Reform is possible and reformism is guaranteed

This fall the Canadian magazine Adbusters issued a call that Occupy Wall Street take action in support of a so-called Robin Hood Tax, which would "slow down some of that $1.3-trillion easy money that's sloshing around the global casino each day – enough cash to fund every social program and environmental initiative in the world." I'm not excited about this proposal, to put it mildly, but I raise it because I want to get at an issue that Juan Conatz recently raised: is reform possible in capitalism today? In his piece Juan lays out some of the arguments made by people on the left that reforms are impossible. People should read his article. His article prompted me to finally take the notes I've been accumulating and bang them into this piece. This is on the rough side with minimal editing, apologies for the inevitable typos.

In talking about Occupy Wall Street I've gotten into arguments with some of my friends and comrades about this repeatedly. I don't think I can prove that reforms are possible - I think only the actual creation of reforms would demonstrate their possibility in a conclusive way. Still, I'm going argue that reforms are possible, because, well, I think reforms are possible. If I'm right about that, then if we operate under the assumption that reforms are impossible, we will be unprepared if reforms actually occur. I also want to add that any argument about the impossibility of reform etc in my opinion needs to take into account that reforms aren't just redistributive in a humanitarian sense - the Bush tax cuts were reform, just a reform that deepened inequality, likewise for the austerity measures tied to the debt ceiling deal. The Pentagon recently got another $50 billion allocated to it, so it seems to me that money is available for political priorities. So reforms are already happening, just tied to different constituencies and political priorities. The argument about the structural impossibility of reform seems to me to overlook this.

Most of my closest political friends and comrades and I are young enough that we have lived most or all of our lives in periods of relative working class defeat and retreat - periods of relatively low levels and intensities of struggle. We have more experience with workplace struggles that are very small to moderate in size relative to the size of the working class as a whole. While I am no Leninist, I think Lenin has a useful formulation, he said once that "politics begin where millions of men and women are; where there are not thousands, but millions." I don't know that I would say that anything less than millions of people is pre-political, but there is an important point here that truly massive struggles are much larger than anything that many of us have experienced. In the current period, this may change, and it may be that we see politics at the level Lenin described. In that case, this scale of politics won’t necessarily be subjectively revolutionary. A lot of it will be, at least initially, reformist in character. We will see a rise in demands for reform — we’re going to see more reformism. We already are seeing this. Whether or not reform is possible will shape how we respond to reformists. If reform is impossible, then the capitalist system has less options in responding to massive working class movements.

I’ll be honest, I find the idea that reform is impossible compelling at some level. If reform is impossible then we can argue against reformists by pointing out the impossibility of their projects. Let's say there's no room for maneuver anymore. In that case, there just objectively is no more real systemic fix possible, we're in the last stage such that the options are extend it in time, delaying the breakdown, or degrade into more barbaric and authoritarian forms, or a rupture that moves toward a genuinely different and better society. If this is the case, then thought directed to possible course corrections and pro-systemic reforms is just a waste of time. If reform is impossible then we don't have to argue in favor of communism over a reformed capitalism. If reform is impossible then perhaps we're closer to a communist society. If reforms are impossible this also means that reformist forces can never really win out. If reformists gain (or keep) dominant positions in social movements and in ideas, the worst they can do is temporarily distract the working class away from revolutionary tasks but they can't actually win reforms. And we the communists will still be here when the reforms don't actually materialize. On the other hand, if there are fixes possible and we assume there aren't then we're going to be suckerpunched when they take place and the reformists will be in a better position.

The core question is whether or not we're currently touching objective systemic limits that dictate capitalist responses. In my view, the current moment is political, about priorities and decisions, and is not dictated straightforwardly by economic possibility. Over all, I think arguments like “economic conditions mean that global elites are unable to do XYZ" strikes me as wrongheaded in part because of an overemphasis on structural imperatives and an underemphasis on ideology and elites' politics. As an analogy, I once heard about a union organizing drive at a facility for the developmentally disabled in the early 2000s. This was a privatized facility that was still dependent on state subsidy rates - medicaid reimbursements, which had been cut or stagnant. In contract negotiations, according to the financial data supplied by the bosses they honestly couldn't afford to give out the  raises that the union wanted to get in negotiation, couldn't give that dollar amount to that many people. So the union lobbied like crazy to get medicaid reimbursements for group homes raised in that state. They succeeded, then fought to make sure the bosses actually handed over the raises. That was a case where the employer ran up against real limits in terms of profitability and simply couldn’t give a meaningful concession. I don’t think we’re in a moment where the capitalist system as a whole has run up against a limit like that in such a way that no meaningful reforms are possible.

