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Title: Review: Radical Economics and Labor
Author: Anarcho
Date: December 19, 2011
Language: en
Topics: book review, economics, Labor
Source: Retrieved on 24th April 2021 from https://anarchism.pageabode.com/?p=595

Anarcho

Review: Radical Economics and Labor

The revolutionary union the Industrial Workers of the World marked its

100^(th) anniversary in 2005. To mark this event a conference was held

at the University of Missouri-Kansas City, hosted by the editors (Fred

Lee and Jon Bekken) of this useful selection of talks from it. As well

as an introduction, this book has ten chapters on a wide range of

subjects on something often not much discussed in radical circles,

political economy.

The first three chapter discuss aspects of the history of radical

economics. The first, Noel Thompson’s “Senex’s Letters on Associated

Labour and The Pioneer, 1834”, discusses working class socialism in

1830s Britain. Focusing upon a series of letters published in the paper

The Pioneer, it discusses the proto-syndicalist ideas of British

socialists who had formulated both a critique of wage-labour (hired

labour) and a vision of associated (free) labour to replace it. The aim

was, to quote Letter XII, to “banish the word wages from the language

and consign it, with the word slavery, to histories and dictionaries.”

(18).

This vision was one of co-operative market socialism, predating

Proudhon’s vision – even down to the idea of establishing a bank. (16)

Strangely, the introduction calls this an “almost proto-Marxist” (5)

political economy so failing, like the article itself, to mention, never

mind discuss, the clear links to Proudhon’s mutualism (who presented a

critique of wage-labour that also predated Marx’s). Unsurprisingly given

the nature of the conference, Thompson stresses the links to syndicalism

and the IWW yet while these aimed to end “the commodification of labour”

and ensure “decentralised economic decision-making” (22) both tended to

aim for communism rather than have fair prices.

The second chapter, Jon Bekken’s “Peter Kropotkin’s anarchist economics

for a new society”, is exceptional. Bekken makes the key point that

Kropotkin’s economics “arose out an engagement with the workers’

movement of his day” and so reflected “not abstract principles” but

rather was “honed in workers’ struggles and debates.” (27) This chapter

covers almost all aspects of Kropotkin’s vision for communist-anarchism,

presenting an excellent introduction to his ideas and ideals.

Bekken correctly stresses that Kropotkin argued what is efficient under

capitalism may not be technically efficient but rather established “to

facilitate manager control” (30) and “facilitate market domination and

control.” (40) Sadly, most on the left still follow Lenin in proclaiming

the “efficiency” of large-scale production and so fail to comprehend

that this is based on capitalist definitions of efficiency and economy

and so on capitalist criteria! That Marxism bases itself on centralised,

large scale industry because it is more “efficient” and “economic”

suggests nothing less than that its “socialism” will be based on the

same priorities of capitalism. This can be seen from Lenin’s idea that

Russia had to learn from the advanced capitalist countries, that there

was only one way to develop production and that was by adopting

capitalist methods of “rationalisation” and management. Thus, for Lenin

in early 1918 “our task is to study the state capitalism of the Germans,

to spare no effort in copying it and not to shrink from adopting

dictatorial methods to hasten the copying of it.”

Kropotkin was right to argue that socialism will need to develop new

forms of economic organisation based on socialist principles. Thus we

find Kropotkin arguing for the division of work against the division of

labour, the latter being “inefficient – demoralising and fatiguing

workers and stripping them of the knowledge and the means necessary to

innovate in their work.” (39) The need was for the wealth of society

(workplaces, lands, housing, roads, etc.) “must be socialised and

marshalled to meet the needs of the entire society.” (30)

Bekken rightly notes that Kropotkin recognised that workers are

exploited by capital. “If workers could meet their daily needs without

hiring out their labour power,” he summarises, “few would consent to

surrender their control over their own labour in order to work for

wages” which are “a mere fraction of the goods they produce.” (31) He

also presents Kropotkin critique of the Labour Theory of Value (28–9)

although this will not necessary convince someone familiar with all of

Marx’s work. This is because while Kropotkin was right to point out Marx

argued that prices were “proportional” to “the amount of labour

necessary for production” (28) this ignores that this was in volume 1 of

Capital and was related to a simplifying assumption (namely, the same

level of investment in all workplaces) which was later dropped in volume

3. Similarly, volume 1 does not actually suggest that commodity’s price

is equal to its labour-cost (i.e., exchange value) independently of

“external markets and social conditions” (28) but rather that prices are

regulated by their cost of production towards which market prices are

tending. However to be fair to Kropotkin, Marx mentioned this in a

footnote.

