Capitalism and the State
Capitalism everywhere in history has been born with the assistance
of the state and its repression and compulsion. This was so in the birth
of capitalist relations in Britain. The facts of history are covered
over by those philosophers, economists, statesmen, politicians who have
talked or written in sonorous phrases about the freedom created by capitalist
property ownership and market exchange.
Following the war, state 'planning' developed to a far
greater extent, due in large measure to the anti-capitalist upsurge
of the working class and, in the colonial countries the upsurge of nationalist
feelings.
The rank and file of unions were demanding the carrying
out of traditional demands of nationalisation of industries. In Britain,
the Labour government which was swept into power carried forward the
nationalisation of mines and railways, demands which had been swept
through a Labour Party conference before the war ended. In Germany every
political party was compelled by the feeling among the mass of people
to call for the nationalisation of the powerful combines that had done
well out of fascism. The movement was held down by the occupation troops
and diverted into the co-determination and consensus joint committees
in factories.
State actions assisted the re-constitution of capitalist
economies in Europe. In Britain, the nature of nationalisation measures
was very clear. They were a response to the radicalisation of the working
class but under the prevailing capitalist economy they became a way
of preserving capitalism.
The reality of the period since the end of the war finally
and historically registered as utopian the reformist state socialism
theories - that through piece by piece nationalisation, using the capitalist
state, a parliamentary government of Labour would bring about socialism.
Pushed to an election which gave them an overwhelming victory the Labour
leaders were compelled to go ahead with nationalisation. They had used
vague, woolly phrases about socialist change but determined their politics
on adjustments to capitalism..
Bankrupt capitalist enterprises were reorganised by the state. Capitalist
owners reaped a harvest from nationalisation just as four a decades
later they had a bonanza from privatisation. With the capitalist class
remaining dominant in control and ownership in industry and with control
of the state, the nationalisation policies were basically shaped to
their interests and expansion.
The nationalisations released locked up capital with very
generous terms of compensation. In Post-war Britain, Alam Sked and Chris
Cook wrote:
As time went on the defects of the programme became ever more apparent.
To start with, it seems that many of the previous owners had been compensated
over generously, £164,600,000 was paid out, for example, to the
mine owners, leaving miners to think that the fruit of their labour
was destined even yet - and for some time to come - to find its way
into familiar pockets. moreover, since these former owners were now
able to invest this money in much more profitable enterprises, it seemed
as if the Government had really rewarded capital instead of labour
....In practice all that happened was that the state bought out the
former owners and allowed the former management to remain. Labour was
accorded no greater say in industrial decision-making, and since it
shared in no profits it gained no economic benefit either....Cripps
said:"I think it would be almost impossible to have worker-controlled
industry in Britain, even if it was on the whole desirable."(1)
Engels in the nineteenth century pointed out that the
contradiction in capitalism between social production and private appropriation
compelled the state to intervene. It took over the running of industries,
as for example, the capitalist state in certain countries took over
the railway system to bring together the capital to construct an infrastructure
on which a rising capitalist society could be built.(2) But by pointing
to an action by a capitalist state to overcome a contradiction of capitalism
in specific circumstances Engels was by no means declaring that here
was a tendency that could change capitalism's basic realities by simple
evolution.
The central role of state ownership, control or guidance
in a capitalist society, whether under reformist governments or conservative,
has been to assist private capitalism, either immediately or in the
long term. The state serves the dominant class relations. Even in the
most difficult periods for capitalism during the period of war for example
it is individual profit which is dominant in state controls, with the
leading capitalists heading the control body just as the leaders of
industry were the Fuehrers in the German fascist economy.
In the last decades of the twentieth century, however, the ideology
of 'economic liberalism' preached the free market and excoriated the
'command economy' and state interference. The selling off of nationalised
industries has been taking place all over the world. It would seem that
the whole direction has been altered so that the capitalist state is
withdrawing from intervention in the economy. In fact that is an illusion
created by this ideological offensive.
Thatcherism attacked state intervention while carrying
out an offensive against the working class which would have been impossible
without state help and state planning. At its centre was the defeat
of the unions. That was prepared in Britain by the state legislation
and the plans of the state to smash the miners who had been responsible
for the defeat of Heath's Tory government in 1972 and 1974.(3)
The dismantling of the Welfare State, the cuts in public
expenditure, the drastic reduction of what had become known as the 'social
wage' thus lowering the floor for wages: all have been carried out by
government legislation with the use of state institutions.
