The word socialism
first appeared in 1827. Robert Owen defined socialism as “the abolition of private property”. Karl Marx took a
similar line, and extended the idea of common ownership to the national economy.
At least at that time, socialism and communism were virtually synonymous, especially in terms
of their shared vision of the final goal. They both meant the common ownership
of the means of production, and the end of markets and competition.
Robert Owen
This view persisted throughout the twentieth century, including within the UK Labour Party. George Bernard Shaw wrote with approval: “Socialists are trying to have the land and machinery ‘socialised,’ or made the property of the whole people”. In 1908 the Labour Party Conference passed a resolution, adopting the aim of “the socialization of the means of production, distribution and exchange to be controlled by a democratic state”. In 1924 Sidney Webb summarized his view of socialism as involving “(1) Collective Ownership; (2) Collective Regulation; (3) Collective Taxation; and (4) Collective Provision”.
Similar views were found among Labour
Prime Ministers. J. Ramsay MacDonald saw socialism as “a movement to supplant
Capitalism altogether, by organising communally the services which Capitalism
performs or ought to perform.” In 1937 Clement Attlee wrote of the “evils” of
capitalism: their “cause is the private ownership of the means of
life; the remedy is public ownership.” Attlee then approvingly quoted the words
of Bertrand Russell: “Socialism means the common ownership of land and capital
together with a democratic form of government.”
In my book Is Socialism Feasible?I show the persistence of this view of socialism. I also discuss several attempts to change its meaning, including by Douglas Jay, Anthony Crosland, Deng Xiaoping and Tony Blair. Blair tried to shift the meaning to social-ism, by replacing the goal of common ownership by vaguely-specified “ethical values” and a recognition that individuals are socially interdependent. This attempt to revise the meaning has not made much of a mark.
Deng Xiaoping faced the
problem of persuading the Chinese Communist Party to support his enormously
successful market reforms. Deng declared:
“The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all … common prosperity is the essence of socialism.”
Note the subtle shift from property to prosperity. If that is socialism, then few people are not socialists.
But the original meaning endures. The Merriam-Webster
Dictionary defines socialism as “a system of society or group living in which
there is no private property” or “a system or condition of society in which the
means of production are owned and controlled by the state.” This is remarkably
similar to the original definitions of Owen and Marx.
How
moderates help Corbyn, and socialists help Trump
Among prominent living politicians today, including
Jeremy Corbyn, Bernie
Sanders and Jean-Luc Mélenchon, Socialism has retained its original meaning,
of widespread common ownership, or at least they have not renounced that original
definition.
Bernie Sanders
At the same time, leading Labour Party moderates
who support a mixed economy continue to support “democratic socialism”. By
doing so they give succour to the full-blooded socialist left, who are much
closer to the enduring traditional view of socialism than the moderates themselves.
We can pretend that the word socialism has
shifted in meaning, but there is little evidence of a major and widely accepted
change.
Moderate or otherwise, those using the “democratic
socialism” label help to sustain the mistaken idea that socialism (in its enduring
and prevalent sense) is compatible with democracy. History and theory both show
that a totalitarian concentration of political power flows inevitably from the unmitigated
concentration of economic power in the hands of the state that is associated
with large-scale socialism.
Alexandria Ocasio-Cortez
A similar problem exists in the US, particularly
after the recent election of a young group of socialists to congress, including
the impassioned and eloquent Alexandria Ocasio-Cortez. Along with Sanders, they
are members of the Democratic Socialist Alliance (DSA) within the US Democratic
Party.
The DSA argues for “a vision
of a humane international social order based both on democratic planning and
market mechanisms”. They also argued that “widespread worker and public ownership will greatly lessen
the corrosive effect of capitalists [sic] markets on people’s lives”. While, unlike many other socialists, the
DSA notably accepts an enduring role for markets, its agoraphobic bias is
revealed by the failure to mention the corrosive effects of bureaucracy on
people’s lives.
In some
statements, leading DSA politicians seem to favour Nordic-style, welfare state
capitalism. But they have not made it clear that they support the large private
sectors and financial markets that are prominent in all the Nordic countries. Instead,
they go along with the abolition of capitalism. They distance themselves from
the Communist regimes of the past. But while the experiment with socialism in
Venezuela has led to a catastrophic human disaster, they
fail to come out in full condemnation of that regime.
This helps
Trump. Not only does he mobilise racist prejudices, he also uses their
self-declared socialism to describe
them as communist. Given that socialism and communism were (at
least originally) virtual synonyms, this ammunition is handed to Trump by his
most fervent opponents.
The changed
meaning of social democracy
When Social Democratic parties were first formed
in Europe in the nineteenth century, most were strongly influenced by Marxism.
They were fully socialist in its original sense.
Some separation of meaning between socialism and
social democracy occurred beforehand, but it was brought to a head by the onset
of the Cold War in 1948. Europe as a whole, and Germany in particular, were
divided between the Eastern and Western Blocs.
All socialist and communist parties had to
choose – the East, the West, or a plague
on both? With Moscow ties in many cases, almost all Communist parties chose the
East. Many moderate Socialist, Social-Democratic or Labour parties chose the West.
SPD Congress in Bad Godesberg 1959
At its Bad Godesberg Congress in 1959, the
German Social Democratic Party (SPD) made fundamental changes to its aims. It
dropped its opposition to capitalism, and it abandoned the Marxist analysis of
class struggle. The
SPD declared:
“The Social Democratic Party therefore favours a free market wherever free competition really exists. Where a market is dominated by individuals or groups, however, all manner of steps must be taken to protect freedom in the economic sphere. As much competition as possible – as much planning as necessary.”
The crucial point here is that the
SPD moved from (temporary or permanent) toleration
of markets and competition, to accepting
markets and competition as desirable, alongside strong public enterprise
and state regulation where necessary.
This explicit and fundamental change in
aims in the world’s largest and most influential Social Democratic Party led to
a separation of meanings of the terms social
democracy and socialism. But it
must be acknowledged that strong residues of old-style thinking persisted, in
the SPD and in social-democratic parties in other countries.
The acid
test
There is a simple test to distinguish a socialist from a social democrat, according to currently prevalent meanings of those
words.
To be a social democrat it is not enough to accept
markets and a mixed economy, as Jeremy Corbyn, John McDonnell and the Democratic
Socialists of America have done. After all, a mixed economy could be accepted
as a temporary staging post in the transition to full-blooded socialism, as Vladimir
Lenin did with his New Economic Policy in 1921.
A modern social democrat must go further. He
or she must make a clear and positive case why markets, competition and a private
sector are more than a temporary expedient. It
must be argued that these things are indispensable, both for economic efficiency
and the preservation of freedom. This is the acid test. The SPD in 1959 understood
this point and it passed the test.
As far as I am aware, neither Corbyn, McDonnell, Sanders nor Ocasio-Cortez have made such a positive case for a permanent private sector. If I am right, then they are socialists, not social democrats. Despite their protestations, they are closer to traditional communism than to modern social democracy, as practiced in the Nordic countries and elsewhere. I would be delighted if they can prove me wrong.
Large-scale socialism is outdated, extreme and
demonstrably incompatible with democracy. At least if these declared socialists
want to win parliamentary majorities and form governments, then they have to
change their terminology, and dispose with outdated and unfeasible ideas.
But while Nordic social democracy remains remarkably successful (as I show in my book Is Socialism Feasible?) the social-democratic brand throughout Europe has declined in electoral support. Although re-naming is necessary, much more than renaming is required. The abandonment of the socialist label is but a first step. But that is another story.
17 July 2019
References
Attlee, Clement R. (1937) The
Labour Party in Perspective (London: Gollancz).
Blair, Tony (1994) Socialism,
Fabian Pamphlet 565 (London: Fabian Society).
Crosland, C. Anthony R. (1956) The Future of Socialism (London: Jonathan Cape).
Democratic Socialists of America (1995) ‘Where We Stand: Building the Next Left’, DSA: Democratic Socialists of America. https://www.dsausa.org/where_we_stand.
Griffiths, Dan (ed.) (1924) What is Socialism? A Symposium
(London, Richards).
Jay, Douglas (1937) The
Socialist Case, 1st edn. (London: Faber and Faber).
When vital words lose their meaning, then democracy will die
Geoffrey M. Hodgson
Theresa May once told us that “Brexit means Brexit”. We were not made any wiser.
In George’s Orwell’s famous book 1984, the all-powerful Party has the slogans “War is Peace”, “Freedom is Slavery”, “Ignorance is Strength.” We are much closer to that Orwellian World of doublethink now.
In the local elections on 2 May 2019 there was a surge in the vote for the remain parties – Liberal Democrats, Greens, Scottish Nationalists and Plaid Cymru – who do not want Britain to leave the European Union. In a campaign with “Stop Brexit” as their by-line, the Liberal Democrats gained over 700 council seats, their all-time best performance.
Meanwhile, the two main parties who “respect” the illegally-gained referendum result and who are trying to get some kind of Brexit deal, suffered badly. Labour failed to make net gains against the worst government in more than a century, and the Tories themselves lost heavily.
Hence voting for Remain means voting for Brexit. The Orwellian world of doublethink has finally arrived, 35 years after the book predicted. Remarkably few media interviewers or presenters, including from the corrupted BBC and the populist ITV, have challenged this interpretation of the election results. Ignorance is strength. Remain means Brexit.
Brexit means Remain
But in this Orwellian world, Brexit means Remain too. We are now into double doublethink.
The brilliant and indefatigable Femi
Oluwole tried to put Madeley right. Femi is an expert in EU law. But it was to
no avail. The idea that remaining in a customs union means remaining in the EU
prevailed on a popular ITV programme, which boasts about 700,000 viewers daily.
It got even worse. On 4 May 2019 the Tory MP Mark Francois
was interviewed by Femi. First Francois claimed that any customs union with the EU mean that the
UK would still be “in the EU”, then “in effect” still be in EU, then he
switched back to “in the EU”.
Francois is an opportunist, pandering
to the ultra-Brexiteers who dominate his party. It is possible that, unlike the
poorly-briefed Madeley, he knows the truth. Hence the wily use of the “in
effect” fig-leaf here and there.
I did some polling myself. I did my best to get
Leavers to participate, but any Twitter poll of mine will have a sample bias
toward Remainers. The poll has a relatively small sample of a few hundred
responses, and the results have to be used with caution.
Amazingly, despite the likely Remainer bias, 22 per cent on my poll thought that the statement “If UK is in a customs union with the EU, then it is still a member of the EU” is true. 73 per cent thought it was false. 5 per cent of respondents did not know.
Overall,
that means that over a quarter of respondents did not know that it is possible to
be in a customs union with the EU and not be in the EU. If it were possible to
compensate for the likely Remainer bias, then this figure would probably be
higher.
Turkey – already in the EU?
Turkey has a well-established customs union with the EU. This means that its trade tariffs and duties must match those of the EU. It also means that Turkey is heavily embroiled with EU agreements and EU regulations. But Turkey is not a member of the EU.
An EU member state is subject to the privileges and obligations of membership. The member states of the EU are subjected to binding EU laws in exchange for representation within the common legislative and judicial institutions. Turkey has no representation in the European Parliament, and no seat in the Council of the European Union or the European Council. Other than via op-in agreements, it is not bound by EU laws.
But, according to my poll, something around 20 per cent of the British adult population seem to believe that being in a customs union means being a member of the EU. According to them, Turkey must be a member of the EU.
So why did Boris Johnson and Vote Leave tried to scare people during the 2016 referendum by say that Turkey was “to join” the EU? If a customs union means EU membership then Turkey was already a member. But Vote Leave itself implicitly denied this.
According to the mistaken 20 per cent, if the UK stays in a customs union after declaring it has achieved Brexit, then Brexit has not truly happened. This particular Brexit means Remain. Many people, including some politicians and TV presenters, seem to believe this.