So market prices are influenced by competition and, in the case of

labour, Marx argued that wages were influenced by moral and historical

factors (i.e., “social conditions”). Bekken is right to argue that “wage

levels have little to do with the cost of reproduction” but rather “the

relative economic, military and social power held by the respective

parties.” (29) Marx did not explore how recognising that wages have a

historical and moral element impacted on his core aim to reconcile

exploitation of labour with goods selling at their values (cost of

production). Similarly, he abstracted from (i.e., ignored!) class

struggle in all three volumes of Capital, making these comments

extremely relevant.

Finally, Bekken is correct to note the current poverty in the radical

visions presented today that “many socialists still accept the wage

system and money” (40) and, again rightly, points to Parecon (43) as an

example. He fails to discuss Kropotkin’s ideas on the process of

revolutionary change and transition (which Kropotkin considered as

taking 4 or 5 years, as per the Great French Revolution). He does

mention that Kropotkin argued that goods in short supply should be

rationed during a revolution but does not discuss in the early stages of

a social revolution all forms of money can/will be abolished. As no

social revolution has so far done so, it is a valid question to discuss

in light of this. To be fair, most would rightly consider this outside

the scope of the article. Suffice to say, this is a different issue than

systems like Parecon which envision money being used forever.

So an altogether impressive summary of Kropotkin’s ideas but while

chapter 2 is extremely good, the next one by Matthew Forstater (“Some

notes on anarchist economic thought”) is disappointing. It tries to

cover too much in too little space and so is lacking. At times it is

extremely superficial. For example, he rightly rejects addressing

“anarcho-capitalism” when discussing anarchist economic ideas but he

proclaims that this “should more properly be called libertarian”! (46)

Now, if anarchists acquiesce to the capitalist-right stealing the good

name libertarian to describe their authoritarian, albeit privately

hierarchical, ideology then what is the point?

Forstater is right that anarchism “is not only opposed to the State, but

also capitalism” he is just wrong to think that it is only anarchism “in

this sense” which is so. Anarchism, from the start, has always been

anti-capitalist and anti-state and so to oppose just the latter is not

libertarian in any sense of the word (as is more than confirmed if you

read “anarcho-capitalist” ideologues). So it is not quite right to

state, like Forstater, that “anarchists share many of the traditional

socialist positions opposing capitalism” and that we “part from

socialists on a number of accounts.” Anarchists are libertarian

socialists, so we part with state socialists on key issues. As for

sharing “socialist positions”, anarchists have often been first in

advocating them (for example, Proudhon predated Marx’s theory of

surplus-value being the result of exploitation in production caused by

wage-labour by a few decades!).

Another example of the essay’s superficial nature is the repeating of

the stereotype that anarchists favour “small” levels of production and

these must “not be at a scale beyond the needs of the local production”

(47) While Marxist diatribes against anarchism proclaim this with

abandon, it is sad to see it here. Particularly when the correct

position is stated on the next page, namely that anarchists “embrace the

notion of appropriate (or intermediate) technology, that is, utilising

organisational and technological means that are ecologically,

politically, socially and economically appropriate.” (49) Thus we find

Kropotkin stating that “if we analyse the modern industries, we soon

discover that for some of them the co-operation of hundred, even

thousands, of workers gathered at the same spot is really necessary. The

great iron works and mining enterprises decidedly belong to that

category; oceanic steamers cannot be built in village factories.”

Similar arguments can be found in Proudhon.

It also seems strange to read that anarchists view “municipal

confederalism” as “the basis for alternative economic planning” (48)

given that we have been arguing for economic federalism since Proudhon!

Pointing to Braverman’s “distinction between the social division of

labour and the detail worker, and his conclusion” (48) is equally

perplexing given this is also found in Proudhon’s work. It gets worse

when he states the “Marxist approach may offer help” by suggesting “an

historic approach” (51) when this was precisely Proudhon’s argument in

System of Economic Contradictions – not to mention the French

anarchist’s general influence on Marx!

