Social Democracy: The Last Bastion of Capitalism

Back in 1911, Churchill had argued that welfare provision would deter workers from turning to “revolutionary socialism” and, by the 1930s, his prediction had proved correct. This still echoes today and sums the premise in a nutshell. Social Democracy is both the graveyard, and the gravedigger of every social movement.  Under the mantle of “progressivism”, it sucked every chance the masses had at liberation. At various stages of social and economic development they compromised, but when something was won, small or big, they jumped to monopolize it. This policy of compromise, ultimately transformed them into the cornerstone of modern capitalism, it became the last bastion of capitalism. The result of this transformation can be ironically described as “capitalism with a human face”, in comparison with the capitalism of the late 19^th century and early 20^th century, which is characterized as “wild” capitalism. The “humanization” of capitalism; or better said the salvation of it, is the tragedy and irony of the old social democrats within the “First International”.

It is actually a tragedy, when Marx, through his followers of course, prolonged the survival and perpetuation of the very capitalism which they vigorously fought against. And to dramatize the situation even more, from this social democracy the heretic son “Leninism” was born. While the former perpetuated capitalism, the later tried to escape its reformist shackles but ultimately succumbed to the same temptations; statism and most importantly compromise.  Unfortunately, “Leninism” naturally became in its turn, the graveyard and the gravedigger of social movements, instituting the “worst of all despotic governments” as Bakunin truly “prophesied” some two hundred years ago. That said a pattern seems to be seen, the seeds are bad if the fruits are always rotted inside. While the heretic son was dismantling the free soviets and the factory committees after getting power in 1918 in Russia, in the same time the father was clapping down a revolution in Germany in the name of capitalism. Disillusioned by both, some Marxists tried to escape this tragic conundrum, even more questioning the very “socialist” nature of Leninism, and more importantly, trying to show the capitalist aspects of the order they institute in Russia. These aspects were no doubt the inheritance of social democracy, because whilst social democracy is on the center-left of capital; Leninism is on the left of capital neither of them breaking away from it.     

This marriage, between social democracy and capitalism is in reality the old marriage between the state and capitalism. Social Democracy is the “progressive” face of the modern state apparatus; this apparatus was and still is the “executive committee of the bourgeoisie” as Marx noted. Let’s put aside the “power corrupts” concept (which is absolutely true in our case) and look at the historical meaning of the state in relation to the bourgeoisie. The modern “nation state” is the product of class antagonisms within the old feudal order; the mercantilist class representing itself in the “nation state” versus the multinational aristocratic class, representing itself in the multinational empires.  The “National Awakenings” that occurred in the early part of the 19^th century, were the products of these class antagonisms within various multinational empires. Such events were primarily led by the former local mercantilists, which now became the national bourgeoisie; their interests conflicting with the primitive aristocratic privileges.  This historical process was called “revolutionary” by Marx himself, which pointed how the bourgeoisie destroyed the old feudal order; consolidated its power by creating the modern “nation state” i.e. the state; and through this providing a legal framework for capitalism itself. Or in simpler terms, the modern state was the one that firstly “legalized” capitalism.  

Considering the history detailed above, social democracy is the last defense of capitalism. Social democracy is embodied in the state. This is also the “sin” passed down to Leninism; trying to obscure the very concept of  the “state” itself, the Leninists try to create certain variations of it, a “workers state”, “socialist republic” and so on. But how can one build on a structure which is foreign to the working class? The state in itself as a concept and structure is the product of the bourgeoisie.  One cannot live without the other.

Not drag this even more, the most important conclusion I think is this; social democracy is the compromise capitalism offered us under the form of the “welfare state”. Winston Churchill was indeed a heavy drinker and smoker, but that doesn’t mean he was dumb.   

On Labor Exploitation

It remains evident to both a professed State Capitalist or a Stalinist that exploitation exist in the world. The central difference between the two would be their perception of what constitutes exploitation and who they think does the exploitation. The factor that also makes them similar is their historical justification of exploitation in the name of what they consider a greater future. Which I'll explain in this essay.

