant without changing the constitution.
The idea is that enough states swear to support the winner of the popular vote, that the winner of the popular vote will have to win the EC. They are promising to do that once enough states promise to do it, that it actually works.
They need 270 EC votes, and currently they have enough states to get 172 EC votes. If they get enough further states to get 98 more EC votes, then it takes effect.
https://www.nationalpopularvote.com/
Jonah:Yes, that’s a specific example of the general Electoral college change I was talking about. Thanks for the link.
Another set of changes involve the reduction of the influence of money and corporations in politics. This should be doable through laws, but the current Supreme Court majority loves corporations, so a constitutional or court change may be needed there.
Also, laws could be changed that currently support the role of two parties in elections. These are purely state laws.
The tax structure can certainly be changed to actually be supportive of workers and not capital accumulation.
Banking laws can be changed.
Medical insurance can be changed.
The various electoral changes would lead us towards the goal of the power of the state being firmly in the hands of the people — where it should be. Once that occurs, subsequent changes in ownership can be accelerated.
Free market? What free market? Except, maybe, for some farmer’s markets, there are no free markets anywhere I am familiar with. The first thing any right-thinking capitalist (pun intentional) does it try to either establish a monopoly or come to a tacit agreement with competitors not to compete. When is the last time you have heard of an anti-trust case? And even in those farmer’s markets, I wager that there are tacit understandings not to cut price. My wife was a professional translator and when she was breaking in and offered a cheap rate for a charitable, all the other translators dumped on her. Once she got established she charged the going rate. Free markets; don’t make me laugh.
And I don’t think there is a genuine socialism anywhere in the world, either. The Soviet Union was just another oligarchy. Cuba? Maybe at the beginning, but the workers never owned the means of production. A government did. And I won’t discuss the disaster that is Venezuela.