Radical perspectives on the crisis

Its always stimulating to read SpikeyMikes contributions which do offer some food for thought . But again for clarity i will re-iterate the SPGB/WSM position on trade unions

We recognise that, under capitalism, workers depend on the wage or salary they get for the sale of their labour-power and that it is in their interest to get the highest possible price for this; collective organisation and action, as via trade unions, can help obtain this. In other words, we're talking about haggling over the workers' commodity. Clearly, necessary though it is, this has no anti-capitalist content. This doesn't mean that the wages struggle isn't part of the class struggle. It is, but as an economic, defensive struggle within capitalism to get the best deal under it. Obviously, being part of the class struggle, it has the potential to develop into full class consciousness, ie a recognition of the need to get rid of capitalism and to take political action to do this. But it's not going to develop into socialist consciousness automatically without those involved hearing the case for socialism. Which of course is why the SPGB produce leaflets and pamphlets directed at trade-unionists.

Discontent over wage levels or conditions at work can be a catalyst for socialist understanding but so can many other things such as concern about the environment or war or the threat of war or bad housing or the just the general "culture" of capitalism . It can be said that history has not borne out the view that there is some sort of automatic evolution from trade union consciousness to reformist political consciousness to revolutionary socialist consciousness (as Marx and Engels and Social Dmocracy tended to assume). It's just not happened. In fact the opposite has: trade unions have dropped talking about the class struggle and socialism to present themselves as on a par with insurance companies, complete with tendy names such as UNITE or whatever to deal with problems at work.
We have never uncritically accepted trade unionism. As we said in 1912 we support only trade unionism when it is on sound lines .

"Sound lines" mean that while fighting the daily battles the toilers must adopt a policy of "No Compromise". They must have no regard for the master’s interests or property. "Conciliation" and "Arbitration" schemes and long notices must be strenuously opposed. They have got to teach their members that the interests of workers and employers are in direct opposition. Above all, the trade unions must use all their powers to increase the solidarity of the revolting working class and show the need for the toilers acting as a class. There must be no blacklegging of one section upon another, and the grievance of one part must become the interest of all. Thus only can the unions be moulded into a body capable of assisting in the revolutionary change."

In our view trade-union action is necessary under capitalism, but is limited by being of an essentially defensive nature. To overcome this limitation the workers need to organise themselves into a socialist political party aiming solely at the capture of political power to establish socialism (i.e. the so-called maximum programme). The real difference with the SPGB and various anarchists/syndicalists is over which form of activity and organisation--political or industrial--is the more important. Our view is that it is the winning of political control which is more important and that is why we emphasise this.

The SPGB enter the present political scene on two levels. One, we can and do give a thorough analysis of the present human conditions engendered by human actions and seek to rationally workout a cause and effect towards providing achievable solutions to problems thrown up as best as humans can do for the time and the technology. This invariably leads to demands for a complete revolutionary change in society on many levels, ownership,methods of analysis, production, and human thinking, which involve both outlook and expectations. Two, we have the ability to rise above the general fracas of the bourgeois parties and the trade unions and using evidence from present human capabilities envisage and present what a different society could now function like for the benefit of all.

The WSM doesn't create recipes for the cookshops of the future but we do lay down certain preferences for what we would like to see in the class struggle menu .

"In countries like India workers have the legal right to form trade unions. But there, too, unlike Europe and America, most of the big trade unions have been organised from above as fund-raising, vote-catching political subsidiaries of self-seeking "leaders" than as spontaneous, grass-root, independent and autonomous organisations of the working class to defend their economic interests. Moreover in the absence of factory-wide free election of trade union functionaries, there are as many unions as there are political parties, most of them operating with their hired gangsters and peculiar flags having very little regard to class-unity. Actually these trade unions are not genuine trade unions.
Still workers' organised resistance against exploitation is a must; and for that matter, their resistance struggles must have to be freed from the infamy of remaining divided and subservient to various capitalist political parties. This they can achieve by organising themselves in fully integrated and independent trade unions of their own, by throwing away all kinds of blind faith and submissiveness regarding the wretched hierarchy of subscription-squeezer and flag-hoister "leaders". The working class movement is a movement of equals-organised by the workers and in the interest of the workers. No "leader", supposedly having some unknown "god"-given or "intrinsic" trick-finding qualities given is necessary to lead the working-class movement. For a "trick" cannot throw profit overboard. Simply because private property lives to levy its tribute on labour.All workers are able, rather abler than the "leaders", to understand their own class-interests only if they are fully informed of their circumstances from local to global. And to be informed of what is happening around, and what has happened earlier, what they require is to meet in regular general assemblies, discuss and debate all that matters keeping ears and minds open and decide to take such steps as deemed useful. In case a strike is to be declared, they would need a strike committee to be formed of recallable delegates elected and mandated in the general assembly-thus retaining the ultimate control in their own hands.
Where there are many rival trade union shops in a single factory or workplace operated by many capitalist political parties, a socialist worker can neither keep on supporting the one he is in, nor go on seeking membership of one after another or all at the same time, nor can he open his own "socialist" trade union instead. What he can, and should, do as an immediate perspective, is to try to form a "political group" with like-minded fellow workers and campaign for a class-wide democratic unity as stated above. Whenever an opportunity arrives the group must use the assemblies as a forum for political propaganda to expose the uselessness of "leaders" and show that the trade union movement is unable to solve the problems of crises, insecurity, poverty, unemployment, hunger and wars" Manifesto of the World Socialist Party (India), March 1995.(when part of WSM)

A position that may find a sympthetic ear from those who think the SPGB/WSM has been too accepting of the trade union status quo .

If Spikeymike when he talks about

"We are talking crudely here about the development of a situation of dual power in which the working class challenges the power of the capitalist system - economically and politically"

means the same as when i said in a previous post

What matters is a conscious socialist majority outside parliament, ready and organised to take over and run industry and society; electing a socialist majority in parliament is essentially just a reflection of this. It is not parliament that establishes socialism, but the socialist working-class majority outside parliament and they do this, not by their votes, but by their active participating beyond this in the transformation of society.

Then the differences between us are not so great .

A social movement does not exclude political movement. There is never a political movement which is not at the same time social. There is no dichotomy

It is only in an order of things in which there are no more classes and class antagonisms that social evolutions will cease to be political revolutions." Karl Marx in The Poverty of Philosophy, Paris 1847

Here is an article by our section in the US on the occupation in Chicahttp://en.internationalism.org/inter/149/chicago-occupations

baboon

I gave the details for the Woodley quotes Capricorn. Look at it. Incidentally this trade union defender of the national interest is living in his union London apartment with a rent of 50 quid a week. Good news for the members.

I see you are regular reader of the Daily Mail but it's not your politics that I want to discuss any more but only your intellectual honesty.

In message 290 of 18 December you suggested that I'd
baboon

never heard the national interest invoked in wage claims or union negotiations for wage cuts. Read the recent quotes from Tony Woodley above Capricorn - it was about a week ago.

In answer to my challenge as to where and when Woodley invoked the national interest in "union negotiations for wage cuts" (as opposed to in union claims for higher wages, which I readily admit he will have done), you replied as above.

This is what your original message (No 232 of 11 December) said:
baboon

Tony Woodley, their union official, said yesterday on Channel 4 News: that the economic crisis is "only a short term problem"; the car industry "represents thousands of jobs for our country"; "we will jettison thousands of jobs unecessarily"; "we don't want too many victims"; "it's not right for our country".

These are certainly invocations of the national interest, but not as a reason for wage cuts.

You've been caught out again, Baboon.