Before I go on, I should say, by "reform" I mean two things that are only partly related. What really matters about reforms, from a communist perspective, is whether or not the reforms shore up capitalism in some way, by making capitalism more stable or profitable, or by blunting or preventing working class struggle. Economically, it costs to implement reforms. Other than nature and expropriation, all wealth comes from workers, but the capitalists claim that wealth. So the costs of reform have to come from somewhere and often require capitalists to give up a bit of the wealth they claim belongs to them. At the same time, reforms can prove profitable despite initial costs. And reforms don't have to be economic in a narrow sense. Reforms can also include the extension of rights or the end to repression. Amnesty International lists numerous types of human rights violations in the United States that could be eliminated including police brutality and the death penalty. Between 2003 and 2006, the most recent years I can find information on, police in the U.S. killed 1553 people. These types of killings could be eliminated or reduced by reform. (Doing so would also reduce the sparks that give rise to riots; while police brutality alone rarely causes riots it is often an important catalyst, for more information on some important riots in U.S. history see this article.) Immigration policy reform is also possible. Actually, immigration reform is currently happening in the US -- the US is cracking down on immigrants really aggressively, with an increase in deportations. These deportations don't have to happen and could be ended.

Impossibility of reform?
I don’t know if I understand the arguments behind the claim that reforms are impossible. I do think that reforms are initially unlikely. The current capitalist class and the government at least in the US seem to me more in the mood to bust heads and throw people into the street than they are in the mood to issue concessions. They have been for a while. If the working class goes on the offensive, though, this might change. And there are some voices among the capitalists and their ideologists who have called for reform. Billionaire Warren Buffet, for example, has called for more taxes on the rich, and Nobel Prize winner Paul Krugman, no radical, has been writing in the New York Times for a while about reforms that would help capitalism. These voices seem to be drowned out by the majority of capitalists and pro-capitalist voices, but that doesn’t mean that reform is systematically impossible in the present. At one point, most capitalists - certainly most US capitalists, and most high level US government personnel - were ideologically white supremacists. This changed. Capitalists can change their minds and decide to do capitalism differently. They don’t do so in a vacuum, of course; this happens when forces within the capitalist class convince other capitalists that it’s in their interests to change. Mass struggle are a hugely important factor in shaping how capitalists see their interests and in how intra-capitalist class politics plays out. In any case, I think that under the disposition of the current capitalists reform is unlikely, but that doesn’t mean reform is structurally impossible. And we’re in a volatile moment and the disposition of the capitalists may change if we see large working class offensives.

Actually, the disposition of the capitalists is already changing - in the US at least we’re seeing an uptick in repression and innovations in the techniques and technologies of repression. I expect that this is going on worldwide. In the spring of 2011 there was least one US politician who talked about using lethal force on protesters. He lost his job for it, but this too could change - they could become more comfortable with intensifying repression up to and including an expansion of comfort with using lethal force. There will be advocates for this position, though few public ones. There will also be advocates for reform. Some people on the left have suggested the repression of Occupy Wall Street has radicalized more people and kept Occupy going longer. If that’s true, some people among the capitalists and their support personnel will figure this out and begin to suggest alternative courses of action. (It’s worth noting that the Albany police refused to clear out Occupy Albany, but they didn’t refuse saying “this order is wrong,” they refused saying “we are experts in policing and the politicians are not,” which is to say, that they thought that a hands-off response to Occupy was a better policing strategy.) Which voices among the other side win out is not going to be determined simply and solely by objective, pre-existing economic events and factors. It’s going to be the result of politicking among capitalists and their forces, and the result of the actions of the working class.