A threat to democracy
Whether these misunderstandings result from deceit
or ignorance, they are fatal for rational discourse in a democracy. If
different groups of people are using the same words to mean very different
things, then meaningful conversation is impossible.
Consequently, it cannot be claimed that the meaning of Brexit is generally clear, and it is “the will of the people”. It is no longer reasonable to say that the 2016 vote in favour of Brexit must be “respected” when there is inadequate agreement on what Brexit means, and at least one-fifth of the population misunderstand the basic facts of what being a member or non-member of the EU means. To many people, some Brexits mean Remain.
If our parliamentary system ever regains a measure
of sanity, then one of its first acts of legislation should be to place
constitutional voting thresholds in the use of referendums, especially those
that could lead to major constitutional changes or the removal of our rights.
Even a 60 per cent threshold may be unsafe as a basis for legislation, especially
when over one-fifth may not understand what the proposition in the referendum
means. A super-majority of over 60 per cent must vote for a proposition for it
to have any advisory or compelling force.
Television channels such as the BBC, ITV and
Channel Four have a public service broadcasting obligation as a condition for
the licence to broadcast. This system has clearly failed us. They have a duty
put out the facts, even if the public or the politicians do not want to hear
them.
Television presenters that put out falsehoods such
as “being in a customs union with the EU means being a member of the EU” should
be reprimanded or sacked. A schoolteacher or lecturer that repeated similar
falsehoods would be deemed incompetent and would face a similar fate. There can
be no short measures here. Our democracy is in severe danger.
Driven to extremes
The level of public misunderstanding over what
Brexit or Remain mean puts the Tory government and its current Labour
opposition in great difficulty. To move toward Brexit, they need to agree to
the “backstop” conditions, involving a customs union with the EU, so as to
avoid a hard border between Ireland and Northern Ireland. The alternative is a no-deal
Brexit that would put the UK economy into recession, destroy the Good Friday
Agreement and threaten peace in Ireland and even on the British mainland.
Both the Labour and the Tory leaderships have edged toward a Brexit that avoids a no-deal outcome and keeps a soft border in Ireland. A group of Labour MPs led by Stephen Kinnock want to go even further: they are pushing for Norway-style status after Brexit.
But the current level of misunderstanding over the
meaning of Brexit and Remain puts all these Brexit solutions into great
difficulty. Any Brexit deal involving a customs union or Norway-style membership
of the Single Market, will be seen by around one fifth of the population as not
Brexit but Remain.
Given this confusion, many Labour and Tory voters who
support Brexit will see their parties as betraying the referendum results that
the party leaders themselves have urged everyone to “respect”. Meanwhile,
Labour and Tory voters who support Remain will see the enabling of Brexit as
contrary to the national interest and a removal of individual rights.
Any deal-bound Brexit has now become extremely
difficult and potentially unpopular. Any deal with the EU must involve some
kind of customs union with the EU. But such solutions will alienate large
numbers of Brexiters and even more Remainers. The Brexit discourse has polarised,
with supports of Remain on one side, and advocates of “no deal” on the other.
Nigel Farage understands this. Before the 2016
referendum he advocated a Norway-style Brexit model. He now says that any customs union is a betrayal
and he is pushing for no deal. Thanks to his frequent appearances on the
pro-Brexit BBC and ITV, he is piling up his electoral support and pulling over
large chunks of Tory voters.
“This was the first Electoral test of our policy of ‘constructive’ ambiguity on Tory #brexitshambles. It showed that when you cower in the middle of the road on the biggest existential crisis facing Britain for generations you get squashed.”
As a result, as Bradshaw admitted, lifelong Labour
voters were deserting to the Liberal Democrats.
The battle now is between those that are
campaigning for Remain, including the Liberal Democrats, the Green party and
Change UK, on the one side, and those campaigning for the most extreme and
damaging of all possible Brexits, on the other. The Conservatives and Labour are
piggies in the middle. They will be the losers.
Over two thousand years before Orwell, the great
Chinese philosopher Confucius wrote:
“If names are not right, words are misused. When words
are misused, affairs go wrong. When affairs go wrong, courtesy and music droop,
law and justice fail. And when law and justice fail them, a people can move neither hand nor foot.”
Today, words have been misused. Law and
justice have failed. Politicians are immobilized. A catastrophe is brewing. We must
avert it.
Double doublethink – where both Remain and
Brexit are given their opposite meanings – is making meaningful dialogue impossible
in a divided country. Unlike we act firmly and quickly, our democracy could be disabled.
Difficult and dangerous times are ahead.
Stiglitz is wrong.
The persistent vagueness and misuse of such words sows confusion. In fact, socialism
has an enduring meaning that is virtually identical to that of communism. In
this blog I explain why.
The origins of the words socialism and communism
The word socialism appeared in November 1827 in
the Co-operative Magazine, published by
followers of Robert Owen, where a writer referred to “Communionists or
Socialists”. It was used in the Poor
Man’s Guardian in 1833 and moved into more frequent usage thereafter. As J.
F. C. Harrison noted: “By 1840 socialism was virtually synonymous with Owenism”.
Robert Owen
For Owen and his
followers, socialism meant the abolition of private property. It also acquired
the broader ideological connotation of cooperation, in opposition to selfish or
competitive individualism. Communal property was seen as its defining institutional
foundation. As Owen argued in 1840, “virtue and happiness could never be
attained’ in “any system in which private property was admitted”. He aimed to
secure “an equality of wealth and rank, by merging all private into public
property”.
In 1840 in Paris,
the word communiste appeared in an
article by Étienne Cabet and in a pamphlet by Théodore Dezamy and Jean-Jacques
Pillot. Influenced by Owen, Cabet was a Christian advocate of utopian communist
communities.
Carrying a
letter of introduction from Owen, John Goodwyn Barmby went to Paris in 1840 to
meet the advocates of le communisme. On
his return, Barmby founded the London Communist Propaganda Society in 1841 and established
the Communist Chronicle newspaper. Despite
his close working links with the Owenites, Barmby criticised socialism because “it
wants religious faith, it is too commercial, too full of the spirit of this
world, and therefore is rightly damned”. Communism for him was less
materialistic and more divine.
With the
investment of these idiosyncratic spiritual connotations, Barmby imported the
word communism into English. It
spread in the UK and the US, where the term socialist
was already prominent. The word Kommunist
had appeared in German by 1842, when Marx noted its usage.
In
1843 Engels reported to the Owenite journal The
New Moral World that there were “more than half a million Communists in
France” and that “Communist associations” and individuals describing themselves
as communists were plentiful in Germany, Italy, Switzerland and elsewhere.
Engels addressed his Owenite readers as “English socialists” and saw them as
having very similar aims to the Continental communists.
In
the second (1849) and later editions of his Principles
of Political Economy, John Stuart Mill noted another early difference of
meaning between socialism and communism. For followers of Saint-Simon
or of Fourier in France, communism meant
“the entire abolition of private property”, whereas socialism was “any system which requires that the land and the
instruments of production should be property, not of individuals, but of
communities or associations, or of the government.” Unlike communism, this meaning of socialism
would allow for individual ownership of personal possessions. Hence Mill
described Owenism as communism, because
it upheld the abolition of all private property. But this particular
distinction in meaning between the two words was forgotten after the Owenite and
other utopian experiments faltered.
Perhaps
more influentially, the 1848 edition of Webster’s American Dictionary defined socialism
as a “social state in which there is a community of property among all the
citizens”, and defined communism as “a
new French word, nearly synonymous with … socialism”.
Hence
both socialism and communism referred to the abolition of
(most or all) private property and the establishment of common ownership of the
means of production. Henceforth the two terms became entwined within Marxism, there
to perform an entirely different dance of meaning.
Marxism, communism and socialism
Marx
and Engels often treated the terms socialism
and communism as interchangeable.
But occasionally they gave them different nuances. In 1845 they adopted
the new word communism as their label
for their movement: “Communism is not for us a state of affairs which is to be established, an ideal to which reality [will] have to
adjust itself. We call communism the real
movement which abolishes the present state of things.” When they henceforth
started setting up political organizations they adopted and promoted the term communist rather than socialist. But their ultimate goals were
the same as most socialists at the time.
Frederick Engels
In
1888 Engels explained why he and Marx had chosen the word Communist for theirfamous
Manifesto of 1848. Engels claimed
that the word socialism was then too
‘respectable’ and too ‘middle class’. He wrote:
“Yet, when it was written, we could not have called it a ‘Socialist’ manifesto. By ‘socialists’, in 1847, were understood, on the one hand, the adherents of the various utopian systems: Owenites in England, Fourierists in France, both of them already reduced to the position of mere sects, and gradually dying out; on the other hand, the most multifarious social quacks … in both cases men outside the working-class movement … Whatever portion of the working class had … proclaimed the necessity of a total change, that portion then called itself communist. … Thus, socialism was, in 1847 a middle-class movement, communism a working-class movement.”
Engels omitted to
note that the self-described communists
in the 1840s also had more than their fair share of middle-class devotees, quacks,
bizarre utopians and radical clerics.
It is possible
that Marx and Engels adopted the term communist
partly because it had become more popular in a Continental Europe on the
eve of the 1848 revolutions. While socialism
remained more widespread in Britain, the Owenite movement, with which it
was largely associated, had already passed its peak by 1847. While the younger
term communism had already attracted several
oddballs in the seven years of its use, socialism
had the additional negative legacy of numerous failed utopian experiments in
the 1820s and 1830s, in the UK and the US.
Instead of small-scale
utopian experiments, Marx and Engels favoured a global insurrectionary strategy.
As Engels observed in 1843, the French communists understood the need for “meeting
force by force … having at present no other means”. Marx and Engels chose the
word communism in the 1840s, not
because their goal was different from socialism, but partly because many
self-described communists in
Continental Europe promoted armed insurrection. The penultimate section of the Communist Manifesto attacks various
strands of socialism, not for their collectivist goals, but for their impractical
strategies and their failure to countenance the use of force. The final
paragraph of the whole work drives the point home: “The Communists … openly
declare that their ends can only be attained by the forceful overthrow of all
existing conditions.”
But
a few decades later, the word socialism was
again in the ascendant. In 1880 Engels published Socialisme utopique et socialisme scientifiquein the French Revue
socialiste: notably he put socialisme
rather than communisme in the title.
By 1890 a number of parties describing themselves as socialist or
social-democratic had taken root in Germany, France and elsewhere. In 1895,
Engels wrote approvingly of “the one great international army of Socialists, marching
irresistibly on and growing daily in number”. The earlier emphasis on physical
force was also reduced: the possibility of achieving their goal by democratic
means, rather than by insurrection, seemed greater than before. One of the
major reasons for using the term communism
rather than socialism had disappeared.
William Morris was an artist, craftsman and writer, and one
of the first English intellectuals to embrace Marxism. Writing in a 1903 Fabian
Tract, he saw socialism and communism as virtual synonyms: “between
complete Socialism and Communism there is no difference whatever in my mind”.
They assert that the means of production and the resources of nature “should
not be owned in severalty, but by the whole community”.
Whether they
used the term socialism or capitalism, their fundamental aim was
clear. In the Communist Manifesto,
Marx and Engels echoed Owen and called for the “abolition of private property.”
They proclaimed an economic order in which “capital is converted into common
property, into the property of all members of society.” Engels repeated in
1847: “The abolition of private ownership is the most succinct and
characteristic summary of the transformation of the entire social system … and
… is rightly put forward by the Communists are their main demand.” In 1850 Marx
and Engels again declared: “Our concern cannot simply be to modify private
property, but to abolish it”.
