The Anarchy of Production

By Gwydion M. Williams

Most of the Cold War was fought by the West in defence of the Mixed Economy. Many of its defenders would have denied that the Mixed Economy was even capitalism. Rather more agreed it was capitalism, but an improved Mixed Economy Capitalism. Something that worked much better than the capitalism that caused poverty in the 19th century and the Great Slump of the 1930s.

It was often conceded that World Communism had once had a point: but the new system offered the same benefits at a far lower cost.

All of this was swept away in the 1980s and 1990s. The centre-right and the capitalists became the heroes of history, with socialism an aberration. With Free Markets, Deregulation and Privatisation as the answer to everything.

Five years back, I described the New Right reality as Feed-the-Rich Economics.^[1] ^[2] I reminded everyone that it was the Mixed Economy that had won the Cold War.

And denied that the centre-right or the capitalists could be credited with freedom as we now understand it. Till the 1920s, there were significant radicals who were non-socialists. But socialists and communists were the pioneers of most of the later extensions of today’s range of freedoms.

I pointed out that ‘the normal’ has been redefined many times, mostly by left-wing protests.^[3]

‘Freedom’ is an infinitely flexible word. In the 1950s, when it dominated the USA, male homosexuality was a criminal offense in most of the West. Racism was widespread, and segregation entrenched in the US South. Though nominally anti-imperialist, the USA supported France’s defence of its dwindling colonial empire in Vietnam and the rest of Indochina. Britain and Portugal could be in NATO while still keeping much of their colonial empires. Portugal also had a right-wing dictatorship that was widely described as fascist, though in detail there were major differences. Likewise in Spain, excluded from NATO but strongly supported by the USA.

The success of Mao’s China also prompted the USA to spend vast sums buying out landlords in Asia and giving peasants their own smallholdings, preventing possible Maoist insurrections. This was at a time when most people other than US citizens could visit China and see that it was a lot safer and better-run than it had been before 1949. I’ve detailed elsewhere how Mao’s China matched the global average for economic growth despite the USA hampering its trade and insisting that the Taiwan exiles were still the legal government.^[4] And that Chinese in general had longer and better lives than conventional or pro-Western governments gave ordinary people in other poor countries, despite the errors of the Great Leap Forward.^[5]

Mao’s efforts also gave the Chinese a solid Modernist outlook.^[6] This remains solid at a time when there is a strong revival of older and anti-liberal ideas in much of the rest of the world.^[7]

The New Right came to power with all of the wrong ideas.^[8] In their eyes, the Bolshevik Revolution was a huge error. The pre-1914 order was an ideal that needed to be restored.

But this was nonsense.

Angus Maddison did a grand historic summary of global growth, and most people accept it as about as close to the truth as we can get.^[9] The World Economy: Historical Statistics shows that Britain’s success was remarkable only compared to societies that had stayed much the same from generation to generation. It never managed as much as 2% growth per year in the 19^th century, which would be disastrous by the standards of the second half of the 20^th century.

It is also a fact that the Soviet Union and its East European satellites had solid economic growth in the 1950s. After the immense damage of World War Two, the Soviet Union was for a time overtaking the USA. It was also winning the Space Race in the late 1950s and early 1960s.

Soviet failure from the late 1960s was not down to some inherent defect in socialism. It was down to stagnation when Brezhnev became dominant among the heirs of Khrushchev. But since Khrushchev had raised them, it seems odd he is still widely viewed as a hero rather than a bungler.

It is also a solid fact that after the New Right take-over, the West never got back to the fast growth and occasional Economic Miracles that it had in the 1950s and 1960s.

There were problems in the 1970s. At the time, some of us wanted to advance within the existing Mixed Economy, rather than the wild demand for the immediate overthrow of capitalism. Barbara Castle as a very realistic Labour leftist saw a sensible way forward with an Incomes Policy.^[10] Her 1969 proposal In Place of Strife^[11] would have produced a very different future. But most of the Hard Left favoured strife, ignoring the bald fact that the bulk of the working class in the West did not seek the immediate overthrow of capitalism. They wanted more rights and better incomes, but mostly failed to see they could only secure these by changing the rules within the existing system.