I have of course no brief for Woodley, but I do have for the truth.

ernie

Here is an article by our section in the US on the occupation in Chicahttp://en.internationalism.org/inter/149/chicago-occupations

Predictable but an interesting variation on their anti-union position. The union is criticised for not supporting a campaign to spread the strike with the aim of "no layoffs" and settling in the end for statutory payments with regard to holiday pay, etc in case of lay-offs (I agree that the word "victory" is hardly appropriate in this circumstance, a weaker term such as "a result" would be more appropriate) :

The United Electrical, Radio and Machine Workers Union (UE), a small (35,000 members nationwide), independent, non-AFL-CIO union that had been thrown out of the mainstream labor movement at the height of the cold war because of the union's links to the Stalinist Communist Party, quickly moved to derail the workers away from a struggle against layoffs onto the terrain of bourgeois legality.

According to their US chapter what should have happened was:

Rather than stay locked up in their factory, it would have been better for the Republic workers to march from factory to factory in the Chicago area, to send delegations to other workplaces calling on workers to join the struggle, to demand no more layoffs, no more factory shutdowns.

You can demand "no more layoffs, no more factory shutdowns" in a depression as much as you like, but the chances of achieving this aim are as remote as King Canute's order to the tide to stop coming in. That's what going to happen (sorry to be so brutal but let's not kid ourselves here) and while workers whose jobs are under threat could certainly start off with this demand, if they are going to salvage anything they are going to have to negotiate (whether through, inside, outside or against the unions) lay-off terms better than the legal mimimum. Otherwise employers will just close down the factory and they'll loose their jobs anyway and only get the legal minimum.

So why demand the impossible (and it will be impossible to prevent layoffs and factory closures in the Depression that's now upon us) if you know it is impossible? To force workers to go through the experience of the failure of this understandable but unachievable demand so that they will then turn to revolution?

Who's adopting Trotsyist tactics now?

So why demand the impossible (and it will be impossible to prevent layoffs and factory closures in the Depression that's now upon us) if you know it is impossible?

Is your argument then simply based on historical pragmatism? Would left communism somehow become more palatable to you in a boom economy?

I believe many of the radical gains of the 70's occurred in a recessionary downturn anyhow.

Due to the redundancy and utter uselessness of much of capitalist production, factory closures and joblessness will be an inevitable part of any social transformation. So should we stop there?

Where are all these glorious reforms that you speak so highly off, what have the law abiding bureaucratic unions brought us in, say, the past 30 years?

Sure, if you have a union, use it as a foil, organize in and against it, but don't shrink your imagination down to only what is supposedly 'possible'.

joselito

Is your argument then simply based on historical pragmatism? Would left communism somehow become more palatable to you in a boom economy?

You say this as if historical pragmatism were a vice rather than a virtue.

I would hope that any attempt to formulate demands and impose them on capitalists by force should be based largely on "historical pragmatism." Workers need to make decisions based on the balance of forces at hand. They will surely make mistakes. Hopefully they'll learn from those mistakes and become better at waging the class war over time.

The left communist attitude (at least as represented in that ICC article), on the other hand, seems to be that the workers should try for a general wildcat strike at every opportunity. This will lead to nothing but demoralization. It is in fact little different from what the insurrectionary anarchists preach.

It's also strange to me that the ICC criticizes the unions largely because they think large-scale reforms are not possible in the current period of capitalism, yet they seem to think that demanding no layoffs during a serious recession is a winnable goal. This reflects an extremely naive and ignorant understanding of how capitalism operates.

Unless, of course, they don't think it's a winnable goal and they're advocating encouraging workers to struggle for things which they no aren't possible.

Which is it?

joselito

I believe many of the radical gains of the 70's occurred in a recessionary downturn anyhow.

The only case study I'm familiar with within the context of a working class movement is based on France around the turn of the 20th century a little past WWI (Revolutionary Syndicalism and French Labor: A Cause Without Rebels), and it showed pretty clearly that the intensity of working class struggles increased during upturns and decreased during downturns. I should think this tendency has a universal character unless I see specific evidence that contradicts it, since it seems, to me at least, fairly obvious why this would occur.

This does not mean that no gains can be made during a recession. I'm simply stating that far fewer gains are made during recessions, and that in general the working class loses more battles than it wins during recessions.

joselito

Sure, if you have a union, use it as a foil, organize in and against it

I agree with this, but it directly contradicts the left communist position, which is that militants should not join their workplace unions.

The left communist attitude (at least as represented in that ICC article), on the other hand, seems to be that the workers should try for a general wildcat strike at every opportunity

The point is, as has been constantly emphasised, that the key aim is for the workers to take control of their own struggles. A sign that this is happening is when workers go beyond the unions and are going beyond their own workplace - the search for solidarity from other workers is a key aspect of the struggles in this period. You only have to look at the surge in solidarity (statements, demos, discussions etc) in response to the events in Greece to see what we mean.

This will lead to nothing but demoralization.

Why? See the point above. It's not just a question of whether workers 'win' a particular struggle, but also the necessity, as you rightly point out, to 'learn the lessons and become better at waging the class struggle' - which means that there's a longer term (revolutionary) perspective of immediate struggles..

It's also strange to me that the ICC criticizes the unions largely because they think large-scale reforms are not possible in the current period of capitalism,

Err, no, you haven't been reading closely enough. We 'largely' criticise the unions because, in the period of decadence, they are no longer workers organs, i.e. that they definitively became part of the state and act in the interests of the state. The question of imperialist war was the most significant. If there was a move towards open conflict (as opposed to the unending 'hidden' conflicts) between Britain and another imperialism, the unions would immediately fight to work in the defence of the national interest. The end of the period where unions were useful for the working class was marked by imperialist war - however, the self organisation of the working class also put paid to the union form - the creation of the Soviets.

yet they seem to think that demanding no layoffs during a serious recession is a winnable goal.

Please show - exactly - where we've said this is a 'winnable goal' as opposed to an immediate demand in an economic defensive struggle.

This reflects an extremely naive and ignorant understanding of how capitalism operates.

Damn, just when I thought I'd started to get a handle on things, along came Mikus and blew me away... come off it Mikus, what great insight do you have that we've missed? Please do enlighten us.

[i"]The left communist attitude (at least as represented in that ICC article), on the other hand, seems to be that the workers should try for a general wildcat strike at every opportunity. This will lead to nothing but demoralization. It is in fact little different from what the insurrectionary anarchists preach.

It's also strange to me that the ICC criticizes the unions largely because they think large-scale reforms are not possible in the current period of capitalism, yet they seem to think that demanding no layoffs during a serious recession is a winnable goal. This reflects an extremely naive and ignorant understanding of how capitalism operates.

Unless, of course, they don't think it's a winnable goal and they're advocating encouraging workers to struggle for things which they no aren't possible".

[/i]

said Mikus.

" general wildcat strike" - what do you mean? Total strike of all workers in a country every time workers are threatened with lay-offs? That's not what we say; that would indeed be ridiculous. What we do say is that revolutionaries and militant workers should try to push the struggle in a given enterprise or sector to extend as far as possible. That may go no further than inviting workers from other workplaces to your meetings, or going to theirs. It depends on the circumstances, the possibilities.