The Capitalist history of advocating or apologizing for exploitation:

It is not exactly specified as to when State Capitalism in object began to exist. Although, the end of what is known as the Feudal economic system, the Cottage economy and the beginning of the Industrial Revolution is generally described as the beginning of "State Capitalism". Which is arguably a misnomer, but I will conviniently leave that topic for another essay.

The Feudal system, even though it ensured that the general population remained close to enslaved, was justified by a belief in a naturally designed order of society. Prominently described by Thomas Aquinas in his "The Argument from Design" which was often used to argue that any system other than Feudalism was against "Human Nature". Which rather ironically sounds like the argument of the many people who argue for "Intelligent Design". But in many ways this is not ironic; there has always been those who advocate what is known by later generations as exploitation. There are also a myriad of people who have advocated what is known by later generations as Pseudo-Science. Each generation of individuals mirroring past generations in character, each time attracting some following amongst intellectuals and the general populace.

One thing which was justified by Capitalist and Theocrats alike was the existence of slavery. The various argument for its existence included a belief that the abolition of slavery would lead to massive unemployment, economic depression,  assimulation problems and the claim that the Black slaves were somehow better off than the freed slaves. As well as the Black people who were living in Africa, claiming that there were significant increases in slave life expectancy over the course of decades. There were also a myriad of arguments which claimed that Black people were racially inferior, such as the arguments of John Campbell. The fact that somewhere near 3%-5% of Black people who lived in the South were free and living successfully was of course a figurative "Thorn in the Side" to John Campbell's argument and those like his. Thankfully, legal slavery in the United States came to an end. Slowly the apologist and the advocates for it began to dissappear as well. The abolitionist went from being recognized as "unrealistic radicals" to being seen as the "Good People" who fought to end an unjustifiable evil.

Another thing which the Capitalist once attempted to justify was Imperialism. In today's world the phrase "Imperialist" is largely a buzzword or an insult. You will probably seldom find a politician who claims to have an "empire" or who terms their war an "Imperial expansion". You will probably not find a "respectable" individual like Winston Churchill who argues for the use poisonous gas on "Recalcitrant Arabs" (i.e People who fought for independence from the UK's empire). You will also no longer find individuals who claim that Imperialism is philanthropic and benevolent, but these sort of arguments existed at one point. The rather familiar argument that "X" is bringing opportunity and economic progress to "X" poor place. Such individuals like King Baydouin of Belgium, who was King until as recent as 1993, had praised the developments for the Congo under the bloody rule of King Leopold II of Belgium. Patrice Lumumba criticized Baydouin, even going as far to say "We are no longer your monkeys!". Remarkably, Lumumba was harshly scorned in both the European and Western European media for criticizing a mass murderer like King Leopold. Lumumba was also later killed by the military coup of Colonel Joseph Mobutu, which had the complicity of the Belgian government and the Central Intelligence Agency. The U.S government even admitted in 2006 that it had planned on assassinating Lumumba who was a democratically elected Prime Minister. Of course, King Baydouin's apology for what was imperialism glossed over the significant death toll and human rights abuses of it. Yet, pointed out the small momentary gains of it. One could point out the fact that the UK created a railroad system for India as well as various other infastructural things, but gloss over how Winston Churchill and alike were involved in creating the Bengalese famine which caused millions of deaths. Which brings me to a related subject; the phonomenon of people in the more affluent countries apologizing for their leader's actions in the less affluent parts of the world. A phonomenon which is not solely limited to racial supremacist nor people with pernicious intentions. One which tends to exist in the form of modern day sweat shop apologist who as I will demonstrate; can be juxtaposed to an apologist for Stalinism.

In case you aren't familiar, the prominent economist Nicholas Christoff published an essay entitled Two Cheers for Sweatshops. Him, like many economist have made praise for exploitative work conditions in the belief that they will lead to eventual progress. As well as provide opportunity. In what they euphemistically entitle "Comparative Advantage". This is rather perversely a realistic term. Say that there is a man who is being physically held down by a man who represents a figurative corrupt government. This man holds down a weaker man while another man, the figurative multi-national corporation, kicks the held down man in the face. Eventually, the man kicking the held down man begins to kick the man more lightly than he did before. Meanwhile, Jeffrey Sachs or some other "Neo-Liberal" economist proclaims that "He's not kicking him as hardly as he was before. Therefore, it's only logical that we provide financial support to the man kicking and ask that he doesn't just stop abusing and exploiting the held down man altogether". If you're critical of this logic, you're just someone who "thinks more with their heart, not with their mind" or someone who is utopian, unrealistic and the many other ad hominems generally reserved for the left.