Also popular at the time was Workers Control. The people now running Labour Affairs had a small role among those pushing for it at the time.^[12] We wrote a lot explaining why this was the only type of socialism and radicalism likely to work in the 1970s.^[13] The centre-right at that time was demoralised, and Edward Heath even tried to implement some of these ideas. But a lot of the centre-left saw no need for radical change. Meantime the Hard Left actively undermined Workers Control and an Incomes Policy, and were very surprised when the result was a renewed wave of enthusiasm for capitalism.

Some of those who had helped defeat a plausible road to socialism got demoralised when disorder didn’t lead to a mass movement to overthrow all that existed. There was some prospect, notably the brief paralysis of De Gaulle’s government with the May 1968 protests.^[14] But De Gaulle was able to call a General Election and show that a strong majority backed him.

It was also disastrous that August 1968 saw the Soviet Union crushing the left-wing reformists of Czechoslovakia. With hindsight, we can see that their ideas were similar to what later succeeded in post-Mao China. And which has never been a capitulation to capitalism, whatever Western ‘experts’ imagined. But at the time, it was a collapse of dreams. Many of those who’d been certain that they could get something much better than Incomes Policy and Workers Control within the Mixed Economy then defected and became enthusiasts for a restoration of 19^th-century capitalism.^[15] The others mostly failed to learn anything. A once-influential magazine called ‘Marxism Today’ smugly wound itself up amidst the ruins of left-wing politics.^[16] They were able to remove their own guilt from the histories most people read.

Thatcher and Reagan succeeded, because the society had become deadlocked. And they had initial success as genuine conservatives, asking that Trade Union power go back to what it had been. But they had also swallowed New Right ideology and had hopes of restoring 19th-century capitalism. Even of implementing the Imaginary Capitalism that Adam Smith had proposed. This never really happened: but the idea still has a grip on European and US politics. Most of the centre-left are terrified of suggesting that restoring 19th-century capitalism isn’t in fact a good idea.

It helped that Marxism was confused on the issue. The Soviet Union worked much better than 19th century capitalism, by combining state ownership with a system of professional managers appointed from above. The system of early 20th century US capitalism, which was more successful than the ‘family firms’ favoured in Britain etc.. But managerial ideas moved on, finding ways to make the system more flexible. And to sell it better through advertising.

The Soviet Union never moved on, apart from the foolish notion of creating a pseudo-market that was intended to improve an economy that remained wholly state dominated. Brendan Clifford warned in the late 1960s that this would work worse than Stalin’s system, and this did indeed happen.^[17] ^[18] But he also insisted that Stalin was a simple continuation of what Lenin and Trotsky had begun, which made it unacceptable to most of the left to notice what he’d accurately predicted.

Simple anarchy of production is not the answer. The West gained from the limited anarchy of the Mixed Economy. This prevented the rich people from doing just as they pleased, and the economy worked better. Changes since then have caused no net improvement, and maybe a loss of potential growth for the society as a whole. But society is not a whole, and the very rich keep gaining.

There is also Freedom. Claimed to be absolute, except in practice it isn’t. The normal twist is to think ‘when it’s a limit of freedom that I approve of, then it isn’t really a limit on freedom’. I’ve not seen anyone put it so bluntly; but if you try to work out what they might think they were doing, that seems to be it.

The USA’s Crusade after the Soviet collapse was based on learned ignorance and a complete misunderstanding of how the world worked outside of the societies they were familiar with. Including missing the obvious fact that ‘crusade’ offends Muslims, the victims of the actual crusades in what they remember as their Golden Age.

And like those mediaeval crusades, there was power politics, greed, and much dishonesty.

People may not believe me when I claim that the USA has intentionally created conflict in Ukraine etc. But try stepping back and imagining what you might do if your will could rule it. Always a useful exercise, provided you don’t lose sight of the fact that your wishes will not in fact rule much. But it allows for sensible protests, rather than simply complaining about things you have no idea how to fix.