"demanding no lay-offs in a recession". What does that mean? That we think that if workers struggle they can stop every lay-off during this recession? That would be ridiculous illusion-mongering. There are already massive lay-offs raining down on workers. But when the bosses in a given enterprise or sector say we are going to have to axe 800 jobs, what should the response of the workers be? The unions' response is generally: let's negotiate over the numbers laid off. If they can then announce to the workers that 'only' 500 jobs will go, they call it a victory. The proletarian response, on the other hand is: we will fight all the lay-offs - that's what we mean by the demand 'no lay-offs'. It's a declaration of struggle and of solidarity. We don't have any illusions about the difficulty of doing this, or the small chances of victory. Nothing Trotskyist about this, no phoney plans for saving the capitalist economy through nationalisations or 'workers control'. We know that the only thing that can stop the bosses going ahead with their attacks, even on a temporary basis, is to establish a balance of force against them - a struggle that scares them because it threatens to escape the control of the unions and to spread to other workers.

Don't agree with joselito about using the union, but do agree with his spirit. We have no choice but to defy the logic of capital.

I would hope that any attempt to formulate demands and impose them on capitalists by force should be based largely on "historical pragmatism." Workers need to make decisions based on the balance of forces at hand. They will surely make mistakes. Hopefully they'll learn from those mistakes and become better at waging the class war over time.

Agreed, an analysis of history and tactics is useful at every turn in the struggle. That said, I think pragmatism in the context of union struggles has a logic unto itself; given over thirty years of consistently decreasing numbers of unionized workers and severe reductions in numbers of strike actions amidst steady declines in working conditions across the board, the expectations of those working within the union framework, and those who uphold an ideology of trade union reformism are significantly limited. In this climate, what passes for historical pragmatism is a union bureaucracy overwhelmingly concerned with maintaining its own hide rather than gaining any increases in work conditions or even maintaining existing work conditions.

What I was objecting to above was that Capricorn's incessant baiting of the ICC in regards to their anti-union fundamentalism and insistence on capitalist decadence (much of which i find justified) has lead him to perhaps overstate his own belief in the what the unions are capable of and to take a position that is beginning to simply resemble the antithesis of the ICC position. Many others here, primary among them Catch, have put forth useful comments about the limitations of trade unions and their role within Capitalism that don't fall under this all or nothing approach.

I believe many of the radical gains of the 70's occurred in a recessionary downturn anyhow.

Mikus wrote:

The only case study I'm familiar with within the context of a working class movement is based on France around the turn of the 20th century a little past WWI (Revolutionary Syndicalism and French Labor: A Cause Without Rebels), and it showed pretty clearly that the intensity of working class struggles increased during upturns and decreased during downturns. I should think this tendency has a universal character unless I see specific evidence that contradicts it, since it seems, to me at least, fairly obvious why this would occur.

This does not mean that no gains can be made during a recession. I'm simply stating that far fewer gains are made during recessions, and that in general the working class loses more battles than it wins during recessions.

Perhaps I spoke to soon here, especially if Jeremy Brecher's book Strike! could be considered a valid source.

The end of the "Golden Age" was signaled in 1973 when the United States entered its deepest recession since the Great Depression. By the start of 1975, nearly a quarter of all United Auto Workers members at Ford, General Motors, and Chrysler were on idefinite layoff. The mid-1970's saw a sharp decline in the wildcat strikes, contract rejections, on-the-job resistance, and mass popular insurgency that had marked the Vietnam War era.

It would be interesting to digup some information regarding the period from the 70's to the present to see if there was any increase in worker militancy during any upturns, the mid to late nineties for instance. I realize that you are saying there is a correlation not causation, but it would be telling nonetheless. I suspect that the last thirty or so years only shows a steady decline in worker militancy regardless of upturns and downturns, and I think that the unions (at least in the US) have a big role in this for putting the brakes on worker militancy where it has erupted and recuperating any militants into the bureaucracy, not to mention being utterly flatfooted, selfinterested and obsessed with playing by the rules, and of course limiting its vision to "what is possible" given the past thirty years of givebacks.

Of course this is just conjecture.

miles

The point is, as has been constantly emphasised, that the key aim is for the workers to take control of their own struggles. A sign that this is happening is when workers go beyond the unions and are going beyond their own workplace - the search for solidarity from other workers is a key aspect of the struggles in this period. You only have to look at the surge in solidarity (statements, demos, discussions etc) in response to the events in Greece to see what we mean.

Of course the key aim is for workers to take control of their own struggles. My point is that workers may do this, to some extent, within the unions.

miles

This will lead to nothing but demoralization.

Why? See the point above. It's not just a question of whether workers 'win' a particular struggle, but also the necessity, as you rightly point out, to 'learn the lessons and become better at waging the class struggle' - which means that there's a longer term (revolutionary) perspective of immediate struggles..

You are responding to my statement out of context. I was saying that trying to start a wildcat general strike would lead to nothing but demoralization, not that taking control of their own struggles would be demoralizing. And I don't even think that wildcat strikes or general strikes are demoralizing in all cases. For a group of 200 factory workers in Chicago to think they could start one would be demoralizing.

miles

It's also strange to me that the ICC criticizes the unions largely because they think large-scale reforms are not possible in the current period of capitalism,

Err, no, you haven't been reading closely enough. We 'largely' criticise the unions because, in the period of decadence, they are no longer workers organs, i.e. that they definitively became part of the state and act in the interests of the state.

I'm afraid it is you who hasn't been reading closely enough.

Yes, you guys claim that unions are no longer workers organizations any longer. And why is this? Because permanent economic gains are no longer possible, and hence any permanent worker's economic organization becomes a bourgeois organization. This has been clarified numerous times on this thread alone (for example, Belton in post # 244 and Demogorgon, way back in post #126, although I'm sure you'll be quick to point out that he's merely a lowly supporter rather than a full-fledged member). I don't know why you're trying to downplay this now.

miles

yet they seem to think that demanding no layoffs during a serious recession is a winnable goal.

Please show - exactly - where we've said this is a 'winnable goal' as opposed to an immediate demand in an economic defensive struggle.

This is precisely why I said that either you think it's a winnable goal, or you're advocating that workers fight inevitably losing battles.

And again, if you don't think it's a winnable goal, but you do think it's a good immediate demand, then you must support at least some unattainable immediate demands.

miles

This reflects an extremely naive and ignorant understanding of how capitalism operates.

Damn, just when I thought I'd started to get a handle on things, along came Mikus and blew me away... come off it Mikus, what great insight do you have that we've missed? Please do enlighten us.

Reread my post. Immediately after the sentence you quote I pointed out that you may not think that no layoffs is a winnable demand (in which case you wouldn't have an extremely naive and ignorant and understanding of how capitalism operates), and may support workers demanding it anyway.

In the future, please read my whole posts before letting yourself get blown away.

You are responding to my statement out of context. I was saying that trying to start a wildcat general strike would lead to nothing but demoralization, not that taking control of their own struggles would be demoralizing. And I don't even think that wildcat strikes or general strikes are demoralizing in all cases. For a group of 200 factory workers in Chicago to think they could start one would be demoralizing.

Read Alfs last post above

This is precisely why I said that either you think it's a winnable goal, or you're advocating that workers fight inevitably losing battles.

And again, if you don't think it's a winnable goal, but you do think it's a good immediate demand, then you must support at least some unattainable immediate demands.

Read Alfs last post above

Reread my post. Immediately after the sentence you quote I pointed out that you may not think that no layoffs is a winnable demand (in which case you wouldn't have an extremely naive and ignorant and understanding of how capitalism operates), and may support workers demanding it anyway.

Read Alfs last post above

In the future, please read my whole posts before letting yourself get blown away.

In the future, please read all the posts before lettikng yourself get carried away.