This meant the
complete abolition of markets. They wanted an end to the “free selling and
buying” of commodities. As Marx wrote in 1875: “Within the cooperative society
based on common ownership of the means of production, the producers do not
exchange their products”. Engels argued in 1884 that “no society can
permanently retain the mastery of its own production … unless it abolishes
exchange between individuals.” The abolition of markets was seen as necessary
for social control.
By emphasizing
national ownership, Marx and Engels went much further than Owen and most other
early socialists or communists. Marx and Engels welcomed efforts “to centralize
all instruments of production in the hands of the state” and looked forward to
a time when “all production has been concentrated in the hands of a vast
association of the whole nation”. Described as either communism
or socialism, this utopia of national
ownership and “social” control persisted in their writings.
Phases of communism
In his Critique of the Gotha Programme of 1875,
Marx used the term communism to
describe his goal. He considered “the first phase of communist society as it is when it has just emerged
after prolonged birth pangs from capitalist society.” Eventually a new order
would follow:
“In a more advanced phase of communist society, when the enslaving subjugation of individuals to the division of labour, … when the all-around development of individuals has also increased their productive powers and all the springs of cooperative wealth flow more abundantly – only then can society … inscribe on its banner: From each according to his abilities, to each according to his needs!”
Hence Marx considered
a “first phase” and then a “more advanced phase” of communism. Writing in his State and Revolution in August 1917,
Lenin referred to this passage from Marx’s Critique
of the Gotha Programme but introduced a different usage. He wanted to defend the planned Bolshevik seizure of power
against the criticism that Russia was insufficiently developed economically for
a radical Marxist revolution.
Lenin amended
the Marxist dictionary and renamed Marx’s “first phase of communist society” as
socialism. Under this socialism the means of production would
be in public ownership but there would still be a struggle against bourgeois
ideas and material shortages. When that struggle was completed, and after the
subjugation of ‘capitalist habits’, full communism
would be established. “The whole of society will have become a single
office and a single factory with equality of labour and pay.”
In contrast, Marx
and Engels never distinguished the terms socialism
and communism in this way. For them, socialism and communism both meant the abolition of the private ownership of the
means of production. They wrote of lower and higher “phases” but did not use
different nouns to distinguish them.
The Socialist
International (also known as the Second International) was a global association
of socialist parties, formed in 1889. In 1919, Lenin and the Bolsheviks broke
from the Socialist International and formed the Communist International (also
known as the Third International). The difference between the Communist and
Socialist Internationals was not stated in terms of ultimate objectives.
Instead the Communist International was formed because several parties in the
Socialist International had supported their national governments in the First
World War. There was no declared amendment of final goals, although leaders of
the Second International were accused of de
facto abandoning socialism.
As I show in my
book Is Socialism Feasible? the original
meaning of socialism persisted even
in the relatively moderate UK Labour Party. It was endorsed by leading members such
as Sidney Webb, Beatrice Webb, George Bernard Shaw, Clement Attlee and Aneurin
Bevan.
The failure of revisionism
Especially since
the Second World War, there have been a number of attempts to change the meaning
of socialism, including by Tony Crosland and Tony Blair. But the resilience of
the original meaning is testified by the endurance of the UK Labour Party’s original
version of Clause Four from 1918 to 1995. This original version calls for complete
“common ownership of the means of production, distribution and exchange” and offers
no defence of markets or a private sector. Labour leader Jeremy
Corbyn is among those that would like to return to the 1918 formulation.
Jeremy Corbyn
Some writers
obfuscate the issues, but the undying commitment on the left to common
ownership and the left’s widespread agoraphobia (fear of markets) testify that socialism
has not changed much in meaning. Although some communists may differ from some socialists
in terms of strategy, in general there is little if any difference in terms of
goals.
By
contrast, the term social democracy
has successfully changed its meaning. It now contrasts with socialism, especially in terms of its
advocacy of a mixed, market economy. In 1959 the (West) German Social Democratic
Party committed itself to a “social market economy”
involving “as much competition as possible – as much planning as necessary.”
This was very different from the enduring meanings of the words socialism and communism. Politicians like Sanders need to make clear where they
stand.
20 April 2019
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Griffiths, Dan (ed.) (1924) What is
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and Northampton MA: Edward Elgar), forthcoming.
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Marx (London: New Park), pp. 195-229.
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“It is at times like these that voices like Geras are sorely needed.” @GraySergeant
“I wish we hard Norm’s intelligence, clarity and compassion to fall back on now.” @SP_Duckworth
Geoffrey M. Hodgson
In 1967, Norman Geras came to the University of Manchester and took up a position as a lecturer in politics. I was then an undergraduate student in Manchester and three years his junior. We were both involved in left politics and our paths soon crossed. Together we campaigned against the Vietnam War.
When I briefly flirted with the International Marxist Group in the early 1970s, Norm was a member too. (I’m unsure when he left – he may have stayed on until its dissolution in 1983.) Norm and I were both members of Marxist reading groups, where together we discussed economics and politics.
Disillusioned with the far left, I re-joined the Labour Party in 1974. (I was previously a member in 1966-1968.) Norm did not take that route. Yet we remained in contact until I left Manchester in 1980. I returned to the University of Manchester on a research fellowship in the 1984-1985 academic year. Norm and I met up again. I recollect another study group in that year in which we both took part.
Marx and Human Nature
Norm’s 1983 book on Marx and Human Nature had a big impact on me. In the 1970s he had argued forcefully that the natural foundations of human existence had to be taken into account. The book refuted the fashionable misconception that Marx had denied the existence of a universal human nature.
Against social constructionism, Norm argued that human beings cannot be reduced merely to their relations with others. He argued more generally that human nature had biological as well as socio-cultural foundations.
In 1983 I had already encountered the work of Thorstein Veblen. These influences drove me into biology and evolutionary anthropology. In retrospect, Norm’s input was crucial in the development of my thought. The result was a number of works of mine on evolutionary themes, particularly from 1993 onwards.
After I finally left Manchester in 1985 I did not meet Norm again. We moved in different political spheres and I lost personal contact, but his incisive intelligence had made a permanent mark on me. Despite the intense political disputes on the left, he was always respectful and never acrimonious.
The 2003 Invasion of Iraq
In 2003 Norm retired from his post of Professor of Politics at the University of Manchester. That was the year of the fateful invasion of Iraq. He started a blog, when this mode of communication was in its infancy. Unfortunately I was unaware of this initiative at the time.
Norm supported the US-led invasion in 2003. He argued that it was a humanitarian intervention to remove the vicious dictator Saddam Hussein.
I had supported the first Iraq War in 1990-91 on the grounds that it was important to restore Kuwait’s sovereignty after Saddam’s invasion.
But, like many others, I opposed the 2003 invasion because of its lack of UN backing, its illegality, and disbelief in the pretext that Saddam had weapons of mass destruction. I thought that it would have been better to put other pressure on the regime, along the lines proposed by the French government at the time.
The Euston Manifesto
In 2006 the Euston Manifesto was published. I did not become aware of its existence until a couple of years later. The Euston Manifesto is a bold plea for democracy and universal human rights and for a re-alignment on the left. Its signatories include supporters and opponents of the 2003 invasion of Iraq.
The Euston Manifesto launch in 2006 Left to right: Alan Johnson, Eve Garrard, Nick Cohen, Shalom Lappin and Norman Geras
The Manifesto criticises that “anti-imperialist” left that ends up supporting totalitarian regimes and reactionary insurgent forces, on the grounds that that they are opposed to the West. The Manifesto unequivocally condemned terrorist and the deliberate use of force against civilians.
Principle number seven of the Manifesto reads:
“We recognize the right of both the Israeli and the Palestinian peoples to self-determination within the framework of a two-state solution. There can be no reasonable resolution of the Israeli-Palestinian conflict that subordinates or eliminates the legitimate rights and interests of one of the sides to the dispute.”
Crucially, the Manifesto recognizes the right of both Israel and Palestine to exist, against the “anti-Zionist” rhetoric of many on the left. This “anti-Zionist” left aligns with groups such as Hamas and Hezbollah who declare explicitly for the destruction of Israel.
On reading the Euston Manifesto I found myself in complete agreement with it. I wrote to the organizers offering my support and my signature. But I received no response. It seemed that the group had quickly become moribund.
The Norman Geras Reader
Norm died of cancer in October 2013. I have recently read The Norman Geras Reader – a great collection of some of his writings, which was published in 2017. The Reader also contains the text of the Euston Manifesto.
Everyone on the left would benefit from the Reader, especially the majority in the Labour Party who have come under the sway of a leader who is anti-West, who has joined in with promotors of terrorism, who has shared platforms with anti-Semites, and who remains equivocal about the right of Israel to exist.
The “What’s there is there” subtitle of the Reader in part refers to instances of anti-Semitism in Marx’s writing, which some Marxists choose to deny. Today it might also apply to another over-adored leader of our time.
Long before others, Norm rang alarm bells about these reactionary tendencies on the left. This remains one of the most important and prescient features of Norm’s writing. This is one of several reasons why he deserves to be remembered.
Marxism and liberalism
But despite our strong convergence over the Euston Manifesto, I found that in other respects Norm and I had diverged since we last met in the 1985.
Karl Marx
Norm had moved politically in a liberal direction, but I had moved further. The Norman Geras Reader shows that Norm had remained a Marxist (of sorts) until his death. By contrast, I had departed from Marxism in about 1980 and set out on a decades-long journey from socialism to liberalism.
Despite his continuing adherence to Marxism, the Reader shows that Norm was strongly sympathetic to liberalism and he took its achievements very seriously.
For example, in a 1999 essay he argued that a “minimum utopia is to be conceived not only as socialist but also as liberal”. In 2012 he argued more forcefully:
“Unless … Marxists show themselves willing to engage fully with the intellectual resources of liberalism … unless a Marxist political theory comes to terms with the truths of liberal political theory, acknowledging the normative force of human rights, the idea of judicial independence and the separation of powers … insisting on free elections and an untrammelled freedom of speech and opinion, understanding the virtues of political pluralism … Marxism as a political movement might as well shut up shop.”
Bravo. But unlike Norm I agree with the closure of Marxist activity in the conclusion as well as with the preceding necessary conditions. Marxism cannot be liberal and it should shut up shop as a political movement. We can retain Marx’s more robust analytical insights, particularly on the nature and dynamics of capitalism.
But Marxist politics have been a disaster, and its dreadful and murderous consequences are not accidental. Marxism is incompatible with liberalism.
The politico-economic preconditions of liberalism
Norm rightly berated Stalin and other totalitarian Marxists. But are the disastrous consequences of Marxist regimes all down to bad people gaining positions of power? Surely it must be more than that? Why has every Marxist regime breached human rights, terminated free elections, curtailed freedom of speech and ended political pluralism?
To answer these questions we must look at the politico-economic conditions under which liberal-democratic states have been established and sustained. It is not just about the personalities of individuals.
There is a widespread opinion among non-Marxist social scientists that democracy requires countervailing political and economic power to have a chance of survival. In Marxist terms, if the economic “base” determines the “superstructure”, then a pluralist polity requires a pluralist (or mixed) economy, and not one that is encompassed by a massive state.
A complete concentration of political and economic power in the hands of the state, which Marx and Engels advocated with enthusiasm, always requires and enables a despotic political regime. There are no exceptions. The centralizing economic project within Marxism is incompatible with liberalism.
Accordingly, to prevent such a concentration of economic and hence political power in the hands of the state, there must be a private sector that is free to trade on markets.
Capitalism, socialism and greed
Norm disliked the greed and avarice that is often encouraged by capitalism. I do too. But I have learned that market economies come in many forms and are infused by different cultural precepts. A market economy does not necessarily mean a dog-eat-dog dystopia of greed and selfish individualism. As the Nordic examples illustrate, a better capitalism is possible. We need to build on their achievements and move still further in an egalitarian direction.