In these various conflicts, if the intention was to increase conflict without being blatantly guilty in the eyes of their own people, what else would the USA do?

In most cases, the answer is nothing at all different.

In the second Orange Revolution, open pro-Nazi elements were tolerated. Since the USA was funding the protests, and often organising them, it must have been a conscious choice. A choice perhaps also made in 2010, when the failed President elected after the first Orange Revolution chose to honour a man tainted by fighting part of the war as Hitler’s ally.

Russia’s invasion had modest aims. They wanted to secure their possession of Crimea, with its vital naval base at Sevastopol and access to the Mediterranean. And they wanted to secure autonomy for the Donbass, which rejected the Orange Revolution. As indeed did most of the rest of what the Russian army now occupies.^[19] Those regions had strong pro-Kiev minorities, but a clear majority voted for political parties which disliked the Orange Revolution. Parties which have now been banned despite speaking against the Russian invasion,

It could have been Greater Ukraine keeping friendship with Russia, or Narrow Ukraine asserting its differences. But to try to be both was unjust, and unlikely to succeed. Greater Ukraine was stitched together by the Soviet government, with a strong intention of making sure that it remained in tune with Russian values.

Zelensky now insists that the war will continue until both the Donbass and Crimea have been conquered by a Kiev government that rejects everything Russian. The West treats this as admirable.

‘That which Lenin, Stalin, and Khrushchev hath joined together, let no man put asunder’. No one would consider saying this as a sound principle. Yet they are acting as if it were true.

True even though earlier generations of Ukrainian nationalists hadn’t claimed Crimea, and it was only added in 1954.

For now, it partly diverts Europe and the USA from New Right failure. And from the weakness of the heirs of Clinton and Tony Blair, who treated New Right economic nonsense as a regrettable truth that they had to live with.

The situation is very different from what we might have if Thatcher and Reagan had been authentic conservatives. If they had accepted the basic logic of the Mixed Economy, even if they called it capitalism. If they had not done vast damage to the stability of the economy with privatisation and deregulation, producing a floating and demoralised society in which their socially conservative aims have failed, as should have been expected.

What follows next is anyone’s guess. There is widespread protest, including Trade Union uprisings in Britain. But to succeed in the future, protest needs a better vision of the past.

^[1] https://labouraffairsmagazine.com/problems-magazine-past-issues/the-mixed-economy-won-the-cold-war/

^[2] https://labouraffairsmagazine.files.wordpress.com/2018/06/problems-31-feed-the-rich-economics.pdf

^[3] https://labouraffairsmagazine.com/m-articles-by-topic/m99-topic-menus-from-long-revolution-website/998-from-labour-affairs/the-french-revolution-and-its-unstable-politics/against-globalisation/the-left-redefined-the-normal/

^[4] https://labouraffairsmagazine.com/recent-issues/2019-11-magazine/2019-11/

^[5] https://labouraffairsmagazine.com/m-articles-by-topic/42-china/china-three-bitter-years-1959-to-1961/

^[6] https://labouraffairsmagazine.com/m-articles-by-topic/42-china/921-2/

^[7] https://labouraffairsmagazine.com/problems-magazine-past-issues/the-west-fails-in-five-civilisations/the-west-fails-in-five-civilisations-2/

^[8] https://labouraffairsmagazine.com/past-issues/before-2018/isolated-labour-affairs-pages-before-2015/why-the-individual-is-a-muddled-idea/

^[9] https://en.wikipedia.org/wiki/The_World_Economy:_Historical_Statistics

^[10] https://labouraffairsmagazine.com/very-old-issues-images/magazines-010-to-019/magazine-019-xx/interview-with-barbara-castle/

^[11] https://en.wikipedia.org/wiki/In_Place_of_Strife

^[12] https://labouraffairsmagazine.files.wordpress.com/2019/11/p2-1-the-1970s-debate-on-workers-control.pdf