Capricorn says that he "has no brief for Tony Woodley". Capricorn couldn't be more wrong. It is Capricorn's life-long defence of trade unionism that's put Tony Woodley and his ilk where they are today.
Another of the same kind, Derek Simpson on Channel 4 news last night, talked of "we", "we" meaning the British. He talked about workers "making a contribution" to the efficiency of the companies "we have" in Britain. Companies whose productivity increases have been 'negotiated', implemented and enforced by the unions. This "contribution" that Simpson talks about, includes what he called "sabbaticals" (sabbaticals!), "lay-offs"... "reductions in pay"... all 'negotiated', implemented and enforced by the unions working in axis with their management partners (the degree of knowing complicity is of secondary importance here - what's important is the objective role that the union's play in the division and attacks on the working class and the defence of the corporate and national interest).

80 years of "rank and filism", base unionism, critical unionism and dual unionism, hasn't stopped one iota the development of beaureacratic or "bad" leaders. In fact, it's favoured it with the credibilisation of the unions with all sorts of ideology that within them there is something to defend (some benefits, some protection, etc., etc.,- see the various arguments above). The contact between the lowere echelons of the unions apparatus and the workers is exactly what makes them so valuable to the ruling class. These lower echelons of the unions, whatever their 'good intentions', also act as a transmission belt for trade union ideology; the enforcement of 'negotiations', productivity, lay-offs, wage cuts and union discipline. In a word, the more consistent and thorough exploitation and pauperisation of the working class.
The ideology that the unions have a "bad" leadership but are workers' organisations, is the best defence that the unions could have in the face of workers' mistrust and suspicion of them.

miles

Read Alfs last post above...

In the future, please read all the posts before letting yourself get carried away.

Actually I already had, and I was intending to respond to it, but I don't have all day to respond to each individual ICC'er. I had to split my responses up over two days. But it is very interesting to see you defer to your leader. I guess some people need to be lead by hand. We wouldn't, after all, want you to think for yourself, lest you wind up contradicting other ICC'ers again, as I showed you did with Lurch and Beltov.

Now on to Alf's post.

I understand better what you guys are saying now with advocating a meeting of all workers in Chicago. Obviously that would be nice but I see no reason to denounce the struggle because they didn't do this. The workers in Chicago certainly did make many links with other works, I've heard that many of the Chicago workers have now gone to other workplaces and spoke to workers there about their possibilities and telling them about their experience and so forth. The struggle in Chicago of course didn't get to the point where communists want the working class struggle to go. But it does still seem like a first attempt to grasp in that direction after years of passivity by American workers.

(As an aside, it isn't true that factory occupations always serve to divide and isolate the strikers, and do not work in their interest. One of the things the workers were trying to prevent in the Chicago occupation was the movement of equipment out of the factory. Leaving the factory would not have been conducive to this purpose.)

As for the second point, I don't think you've explained yourself well, nor can you.

Alf

"demanding no lay-offs in a recession". What does that mean? That we think that if workers struggle they can stop every lay-off during this recession? That would be ridiculous illusion-mongering. There are already massive lay-offs raining down on workers. But when the bosses in a given enterprise or sector say we are going to have to axe 800 jobs, what should the response of the workers be? The unions' response is generally: let's negotiate over the numbers laid off. If they can then announce to the workers that 'only' 500 jobs will go, they call it a victory. The proletarian response, on the other hand is: we will fight all the lay-offs - that's what we mean by the demand 'no lay-offs'. It's a declaration of struggle and of solidarity. We don't have any illusions about the difficulty of doing this, or the small chances of victory. Nothing Trotskyist about this, no phoney plans for saving the capitalist economy through nationalisations or 'workers control'. We know that the only thing that can stop the bosses going ahead with their attacks, even on a temporary basis, is to establish a balance of force against them - a struggle that scares them because it threatens to escape the control of the unions and to spread to other workers.

You try to explain the statement, but you end up admitting exactly what I was saying. You advocate that workers struggle for a demand without thinking they'll actually get it. The fact that you don't talk about saving the capitalist economy does not alter this basic fact. I never said you guys were Trotskyists for this, so you don't need to defend yourself there, at least from me. I just think it's a ridiculous tactic, whether it's identical to Trotskyist "transitional demands" or not. I don't see how struggles for unattainable goals can lead to anything but demoralization.

joselito

Agreed, an analysis of history and tactics is useful at every turn in the struggle. That said, I think pragmatism in the context of union struggles has a logic unto itself; given over thirty years of consistently decreasing numbers of unionized workers and severe reductions in numbers of strike actions amidst steady declines in working conditions across the board, the expectations of those working within the union framework, and those who uphold an ideology of trade union reformism are significantly limited. In this climate, what passes for historical pragmatism is a union bureaucracy overwhelmingly concerned with maintaining its own hide rather than gaining any increases in work conditions or even maintaining existing work conditions.

I agree completely, but the problem with the left communist (or at least the ICC's) critique of the unions is that it is based in large part on the idea that all "permanent" (the problematic nature of this word was already pointed out by Quint early in the thread) worker's economic organizations are counter-revolutionary. They see the problem with the unions in their character as permanent organizations. I see the problem as that there is an entire caste of professionals that has developed interests very different from, and frequently in opposition to, the working class' interests. (They sometimes talk about this too but they seem to see this as deriving from the "permanent" character of the unions.) They think that even a democratically organized permanent worker's economic organization would be counter-revolutionary. I don't. (I also don't think it would necessarily be a revolutionary organization, but as has been pointed out before, the ICC has problems understanding that some organizations are neither revolutionary nor part of the state apparatus.)

joselito

What I was objecting to above was that Capricorn's incessant baiting of the ICC in regards to their anti-union fundamentalism and insistence on capitalist decadence (much of which i find justified) has lead him to perhaps overstate his own belief in the what the unions are capable of and to take a position that is beginning to simply resemble the antithesis of the ICC position. Many others here, primary among them Catch, have put forth useful comments about the limitations of trade unions and their role within Capitalism that don't fall under this all or nothing approach.

I had the same opinion at first, but actually capricorn has pointed out a number of times that he is not so much defending any particular union as the principle of permanent economic organization. I think he perhaps came off that way simply because he was debating the ICC, who have the most extreme anti-union position possible (or close to it).

joselito

It would be interesting to digup some information regarding the period from the 70's to the present to see if there was any increase in worker militancy during any upturns, the mid to late nineties for instance. I realize that you are saying there is a correlation not causation, but it would be telling nonetheless. I suspect that the last thirty or so years only shows a steady decline in worker militancy regardless of upturns and downturns, and I think that the unions (at least in the US) have a big role in this for putting the brakes on worker militancy where it has erupted and recuperating any militants into the bureaucracy, not to mention being utterly flatfooted, selfinterested and obsessed with playing by the rules, and of course limiting its vision to "what is possible" given the past thirty years of givebacks

Yes, unions frequently do this, I would not deny it. But it's wrong to give this a universal character. In the Chicago occupation, for example, it's not as if there was some struggle that occurred and was then redirected into a reformist direction. The struggle was partly initiated by workers who also happened to be union reps. I don't think this is an unusual situation, and I don't think this is a bad situation. The union reps were also workers in the factory. They were not state agents, either "objectively" nor "subjectively", (to use two words which I generally don't use).

What did the Republic workers win? Putting aside all the union preachments about “respect,” “justice,” “yes we can,” etc, the back pay they won has probably already run out. They didn’t win anything except a trip to the unemployment line. Their situation is just as desperate as it was before the factory occupation.

The timing of the "strike" is an indication of its weakness. The occupation took place after the company closed its business – the time to strike is while production is taking place, not after it has stopped or relocated. The only leverage that workers have – the company’s interest in the ability of their labor to produce a surplus – is long gone. Its too late.