Furthermore, socialist bureaucracies can encourage selfishness, corruption and ruthless, power-seeking behaviour. Under real socialism these outcomes have typically been just as bad as those found within the worst of capitalisms.
A Worker Cooperative in New York City
Our understanding of human nature is relevant here, as Norm would have insisted. Over hundreds of thousands of years we have evolved to cooperate in small groups of no more than a hundred or so. This suggests that If socialism is to work, then it must be on a small scale.
Capitalism can also engender cooperation within autonomous firms, coordinated by markets. Some of these enterprises could be converted into worker cooperatives.
Class struggle and universal rights
There is a second reason why Marxism is incompatible with liberalism and with the principles in the Euston Manifesto. It concerns the issue of class struggle and proletarian dictatorship, about which Norm (at least in his Reader) had little to say.
Frederick Engels
In Marxism, class struggle is both an analytic and a normative doctrine. It is about the working class seizing power and ending the rule of the capitalists. This doctrine means that the rights of one social class are privileged over another. Universal individual rights are no more. As Engels put it, the legal and individual rights of the Enlightenment are “nothing more than the idealized kingdom of the bourgeoisie.”
Any regime that denies rights to some, especially with malleable criteria concerning who is denied those rights, ends up denying rights to everyone. These are the consequences of Marx’s notion of class struggle and the “dictatorship of the proletariat”.
This is a clear totalitarian impulse. Marxist revolutionaries are deemed to know better what is in the interests of the working class than the working class itself. Democracy becomes an impediment to the realization of those true interests, about which the masses are not fully aware.
Conclusion: wrong turnings
Alas, Norm was silent in his writings about these problems (as far as I am aware) and I never had the chance to discuss them with him. I would have welcomed that.
The Euston Manifesto was a noble attempt to re-orient the left. Especially in the light of the Corbynista takeover of the Labour Party and the rise of anti-Semitism on the left, it should be re-read today. But sadly the Manifesto initiative was stillborn.
I wonder if one of the reasons for the failure of the Manifesto to keep up the momentum it briefly gained at its launch was the incomplete diagnosis by its promoters of where the left has gone wrong?
The Norman Geras Reader shows that the one leading Eustonite was still under the gravitational pull of Marxism, and reluctant to break from its power. (But Eustonite Alan Johnson took a different view on this important issue.) For whatever reason, The Euston Manifesto became a terminus, rather than the starting point of another journey.
Norm and I were both strong opponents the “anything goes” cultural relativism that overtook the left after the Vietnam War. Nick Cohen shows in his book What’s Left? that cultural relativism was one major wrong turning made by the left in its long evolution from the eighteenth century.
But another was the abandonment of universal human rights, when the influence of Marxism over the left became pre-eminent in the late nineteenth century. That wrong turning must also be recognized and reversed. That necessitates a break from Marxist politics, rather than promoting the unrealizable fantasy of a Marxist-liberal marriage.
We live in increasingly worrying times. We need another Manifesto that builds on Norm’s achievement but takes us still further toward the goal of a more egalitarian and humane society.
Camic, Charles and Hodgson, Geoffrey M. (eds) (2011) Essential Writings of Thorstein Veblen (London and New York: Routledge).
Cohen, Ben and Gerrard, Eve (eds) (2017) The Norman Geras Reader: ‘What’s There is There’ (Manchester: University of Manchester Press). See esp. pp. 56, 108.
Cohen, Nick (2007) What’s Left? How the Left Lost its Way (London and New York: Harper).
Geras, Norman (1983) Marx and Human Nature: Refutation of a Legend (London: Verso).
Hodgson, Geoffrey M. (1993) Economics and Evolution: Bringing Life Back Into Economics (Cambridge, UK and Ann Arbor, MI: Polity Press and University of Michigan Press).
Hodgson, Geoffrey M. (2013) From Pleasure Machines to Moral Communities: An Evolutionary Economics without Homo Economicus (Chicago: University of Chicago Press).
Hodgson, Geoffrey M. and Knudsen, Thorbjørn (2010) Darwin’s Conjecture: The Search for General Principles of Social and Economic Evolution (Chicago: University of Chicago Press).
Rich, Dave (2016) The Left’s Jewish Problem: Jeremy Corbyn, Israel and Anti-Semitism (London: Biteback).
When it was used by Robert Owen and his followers from the 1830s, the word socialism meant “the abolition of private property” and the adoption of widespread common ownership. That same meaning was accepted by Karl Marx and Frederick Engels. It was used in the twentieth century to describe Marxist regimes in Russia, China, Cuba and elsewhere. The goal of widespread common ownership was inscribed in the aims and values of the UK Labour Party from 1918 to 1995.
The socialist algorithm has eight steps, arranged in a loop:
Step 1: Critique. Point to all the dreadful things that have happened under capitalism, including war, famine, oppression, exploitation, economic inequality and environmental degradation.
Step 2: Dream. Propose a non-existent, imaginary socialism that is highly democratic, peaceful, egalitarian and non-discriminatory. Say that it includes widespread state ownership but avoid going into details on how a large-scale complex system would work, or about the institutional and administrative mechanisms involved, or how ultra-democracy would operate in practice.
Step 3: Ignore. Discount claims by leading economists, political scientists and historians that such a system could not work fairly and humanely, at least unless major roles were retained within the system for markets and private property. Press on regardless to the next step.
Step 4: Solidarise. Choose some regimes in the past that started on the socialist road, such as Russia, China or Cuba. If a new explicitly socialist regime – Venezuela for example – pops up and carries out some policies you like, such as reducing poverty and illiteracy, then give it your support for a while.
Step 5: Blame. When things go wrong with the nominated socialist regimes in Step 4 – including war, famine, oppression, exploitation, economic inequality or environmental degradation – blame foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries. Don’t blame the issues ignored in Step 3.
Step 6: Deny. When it proves difficult to blame everything that goes wrong on foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries, then deny the scale or even the existence of the problems.
Step 7: Rename. At the point where the socialist regimes nominated in Step 4 become so dreadful – with war, famine, oppression, exploitation, economic inequality or environmental degradation – to the point where blame or denial (Steps 5 and 6) are no longer plausible, then declare that these regimes were not, or are no longer, socialist.
Step 8: Return. Collect £200 and go back to Step 1.
This algorithm has variant criteria, particularly over those used to decide what regimes are described as socialist under Step 4. This leads to endless controversies among socialists over the criteria and outcomes of such choices.
The personal determination to deny facts in Step 6 may also waver among some less-hardened comrades.
Further controversy exists among socialists on the criteria deployed in step 7, which trigger the abandonment of the socialist label in particular cases.
The Russian Revolution
The Russian Revolution instigated the socialist algorithm and led to countless runs of the program. It has also illustrated numerous variants.
Some say that it never was “proper socialism” in the first place, for some reason, such as the failure to establish worker control of the factories, or the dissolution of democratic government. These purists move rapidly to Step 7, collect their £200, and move back to Step 1.
Bertrand Russell quickly collected his £200. He visited Russia in 1920 in a Labour Party delegation, where among others he met Lenin. Russell wrote in 1924: “Socialism … means the common ownership of land and capital, together with a democratic form of government.”
Hence, for him, Bolshevik Russia was never socialist. But Russell did not consider the possibility that any concentration of ownership and economic power in the hands of the state would always undermine political democracy. (Step 3.)
Or you may say that the Bolshevik regime was socialist up to the restoration of some private ownership and markets with the New Economic Policy in 1921. Or you could say that socialism ended in Russia with Stalin’s consolidation of power in 1928. Die-hard forgivers of Stalinism would say that it ended in 1991.
To survive, the die-hards need a good dose of denial (Step 6). For example, in 1990 Corbyn’s future aide Seumas Milne suggested that estimates of deaths under Stalin by Robert Conquest and others were too high. This was quickly contradicted when more evidence became available in 1991 showing that earlier estimates, particularly by Conquest, were in the right ball park.
Socialist Scrabble
Imagine the consternation and debate caused in Marxist circles over these problems. The neatest solution is to avoid any proclamation of socialism and describe all Soviet-style regimes as “state capitalist”. This is the ingenious solution of Tony Cliff and others. Cliff was the founder of what eventually became the Socialist Workers Party.
The trouble with this solution is that the definition of capitalism becomes so flattened and widened that it bears less resemblance to Marx’s analysis in Capital. This disparity becomes more severe when the importance for capitalism of financial markets is taken into account, as highlighted by Joseph Schumpeter and others. Competitive financial markets played no more than a marginal role in Russia from 1917 to 1991.
Leon Trotsky
Leon Trotsky was more subtle. He introduced the concept of “degenerated workers state”. This term signalled that the working class had gained power, but the system had become corrupted by an over-bearing bureaucracy. For Trotsky, Soviet Russia was neither capitalist nor socialist.
But true to his Marxist credentials, Trotsky had to argue that a system where a rising class was neither in nor out of power had to be unstable – it could only last a few years.
Trotsky was murdered in 1940, so he left that problem to his followers. This unstable “transitional” regime lasted for well over half a century, defying Trotsky’s analysis.
And so it goes on. There are numerous variants, and many moves on the socialist scrabble board – playing with labels or names.
Socialist Venezuela
The drama in Venezuela is playing out before us. Many – but not all – socialists hailed the election of the radical socialist Hugo Chávez in 1998.
In 2004 a number of intellectuals and politicians signed a “manifesto” declaring that they would vote for Chávez if they were Venezuelans. The signatories included Tariq Ali, Perry Anderson, Tony Benn, George Galloway, Eric Hobsbawm, Ken Livingstone, Naomi Klein, Ken Loach, John Pilger and Harold Pinter.
As late as 2015, when Venezuela was in ever-deepening crisis and human rights violations were abundant, Corbyn’s enthusiasm for the regime was undiminished. He remarked:
As the problems with the regime of Chávez grew in intensity, Step 5 (Blame) came into force. There may have been involvement by the CIA, particularly in the brief coup that overthrew Chávez for a few days in 2002. But hostilities from outside were relatively mild, particularly compared with Civil War that followed the Bolshevik Revolution in 1917. Venezuela continues to sell oil to the US and several other countries. Venezuela buys arms and military equipment from the UK, as well as from Russia and China.
Neither external nor internal opposition can adequately explain the unfolding catastrophe in Venezuela. In fact, the problems started at the beginning. Chávez manipulated electoral mandates to undermine democratic checks and balances, to increase executive power, to neuter the Supreme Court, to make criticism of his government illegal and to increase censorship.
The outcome after 2013 was the disastrous regime of Nicolás Maduro. Venezuela saw famine, oppression, exploitation, economic inequality and environmental degradation.
By 2018 there was hyper-inflation of around a million per cent per annum, and about three million Venezuelans – about 10 per cent of the population – had emigrated.
Despite his 2014 declaration of support quoted above, John McDonnell has now moved to Step 7, helped by a little more denial on the way. On 20 May 2018 he declared “I don’t think it [Venezuela] was a socialist country”. McDonnell has collected his £200 and returned to Step 1.
Conclusion: back to the beginning
Obviously, it all starts with Step 1. Let us pause here for a while. There is a lot wrong with capitalism. But let us distinguish between capitalist democracies and autocracies.
Democracy is a key variable. The Biblical Four Horsemen of the Apocalypse are conflict, war, famine and death. As I have outlined in my book Wrong Turnings, from historical experience the antidote is clear: the chances of war, famine and premature death can be greatly diminished through a society with democratic institutions that defends +universal human rights.
Many of the horrors of capitalism occurred under undemocratic regimes. Wars between democracies are relatively rare. Famines are much less common under capitalist democracies. Consequently, the reduction of death and misery from famine and war is best pursued by opposition to all forms of despotism, whether capitalist or Communist.