Now I want to address two arguments I've seen that say that reform is impossible. At one point a good friend of mine suggested that currently we are in a downturn in the global economy that fits with the pattern of what some economists call Kondratiev waves - meaning, I think, regular periods of economic decline or crisis - and that this means that reform is impossible. The idea is that there aren't resources available for the capitalists and governments to pay for reforms, because we're in one of these recurring low points, the low point in a Kondratiev wave. This argument doesn't make sense to me. If anything, being at a low point seems to make reforms more likely, not less likely.

The US was at one of those low points around 1890 or 1900. Those were eras of increasing social reform, including regulation of food safety, ‘protective’ legislation about women workers, and workers compensation. And the UK was at the bottom of a trough in 1841. In the 1840s the UK saw major changes in labor/employment law. Marx argues that this provided a boost to the economy, I don’t know if that’s true but he quotes bourgeois economists of his day to back it up so it seems to have become prevailing opinion among economists then. From that same link the UK was at the bottom of a trough again in 1893. In 1897 the UK introduced workmen’s compensation (and keep in mind that reforms in this era usually involve a few years of commissions studying them and so on, so the impulse toward reform dates from close to or prior to the low economic point).

There was an economic high point at 1900 and 1950. The 1930s fall somewhere in the valley in the middle of those high points. I can only speak to the United States here but the 1930s saw the creation of the National Labor Relations Act, the Fair Labor Standards Act, and the Social Security Act. So I don’t see evidence that being in a major downturn, in the valley of a Kondratiev wave, equals limited social reform possibilities. The policy planners of the 1930s certainly thought that active state engagement via social reform was a way to aid the upward swing out of the valley.

There were also big changes in American tax rates in the early 20th century. In 1913 the highest income tax rate in the US was 6%. By 1918 the highest rate was 72%. By 1926 that was back down to 25% where it stayed until 1930. By 1942 it was 88%. Changes in taxation are a type of reform. Basically all taxes involve requirements about where wealth will go - wealth that comes from the work that workers do, from exploitation. Lower taxes direct more wealth into the hands of individual capitalists. Higher taxes direct more wealth into the control of the capitalist state. If that wealth is then redistributed then the working class gets a slightly higher share of the total wealth that came out of forcing us to work. In any case, there were big reforms at the level of taxation in the US in the 1930s.

A second sort of argument I’ve seen is about the falling rate of profit. This is a harder one for me to deal with as I have to say I’m not really up on the material that talks about the falling rate of profit. I’ve tended to avoid them, honestly, for several reasons. So I’m out on a limb here, but, as I’ve occasionally heard the point made — there’s a tendency for the rate of profit to decline in capitalism because of the replacement of workers with machinery. Capitalist profits generally come from time worked by workers, where the workers produce something that the capitalist sells. The difference between the cost of production and the selling price is where profit comes from and the heart of that difference is the labor performed by workers. Marx calls it surplus value. I tried to lay this out with as little jargon as possible in a piece I wrote called “Do you really want to overthrow capitalism?”, and again in a post here at libcom called Workers, The State and Struggle. In another piece I tried to use visuals to help give an overview of the basics in terms of Marx’s writings. Anyway, surplus comes from workers. That means that when capitalists replace workers with machines, they reduce the sources of their profits. All of that strikes me as true. But that doesn’t mean reform is impossible.

The claim that there is a trend for the rate of profit to fall means that over time capitalists will get a lower percentage on their investments. That doesn’t mean they will get less wealth. It means their wealth will increase by a smaller percentage. The rate of profit would have to decline to zero in order for sort of "it will all collapse under its own weight" sort of arguments to be true. And even then it could still be possible to destroy a lot of capital in order to create new room for growth. Given the frequency of wars, political and economic elites seem to be relatively okay with that as a fix.

Imagine a small business without much machinery. The company spends $300,000 a year and generates a profit of $100,000 a year. That’s a rate of profit of 33% over the year. Now imagine a bigger company that spends $300,000,000 and generates a profit of $3,000,000. That’s a rate of profit of only 1% over the year. But it’s still a much larger real quantity of wealth — the larger business made ten times the absolute profits as the smaller company. Whatever else there is to say about all this, a tendency of the rate of profit to fall is not the same thing as a tendency for capitalists to actually run out of wealth. If there are profits being made then there is surplus value being extracted workers and some of that surplus value could be directed toward workers as a type of reform. To put it another way - repression is expensive. If they can afford repression, they can afford reform. Low estimates in Oakland are that the city has spent almost $2,500,000. At least some of that could have been spent differently.