The demand of the strike is also telling: a line of credit from Bank of America to the company for purposes of paying the workers’ their wages. Why should workers make the financial needs of their employers their own concern? Once again the workers gave precedence to the needs of the company over their own. If they wanted to fight, they wouldn’t show concern for the interests of their adversary – just as the employers are completely indifferent to the financial concerns of the employees.

If workers show themselves to be decent citizens whose only interest is to remain cheap labor, they will earn the adulation of politicians and leftists every time.

But it is very interesting to see you defer to your leader. I guess some people need to be lead by hand.

It always amuses me that people accuse the ICC of ´Leninsm´ of ´being uncritical´of Bolshevism and other currents and inviduals within the history of the workers movement. This despite all the critiques that have been written, as well as a major text in our International Review entitled "Against the concept of the ´brilliant leader´" here. And yet, so often, these same individuals seem to be the ones having the biggest fetish for ídentifying ´leaders´....

We wouldn't, after all, want you to think for yourself, lest you wind up contradicting other ICC'ers again, as I showed you did with Lurch and Beltov.

By which you mean, I presume, that because I disagree with you, or that I say similar things to others (in which case I´m obviously a robot) I can´t ´think for myself´? Yes, there are differences of emphasis and opinion within the ICC - something we havn´t hidden. What we share is the framework within which we conduct our debate. You are obviously very well versed in conducting a debate - you can present your arguments, pick holes in others arguments (real and imagined) and yet.... it´s never been very clear what your overall perspective is, despite being invited on several occasions to give one. (This thread is called ´radical perspectives on the crisis).

Then again, on one thread you claimed to be a marxist, and on another thread not a marxist...so maybe it´s asking a bit much for your to have a coherent position. You say you had already read Alfs post, yet you chose to respond to me individually - what´s the matter? Too difficult to collate two posts together? Or, more likely, it´s in response to your need to have the last say on everything?

RC

What did the Republic workers win? Putting aside all the union preachments about “respect,” “justice,” “yes we can,” etc, the back pay they won has probably already run out. They didn’t win anything except a trip to the unemployment line. Their situation is just as desperate as it was before the factory occupation.

This is not true. Two months pay plus vacation pay should last the workers at least two months before running out, unless we assume for some strange reason that the workers went out and spent their money even faster than normal. It has not been two months since they got the back pacy yet.

What the workers won is at least two months of time bought before homelessness, possibly three months for workers that have accrued significant amounts of vacation pay. Unemployment compensation generally lasts 6 months, occasionally more with unemployment extensions (but this depends on the individual case). Welfare plus foodstamps is not even close to being able to support a person and/or his family for more than a month who has to pay rent and/or a mortgage unless s/he has some other source of income (which I'm assuming these workers don't). At best welfare and foodstamps can give the person a month or two to give the landlord at least part of their rent money to buy them a small amount of time before he has him/her evicted.

Buying two months time when you generally have about six months or so before homeless (assuming you qualify for the unemployment) is pretty significant. I know I'd prefer to be in a situation in which I had eight months to try to find some kind of employment before I'm out on the street than a situation in which I had six months, especially considering that this recession is likely to last for quite a while.

This is not to say that the option is not incredibly shitty for the workers involved. But that's the nature of the mode of production we live in. I'd never claim that the workers have made some increase in their living standards but buying a couple of months time before you become homeless is certainly important. A working class which lays down and lets capitalists run over even basic protections is not exactly a working class which is going to overthrow a whole mode of production.

RC

The timing of the "strike" is an indication of its weakness. The occupation took place after the company closed its business – the time to strike is while production is taking place, not after it has stopped or relocated. The only leverage that workers have – the company’s interest in the ability of their labor to produce a surplus – is long gone. Its too late.

I agree. The working class has waited far too long to launch any significant counter-offensive during the crisis. We have to make do with the little crumbs we can get. That's the reality of the situation.

RC

The demand of the strike is also telling: a line of credit from Bank of America to the company for purposes of paying the workers’ their wages. Why should workers make the financial needs of their employers their own concern? Once again the workers gave precedence to the needs of the company over their own. If they wanted to fight, they wouldn’t show concern for the interests of their adversary – just as the employers are completely indifferent to the financial concerns of the employees.

You are misinterpreting this part of the occupation.

Demanding free money from Bank of America to the workers themselves is not going to happen even under the most ideal circumstances, and circumstances are far from ideal right now. I don't know if this is what you are advocating, but if it is then this is a utopian demand and I think it's good that the workers did not take it up, or they'd be homeless about 2 months faster than they are going to be now.

As far as the credit line goes, the demand for credit to the company has nothing to do with the financial interest of the employers. The company already declared bankruptcy. The company will have to pay off the borrowed money of credit through the liquidation of its assets. This is taking money out of the employers' hands one way or another. The company is already dead.

Again, I don't think there's anything revolutionary about the strike. The workers stood together to enforce a law already on the books in order to preserve their legal rights surrounding the sale of their own labor-power. Unfortunately, this is a necessary stage before the working class can even dream of overthrowing the capitalist mode of production.

The best the working class can do right now is organize enough to limit competition between workers such that the effects of the crisis aren't felt as strongly as they otherwise would be. Hopefully this organizing effort will be strong enough to allow the working class to make serious gains and inroads into the capitalists' profits during the next upswing, during which labor-power is in high demand, and eventually to put it in a strong enough position to begin to think about seizing power. Anything else is a pipe dream.

edit

A further example of the pernicious nature of the trade unions from the same Channel 4 News interview with Unite leader Simpson, cited above: Simpson had already vaunted the workers' 'sacrifices' ('negotiated' by the unions) when he was asked, if he was "asking for special treatment for the car industry, what about the USDAW (shop) workers who were losing their jobs in their tens of thousands?" Simpson put the shop workers into a strict economy category distinct from car workers. His whole reply was based on the specifics of each industry. This is not an unusual union ideology expressed by Simpson but permeates the union structure from top to bottom. This sectoralism and corporatism is what defnines the trade unions.

The complicity of the trade unions in foisting this current wave of 'sacrifices' on the working class is not new. A couple of years ago, Tony Woodley and his and other unions, divided up airport workers and imposed massive wage cuts on BA staff, leading to strong anti-union protests. Such tendencies will grow but must go together with self-organisation and general meetings of workers in order to progress. Any and all such developments in this arena should be supported and encouraged.

At the moment the unions are, literally, at the cutting edge of attacks against the working class. The idea, mentioned above on several posts, that 'at least the unions offer some protection, some benefits, etc'. not only has nothing to do with workers unity and solidarity, ie, it's a base appeal to disunity, to 'look after Number One', ie, join our club and we'll protect you (but not the others), but has been shown as completely empty. Not only are the unions not 'providing some benefits, some protection, etc.', they are directly involved in cutting jobs, wages and working conditions.
Who today denies this reality?
At the moment the unions are implementing attacks on the working class and keeping it divided and locked up.

But the unions will be really dangerous when they move with the class struggle and put themselves forward, in one campaign or another, as representing the interests of all workers.

Mikus,

You want to have it two ways: on the one hand the workers are facing an objective situation that dictates “realism.” On the other, the factory occupation was an attempt by the workers to break with the dictates of realism -- that is, to alter the situation for once in their favor, however slightly.

But just because the workers are faced with a terrible situation does not mean that they have to take a positive stance to their role -- “their legal right to sell their labor power,” as you call it, or “exploitation,” as it would be known if there was anything like a labor movement.

