Post on 12-Jun-2015
On the Limitations of Reformist Socialism
Center for Marxist Social Studies
ABF-huset, Stockholm
October 20th 2013
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 1 / 27
Goals of the talk and text
Figure : The Impossibilities of Reformism, samizdat, 2011.
Explaining rise and fall of reformism: ‘Opportunism’ and‘leadership betrayal’ are not adequate nor fruitful.
Present a framework to grasp the limitations of reformist socialismbased on past research and debates.
Enable a structured discussion on strategy across the socialist Left.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 2 / 27
Reformism as a strategic path
Common goal amongst socialists:
A society that does not reproduce social inequalities but ratherenables the free development of individualities.
Requires a transformation of the political economy ⇒ popularcontrol of the productive assets.
Reformist socialism as a strategic path to reach the goal:
Centered on winning national-parliamentary elections to graduallyimplement a series of reforms which transform the structure of thepolitical economy.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 3 / 27
Reformism as a strategic path
Common goal amongst socialists:
A society that does not reproduce social inequalities but ratherenables the free development of individualities.
Requires a transformation of the political economy ⇒ popularcontrol of the productive assets.
Reformist socialism as a strategic path to reach the goal:
Centered on winning national-parliamentary elections to graduallyimplement a series of reforms which transform the structure of thepolitical economy.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 3 / 27
Reformism as a strategic path
Figure : The bearers of reformist socialism? SAP 1925 och PT 2005.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 4 / 27
Social-democratic conception of history
Three phases of the conceived strategy in SAP:
political democracy → social democracy → economic democracy
Figure : Bearers of reformist socialism in Sweden.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 5 / 27
Social-democratic conception of history
Three phases of the conceived strategy in SAP:
political democracy → social democracy → economic democracy
Understood as a cumulative process in Sweden from 1890s to 1970s......until a series of events derailed the movement:
OPEC oil price hike
Counter-offensive by business community
Internal traitors: Kjell-Olof Feldt, et al.
External saboteurs: Prime PR, et al.
...
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 6 / 27
Social-democratic conception of history
In sum:
1 The collapse of reformist socialism as a project is conceived as theoutcome of contingent factors and/or leadership betrayals.
2 Consequently, dilemmas or structural problems inherent to thereformist strategy cannot be examined and exploration of viablealternative paths to the socialist goal is precluded.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 7 / 27
Social-democratic conception of history
Hidden assumptions in this conception:
Parliamentary hypothesis: Societal development is primarilydetermined by the character of the national-parliamentarygovernment. The state is a neutral instrument in the hands ofnational representatives.
Stability hypothesis: Economic conditions are in the main stableand external factors set the economy into crisis.
Distribution hypothesis: Conflicts between the working class andbourgeoisie are primarily a struggle over distribution, not astructural feature of the production process.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 8 / 27
The limits of reformist socialism
Strategic limitations: Inherent limitations which tend to underminethe strategy.
Structural obstacles: Obstacles inherent in the mode of operation ofcapitalist economies that confront the strategy.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 9 / 27
The limits of reformist socialism
Strategic limitation #1: The ideological effects of parliamentaryinstitutions
Formal separation between political and economic order.Individuals within unequal class relations are represented asformally equal citizens.
Parliamentary institutions appear as the embodiment of abstractgeneral public: fictional unity which expresses the self-governanceof the people despite their separation and nonparticipation.
Parliamentary elections in and of themselves tend to ideologicallyaffirm a liberal conception of society. Counter-tendency possibleonly through class-polarizing and conflict-based mobilization.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 10 / 27
The limits of reformist socialism
Strategic limitation #2: The demobilizing effects of parliamentarystrategies
The MP:s of the movement are transformed into representatives inan institution that is based on nonparticipation of membership.Within parliamentary-oriented movements the activity of therepresentatives tends to displace the activity of the movement.
In order to garner votes beyond the movement, the potential MP:sneed to be responsive to nonmember voters, rather than themovement. Incentives subordinate the movement to the partyleadership.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 11 / 27
The limits of reformist socialism
Strategic limitation #3: Formation of a parliamentary bureaucracy
The political profession secures economic privileges and theparliamentary system tends to select people based on status andformal education.