This does not mean that capitalist democracies are always peaceful and unoppressive. Far from it. What it means is that there is plentiful evidence that democracy reduces the chances of famine, environmental degradation, premature death and war. And, for explicable reasons, no socialist country has lasted as a democracy.
Dreaming (Step 2) is fine. But we have to practical and realistic. Rather than ignoring in Step 3, we need to understand. One of the major problems with socialism – at least in its statist and non-market versions – is that a concentration of economic power in the hands of the state leads unavoidably to a dangerous and undemocratic concentration of political power.
“There’s no food”
In the Venezuelan case, the concentration of political power, which was designed to achieve statist control of the economy, had adverse effects well before wholesale public ownership was achieved.
Either way, attempts to move toward socialism weaken the economic sources of countervailing power and undermine the socio-economic foundations of democracy. Despite pronouncements to the contrary, the centralizing mission of statist socialism always leads to the destruction of necessary checks and balances.
In history there has been no exception to this outcome. We may dream of socialist democracy, but in the end we must learn from history and from analysts who show the dangers or impracticalities of socialist solutions to the problems in the world. In short, statist socialism cannot co-exist with democracy and with the protection of human rights.
The common core of all varieties of liberalism is the stress on individual liberty and universal rights, including the rights to private property and to freedom of expression. These universal rights and liberties require equality under the law, under a competent legal system that protects rights and pursues justice.
In a previous blog I laid out Seven Dimensions of Liberalism. The present blog extends that analysis by considering different varieties of liberalism within this seven-dimensional space. I contrast what (in forensic mood) might be described as neoliberalism with what I call liberal solidarity.
Classical liberalism
There are several possible names come to mind as possible labels for the highly varied constituent territories of liberalism. Terms such as classical liberalism, new liberalism, social liberalism, neoliberalism and libertarianism should be considered. But all these labels have their problems.
Adam Smith
Consider classical liberalism. This is typically applied to foundational liberal thought from John Locke, through Adam Smith and Jeremy Bentham to John Stuart Mill. But there are profound divisions within classical liberalism.
Thomas Paine’s pursuit of measures to reduce inequality is unmatched by his liberal contemporaries.
Adam Smith’s emphasis on the importance of “moral sentiments” and justice contrasts greatly with the reductionist-utilitarian approaches developed by Hume and Bentham and adopted (albeit with reservations) by Mill.
Apart from the emphasis on individual rights including private property, the classical liberals agreed on the need for a small state. But they lived in a period when the state and its tax levels were much smaller than they became in the twentieth century.
We cannot automatically assumed that they would have taken the same small-state view in the present context, especially if they were responsive to practical experiment and historical experience.
Consequently, classical liberalism does not denote one distinctive type or phase of liberalism. The original Liberalism from the seventeenth to the mid-nineteenth century contained widely diverging variants.
New liberalism and other labels
A major turn in liberal thought was foreshadowed by Mill and developed in the later decades of the nineteenth century and the early twentieth century by Thomas H. Green, Leonard T. Hobhouse and John A. Hobson in the UK, and in the US by Lester Frank Ward, John Dewey and others.
These “new liberals” saw individual liberty as something achievable only under favourable social and economic conditions. Poverty and ignorance were barren soils for individual freedom and fulfilment. They argued that individual flourishing required the development of an education system, a welfare state and other state action to reduce unemployment and poverty.
John A Hobson
Thinkers such as Green, Hobhouse, Hobson, Ward and Dewey have been described as new liberals. But their ideas are no longer new and the label is in little use today. It also risks confusion with the now-ubiquitous and over-stretched swear-word of neoliberalism.
Social liberalism is another term that has been to describe the strain of liberal thinking – from Green to Dewey – that pursued greater state intervention and a welfare state.
But a problem with this label lies in the multiple meanings of the word social. Many used social liberalism to signal an emphasis on the need for cooperation between individuals through social arrangements to further human fulfilment. The word social here is used in a broad and inclusive sense.
An alternative understanding of social is exclusive: social is regarded as an antithesis to economic. This commonplace but problematic dichotomy contrasts the economic sphere of business and profit-seeking with the social sphere of the family, non-market relations, reciprocity and so on.
This enabled an alternative interpretation of social liberalism as liberalism applied to the narrowly-conceived social sphere. It would involve, for example, the promotion of homosexual rights and the decriminalization of the use of recreational drugs. Worthy as those aims may be, this is a much narrower agenda than that promoted by social liberalism in the broader sense.
Another option is the word solidarism. Inspired by Émile Durkheim and Léon Bourgeois, ideas emerged in France that were similar to and at about the same time as the new liberalism of Hobhouse and Hobson in Britain.
The solidarists criticized extreme laissez-faire and argued that individuals had a debt to society as a whole, which should be repaid through taxation and social welfare schemes. But solidarism in France took a distinctive form, putting more limited emphasis on state intervention than the proposals of some of their British counterparts.
Ambiguities of social democracy
A final term to be considered here is social democracy. This has shifted more successfully in meaning than socialism, but originally they amounted to more or less the same thing. Many of the early social democratic parties were led by Marxists, including the important Social Democratic Workers’ Party of Germany, founded in 1869. Although some social democrats favoured peaceful reform rather than violent revolution, at that time they mostly agreed on the goal of large-scale common ownership.
Harold Wilson
During the twentieth century the usage of the term social democracy shifted radically. After the Second World War it came to mean the promotion of greater economic equality and social justice within a capitalist economy. It also connoted a political strategy orientated toward the interests of the trade unions and the working class.
The term social democracy still carries this historical and strategic baggage. It has been eschewed by some because of its links with socialism. Others argue that its strategic, class-orientated vision has become obsolete. Another problem is that the word social does not make a clear addition to democracy, which few would oppose.
Post-war social-democratic policies are challenged by the fragmentation of their traditional base in the organized working class and by the heightened forces of globalization.
Consequently, while a reformed and reinvigorated social democracy may have some mileage, I suggest we consider the alternative term liberal solidarity to describe an important zone within liberalism. We should examine its principles and its agenda for reform. But first it is necessary to deal with the tricky label and substance of neoliberalism.
Original diversity within the Mont Pèlerin Society
The Mont Pèlerin Society changed in substance and direction. It began under a different name in the 1930s and was first convened under its current name in 1947. It was then an attempt to convene different kinds of liberals in defence of a liberal market economy, just after the defeat of fascist tyranny, during an expansion of Communist totalitarianism, and while witnessing the rise of statist socialist ideas in Western Europe and elsewhere. Liberalism broadly was on the rocks: it needed its defenders.
Michael Polanyi
Michael Polanyi (the brother of Karl Polanyi) advocated Keynesian macroeconomics in a market economy, alongside a radical redistribution of income and wealth. He rejected a universal reliance on market solutions, seeing it as a mirror image of the socialist panacea of planning and public ownership. He did not mince his words against this “crude Liberalism”:
“For a Liberalism which believes in preserving every evil consequence of free trading, and objects in principle to every sort of State enterprise, is contrary to the very principles of civilization. … The protection given to barbarous anarchy in the illusion of vindicating freedom, as demanded by the doctrine of laissez faire, has been most effective in bringing contempt on the name of freedom … .”
Although he attended the first meeting of the Mont Pèlerin Society, Polanyi had drifted away by 1955, stressing its inadequate solutions to the problem of unemployment and its promotion of a narrow view of liberty as the absence of coercion, neglecting the need to prioritize human self-realization and development.
In its early years, the Mont Pèlerin Society hosted debates on the possible role of the state in promoting welfare, on financial stability, on economic justice, and on the moral limits to markets. Like Polanyi and other early members of the society, Wilhelm Röpke argued that the state was necessary to sustain the institutional infrastructure of a market economy. The state should serve as a rule-maker, enforcer of competition, and provider of basic social security. Röpke’s ideas were highly influential for those laying the foundations of the post war West German economy.
While they received a more sympathy from Hayek, Ludwig Mises regarded Röpke’s views as “outright interventionist”. Mises became so frustrated with these arguments in favour of a major role for the state that he stormed out of a Mont Pèlerin Society meeting shouting: “You’re all a bunch of socialists.”
The rise of modern neoliberalism
Angus Burgin’s history of the society shows how its early period of relative inclusivity was followed by schisms, departures, and a narrowing of opinion. People like Polanyi and Röpke became inactive. Eventually the primary locus of the Mont Pèlerin Society shifted to the US, with greatly increased corporate funding under the rising intellectual leadership of Milton Friedman.
Milton Friedman
Hence the Mont Pèlerin Society evolved from a broad liberal forum to one focused on promoting a narrow version of liberalism that is more redolent of Herbert Spencer than of Adam Smith, Thomas Paine or John Stuart Mill. This ultra-individualist liberalism entailed a narrow definition of liberty as the absence of coercion, it relegated the goal of democracy, it neglected economic inequality, it overlooked the limits to markets, it saw very limited grounds for state welfare provision and intervention in financial markets, and it stressed self-interest rather than moral motivation.
But in the seventh dimension it tolerated a multiplicity of positions, as exemplified by Friedman’s opposition to the Iraq War. In all of the seven dimensions of liberalism, the post-1970 position of the Friedman-led Mont Pèlerin Society was redolent of Spencer, but without some of the latter’s Victorian idiosyncrasies. In the first six dimensions, this post-1970 neoliberalism is very different from liberal solidarity.
It is only after the 1960s that the Mont Pèlerin Society acquired a narrower identity, which at a pinch might be described as neoliberalism. Here Mirowski is onto something: “Neoliberals seek to transcend the intolerable contradiction by treating politics as if it were a market and promoting an economic theory of democracy.” In other words this neoliberalism reduces, all of politics, law and civil society as markets, and are analysed using market categories.
Neoliberalism’s affinity with Marxism
This neoliberalism has an odd similarity with Marxism, despite other major differences in theory and policy. Marx and Engels also reduced civil society to economic matters of money and trade. Marx wrote in 1843: “Practical need, egoism, is the principle of civil society … The god of practical need and self-interest is money.”
Karl Marx
Civil society, for Marx, was the individualistic realm of money and greed. Hence Marx concluded that “the anatomy of civil society is to be sought in political economy.” The analysis of the political, legal and social spheres was to be achieved with an economics based on the assumption of individual self-interest.
Furthermore, the state, law and politics under capitalism were made analytically subservient to this dismembered, economistic vision of civil society.
Accordingly, Frederick Engels wrote in 1886 that under capitalism “the State – the political order – is the subordinate, and civil society – the realm of economic relations – the decisive element.” Everything was deemed a matter of greed and commerce, to be understood through economic analysis.
Hence, in its theory of capitalism, classical Marxism was a harbinger of modern neoliberalism, reducing everything to market relations. There was no defence of civil society in its own right.
When attempts were made to build socialism on Marxist principles, not only markets were minimized but also civil society was virtually destroyed. Before 1989, the restoration of civil society was one of the foremost demands of the dissident movements in Eastern Europe.
Certainly there are more sophisticated and less reductionist treatments by Marxists of civil society and the state, not least by Antonio Gramsci. But Marx and Engels, alongside some neoliberals, embraced economic reductionism. Everything turns into the economics of trade, eclipsing the autonomy of politics and law, and neglecting the vital importance of non-commercial interaction and association within civil society.
Neoliberalism versus liberal solidarity
On these vital issues, liberal solidarity stresses its differences from both neoliberalism and classical Marxism. It does not treat the individual purely as a self-interested, market-oriented maximizer. It is committed to democracy as a distinctive source of legitimation for government, and a means of individual and social development (dimension 2), not as a marketplace for power.
Liberal solidarity stresses the feasible and moral limits to markets (dimension 4). It upholds a view of the individual that combines measures of self-interest with a moral concern for justice and fairness (dimension 6). On all these points it is distinct from these other doctrines.