So this is weak chapter, promising far more than it delivers. The next

two chapters are inspired by Piero Sraffa’s economic analysis and,

ironically, come to completely opposite conclusions. Frederic S. Lee’s

“The economics of the Industrial Workers of the World: Job control and

revolution” does not convince. The logic of his argument, backed up by

numerous equations, is that “direct action designed to affect the ‘real

wage’ for the working class by altering the money wage is not possible”

and that “direct action for increasing job control is necessary.” (72)

While the current economic crisis may make you think otherwise, Lee

argues that the “amount of surplus is determined by the capitalist class

and by the state” and “the only limit to profits is how many goods and

services the capitalists and state want.” (69) If this were the case,

why are bosses so keen to resist pay rises and unionisation? Or how can

there be periodic general crisis periods when capital simply cannot make

a profit? This is not to suggest that fighting for job control is not

important, simply that this must be done in addition to fighting for

wage increases – something this essay would end if taken to heart by

workers.

While Lee is right to state that “Marxian and anarchist economic theory

and critiques of capitalism draw largely on the same body of ideas” and

that “their analysis is similar if not identical in many respects,” (73)

he fails to note that anarchists generally argued it first (although

perhaps not to the same depth) and, his arguments to the otherwise not

withstanding, we were correct to root exploitation in production and

seek a solution there. To state “the Marxian-anarcho-syndicalist

arguments for direct action” (55) seems problematic given that the

original Marxian position was that workers should use “political action”

(voting) to seizure power and syndicalist arguments for direct action

developed in opposition to them (directly, in the case of Bakunin and

the libertarian wing of the First International).

Which brings us to Tony Aspromourgos’ “Economic Science and the Left:

Thoughts on Sraffa’s equations and the efficiency of organised labor.”

This is a much better use of Sraffa’s theoretical legacy, producing an

excellent introduction to both his ideas and why they can be useful for

rebel workers. This is because of its emphasis on the impact of class

struggle on the distribution of income in an economy.

Unlike the neo-classical ideology that sees factors of production

receiving their rightful “contributions” to a commodity automatically,

Saffra’s model points to the fact that “the division of surplus between

labour and capital is open to contest by wider forces, by social

forces.” (81) This allows the impact of working class strength to be

included in the analysis of the economy. Thus workers can, by struggle,

influence the real wage, income distribution and profit rates (as they

are, in the Saffrian analysis) “given from outside the system of price

equations” it uses to model the economy. (81) The truth of this can be

seen, as Aspromourgos notes, by the attitude of bosses to workers

organising for “if unions were so impotent to affect outcomes, the Right

would not be so determined to curtail” them. (90)

In short, regardless of neo-classical claims otherwise, “capitalism in

and of itself does not require a unique outcome for the wage share and

associated profitability of capital.” (82) Class struggle plays a key

role – hence the support by capitalists of economic ideologies that deny

it. As Aspromourgos, this means that economics is “a subject close to

the (greedy) hearts of vested material interests” and so “extremely

attractive for” and “very vulnerable to, ideological capture.” He uses

the example of Chemists and how their political views are unlikely to be

“pertinent to the scientific status” of their work – unlike economists!

(83) How very true.

Also true is his conclusion, namely that this analysis gives the boss

class “a rational basis to pursue class struggle” (86) – which, of

course, they do. Aspromourgos also recognises its importance for us, for

“this provides ‘space’ for organised labour to influence, and influence

persistently (not merely temporarily), the distribution between wage and

non-wage income.” (85) He then spoils it by stating “it is also open to

organised labour to vigorously support political parties that project

policies” that “advance” working class interests. (87) It is almost like

the last 150-plus years of trying this has not happened for many

radicals! Suffice to say, we should not ignore political power (and no

anarchist, Marxist myths notwithstanding, has ever suggested that) but

rather than we recognise that electioneering has been the Achilles’ heal

of socialism, becoming as reformist as Bakunin predicted.

Finally, Aspromourgos indicates how Sraffa’s work has “destructive

implications” for “marginalist capital theory (and thereby, it should be

said, for the whole marginalist edifice).” (78) So it must be stressed

that while the bruising debates of the 1960s (usually called the

Cambridge Capital Controversy) saw the neo-classical economists lose to

the Sraffa-inspired radicals (led by Joan Robinson), the mainstream

economics professions continued on as if nothing had happened…

So this is an important chapter and one all radicals should read to get

a better idea of why knowing economic theory (and its history) is

important! And talking of which, the next chapter by Spencer J.Pack

(“John Kenneth Galbraith’s new industrial state 40 years later”)

usefully discusses an intellectual giant of post-war economic thought,

left-liberal John Kenneth Galbraith.