Some possibilities for reform
A recent article at Mother Jones magazine argued that there has been a massive speedup in the US, so that “Americans now put in an average of 122 more hours per year than Brits, and 378 hours (nearly 10 weeks!) more than Germans.” The piece notes, unsurprisingly for LibCom readers, that this has been accompanied by rising incomes for the very wealthy and high profits for capitalists. None of this is earth shattering, but I do think it poses a challenge to the view that reform is structurally impossible. It seems to me that the money is there for reform. I'm not the only one who thinks this. Billionaire Warren Buffett has made news repeatedly by saying that he pays too little in taxes.

Matias Vernengo argues, though not in so many words, that current policies at least in the US are about where wealth goes among the capitalists. That is, the current moment is one in which social inequality and wealth polarization has increased rapidly in ways that are the result of economic policy and the disposition of the capitalists. The left wing of capital has begun to argue that this has reached destabilizing proportions. For Vernengo as for Buffett, tax policy should change, which would fund redistribution.

Some pro-capitalist commentators have argued not only that reform is possible but that it's needed to help capitalism recover. Here’s The Economist magazine:

“America is currently on course for the most stringent fiscal tightening of any big economy in 2012, as temporary tax cuts and unemployment insurance expire at the end of this year. (…) For all the tirades against the Europeans, America’s economy risks being pushed into recession by its own fiscal policy—and by the fact that both parties are more interested in positioning themselves for the 2012 elections than in reaching the compromises needed to steer away from that hazardous course.”

Dean Baker, writing in the Guardian, argued that

“corporate profits were revised sharply higher for both 2009 and 2010. The share of profits in corporate sector output hit a new record high, more than a full percentage point above its previous peak. Finance was the biggest winner within the corporate sector, accounting for 31.7% of corporate profits, also a record high. (…) the economy was plunging even more rapidly than we had previously recognised in the two quarters following the collapse of Lehman. Yet, the plunge stopped in the second quarter of 2009 – just as the stimulus came on line. This was followed by respectable growth over the next four quarters. Growth then weakened again as the impact of the stimulus began to fade at the end of 2010 and the start of this year. In other words, the growth pattern shown by the revised data sure makes it appear that the stimulus worked. The main problem would seem to be that the stimulus was not big enough and it wasn't left in place long enough to lift the economy to anywhere near potential output.”

Writing about the debt ceiling deal and rumbling about the US deficit, economist James Galbraith writes that austerity measure are redistribution of wealth - in an upward direction.

"The right steps would be to lower – not raise – the Social Security early retirement age, permitting for a few years older workers to exit the labor force permanently on better terms than are available to them today. This together with a lower age of access to Medicare would work quickly to rebalance the labor force, reducing unemployment and futile job search among older workers while increasing job openings for the young. It is the application of plain common sense. And unlike all the pressures to enact long-term cuts in these programs, it would help solve one of today’s important problems right away.”

Galbraith writes elsewhere about Social Security that

"the financial crisis has left the country with 11 million fewer jobs than Americans need now. No matter how aggressive the policy, we are not going to find 11 million new jobs soon. So common sense suggests we should make some decisions about who should have the first crack: older people, who have already worked three or four decades at hard jobs? Or younger people, many just out of school, with fresh skills and ambitions? The answer is obvious. Older people who would like to retire and would do so if they could afford it should get some help. The right step is to reduce, not increase, the full-benefits retirement age. As a rough cut, why not enact a three-year window during which the age for receiving full Social Security benefits would drop to 62 -- providing a voluntary, one-time, grab-it-now bonus for leaving work? Let them go home! With a secure pension and medical care, they will be happier. Young people who need work will be happier. And there will also be more jobs. With pension security, older people will consume services until the end of their lives.”