Of course, the Republic workers wanted money to live, but they don’t have to say “jobs with justice” and all that shit. Because wages are not payment for work performed; they are the means by which employers extract profit and enrich themselves, and if they can’t get their profit then the wages are gone, and the workers are in for a life-threatening disaster. There is no objective reason the workers can’t say: “this is a shitty way to live, working for wages!”

And they (and you) really have no way of knowing what is a realistic demand or not. The company is a private business and its finances are not open for inspection. That is the absurdity of the demand for a line of credit from Bank of America. Why should they care where the money comes from? Why should their ability to survive have to be financially realistic? If that’s what realism demands, maybe its time to be a little utopian!

And since they went to all the trouble of occupying a factory, why doesn’t somebody make the observation: there are other things that can be done with a factory than making profits for rich people! That might be the start of something better than: two months before eviction (and no Christmas this year, kids!). Or your “necessary stage”: wait until you have sweated and broken your back to restore profits and then you might be able to fight for something better.

RC

You want to have it two ways: on the one hand the workers are facing an objective situation that dictates “realism.” On the other, the factory occupation was an attempt by the workers to break with the dictates of realism -- that is, to alter the situation for once in their favor, however slightly.

This is not trying to have things both ways any more than advocating certain strategies in a war would be trying to have things both ways. In a war, the people planning the war take into account both the objective situation and attempt to change it, within the given possibilities. Trying to change a situation has nothing to do with breaking with realism. Changing a situation works best if you have a good understanding of the reality of the situation, not if you make utopian demands.

RC

Of course, the Republic workers wanted money to live, but they don’t have to say “jobs with justice” and all that shit. Because wages are not payment for work performed; they are the means by which employers extract profit and enrich themselves, and if they can’t get their profit then the wages are gone, and the workers are in for a life-threatening disaster. There is no objective reason the workers can’t say: “this is a shitty way to live, working for wages!”

I agree. I don't see what this has to do with what was under discussion though. I never said I agreed with everything the workers said. I said it was a victory for the workers involved -- they had certain goals, and they obtained them.

RC

And they (and you) really have no way of knowing what is a realistic demand or not. The company is a private business and its finances are not open for inspection. That is the absurdity of the demand for a line of credit from Bank of America. Why should they care where the money comes from? Why should their ability to survive have to be financially realistic? If that’s what realism demands, maybe its time to be a little utopian!

The company declared bankruptcy. We therefore do know, if not its exact finances, at least that it was not going to pay up. A bankrupt company does not have to pay its workers. They could demand and demand and demand, but they wouldn't get their money back.

You ask why workers should have to care where the money comes from. I agree. But you are confusing how things should be with how things are. The fact of the matter is that workers do have to care about this, insofar as their getting money depends on it. You might as well say "Why should workers have to produce for capital at all?", and then advocate that the workers simply stop working. Unfortunately, the need to work is enforced by the working class' separation from the means of production.

In addition, I have already explained that the money is coming out of the employers in any case, as the employers have to pay the loan back -- not the workers.

RC

And since they went to all the trouble of occupying a factory, why doesn’t somebody make the observation: there are other things that can be done with a factory than making profits for rich people! That might be the start of something better than: two months before eviction (and no Christmas this year, kids!). Or your “necessary stage”: wait until you have sweated and broken your back to restore profits and then you might be able to fight for something better.

Are you advocating that they began to produce for use? To produce for use, they'd have to be able to obtain their inputs for free, as well as feed the producers for free. This is not a possibility right now.

And you are imputing a view to me which I never held, and in fact goes against what I have been saying. I never said that workers have to break their backs, work harder and wait until they've restored profits until they can fight for something better. I have been saying quite the opposite -- they have to wait until they have gained experience reducing their employers' profits (by improving their own working conditions) before they can overthrow the whole profit system.

Mikus,

I proposed no demands, but criticized the stupid realism of the workers.

Utopia means something that does not go; it is a mere wish. It wants something that is necessarily impossible, like violating a law of nature.

You might as well say "Why should workers have to produce for capital at all?", and then advocate that the workers simply stop working. Unfortunately, the need to work is enforced by the working class' separation from the means of production.

Here you want to be scientific, so you have looked for the necessity of the thing, the reason for it. Yes, the compulsion of workers to work for capital is owed to their separation from the means of production. OK, so far, so good. But is this a necessity of production, like a law of nature? No, of course not. Then where then does this separation of the working class from the means of production come from? It is not just a given, like a law of nature. It exists because of the law of property that is created and enforced by the state.

You say you are realistic; you are like the general of an army at war. But there is one thing a general will not do: drop all his weapons and show consideration for the enemy.

The workers – very much in the spirit of this realism – appealed to the state, the very reason for all their poverty and negative dependence on capital, as their guardian and protector. In order to do this, they had to show themselves as useful for capital, good workers with positive proposals for how the state can do justice for them too with their modest demands – and not say anything crazy, or “unrealistic” like: why should we have to work for capital at all?

Please understand: I am not criticizing the workers for having compromised. That is something we all have to do every day in this fucked up bourgeois society. But they compromised before they even fought. They disarmed themselves. Their continued usefulness as sweat and muscle for capital and fodder for the state was never even in question.

For decades now the realism of the workers has said: we have to look out for the profitability of our company because it is faced with cut throat competition on the world market (“globalization“), so we better limit our demands or we will lose our jobs. (Right now this ideology is undergoing some alteration as the “crisis.”)

These economic realities set by competition are nothing but the capitalists own interest in profit. Every capitalist presents himself to the world as subject to external constraints; but the motive for profit is not created by competition, but vice versa. So it is not really a constraint: it is the agreement among capitalists to fight for profit that makes them compete. They all complain about the competition, but stick to it. The objective constraints force them to use their means -- labor power -- more effectively by exploiting it more intensely. The “economic realities” force the workers to the opposite: they give up their interest by trying to be successful in competition. They sacrifice for it; they do not gain.

I am not saying that revolution is about to happen, or will happen any time soon -- only that it is necessary. The capitalist system must be stopped. This is my message for the workers. Of course, this consciousness is not happening anywhere. But since we can’t overcome capitalism right now, what would be a good step by the workers?

The workers have to fight for wages -- even just to enable their standard of living to remain the same (and this is a good argument against the system, but put that aside). Even if workers don’t question capitalist economics, if they say: our economic fortune comes first, then they are on the right track. If they insist on this antagonism, then we’re fine. No knowledge of surplus value is needed to say: his good living is not mine; everything he has, I produce; the less he pays, the more he squeezes from me, the higher his profit. Its not a difficult theory: he just has to agitate for his point of view. If they want to get the most out of their labor, this means: stick together, stand on your materialism, don’t give in.

This type of struggle cancels the ideology that we’re all in the same boat. It attacks the dominant ideology that employers and employees have a harmony of interests. Maybe this way workers would open up to the idea that capitalism is not the best way of production; that revolution is sensible.

But this type of working class struggle doesn’t happen any more. The workers say: we want 5 percent because the company can afford it! This already aims at what is realistic, its not a class point of view because it is concerned about the other side. Of course they can afford it, they are capitalists! So why tell them? They don’t concern themselves with whether you can afford them; their business is to lower living standards, that’s what capitalists do. If you want to win anything, you have to hurt the capitalists!

In the name of realism the workers (or their unions) are always making alternative offers and constructive criticism within the logic of the economy. Production plans like: we’ll do this and that to remain profitable. Then, when profits are ripe, we’ll be able to demand something … And so we arrive at the present.

Hey, Baboon, what do you think of this ?
Should these workers have just let themselves be walked all over by their employer or should they have formed a permanent and democratically-organised fighting union not linked to the state? Or are they worse enemies of the working class because they are more militant and more grass-roots than Tony Woodley and Derek Simpson (for US readers, the leaders of UNITE, the biggest trade union in Britain)?