Today, liberal solidarity must emphasise its radical differences from both post-1970 neoliberalism and from Marxism. This is made extremely difficult in a leftist intellectual context when any defence of markets or private enterprise, to any extent or degree, is pushed aside as neoliberal. Current cavalier uses of the term do much more harm than good.
Many so-called anti-neoliberals are also anti-liberals. They prioritize neither liberty nor freedom of expression. They offer no defence of private enterprise or markets, to any extent or in any form. They promote a state-dominated economy, which we know from history will always threaten freedom and human rights. They believe they are principled. They may have good intentions. To quote from their mentor Lenin: “The road to hell is paved with good intentions.” But as Marxists fail to understand, the only principled and effective defence of human rights is some form of liberalism.
Liberalism has to be fortified, but not in all of its forms. Liberal solidarity is the radical alternative to the illiberal or undemocratic populisms of the left or right. It can address the problems created by large corporate interests, by the power of undemocratic capitalist technocrats or by incipient dictatorships. It emphasises the importance of markets and private property, but without regarding them as universal panaceas. It retains uppermost the importance of human rights and human cooperation, with the goal of human flourishing and social development.
19 August 2018
Published by University of Chicago Press in January 2018
References
Burgin, Angus (2012) The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge MA: Harvard University Press). See pp. 16, 80-86, 121.
Jacobs, Struan and Mullins, Phil (2016) ‘Friedrich Hayek and Michael Polanyi in Correspondence’, History of European Ideas, 42(1), pp. 107-30.
Marx, Karl and Engels, Frederick (1962) Selected Works in Two Volumes (London: Lawrence and Wishart). See vol. 1, pp. 362, 394-5.
Marx, Karl and Engels, Frederick (1975) Karl Marx and Frederick Engels, Collected Works, Vol. 3, Marx and Engels: 1843-1844 (London: Lawrence and Wishart). See p. 172.
Mirowski, Philip (1998) ‘Economics, Science and Knowledge: Polanyi vs. Hayek’, Tradition and Discovery: The Polanyi Society Periodical, 25(1), pp. 29-42.
Mirowski, Philip (2009) ‘Postface: Defining Neoliberalism’, Mirowski, Philip and Plehwe, Dieter (eds) (2009) The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge MA: Harvard University Press), pp. 417-55. See p. 456.
Mirowski, Philip (2013) Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown (London and New York: Verso). See p. 71.
Polanyi, Michael (1940) The Contempt of Freedom: The Russian Experiment and After (London: Watts). See pp. 35 ff., 57-58.
Polanyi, Michael (1945) Full Employment and Free Trade (Cambridge: Cambridge University Press). See pp. 142-6.
Polanyi, Michael (1951) The Logic of Liberty: Reflections and Rejoinders (London: Routledge and Kegan Paul).
All versions of liberalism stress individual liberty and universal rights, including the rights to private property and to freedom of expression. These universal rights and liberties require equality under the law, under a competent legal system that protects those rights and pursues justice.
Original conservativism differs from liberalism because it stresses established or religious authority and tradition over rights. Socialism generally differs from liberalism because it downgrades the right to private property. But there is no historical case where personal and civil liberties have existed without extensive rights of private property.
Statist socialism further differs from liberalism also because it concentrates politico-economic power in the hands of the state, thus undermining countervailing power, which is necessary to sustain democracy and individual rights. Marxism differs from liberalism to an even greater degree, because it regards all liberal rights as bourgeois: it rejects the idea of universal individual rights in favour of the class rule of the proletariat.
Liberalism was broadly defined in its struggles against despotism. But once autocracy is removed, and freedom and legal equality are established, then liberalism as a whole lacks a further common purpose, other than the preservation or consolidation of those liberal gains. At this point, the wide liberal coalition divides into multiple zones, exploring different districts of their spacious common territory, and falling on different sides of key dilemmas.
Hence the Enlightenment triumph of liberalism gave way to rival liberalisms, each stressing different priorities or visions of the future. These differences range across multiple dimensions in conceptual hyperspace.
While exploring seven dimensions of this hyperspace, I accent a particular variety of liberalism that I call liberal solidarity.
The seven dimensions
Consider the following seven vital dilemmas:
1. Broad versus narrow conceptions of liberty.
The narrow definition of liberty, promoted by Freidrich Hayek and Milton Friedman among others, is the absence of coercion. Other liberals – including John Stuart Mill, Michael Polanyi, Isaiah Berlin and Amartya Sen – argued that this is insufficient. They asked us to consider the conditions enabling the individual to appraise his or circumstances and then to act freely, typically in cooperation with others. These conditions constitute positive or public liberty, in contrast to the negative or private liberty provided by the absence of coercion. As well as the capacities for choice and action, some writers argue that liberty is also about the opportunities for self-development and for human flourishing.
2. Degrees of commitment to representative political democracy.
Most liberals support representative political democracy, as long as it does not overturn basic human rights, including the rights of minorities. But some liberals, such as Ludwig Mises and Hayek, have regarded democracy as dispensable under specific conditions, believing that the preservation of private property and markets are more important. The counter argument is that democracy is strongly correlated with economic development, the protection of human rights, and the absence of war and famine. Hence democracy is vital for a healthy, tolerant and open society.
3. Degrees of emphasis on economic equality.
Thomas Paine was a liberal who stressed the interdependence of individuals in a free society. Hence, given our debt to others, we are obliged to pay taxes for the common good. Also John Stuart Mill argued there should be some redistribution of inherited wealth. Against libertarian individualists, many liberals defend responsible trade unions as a way of empowering working people and reducing inequality. These are cases of liberal solidarity rather than atomistic individualism.
4. Possible limits to choice and markets.
While liberals generally stress the importance of individual choice, in both trade and politics, some also stress the practical and moral boundaries to contracts and to markets. Today we condemn the holding and trading of slaves. For democracy to be uncorrupt, there should not be markets for the votes of ordinary people or politicians. Other market arrangements are challengeable, on moral or practical grounds, suggesting that contracts and markets are not the solution to every problem.
5. Grounds for state intervention and a welfare state.
Some liberals, including John A. Hobson and John Dewey, saw the provision of adequate healthcare and education as vital for individual self-determination and flourishing. Individuals should also be as free as possible from the anonymous coercions of ignorance, destitution and illness. Hence the liberals David Lloyd George and William Beveridge built the foundations of the welfare state in the UK. John Maynard Keynes pointed to the need for the state to intervene to prevent financial crashes and minimize unemployment. Many modern liberals also accept the legitimacy of judicious state action to mitigate climate change.
By the above five criteria, liberal solidarity recognizes liberty as more than the absence of coercion, defends political democracy, attempts to reduce extremes of economic inequality, and conceives of a larger role for the state than small-state versions of liberalism. It promotes a mixed economy including some public ownership and a variety of forms of private enterprise. The mixture would include worker cooperatives (which are the most viable positive legacy of small socialism).
Liberal solidarity counters the original liberal emphasis on minimal government. Some state intervention is necessitated by the limitations of markets and by growing complexity. Nevertheless, all liberals acknowledge the dangers of excessive bureaucracy and concentrations of state power, and they call for mechanisms of scrutiny and accountability, as well as for countervailing powers.
6. Self-interest versus cooperation and morality.
Several liberals have argued that social order emerges out of the interactions of self-interested, pleasure-maximizing individuals. But this is not a universal view among liberals. While recognizing the selfish aspects of human nature and the incentives they offer for trade and innovation, many liberals stress the importance of morality, justice or duty. They argue that adequate social cohesion cannot be achieved on the basis of selfishness alone. Adam Smith expressed this view: he was not an unalloyed advocate of individual selfishness. Charles Darwin – who politically was a liberal – explained how, alongside a measure of self-interest, morality and cooperation were products of human evolution, and thus part of our nature. Hobson took up this Darwinian view, also underlining the importance of moral motivation. Relatedly, Keynes saw the Benthamite utilitarian calculus of pleasure-seeking, as “the worm which has been gnawing the insides of modern civilisation and is responsible for the present moral decay.” The motivational bases of liberal solidarity are morality, sympathy and justice, and not simply personal satisfaction or self-interest.
7. Nationalism versus internationalism and openness.
Like socialism and conservativism, liberalism has been divided on questions of foreign policy. Socialists, conservatives and liberals have argued for and against specific wars, for or against imperialism or colonialism, for or against the idea of exporting favoured institutions by invading other countries with armed force. They have also been internally divided on immigration policy, advocating different degrees of restriction or free movement.
Addressing dimension six, liberal solidarity emphasises our potential for cooperation and moral judgment, rather than focusing on self-interest alone. In regard to dimension seven, liberal solidarity opposes imperialism and colonialism. It stresses the importance of social inclusion and the benefits of free movement.
Liberals, Conservatives and Republicans
From the beginning of the twentieth century, in the UK and the US, liberalism became more interventionist. Versions of liberalism prominent in the UK and US are closer to liberal solidarity than some variants in Continental Europe.
When unfettered-market, minimal-state versions of liberalism re-emerged in the UK and US, and became more prominent in the 1970s, they had to find different homes. They took over the Conservative Party in the UK and the Republican Party in the US. Hence Margaret Thatcher was elected as a Conservative Prime Minister in 1979 and Ronald Reagan as a Republican President in 1980. In some their ideas they sounded like nineteenth-century liberals: Whigs became Tories.
But their adoption of unfettered-market ideology was partial, and often compromised when traditional conservative values were threatened. Supported by Thatcher, Reagan ramped up military spending. Their nationalism was heightened when it came to foreign policy and international trade. They retained restrictions on recreational drugs or prostitution. They stressed ‘family values’ as much as rampant individualism.
Like others, these two parties are coalitions, involving unfettered-marketeers, nationalists and traditional conservatives. The election of Donald Trump as US President in 2016 shows the strength of the conservative and nationalist strain among Republicans. Trump is no liberal: he advocates torture, attacks minorities, threatens the press, imposes tariffs and pursues a version of economic nationalism.
Thatcher and Reagan overlooked the absence of democracy in Augusto Pinochet’s Chile and in Apartheid South Africa, and supported stronger military and executive powers. As Andrew Gamble put it, Thatcher and Reagan promoted a ‘free economy and a strong state’.
Thatcher and Reagan were inspired by leading intellectuals such as Hayek and Friedman, who had been working for decades to restore the influence of unfettered-market liberalism. But neither Hayek nor Friedman fits exactly into the Thatcher-Reagan mould. Friedman, for example, advocated the decriminalization of drugs and opposed compulsory military service. He also opposed the Gulf War of 1990-1991 and the Iraq Invasion of 2003.
Hayek voiced partial support for a welfare state. Although he did not support redistributive taxation to reduce inequality, he advocated legislation to limit working hours, state assistance for social and health insurance, state-financed education and research, a guaranteed basic income, and other welfare measures. At least once, Hayek also accepted Keynesian-style, counter-cyclic government strategy to deal with fluctuations in economic activity. Consequently there was some significant difference between Hayek and other libertarians.
Challenges for liberal solidarity
Having set out the large, seven-dimensional hyperspace and explored a few of the important positions within it, it is clear that the depiction of liberalism as broad church is an understatement. The potential variation within liberalism is huge. That is both an asset and a problem. Each variety of liberalism faces the difficulty of distinguishing itself from others. We need to subdivide liberalism’s massive territory if we are to navigate and explore different positions. Each important position within the large space needs to be differentiated from others.
A later blog will further explore the seven-dimensional hyperspace of liberalism and develop the case in favour of liberal solidarity. I shall also show a dramatic contrast with what is often described as neoliberalism.
1 August 2018
Published by University of Chicago Press in January 2018
Bibliography
Gamble, Andrew (1988) The Free Economy and the Strong State: The Politics of Thatcherism (London and New York: Palgrave Macmillan).
Despite their declared support for free trade, Tory libertarians like David Davis and Jacob Rees-Mogg are acting as if there were still a British Empire.