Nobel prize winning economist Paul Krugman, writing about the debt ceiling deficit deal made by the US Congress in the late summer of 2011, said that

“We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond. The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record. Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.”

So far arguments like these are in the minority among the capitalists and their governments, but there is a conversation about them happening. If reform is impossible, we don't need to think much about any of this. If reform is possible, then arguments like these will compete with arguments about why reform shouldn't happen. If social movements continue to rise, we'll also see arguments that the answer is repression, not reform. I think the outcome of those arguments among capitalists will be political. The answer won't be inevitable and it won't be determined by the economy in a narrow or mechanical way, which is to say, I don't think that we've yet run into objective limits to capitalism such that the capitalists have no options other than keep doing what they're doing now or get more repressive. They may well opt for either of those choices, but none of this is inevitable or a matter of simple economic requirements. Whatever happens will be in part the result of how the capitalists respond to the struggles of the working class. That capitalist response will be shaped by the changing disposition of the capitalist class - how it sees itself, how it sees the world, what it believe in, who is hegemonic within it. This is politics, not objective necessity.

Final thoughts on the possibilities of reform
We are not likely to see a big boom in anyone handing out big concessionary wins to people in the near future. But if things really start to kick off, and it seems like we’re heading in that direction given current events, there is a possibility of some kind of reformist turn by people in power, to try to recuperate. I think this matters for what we should expect in a later round. I agree that reform is not in the cards in the near future, austerity is. That’s the first round. Also in this round: large social movements, and probably growing ones. Currently, the state is responding with repression or ignoring Occupy. If reform and compromise isn't possible then the only options in future rounds are steps toward socialism or toward barbarism -- major social rupture or major repression, and really a cocktail of both -- but if reform is possible then that's the third option. What I mean is, if stuff really starts to kick off, ruling class priorities can change with regard to the allocation of surplus value. Some people seem to think that there's just not enough surplus value around that can be re-allocated in a politically feasible way. I think there is such a response possible if ruling class priorities change.

I think over all in terms of reform absolute standards of living is less important than securing loyalty, or rather, in shaping the form that resistance and social friction take. If no reform is possible, then we don’t need to spend time on this. If reform is possible, then we will need to be prepared to answer these moves. It’s clear that we're not currently dealing with capitalists and rulers who need to be conciliatory or recuperative, but that's different from ”reform is impossible." If movements grow and become more combative and radical, the capitalists will develop a need which could be met by reform. If they can’t do so, then we’re in a different situation than if they are able to do so. Several people I know have said that we will not see meaningful reforms without mass uprisings of the working class. I agree. But the big question is what happens after these mass uprisings? Reforms will be a way for the system to try to compensate, to temporarily relieve pressures from below and to stratify the class in some way to break up the class composition that drove the uprisings.

It seems to me that reforms have at least three functions. One is to oil the hinges of capitalists' actions - extending credit to companies so they can buy stuff to make stuff to sell stuff etc, in order to avoid problems that capitalists run into that aren't an immediate/short-term product of workers struggles. The other is to prevent or defuse social unrest on the part of some constituencies - not everyone, just enough people to keep too large a swath from boiling over too far. (One of the most interesting things I think came out of the race traitor type analysis was the point that white skin privilege was analogous to social democracy in this way.) We saw glimmers of this possibility in the struggles in Wisconsin earlier this year, both in the actions of the parliamentary-militance (a highly narrowed kind of “militance” to be sure) of the Democrats who broke legislative quorum and temporarily became a kind of folk heros to many, and in the degree to which the mobilizations didn't find a way to really move beyond the interests of unionized public sector workers. The legislative recall is another version of this I think, if it worked.

A third function of reform is to govern the capitalist class in the interests of systemic stability. That is, reforms are partly a way to spread capitalist class consciousness. While every capitalist is likely to have a clear boss-consciousness in relation to their subordinates within their enterprise, there's no guarantee they'll be class conscious as capitalists - in some ways various laments that have been written in the mainstream press about CEOs taking the money and running, or industries that pollute, or the way insurance companies raise costs for other companies and create systemic pressures in the US, or the problems with finance capitalists, these are all individual capitalists or subgroups of capitalists who are not primarily thinking/acting in terms of the long term interests of the capitalist class and the stability of the capitalist system.