In the reality the policies of 'neo-liberal' governments are far from
meaning reliance on the untrammelled working of market forces - the
'hidden hand' which ensures the benefit of all. Professor Hayek, himself,
the great guru of 'economic liberalism' was not for unfettered laissez
faire. In his address in 1947 to the first conference of the Mont Pelerin
Society, which he formed, he defined economic liberalism as:
… a policy which deliberately adopts competition, markets
and prices as its ordering principles and uses the legal framework enforced
by the state in order to make competition as effective and beneficial
as possible - and to supplement it where, and only where, it cannot
be made effective...
In the past, state assistance has been necessary for
capitalism to develop its infrastructure like railways where immediate
returns on capitalism not forthcoming. Railways and public services,
if they developed under private capital, did so heavily subsidised.
Now, the parastic nature of present-day capitalism means that the state
subsidises private buyers and speculators when it privatises industries.
. In this day and age of capitalism, privatisation has provided a golden
trough for capitalists all over the world. The profitable bonanza from
privatisation, which opened up new profits for capitalist speculators
and 'entrepreneurs', has been impossible without the guarantees and
assistance of the state.
There is the whole historical development of the nation state, which
the multinationals cannot wipe away. Their base still remains in their
national country, and the biggest world combines, for instance, the
oil companies of the US manipulate their own state internally and externally,
diplomatically and militarily in their own interests. (For example in
the 'oil price crisis' of 74).
The argument has impressed some Marxists that the state
does not have the same role in capitalism because of the development
of trans-national companies and of 'globalisation'. The state is a basic
essential to capitalism an instrument for protecting the legal foundation
of the capitalist property rights and its contracts. It grew under capitalism
together with the nation guaranteeing the home market for capitalism
and then providing protection and assistance for its overseas trade.The
great imperialist powers are Germany, Japan and the US. In all of them
their big international combines are closely linked with their state.
North American strength and influence economically is bound up with
its military and diplomatic might, which time and again clears the way
for its powerful businesses. In fact, a great many of the possibilities
of these transnationals depend upon the response of their own national
state at home and the strength of their own national state in relation
to that of the country in which they operate. Many of the operations
of these national combines can only take place because with the strength
of their national states.
The problems, contradictions and conflicts of the struggle
for profit by the increasingly powerful transnationals have also meant
an increase of national and ethnnic antagonisms and an increase in divisions
between the most powerful nations and their blocs.
Unity of capitalist states can only come by the hegemony of one state
bringing it about by force. It cannot come by a growing together of
capitalist conglomerates or through calling an abstract world market
a world state. This is what some writers conclude, who appear to see
the movements in the world solely in terms of concepts,
The antagonisms in the capitalist world were held down by the overwhelming
strength of United States capitalism for two and a half or three decades
after the war. They broke out in the 1970s owing to the uneven development,
which is a law of capitalism and Lenin stressed in his study of imperialism.
(see below).
The organisations of representstives of nation states
- United Nations, GATT, European Union go through increasing conflicts
and threats of breaking up.
1. Post-war Britain. Penguin. 1990. Sir
Stafford Cripps who had been a leader of the Labour left before the
war was then a member of the Labour Government.
2. 'These productive forces themselves
press forward with increasing force to rid themselves of their character
as capital, to the actual recognition of their character as social production
forces.
It is this pressure of the productive forces, in their mighty upgrowth,
against their character as capital, increasingly compelling th4e recognition
of their social character, which forces the capitalist class more and
more to treat them as social productive forces, insofar as this is at
all possible within the framework of capitalist relations. Both the
period of industrial boom, with its unlimited credit inflation, and
the crisis itself through the collapse of great capitalist establishments,
urge forward towards that form of the socialisation of huge masses of
means of production which we find in various forms of joint stock companies.....At
a certain stage of development even this form no longer suffices; the
official representative of capitalist society, the state, is constrained
to take over their management. This necessity of conversion into state
property makes itself evident first in the vast institutions for communication:
the postal services, telegraphs and railways." Engels. Anti-Durhing.
Lawrence and Wishart.
3. See Enemy Within. Seumus Milne. Pan
Books. 1994:
“Tory Government and state planned and carried out intervention
against the miners for many years:
The secret war against the miners has been
the hidden counterpart to the open struggle by successive Tory governments
against the NUM, a struggle which helped shape the course of British
politics over two decades....
Confrontation between Tory administrations and the miners, for many
years the most politicised and strategically important section of the
country's workforce, have punctuated British twentieth-century history
at its moments of greatest domestic political and industrial stress.”