Geoffrey M. Hodgson
The Brexiteers in the Tory Party do not understand the mechanics of modern trade and have no viable blueprint for Brexit.
Substantial harmonization of standards and regulations is required when trade crosses international borders. The EU Single Market enables massive gains from trade within a harmonized system of regulation. EU member states have a say in the development of those regulations, within a common system.
Outside the EU, the UK would have to replace a huge apparatus of EU-wide regulation that has grown up since 1973 when it joined. This regulatory legislation would be an even more formidable burden than any increased tariff levels that would be adopted if the UK leaves the EU Customs Union and Single Market.
This problem creates a dilemma for libertarians who distrust all state machines – especially large ones outside their national comfort zone. Hence, alongside nationalists and hard left socialists, libertarians were in the intellectual forefront of the 2016 Brexit vote in the UK, chiming in with overblown complaints about Brussels bureaucracy, made more strident because this bureaucracy spans national boundaries and is staffed by foreigners.
Some of these libertarians are atomistic individualists, unable to accept that markets consist of more than individuals in isolation. These libertarians are seemingly unaware that all trade and markets must involve commonly accepted rules, as well as the wills and assets of individuals. Markets, in short, are social institutions.
Entering or leaving markets requires dealing with systems of rules. In practice, exit from the EU Single Market means either that regulations have to be developed independently, thus reducing trade possibilities, or that EU regulations have to be accepted for future trade, while having little say in their formation.
The libertarian dilemma
Minimal-state libertarians are thus caught in a dilemma. They have either to accept the adjudications of a foreign court, thus dramatically violating their characteristic anti-state position, by accepting not only state legal system but one outside their homeland, or they have to curtail their cherished ideological ambitions for free trade and markets across national boundaries.
More generally, any contract between sellers and buyers across international boundaries requires agreement on the means of adjudication, if a dispute arises over its terms or fulfilment. Typically it is agreed that disputes will be resolved in the courts of one nominated country. The European Court of Justice was set up to deal with contractual disputes within the EU, and between EU traders and contracting businesses located outside the EU.
Regulatory harmonization and trade dispute adjudication create problems for libertarians. Just as big socialists believe in a fantasy world where the state can do everything, some libertarians believe in the obverse fantasy of a minimal state, where trade somehow operates without an extensive state legal infrastructure. As Jamie Peck put it, these “neoliberals” espouse “a self-contradictory form of regulation-in-denial”.
Nevertheless, when faced with the real world of business and contract, these libertarians acquiesce with the state machine and its legal system within their own national boundaries. Their nationalism means that they can live with that outcome.
But when trade crosses international boundaries, the problems of regulatory harmonization and dispute adjudication compel these libertarians to accept – especially when trading with a larger economic bloc – that disputes may have to be resolved in courts outside their national boundaries.
For closet nationalists in libertarian clothing, accepting the judgments of a foreign court is a step too far. The lenience granted to their national courts is not granted to those of foreigners.
Bring back the British Empire – and other fantasies
British nationalists in libertarian clothing may then call up another fantasy from the past. They can imagine that Britain is still a great power, and that it has the capacity to compel that all trade disputes be resolved in British courts. In their imagination these libertarians bring back the British Empire. Imperial power makes everyone else a rule-taker. They may talk of that bygone world in the corridors of Eton, but it is far beyond the reality of global power today.
Across the Atlantic, American nationalists in libertarian clothing perform ideological gymnastics by allying themselves with politicians such as Donald Trump. He an economic nationalist rather than an advocate of international free trade. As long as these dubious libertarians can concentrate their gaze on the domestic US market and avoid the world beyond, then with some additional fantasising they might continue to believe in their myth of a minimal state.
Instead of the Empire, a US national fantasy is the Wild West. Historically, this was a short-lived zone, partly out of reach of the state and its system of law. Deals were done, aside the barrel of a gun. It is the US version of a mythological libertarian paradise. Global reality today, however, is very different.
A third fantasy is the idea of Jeremy Corbyn that Britain can leave the EU and build socialism. This is a mythical as the other fantasies. Corbyn does not understand markets and has no viable blueprint either – but that is the subject of other blogs. In the meantime, we note that all these efforts to leave the EU are based on fantasies that have little connection to the world in which we live today.
9 July 2018
Published by University of Chicago Press in January 2018
Stretching the word “neoliberal” to cover people as different as Deng Xiaoping and Donald Trump has turned it into an absurdity.
Geoffrey M. Hodgson
Once upon a time, the word neoliberalism might have been confined to an extreme form of individualism that eschews state regulation, promotes economic austerity and a minimal state, opposes trade unions and vaunts unrestrained markets as the solution to all major politico-economic problems.
But today the usage of the word neoliberalism is no longer so restricted. I have been told more than once that anyone who is not a socialist is automatically a neoliberal. Any defence of the existence of markets now risks quick rejection with an angry neoliberal stamp upon it.
More frequently these days, a wide range of politicians, from Margaret Thatcher and Ronald Reagan at one extreme, to Bill Clinton, Hillary Clinton, Emmanuel Macron and Tony Blair at the other limit, are all described as neoliberals, despite, for example, hugely varied policies on taxation, government expenditure and the role of the state.
In their book on Neoliberalism, Damien Cahill and Martijn Konings describe the US President Donald Trump as a neoliberal. Yet he is a supporter of protectionism and he has imposed import tariffs: he does not believe in free trade. The word neoliberal is now stretched beyond credence and coherence.
Sneaky Deng Xiaoping was a neoliberal
Guardians of socialist purity have described some errant Marxist or socialists as neoliberals. In his Brief History of Neoliberalism, Marxist academic David Harvey described revisionist-Marxist Deng Xiaoping as a neoliberal.
From 1978, Deng supported the reintroduction of markets into the Chinese economy. But he still proposed a strong guiding hand by the state, including centralized management of the macro-economy and the financial system.
Harvey admitted that Deng’s policies led to strong economic growth and “rising standards of living for a significant proportion of the population” but he passed quickly over this ellipsis.
In fact, Deng’s Marxist-revisionist “neoliberal” reforms lifted more than half a billion people out of extreme poverty, albeit unevenly and at the cost of greater inequality. That was about one-twelfth of the entire world population in 2000. With this development, China halved the global level of extreme poverty. The bulk of the poverty reduction in China came from rural areas.
This achievement is unprecedented in human experience. If China’s extension of markets is neoliberalism, then neoliberalism is the most beneficial economic policy in history.
Vladimir Lenin and Josip Tito as neoliberals
But earlier contenders for the title of “the first neoliberals” can be found. In her book on Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism, the sociologist Johanna Bockman found roots of neoliberalism in the experiments in so-called “market socialism” in Josip Tito’s Yugoslavia from the 1950s and in Hungary from the 1960s.
There is no stopping this neoliberal treachery – infiltrating socialism as well as capitalism!
Josip Tito
Adopting the methodology of Harvey and Bockman, I would like to nominate Vladimir Ilyich Lenin as the first neoliberal, for his betrayal of socialist central planning and his introduction of the New Economic Policy (NEP) in Soviet Russia in 1921. In this admitted “retreat” from socialism, Lenin re-introduced markets and profit-seeking private firms.
Crucially, in support of this nomination, there is evidence that Deng’s post-1978 reforms drew a strong inspiration from Lenin.
“A brainless synonym for modern capitalism”
Of course, I am being ironic. My point is that, thanks to Harvey and others, neoliberalism as a term has become virtually useless. As Philip Mirowski and Dieter Plehwe put it, neoliberalism for some has become “a brainless synonym for modern capitalism.”
Mirowski also complained that opponents “often bandy about attributions of ‘neoliberalism’ as a portmanteau term of abuse”. But Mirowski did not drop the term.
Geoffrey Hodgson & Philip Mirowski
In his superb history of the Mont Pèlerin Society, Angus Burgin commented critically on the term neoliberalism:
“It is extremely difficult to treat in a sophisticated manner a concept that cannot be firmly identified or defined.”
The word is no longer sound currency. Bad usage has driven out the good. It has become a swear-word rather than a scientific term.
Neoliberalism as a ruling class strategy
Part of the impetus behind the excessive and ultimately destructive use of the word neoliberal is the Marxist belief, expressed by David Harvey among others, that neoliberalism is a strategy serving the interests of the capitalist class.
Following the post-war settlement of 1945-1970, which conceded greater power and shares of income to organized labour, rising neoliberalism allegedly rescued the capitalist class.
Their evidence is that in several major countries from the 1970s, trade unionism declined in strength and the shares of national incomes going to the top five per cent increased.
Second, in several countries, including most dramatically in China, standards of living have increased, even for the lower income deciles. While for many people in the US, real wages have stagnated, this has not been the case in several other countries, particularly prior to the 2008 crash.
Third, the argument may exaggerate the degree to which the capitalist class is united, in terms of their real interests or of their perceptions of them.
Fourth, it is questionable that capitalist interests are best served by declines in real wages, given the powerful Keynesian argument that capitalist prosperity depends on effective demand in the economy as a whole. Higher real wages can increase prosperity across the board, and serve the interests of capitalists and capitalism.
Fifth, there are other, possibility more effective, strategies for countering the power of organized labour and reducing the incomes of many people in favour of the top five per cent. These alternatives include economic nationalism, which can take the extreme form of fascism. Generally these are not free-market, small-state approaches. If they are all labelled neoliberal, and regarded as the grand global strategy of the bourgeoisie, then the analysis becomes dangerously insensitive to the increasingly probable threats of economic nationalism and fascism.
Neoliberalism and the Mont Pèlerin Society
Perhaps the most well-informed and intelligent attempt to give neoliberalism a distinctive meaning is by Philip Mirowski, who associates it, more or less, with the Mont Pèlerin Society.
But the Mont Pèlerin Society changed to a degree, in substance and direction. It began under a different name in the 1930s and was first convened under its current name in 1947. It was then an attempt to convene different kinds of liberals in defence of a liberal market economy, just after the defeat of fascist tyranny, during an expansion of Communist totalitarianism, and while witnessing the rise of statist socialist ideas in Western Europe and elsewhere. Liberalism broadly was on the rocks: it needed its defenders.
As a measure of the relative inclusivity and internal diversity of the Mont Pèlerin Society, consider the testimony of the philosopher Karl Popper, who was a friend of Hayek and a prominent Mont Pèlerin member in the early years. Popper wrote to Hayek in 1947 that his aim was “always to try of a reconciliation of liberals and socialists”.
Michael Polanyi and Wilhelm Röpke
Michael Polanyi – the brother of Karl Polanyi – was a founder member of the Mont Pèlerin Society. He advocated Keynesian macroeconomics in a market economy, alongside a radical redistribution of income and wealth. He rejected a universal reliance on market solutions, seeing it as a mirror image of the socialist panacea of planning and public ownership. He did not mince his words against this “crude Liberalism”:
“For a Liberalism which believes in preserving every evil consequence of free trading, and objects in principle to every sort of State enterprise, is contrary to the very principles of civilization. … The protection given to barbarous anarchy in the illusion of vindicating freedom, as demanded by the doctrine of laissez faire, has been most effective in bringing contempt on the name of freedom …”
Polanyi had drifted away from the Mont Pèlerin Society by 1955, stressing its inadequate solutions to the problem of unemployment and its promotion of a narrow view of liberty as the absence of coercion, neglecting the need to prioritize human self-realization and development.
Michael Polanyi
In its early years, the Mont Pèlerin Society hosted debates on the possible role of the state in promoting welfare, on financial stability, on economic justice, and on the moral limits to markets. Like Polanyi and other early members of the society, Wilhelm Röpke argued that the state was necessary to sustain the institutional infrastructure of a market economy. The state should serve as a rule-maker, enforcer of competition, and provider of basic social security. Röpke’s ideas were highly influential for those laying the foundations of the post war West German economy.