Just back to this after a break, so sorry to cut accross the ongoing debate with the ICC, though interesting to see some new contributors with a slighlty different angle on things.

I want to reply briefly to ajj's earlier response to my points.

Firstly I find the support for 'general assemblies', 'strike committess' etc which cut accross the existing trade unions in the WSM (India) statement encouraging. It is interesting that this should originate from that part of the world rather than in Britain, but the situations are not so different in practice. Everywhere (if to varying degrees) the trade unions fight on sectional, capitalist political, religious, state sponsored, gangsterist and other anti working class lines necessitating a class based response from workers which cuts accross these sorts of divisions.

The problem with this rather confused statement seems to be that it still imagines this approach to organising could be a regular part of some alternative trade union structure thus linking it back into the 1912 SPGB advice quoted in the same post and ignores the actual experience world wide of the development of the trade unions in the real world.

In practice the WSM/SPGB is still arguing the traditional left defense of the trade unions that the failure is the 'leadership' and/or the structure of the unions which could be corrected by either their reform or replacement by a better organised and lead trade union.

But in the same way that most workers are not permanently pro-revolutionary neither are they/we permanently active in our everyday collective defense of our working/living conditions.

The organisation of assemblies, strike/occupation comittees, pickets, newsletters etc is something borne of necessity in certain situations. Much of the time those situations may be localised geographically or industrially but the global and increasingly integrated nature of capitalism means that periodically capitalism enters into crisis providing a material basis for a more widespread class based response and a new necessity for class based organisation and action.

Of course it may be true(as discussed in other posts) that workers pursuing sectional interests will more readily engage in strikes etc in 'boom times' and may indeed make some limited 'gains' without an extensive class wide struggle, but in a capitalist crisis (economically based but with inevitable political and social ramifications) the need to struggle is equally essential if more dangerous - there is much to lose but potentially much more to gain from an extensive class wide movement.

And here is why my earlier reference to the development of a situation of 'dual power' and ajj's statement about ' a consciouss socialist majority,.... organised outside' (but also inside parliament!!) are completely different. Clearly I am talking about the material conditions for the development of mass consciousness, whereas ajj is describing the reverse situation. As I have argued elswhere an 'idealist' rather than a marxist materialist approach.

Incidentally the same WSM India statement at the end seems to correctly refer to the need for active political minority organisation in the workplace which I would agree with (along with the ICC and others no doubt) but this is not to my knowledge a common political stance in the SPGB is it? I argued on another thread that the SPGB refused to act in relation to workplace struggle in an active and collective way as a political organisation and was not refuted in this by ajj, so are there some difference of opinion on this in the WSM/SPGB?

Just to add to my post above.

The views I have expressed in my recent posts criticising the WSM/SPGB, and in particular in relation to my references to 'dual power', are perhaps better explained quite briefly and succinctly in my comrade Mark Shipway's introduction to 'Council Communism' included on the site linked here:

http://www.kurasje.org/arkiv/15600t.htm

in the sections headed 'Theoretical Questions' onward.

There is of course much that could be added to this explanation by way of more modern examples.

Here's the latest on the story about the unions agreeing to pay cut for steelworkers. Half-pay for staying at home sounds like a good deal in the circumstances. Better, anyway, that being made redundant (even though this could come). This sort of thing is going to happen more and more as the depression deepens.

I didn't want to start a new thread for this, so I thought I just post it here:

Why the U.S. Stimulus Package is Bound To Fail by David Harvey

David Harvey also posted a speech he gave:
http://davidharvey.org/2008/12/a-financial-katrina-remarks-on-the-crisis/

I think it's absolutely terrible, both economically and politically.

He starts out with the famous Marx quote, talking about the need to transform commodities into money during crises. When Marx says "the bourgeoisie", Harvey says "read: Wall Street." Apparently Harvey equates the bourgeoisie specifically with the moneyed capitalists.

Then, keeping in line with his shtick, he describes the major financial events in the last year or so largely in terms of a transfer of wealth from workers to capitalists (and specifically the moneyed capitalists). He even goes so far as to assert that the big returns of a few hedge funds last year (while most of the industry tanked) were derived from a transfer of wealth from foreclosed homeowners to the hedge funds. He says that this happens "somehow or other", basically admitting he doesn't know how this might work.

Of course, he's completely wrong. Any hedge fund that made money last year did it by shorting the right assets, by betting on volatility, by buying the right credit default swaps, etc. The collapse in housing prices and the foreclosure of homes has not been a means of making money, but has created enormous losses. Foreclosures only recover a certain percentage of the losses, except when prices are rising quickly (in which case the bank might be able to recover all losses and perhaps even turn a profit). But the exception proves the rule: a period of rising house prices is precisely the time when the number of foreclosures are low. Either Harvey just doesn't understand the way the financial system works or he's going for some kind of vague economic populism to try to incite anger at the bankers.

He also seems obsessed with this 3% compound annual rate of growth thing. I don't really know where he got this idea from, and I don't at all understand its supposed significance. Insofar as it's true, it's just an average rate of growth. To try to use it to explain anything is strange.

He basically concludes his talk by advocating "class struggle," his idea of this apparently being that workers should take control of "the surplus" and creating a new bank which acts in ways that are "beneficial to people", and which "rebuild lives", by building energy efficiency and creating jobs that employ people.

It's amazing how these "Marxists" have gone full circle right back into Proudhonism.

He even goes so far as to assert that the big returns of a few hedge funds last year (while most of the industry tanked) were derived from a transfer of wealth from foreclosed homeowners to the hedge funds. He says that this happens "somehow or other", basically admitting he doesn't know how this might work.
Of course, he's completely wrong. Any hedge fund that made money last year did it by shorting the right assets, by betting on volatility, by buying the right credit default swaps, etc. The collapse in housing prices and the foreclosure of homes has not been a means of making money, but has created enormous losses.

while he's wrong in the sense that their wasn't a direct transfer of wealth from foreclosed homeowners to hedge funds, he is correct that the big returns of a few hedge funds last year (and the year before) were made as a result of the bursting of the subprime bubble, John Paulson's hedge fund for example had been shorting the ABX index and specific CDO's for a couple of years prior which eventually made the fund billions, and paulson 3.7bn dollars personally in 2007 - all the other big hedge fund winners in that year were a result of betting against subprime mortgages. clearly these profits were not a direct transfer of value from foreclosed homeowners to the hedge funds, but a transfer of (fake) value between market participants, with those on the losing side (or the system in general more correctly) of those bets then being bailed out through an eventual rollback on living standards of the working class - so the transfer of wealth that he talks about from the working class was not to the winners but the losers

i have a lot of respect for david harvey, but I have noticed that his grasp of a few things (derivatives for example he always gets himself tied up in knots with) tend to let him down at times and potentially discredit a lot of this other work - the stuff about the people's bank at the end as well seemed a bit odd but to an extent is consistent with his previous writings about spatio-temporal fixes for the absorbing of surpluses (apart from the fact there is no surplus!) - despite him having taught a course on capital for more than 40 years i don't think he has ever said he was a marxist, so to have ideas about 'seizing control' of the surplus and using it for social purposes while obviously inconsistent with an avidly marxist position, seems to me to just be his pragmatic response to a situation which precludes any potential of a progresssive transofrmation of the social & economic basis of organising society - mind you to think that the surplus could be seized and used for social purposes is just as utopian as the idea of a (progressive) revolution

Thanks for the info on Paulson's fund, I wasn't sure what he specifically shorted.