Another claim is that these sweatshops improve living standards over time. There may actually be some objective proof for this claim. Although, these claims seem to conviniently overlook the role of labor activist and unions in creating better conditions. The massive general strikes in South Korea during the nineteen ninetees. The role of unions in creating what is now known as a "weekend", the eight our workday and many other things for which the magical "profit motive" doesn't grant. It also ignores the role of "structural adjustment programmes" of the World Bank, International Monetary Fund and the World Trade Organization in creating poverty. These are programs which require that third world governments taking loans must stop subsidizing agricultural sectors and accept in cheap grain from the first world. Thus, destroying opportunities for local farmers to sell locally grown crops as well as create a need for farmers to migrate to urban centers. Basically, creating a need and introducing a solution that best fits the person creating the need.

Despite what the Nobel prize winning economist Milton Friedman wrote in Capitalism and Freedom. Capitalist are often not the promoters of freedom. Nike corporation has negotiated with Indonesia's military dictatorship in order to suppress unionization. Any prominent free market economist would of course agree that the Suharto dictatorship doesn't exactly help economic growth. According to a study by the University of Michigan:


"FAQ #3. Do Nike jobs raise living standards in the long run?
Foreign investment sometimes does this, but only when coupled with support for labor organizing and democratization, with decent pay and conditions, and with commitment to the local economy when things get better. Nike runs in reverse. In Indonesia, "Nike has created 115,000 jobs that pay near-subsistence wages, but even [military] government officials grouse that such operations generate little self-sustaining economic development" [LAW]."

Another claim by the Lassiez-Faire crowd refers to the polarized reforms under Augusto Pinochet's Chile. Pinochet, who took power in a CIA supported coup d'etat. It is estimated that Pinochet's forces "are conservatively estimated to have killed over 11 000 people in his first year in power." [P. Gunson, A. Thompson, G. Chamberlain, The Dictionary of Contemporary Politics of South America, Routledge, 1989, p. 228]. The market reforms that were claimed to be a "miracle" by Milton Friedman. Although despite his claims, The initial effects of introducing free market policies in 1975 was a shock-induced depression which resulted in national output falling buy 15 percent, wages sliding to one-third below their 1970 level and unemployment rising to 20 percent. [Elton Rayack, Not so Free to Choose, p. 57].

In all fairness, the Pinochet regime actually did decrease inflation though. The Pinochet regime reduced inflation, from around 500% at the time of the CIA-backed coup, to 10% by 1982. From 1983 to 87, it fluctuated between 20 and 31%. The advent of the "free market" led to reduced barriers to imports "on the ground the quotas and tariffs protected inefficient industries and kept prices artificially high. The result was that many local firms lost out to multinational corporations. The Chilean business community, which strongly supported the coup in 1973, was badly affected." [Skidmore and Smith, Op. Cit.].  

Wealth also didn't "trickle down" as so praised. For example, in the last years of Pinochet's dictatorship, the richest 10 percent of the rural population saw their income rise by 90 per cent between 1987 and 1990. The share of the poorest 25 per cent fell from 11 per cent to 7 per cent. [Duncan Green, Op. Cit., p. 108] The legacy of Pinochet's social inequality could still be found in 1993, with a two-tier health care system within which infant mortality is 7 per 1000 births for the richest fifth of the population and 40 per 1000 for the poorest 20 per cent. [Ibid., p. 101].

Basically, this new era of "Neo-Liberalization" is not as great as supposed. At least not for much of the world. You could easily apologize or advocate it by making vague appeals to the increases in life expectancy in the third world as proof that globalization "works". But, using this to apologize for it's legacy is in many ways like apologizing for the legacy of individuals like Iosif Stalin. Considering that under Stalin life expectancies increased from 32 in 1913 to 63 in 1956 according to Patrick McNally. Similar increases in life expectancy occured under Mao Tse-Tung and Enver Hoxha. Of course, if a mainstream economist were to to publish an article entitled "Two Cheers for Stalin" or "Two Cheers For Slavery" or even "Two Cheers For Imperialism" they would rightfully not be taken seriously in the modern US. Considering the 2.5 million or so people who died under Stalin's purges. As well as Stalin's removal of democracy in favor of centralism, his signing of the Molotov-Ribbentropp pact and his imperialistic invasion of Finland. One would have to ignore many of these negatives to view Stalin as existentially positive like many in today's Russia do. The same should go for Sweatshops, as it does with things like slavery and Imperialism.