While they received a more sympathy from Hayek, Ludwig Mises regarded Röpke’s views as “outright interventionist”. Mises once became so frustrated with these ongoing arguments in favour of a major role for the state that he stormed out of a Mont Pèlerin Society meeting shouting: “You’re all a bunch of socialists.”
The rise of Milton Friedman
Angus Burgin’s history of the society shows how its early period of relative inclusivity was followed by schisms, departures, and a narrowing of opinion. People like Polanyi and Röpke became inactive. Eventually the primary locus of the Mont Pèlerin Society shifted to the US, with greatly increased corporate funding under the rising intellectual leadership of Milton Friedman.
Milton Friedman
Hence the Mont Pèlerin Society evolved from a broad liberal forum to one focused on promoting a narrow version of liberalism that is more redolent of Herbert Spencer than of Adam Smith, Thomas Paine or John Stuart Mill.
This ultra-individualist liberalism entailed a narrow definition of liberty as the absence of coercion, it relegated the goal of democracy, it neglected economic inequality, it overlooked the limits to markets, it saw very limited grounds for state welfare provision and intervention in financial markets, and it stressed self-interest rather than moral motivation.
Perhaps Friedman was a neoliberal. Perhaps Hayek too. But if we add Lenin, Tito, Deng or Trump to the list, then we are in the realms of absurdity – the term becomes useless.
1 June 2018
This book elaborates on the issues raised in this blog:
Published by University of Chicago Press in January 2018
Bibliography
Bockman, Johanna (2011) Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism (Stanford: Stanford University Press).
Burgin, Angus (2012) The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge MA: Harvard University Press). See esp. pp. 57, 80-86, 116, 121.
Cahill, Damien and Konings, Martijn (2017) Neoliberalism (Cambridge UK and Medford MA: Polity Press). See esp. pp. 144-5.
Harvey, David (2005) A Brief History of Neoliberalism (Oxford and New York: Oxford University Press). See esp. pp. 1-3, 120-22.
Jacobs, Struan and Mullins, Phil (2016) ‘Friedrich Hayek and Michael Polanyi in Correspondence’, History of European Ideas, 42(1), pp. 107-30.
Mirowski, Philip (2013) Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown (London and New York: Verso). See esp. pp. 29, 71.
Mirowski, Philip and Plehwe, Dieter (eds) (2009) The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge MA: Harvard University Press). See esp. p. xvii.
Pantsov, Alexander and Levine, Steven I. (2015) Deng Xiaoping: A Revolutionary Life (Oxford and New York: Oxford University Press). See esp. p. 373.
Polanyi, Michael (1940) The Contempt of Freedom: The Russian Experiment and After (London: Watts). See esp. pp. 35 ff., 57-58.
Ravallion, Martin, and Shaohua Chen (2005) ‘China’s (Uneven) Progress against Poverty’, Journal of Development Economics, 82(1), pp. 1-42.
Karl Marx was born on 5 May 1818. He was one of the greatest social scientists in human history. The intellectual structure of his thought has affected our understanding of history, of economic development and of political power. All modern scholars of significance have to define their position in relation to Marx’s monumental achievement.
Many of Marx’s predictions were wrong. He was mistaken, for example, about the general deskilling of the working class. On the contrary, although many remain unskilled, average skill levels have increased. Furthermore, although many remain desperately poor, the average standard of living of the working class has vastly increased since his time.
On the other hand, some of Marx’s predictions have been vindicated. He characterized the nature of the capitalist system more acutely than any of his predecessors and he predicted its spread over the entire world. He saw capitalism a dynamic system that broke down archaic institutions and barriers to trade.
Marx also focused on the generation of inequality under capitalism, which has increased and is recognized as a serious problem.
Marx got some forecasts wrong and some right. Prediction is far from everything in social science. What towers above all is his contribution to our understanding of the inner dynamics of capitalism. With all its shortcomings and theoretical flaws, it remains a huge achievement.
Was Marx the author of the Marxist tragedy?
Let us turn from Marx the social scientist to Marx the politician. Remarkably, from 1917 to the present day, a number of regimes have been set up by revolutionary activists who have claimed to be Marxists. All of these turned sour: these totalitarian regimes led to millions of deaths. Estimates vary. 90 million is on the conservative side, with about 65 million in Mao’s China alone.
Marxism has various ideological immune systems to deal with these brutal facts. One gambit is to blame it on the hostile interventions of foreign powers. But it is implausible that these alone are responsible for the outcomes. No foreign intervention prompted Mao’s Great Leap Forward of his Cultural Revolution, for example, which together led to about 40 million deaths.
Leon Trotsky
Another argument – due to Leon Trotsky – is to blame it on the creation by tyrannical leaders such as Stalin of a bureaucratic caste that denied the working class any democratic power. But this implausibly assumes that a huge nationwide bureaucracy can somehow be run on the basis of meaningful votes on every important decision. No-one with any practical experience of a large organization would entertain such a fantasy.
A more colourful recent excuse is due to Yanis Varoufakis, the influential Greek academic and politician. He argued that the Marxist texts were too powerful. As a result they attracted devious opportunists who rode the Marxist rhetoric for “their own advantage.”
The problem, it seems, was that Karl Marx and Frederick Engels were too powerful with their prose. If only they had written more turgid texts – then millions would have been saved from the famines and the Gulags.
Marx bears some responsibility for the murdered millions
At least two major aspects of Marx’s thought removed protections of human rights and paved the way for brutal totalitarianism.
The first was his doctrine of class struggle. Analytically, this may have some value and it is subject to academic debate. But it was also a normative doctrine, about the working class seizing power and ending the rule of the capitalists.
Marx and Engels argued that the current aims and desires of the proletariat were less important than its historical destiny to abolish capitalism and become the ruling class. They wrote:
This is the first totalitarian impulse. Marxist revolutionaries are deemed to know better what is in the interests of the working class than the working class itself. Democracy becomes an impediment to the realization of those true interests, about which the masses are not fully aware.
The normative doctrine of class struggle has another outcome. It means that the rights of one social class are privileged over another. Universal individual rights are no more. As Engels put it, legal and individual rights are “nothing more than the idealized kingdom of the bourgeoisie.”
Their normative arguments in favour of socialism are not based on any alleged rights. Instead, socialism is seen as historic destiny. Marx tried to show that crises within capitalism are recurrent and inevitable, and that capitalism digs its own grave by enlarging and empowering the working class.
The consequence of this class deprivation of human rights was enshrined in law under Marxist-socialist regimes. The 1918 Constitution of the young Soviet regime distinguished between the rights of the workers and the rights of others. The Soviet state also announced that it
A major problem here was that the criteria used to decide what was detrimental were unspecified, opening the door to arbitrary repression by the authorities. This is exactly what happened.
A regime that denies rights to some, especially with malleable criteria concerning who is denied those rights, ends up denying rights to everyone. These are the consequences of Marx’s “dictatorship of the proletariat”.
A full concentration of economic power leads to totalitarianism
A second aspect of Marx’s thought that promoted totalitarianism concerns the economy.
But as subsequent experiences from Russia to Venezuela illustrate, such a massive concentration of economic power requires for its enforcement, and sustains as an outcome, a massive concentration of political power that is intolerant of democracy. The good intentions or democratic inclinations of leaders are not enough. Those most hungry for power, and least affected by moral qualms in exercising it, will eventually rise to the top.
There is a widespread opinion among non-Marxist social scientists (including Barrington Moore, Douglass North and Francis Fukuyama) that democracy requires countervailing political and economic power to have a chance of survival. In Marxist terms, if the economic “base” determines the “superstructure”, then a pluralist polity requires a pluralist (or mixed) economy, not one that is overshadowed by a massive state.
A complete concentration of political and economic power in the hands of the state, which Marx and Engels advocated with enthusiasm as well as eloquence, always requires and enables a despotic political regime. There are no exceptions.
Leszek Kolakowski
Over forty years ago, Leszek Kolakowski was an Eastern European dissident and a perceptive critic of Marxism. He wrote:
“My suspicion is that this was both Marx’s anticipation of perfect unity of mankind and his mythology of the historically privileged proletarian consciousness which were responsible for his theory being eventually turned into an ideology of the totalitarian movement: not because he conceived of it in such terms, but because its basic values could hardly be materialized otherwise.”
Kolakowski was right. Many have still to learn the tragic lessons of Marxist failure in practice, as well as of its partial but flawed analytical success.
Critics will say that giving Marx some blame for the atrocities of the twentieth century is like trying to blame Jesus for the atrocities of the Spanish Inquisition. They are wrong, Jesus never advocated class war or a concentration of economic power in the hands of the state, both of which create the conditions for tyranny.
5 May 2018
Minor edits – 6 May 2018
This book elaborates on the issues raised in this blog:
Published by University of Chicago Press in January 2018
Bibliography
Courtois, Stéphane, Werth, Nicolas, Panné, Jean-Louis, Packowski, Andrzej, Bartošek, and Margolin, Jean-Louis (1999) The Black Book of Communism: Crimes, Terror, Repression (Cambridge MA: Harvard University Press).
Fukuyama, Francis (2011) The Origins of Political Order: From Prehuman Times to the French Revolution (London and New York: Profile Books and Farrar, Straus and Giroux).
Kolakowski, Leszek (1977) ‘Marxist Roots of Stalinism’, in Robert C. Tucker (ed.) (1977) Stalinism: Essays in Historical Interpretation (New York: Norton), pp. 283-98.
Moore, Barrington, Jr (1966) Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World (London: Allen Lane).
North, Douglass C., Wallis, John Joseph and Weingast, Barry R. (2009) Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (Cambridge and New York: Cambridge University Press).
Norm’s 1983 book on Marx and Human Nature had a big impact on me. In the 1970s he had argued forcefully that the natural foundations of human existence had to be taken into account. The book refuted the fashionable misconception that Marx had denied the existence of a universal human nature.
Norm supported the US-led invasion in 2003. He argued that it was a humanitarian intervention to remove the vicious dictator Saddam Hussein.
Norm died of cancer in October 2013. I have recently read The Norman Geras Reader – a great collection of some of his writings, which was published in 2017. The Reader also contains the text of the Euston Manifesto.
A complete concentration of political and economic power in the hands of the state, which Marx and Engels advocated with enthusiasm, always requires and enables a despotic political regime. There are no exceptions. The centralizing economic project within Marxism is incompatible with liberalism.
Some say that it never was “proper socialism” in the first place, for some reason, such as the failure to establish worker control of the factories, or the dissolution of democratic government. These purists move rapidly to Step 7, collect their £200, and move back to Step 1.
When unfettered-market, minimal-state versions of liberalism re-emerged in the UK and US, and became more prominent in the 1970s, they had to find different homes. They took over the Conservative Party in the UK and the Republican Party in the US. Hence Margaret Thatcher was elected as a Conservative Prime Minister in 1979 and Ronald Reagan as a Republican President in 1980. In some their ideas they sounded like nineteenth-century liberals: Whigs became Tories.
Outside the EU, the UK would have to replace a huge apparatus of EU-wide regulation that has grown up since 1973 when it joined. This regulatory legislation would be an even more formidable burden than any increased tariff levels that would be adopted if the UK leaves the EU Customs Union and Single Market.
More generally, any contract between sellers and buyers across international boundaries requires agreement on the means of adjudication, if a dispute arises over its terms or fulfilment. Typically it is agreed that disputes will be resolved in the courts of one nominated country. The European Court of Justice was set up to deal with contractual disputes within the EU, and between EU traders and contracting businesses located outside the EU.
The consequence of this class deprivation of human rights was enshrined in law under Marxist-socialist regimes. The 1918 Constitution of the young Soviet regime distinguished between the rights of the workers and the rights of others. The Soviet state also announced that it