I'm not too familiar with David Harvey, I've only read some articles and parts of The Limits to Capital and The New Imperialism. I've never been impressed with the obsession with wealth transfer, and I've never seen how it's a fundamentally different idea than what you get from people like Naomi Klein. And I hate the kind of language that he uses, with "spatio-temporal fixes". I generally think that if you can say something, you should be able to say it clearly.

I didn't know he wasn't a Marxist, I somehow remember someone telling me that he was once a Trotskyist, and I assumed he still considered himself some sort of Marxist given that tends to try to use Marx in his analysis.

You said that his support of a people's bank is his pragmatic response to the current situation. I think its pure utopianism excludes it from being pragmatic. Marxists really need to point this out.

I think a lot of people are excessively confused by derivatives, and a lot of the confusion ends up leading to these silly populist ideas. Derivatives are obviously complex in their own way but I don't think they're much more confusing than securities. In fact, I think the more difficult issues are involved with simple things like what we've been discussing on the housing thread. There's this annoying tendency to just say "well, these companies hire physicists to work on these crazy assets, therefore I couldn't possibly understand them." And this sort of idea is really amplified in people's minds when they see popular theorists like Harvey or Goldner, who most people think of as specialists in that sort of thing, basically admitting they don't fully understand the mechanisms. I think it shows a lot more about the quality of the analysis than the inherent complexity of the assets. Physicists aren't needed to understand the basic principles of securities and derivatives, just to figure out the exact pricing models, the default risk, etc. That's the kind of thing that's really only very important if you're an investor or perhaps if you're trying to do some kind of quantitative analysis.

Anyway, it annoys me that this idea is prevalent. If you can understand securities, you can understand derivatives with a little bit of work.

Derivatives are fairly easy to understand in principle. Newcomers would do best to look at how derivatives were first used in agricultural production to hedge against future price fluctuations. I think this should give you an idea of how derivatives work in their simplest form. The problem nowadays is the sheer scale, variety and complexity of derivatives products, coupled with jargon ('swaptions', etc.), is an awesome mess that confronts anyone who turns their attention to the industry when they have little prior knowledge. So, I am not surprised that many people simply switch off!

I believe derivatives could now be vital to understanding the global economy in the present day because - and like so much else, my ideas here are very much work-in-progress - of how world money is changing. As value measures have become more unstable (ie because of the end of convertibility), the assessment and calculation of risk has become more important. Thus we have seen an explosion in the derivatives markets (I have figures to hand of US$683.7 trillion worth of derivatives contracts outstanding at the end of June 2008. These figures are from the Bank of International Settlements), where finance companies can make huge profits from the fees charged.

Moreover, there are interesting arguments concerning the evolution of derivatives in all their forms as means of measuring future value by means of calculating abstract risk through matrices. It is perhaps also no coincidence that we have also seen the rise of derivatives in tandem with the rise of fictitious capital.

I found some interesting work done by two Australian scholars concerning the way in which the system of derivatives might now be considered as a kind of "non-state money". I don't pretend to know fully all the details, but what they say is worth thinking about. Link here. Also, a link here to a review of a book of theirs (which I haven't yet read).

I have figures to hand of US$683.7 trillion worth of derivatives contracts outstanding at the end of June 2008

this is a common misconception that this 600 hundred trillion figure is the value or worth of derivatives - the figure is, for must purposes, completely irrelevant and meaningless (and a good example of where david harvey for example has got himself tied up in knots in the past) - the 'value' of those contracts is probably about a tenth of that figure and even then it includes lots of double counting and gross up's which don't adequately express the true exposure that the holders of these contracts actually have - the true value in total of these derivatives at a societal level would in fact be precisely zero - although that would only hold in a hermetically sealed environment where the impacts of losses & defaults triggered by these contracts did not go on to contaminate everything else, which they of course do

yeah it's the notional value.

There is also a marxist account of derivatives: Dick Bryan & Michael Rafferty: Capitalism with Derivatives: A Political Economy of Financial Derivatives, Capital and Class. Palgrave Macmillan, 2006. From what I've understood It's an attempt to theorize derivatives in Marx's categories. I've only read the first chapter on the basics though.

See the review in Capital & Class here. The book can be downloaded from the fantastic e-book warez site, gigapedia.org as a PDF.

Caleb

The problem nowadays is the sheer scale, variety and complexity of derivatives products, coupled with jargon ('swaptions', etc.), is an awesome mess that confronts anyone who turns their attention to the industry when they have little prior knowledge. So, I am not surprised that many people simply switch off!

I agree that the amount of jargon and the amount of different types of derivatives causes a bit of fear in the mind of the beginner. This is natural and I wouldn't blame an beginning reader for being intimidated by this stuff. What I don't like is when the supposed experts act as if derivatives were something beyond anyone's ability to understand. Surely the point of writing on the topic is to demystify it.

Caleb

I believe derivatives could now be vital to understanding the global economy in the present day because - and like so much else, my ideas here are very much work-in-progress - of how world money is changing. As value measures have become more unstable (ie because of the end of convertibility), the assessment and calculation of risk has become more important.

I think you are very correct, the end of a fixed-rate currency system was fundamental to the development and spread of currency and interest rate derivatives.

But I don't know what you mean by derivatives functioning as "non-state money". For Marx, money is defined as 5 basic functions -- measure of value, means of circulation, means of payment, hoard (store of value), and world money. I don't think derivatives fits into any of those functions. The researchers you refer to might have some different definition of money in mind but if it's none of the functions I listed, it's going to have very little in common with what we normally refer to as "money".

I'm not a fan of the "abstract risk" idea. (Did you come across this idea from David McNally, in his recent article?) The type of risk measured by investors isn't "abstract" (if by that you mean, just any type of risk at all) but specifically risk that a return will be less than expected (whether due to a fall in the income stream that a security represents, or a risk that one's profits could be eroded by a change in exchange rates, inflation, etc.). Talking about "abstract risk" just serves to mystify this.

Thanks for that link, jura. It has a lot of good stuff.

There's been a funny fight between Brad DeLong and David Harvey on the Harvey article that Jura posted:

http://sites.google.com/site/radicalperspectivesonthecrisis/news/delongrespondstoharveyonstimuluspackageharveyrespondstodelongsresponse

I think DeLong is reading way too much into Harvey to conclude that he is defending the "Treasury view." I do agree with him though that it's hard to see if there's any argument at all in Harvey's article.

It's is more of an amusement than a serious debate.

Message 230

baboon wrote:

Tell you what Capircorn, from now, let's keep a general eye on what the unions do in the face of this unfolding economic crisis. Just generally. Let's keep an eye out to see what "defence", "protection and benefits" the trade unions internationally and in Britain give to the working class.

Right, Baboon ... you're on. But first let's agree on the terms of the bet. My bet is that workers in unionised workplaces will not suffer so much in the coming depression (and, yes, many will probably suffer real wage decreases, nothing can stop this in a slump) as those not in them (they'll get bigger wage decreases and smaller redundancy payments).
If you win, I'll take out a take out a sub to "World Revolution". If I win, you join a union. OK

Just to resurrect this debate a few years years on and still in the midst of the recession with union-led general strikes called in several countries, with free-marketeers and governments accusing unionised public sector workers of having better wages and pensions that require being dismantled to bring into line with mostly un-unionised private sector workers and are being resisted by the unions by official strikes.

Who do we think have won the bet?

Have the unions been co-opted and act as pro-management, pro-austerity, pro-State organisations in UK, Greece, Portugal, Spain, and elsewhere or within their limitations are performing as necessary defensive workers organisations to counter attacks on workers conditions?