I think this is highly unlikely in the short term but it's certainly possible that there could be strong moves toward regulation etc if the capitalist political forces change. This would depend on shifts among the politics of the capitalist class. Right now there's a strong rightward push and that’s worrying, but there are already pieces of a left pushback by reformists. It's scattered and often incompetent and it may not amount to anything, but we don't know for sure that it won't. It's not systemically impossible (not ruled out by large-scale structural forces such as rates of profit) though the current weight of history is against it (current balance of power among different groupings and ideologies that are believed in widely). If there is such a reformist pushback and it gains steam, it will involve new forms of governing capitalists. Green capitalism is one source of this, tied to technology research and forms of production. At a smaller scale, the Employee Free Choice Act effort in the US was a small form of this - revising the terms of governing employer behavior to allow workers to provide more of a counterweight to keep capitalist accumulation in greater balance.

I don't know how to prove that there are enough resources available to capitalists in the system to create new forms of securing stability. I have a hunch that there are, because there's just a lot of money around. It'd probably need to be taken away from some of its owners to do that. Capitalists and the capitalist state is not above putting down a few capitalists sometimes, when they believe its in their interests and the long term interests of the capitalist system. National insurance in the US is one example, it would expropriate big chunks of finance (insurance) capital in order to create reforms. A more militant reformism that actually took some resources would be able to go further. If that happened, it'd be heated and intense but not necessarily revolutionary. Here’s Marx in chapter 32 of Capital volume 1 --

"as soon as the capitalist mode of production stands on its own feet (...) expropriation of private proprietors, takes a new form. That which is now to be expropriated is no longer the labourer working for himself, but the capitalist exploiting many labourers. This expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralization of capital. One capitalist always kills many."

Marx then goes to make a prediction that this leads to the end of capitalism, but it doesn't have to necessarily, or at the very least we don't know the pace or timing so the prediction means little. It certainly seems like capitalism has lasted longer than Marx expected. My point here is that's been recognized for a very long time that expropriation of some specific capitalists can sometimes be in the interests of other capitalists or of the capitalist system as a whole. If things get really volatile, visionary capitalists and capitalist politicians will consider massive social repression of workers and they will also consider expropriation of some capitalists in order to free up resources in service of systemic stability.

I would also like to suggest this piece by Aufheben. Toward the end it makes a point that these sorts of matters are better addressed by a high level of empirical evidence (though I would add that since these are speculative matters we're not going to find empirical *proof* so much as highly convincing and more sophisticated and useful speculation). They also express "skepticism with regards to the inevitable schematism of such a stages approach – where the concrete developments are presumed to be explained by referencing the stage of capitalism they fall under." They address what they see as a move on the part of the French group Theorie Communiste. They see Theorie Communiste as posing an analysis of history and the present which, at a theoretical level, "is meant to eliminate all accomodation of the class within capitalist reproduction and make revolution, in its real sense as communisation, the necessary climax of this cycle of struggles." That's connected to the basic point I’m trying to make here, I think we should be very hesitant about theoretical perspectives that make strong claims about the narrow range of possibilities for the capitalist class to maneuver. Ruptures and dramatic shifts in consciousness can occur on the other side of the class line too, so to speak, the working class is the more volatile class but the capitalists can get volatile and suddenly shift their political vision and organization as well.

As a final comment, I think that really getting at whether or not reform is possible means also addressing what our orientation toward reformists is. As communists, the reason we’re not reformists is not because reform is impossible, I would think. It’s because the type of life we want for ourselves and our loved ones and for humanity is impossible under capitalism. I also want to make some suggestions on stuff to read that might help enrich conversation on this. I’ve already mentioned Juan’s piece and that Aufheben piece. Juan surveys a lot of material in his post. I get into some of this in a piece I wrote called “Workers, the State, and Struggle.” I think that this short bit by Marx is useful, I mentioned it in a comment on Juan’s post. I also think that Aufheben’s three-part article on decadence is super important and useful for thinking this through. It probably would also help to look into the history of reformist movements and social reform under capitalism.