Overall, all exploitation should be viewed in the same light. One form being easily juxtaposed to another. If a politician is to rightfully denounce the abuses under Stalinism, then they should also be denouncing the abuses under the system of sweatshops. Not making an attempt to apologize for one of them out of political or economic convinience, while glossing over the abuses of the other in the name of "necessity" or anticipated future gain. I think that unless one wishes to subscribe to double standards then this point should remain pertinent. Thus, I think I've gotten across the point that I was trying to get across. Therefore, I rather awkwardly conclude this essay here.

What is socialism ?

Ask an average Joe what is socialism and he will point out to China, the former Soviet Union, Cuba or other state capitalist or totalitarian dungeon. Of course, it's not his fault, after a cold war based upon indirect intervention and massive propaganda the truth lies underneath, to quote Noam Chomsky: "When the world's two great propaganda systems agree on some doctrine, it requires some intellectual effort to escape its shackles. One such doctrine is that the society created by Lenin and Trotsky and molded further by Stalin and his successors has some relation to socialism in some meaningful or historically accurate sense of this concept. In fact, if there is a relation, it is the relation of contradiction." So it's not much about education here, as it is about misinformation. Socialism in the classical/libertarian sense does not imply state ownership of the means of production, if we involve the state in distributing wealth and owning all means of production, than we defeat the very purpose of socialism. Socialism meant, until the rise of Leninism, democratic workers control over the means of production and distribution. In the infamous Russian Revolution for example, we saw a revolutionary factory committee movement throughout the Russian working class as factories and plants were seized and run under workers self management. Lenin's idea was vastly different than the libertarian socialist tendency of the organized Russian masses, for Lenin "socialism" ran through the terrain of state capitalism and, in fact, simply built upon its institutionalized means of allocating recourses and structuring industry. As Lenin put it, "the modern state possesses an apparatus which has extremely close connections with the banks and syndicates, an apparatus which performs an enormous amount of accounting and registration work . . . This apparatus must not, and should not, be smashed. It must be wrestled from the control of the capitalists," it "must be subordinated to the proletarian Soviets" and "it must be expanded, made more comprehensive, and nation-wide." This meant that the Bolsheviks would "not invent the organizational form of work, but take it ready-made from capitalism" and "borrow the best models furnished by the advanced countries." Although I intentionally omit "social democracy", knowingly it is older than Leninism and was considered the "mainstream" form of socialism until the rise of Leninism, maybe I can be accused of intellectual dishonesty, but social democracy for me is the same state monopolistic system, albeit minus the "revolutionary" vanguardism of the Leninist. This statist vision of socialism, coupled with Lenin’s vanguardist interpretation of Marx's "Communist Manifesto"(although Marx's own writings alluded to centralization of economic and social power into the state) paved the way for modern totalitarianism and the disasters that followed it. This form of socialism based upon democratic workers control and anti-Leninism, was known in the time of Lenin, as “left communism”, this tendency along with anarcho-syndicalism, anarchist communism and other forms of social anarchism, come from the same philosophical and political tradition called “libertarian socialism”.  Libertarian socialism unites all these varied tendencies under one umbrella term, although with many differences between them, the main characteristics of these tendencies, such as workers control, anti-vanguardism, anti-centralism etc. puts them under one overall tradition, which is constantly evolving.  For example, new tendencies occurred inside the libertarian socialist tradition at the end of the 20^th century, tendencies such as “Participatory Economics”, “Inclusive Democracy”, “Libertarian municipalism” etc.  All of these tendencies drew inspiration from the later libertarian socialist trends, building upon the already vast theories that came before them. So overall, the term socialism cannot be monopolized by the Leninists and its derivates, because socialism in this tradition is vastly different and unique.