Galbraith was America’s leading Keynesian and Institutionalist economist

(with some post-Keynesians claiming him also) and Pack presents a good

introduction and evaluation of his ideas and works, its strengths and

weaknesses. Thus Pack notes that class struggle was “insufficiently

stressed” (96) by Galbraith and that he “paid insufficient attention” to

the global nature of capitalism (97) but like Galbraith does not really

discuss the stock market and rentier interests (like Keynes, Galbraith

underestimated how willing these were to undergo euthanasia). On the

positive side, Galbraith described capitalism as it was, not what the

ideology proclaimed it and so “the nature and role of big business” was

“always a central concern in his writings.” (101) He rightly placed

planning at the heart of the modern corporate dominated economy,

discussing their attempts to “try to gain control over what is sold and

what is supplied to minimise or get rid of disruptive market influences”

(101) and uncertainty. It was this ever-expanding capitalist planning

based on one criteria (profit) which Marx so tragically confused with a

requirement for (even more) centralised social planning under socialism.

Moreover, Galbraith’s ideas on “countervailing power” are important,

even if we must ignore his hope that the (capitalist!) government would

“help organise countervailing powers.” (98) He was right that

countervailing power “is needed to counter original economic power” (98)

but there is no requirement for it, as can be seen for the last 30 years

of neo-liberalism. Indeed a powerful case can be made that our current

problems flow from the fact that the people in charge of big business

have no unions around to hold back the imposing of their craziest

visions on their companies (and so society).

Pack usefully discusses the impact of this destruction on workers’

living standards, noting “stagnant living standards” with “all gains in

productivity” going “to the capitalists and their hired managers” and so

the real wage for non-supervisory workers “has been falling since 1973.”

(105) In short, the “managerial class has been making out like bandits”

with the amount of “surplus value being appropriated ... getting

larger.” (104) Interesting, and rightly, Pack links the

declining/stagnating wages of workers with longer hours and more family

members working and notes this implies we are on the “backward bending

part of their labour supply function.” (109) He also notes how the elite

has used the wealth flooding upwards to promote “pro-capitalist cultural

hegemony and movements” including “research centres” and “partisan news

media and commentators.” (106)

Pack also discusses where Galbraith’s vision went wrong, based in part

on Galbraith’s own reflections on his ideas. Thus Galbraith

“underestimated the intensity of the class struggle and the power of the

capitalists, the formal owners of the means of production” (i.e., the

rentier class), that the US was not “a closed economic system” (105) and

that he had “overemphasised the competence and ability of the

technostructure.” (107) Ultimately, he underestimated how willing the

capitalist class would be to let enlightened liberal intellectuals get

into office in order to do the right thing.

Yet insofar as he described and understood reality, Galbraith is useful

to radicals today – and it was this feature of his work which ensured

his hatred by the right along with his use of his wit to critique their

self-serving positions – it is fair to say that his work can only

contribute to our understanding of capitalism, an understanding which

must have its foundations in revolutionary thinkers (in all senses of

the word). As Pack notes, “Galbraith was not a radical” but his and the

radical’s “view of the state of the world may not be that far apart.”

(108) Suffice to say, compared it his great rival of his lifetime,

Milton Friedman, Galbraith was a far better economist who based his

ideas on reality, not the myths of neo-classical economics. Sadly, as

Galbraith was on the side of the many (even if somewhat

paternalistically) and did not enrich and empower the few as Friedman

did, it was his rival who got the so-called Nobel Prize in economics

(only a few years before applying his ideas refuted them!). History,

though, will judge them more accurately than their obituaries in the

mainstream economics press did!

This chapter is followed by one presenting a feminist-Marxist critique

of “the academic field of industrial relations” by Richard McIntyre and

Michael Hillard. This is extremely Marxist, so much so in fact that it

seems to equate class analysis with Marx (116) and links “inequality of

bargaining power, management authoritarianism, and workers’ economic

insecurity” solely to Capital in spite of Proudhon raising these 27

years previously. (117) While bemoaning the academics for ignoring Marx,

they are keen to present long-standing anarchist positions as

innovations from Marxism! Thus they present an expanded definition of

the working class as “everyone subordinated to capital” and so “there is

no longer a special significance to the industrial working class” (124)

that Bakunin would have agreed with. Similarly, they note that primitive

accumulation was “treated by Marx mostly as an historical phenomenon”

but is “in fact a key site of conflict in the contemporary world” (124)

so repeating Kropotkin’s critique of 1912:

“What, then, is the use of talking, with Marx, about the ‘primitive

accumulation’ — as if this… were a thing of the past?… nowhere has the

system of ‘non-intervention of the State’ ever existed… The State has

always interfered in the economic life in favour of the capitalist

exploiter… And it could not be otherwise. To do so was one of the

functions — the chief mission — of the State.”

But, then, they proclaim that Rosa Luxemburg “was perhaps the first and

most important radical to understand and advocate for community-based

militancy, one that included women and eschewed centralism”! (130) That

this ignoring, say, the community organising by Spanish anarchists from

the 1860s onwards (see, for example, Temma Kaplan’s Anarchists of

Andalusia 1868–1903) and the likes of Louise Michel, Lucy Parsons and

Emma Goldman should go without saying. As for centralism, perhaps this

may be true within the Marxist wing of socialism but libertarian

socialists had been opposing it since the 1840s. Surely they are aware

of the likes of Proudhon, Bakunin and Kropotkin?

So there is nothing wrong as such with much of what they argue, it just

seems incredulous that they think this is something new and that we

should be grateful for the Marxist tradition for it!

In Chapter 8 John Marangos discusses “Labor during transition” in the

ex-Stalinist countries from an Institutionalist economics perspective.

This is a useful summary of the terrible impact of the implementation of

neo-classical economic dogma after the fall of the Warsaw Pact. As he

suggests, the “cultural and institutional conditions of existence were

ignored accounts for the disastrous results” (143) while “real wages

declined, working conditions deteriorated, and unemployment and poverty

was instituted as a permanent feature of the labour market.” (155)

Moreover, the state acted to “curtail the development of embryonic

labour unions” and “to institutionalise management’s power” (153) This

is unsurprising given that it was class war that was being waged during

this time, although perhaps it is just the academic tone of this chapter

which gives the impression its author is surprised by it!

Marangos is right to mention Karl Polanyi and his argument that there is

nothing “natural” about free-market capitalism, that the state acts to

create “fictitious commodity” like labour and land in the initial rise

of capitalism and that it was the state which did so in the ex-Stalinist

regimes as well. As such, his chapter is a useful introduction to the

power of Institutionalist economic analysis. However, there are aspects

of his account which are debatable, not least the assertion that these

regimes moved “to capitalism.” (143) It would be more accurate to state

they were going from state-capitalism to market-capitalism. He also

makes the inaccurate assertion that “[u]nder Stalinism trades unions

were totally controlled by the party and their character changed so that

they could function as an element of the state.” (153) In fact, this had

happened under Lenin and Trotsky (with the latter keen to militarise

labour and abolish all union independence rather than most of it as

Lenin did). Finally, those class warriors Bakunin, Kropotkin and Goldman

would have been surprised to read about “class, consciousness, and

conflict as articulated by Karl Marx and his followers.” (145)

Marangos stresses the “importance of culture, history, working rules,

conflict, power, inequality, and government” (144) to economic theory.

That mainstream economic ideology ignores all this (and, moreover, was

designed to exclude it) shows the importance of Institutionalism and

other forms of heterodox economics.

The last two chapters are more practically focused. Chapter 9 is a

discussion of offshoring and outsourcing production in low-income

countries and its impact on labour. This, of course, is extremely

relevant to a union with global aspirations like the IWW but to ponder

whether this is a “new” era of capitalism seems misplaced, given that

Bakunin was arguing for global unionism in the First International back

in the 1860s. Unfortunately, its conclusions are reformist. The final

chapter is an analysis of a real struggle, namely the bank workers’

union movement in Brazil between 1994 and 2004. Suffice to say, more

articles like this would be helpful for workers to learn from the

struggles of others and it is a fitting end for a book inspired by the

IWW.

So, a mixed bag. Some articles are excellent and will be read by

activists and academics with great interest and benefit (Bekken on

Kropotkin and Aspromourgos on Saffra spring to mind) while others are

useful introductions for further reading/research (Thompson on Senex and

Pack on Galbraith). Some would definitely benefit from a reading of

libertarian theory – suffice to say, why squeeze in Marxism when

anarchism has been addressing the issue for some time? The essays,

though, are about relevant subjects for the IWW in its second century

and do their inspiration justice.

Radical Economics and Labor: Essays inspired by the IWW Centennial

Edited by Frederic S. Lee and Jon Bekken

Routledge Advances in Heterodox Economics

Routledge

New York

2009