The professional politicians of the party tend to be dominated bypeople who systematically distort the goals of the labourmovement.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 12 / 27
The limits of reformist socialism
Strategic limitation #4: The limits of the nation state
Focus on the national parliament affirms the nation ideologicallyas the natural political unit. But capital accumulation proceedsbeyond these boundaries.
Lacking a coordinated political strategy the reformist partiescripple when the possibilities of ‘reformism in one country’ vanish.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 13 / 27
The limits of reformist socialism
Strategic limitations
1 The ideological effects of parliamentary institutions
2 The demobilizing effects of parliamentary strategies
3 Formation of a parliamentary bureaucracy
4 The limits of the nation state
⇒ Demobilization of the labour movement
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 14 / 27
The limits of reformist socialism
Structural obstacle #1: The dependency on the capitalist sector
The state provides the capitalist sector a legal system etc., but isin turn dependent on tax revenues from the sector.
State managers must ensure that economic activity is maintained.This is largely determined by the level of investments within thesector.
Potential investment strikes and capital flight constitute astructural mechanism which disciplines states to pursue policieswhich do not harm the business confidence.
Contra the parliamentary hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 15 / 27
The limits of reformist socialism
Structural obstacle #1: The dependency on the capitalist sector
The state provides the capitalist sector a legal system etc., but isin turn dependent on tax revenues from the sector.
State managers must ensure that economic activity is maintained.This is largely determined by the level of investments within thesector.
Potential investment strikes and capital flight constitute astructural mechanism which disciplines states to pursue policieswhich do not harm the business confidence.
Contra the parliamentary hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 15 / 27
The limits of reformist socialism
Structural obstacle #2: Economic consequences of high rate ofinvestment
Average rate of return on invested capital stock is determined by thebalance of three factors
⇑ Growth rate of total labour-time
⇑ Growth rate of productivity
⇓ Investment level
The reformist strategy strives for high levels of investment, but if thisbalance is not favourable the result is a crisis of profitability.
Contra the stability hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 16 / 27
The limits of reformist socialism
Structural obstacle #2: Economic consequences of high rate ofinvestment
Average rate of return on invested capital stock is determined by thebalance of three factors
⇑ Growth rate of total labour-time
⇑ Growth rate of productivity
⇓ Investment level
The reformist strategy strives for high levels of investment, but if thisbalance is not favourable the result is a crisis of profitability.
Contra the stability hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 16 / 27
The limits of reformist socialism
Structural obstacle #3: Political consequences of high rate ofinvestment
Class configuration which enables high investment levels and fullemployment unravels due to shifting balance of forces.
Indeed, under a regime of permanent full employment, the‘sack’ would cease to play its role as a disciplinary measure.The social position of the boss would be undermined, and theself-assurance and class-consciousness of the working classwould grow. Strikes for wage increases and improvements inconditions of work would create political tension.(M. Kalecki, 1943)
Contra the distribution hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 17 / 27
The limits of reformist socialism
Structural obstacle #3: Political consequences of high rate ofinvestment
Class configuration which enables high investment levels and fullemployment unravels due to shifting balance of forces.
Indeed, under a regime of permanent full employment, the‘sack’ would cease to play its role as a disciplinary measure.The social position of the boss would be undermined, and theself-assurance and class-consciousness of the working classwould grow. Strikes for wage increases and improvements inconditions of work would create political tension.(M. Kalecki, 1943)
Contra the distribution hypothesis
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 17 / 27
The limits of reformist socialism
Structural obstacle #4: Ecological limits to economic expansionrate
High investment level is required for a transition to resource- andlabour-saving technologies.
In capitalism, high investment levels result in growth of output percapita, but in general lacking counterbalancing reduction of finiteresource extraction.
High investment levels for advancing reformism or sustainabledevelopment?
Dilemma inherent to strategy
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 18 / 27
The limits of reformist socialism
Structural obstacle #4: Ecological limits to economic expansionrate
High investment level is required for a transition to resource- andlabour-saving technologies.
In capitalism, high investment levels result in growth of output percapita, but in general lacking counterbalancing reduction of finiteresource extraction.
High investment levels for advancing reformism or sustainabledevelopment?
Dilemma inherent to strategy
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 18 / 27
The limits of reformist socialism
Strategic limitations
1 The ideological effects of parliamentary institutions
2 The demobilising effects of parliamentary strategies
3 Formation of a parliamentary bureaucracy
4 The limits of the nation state
⇒ Demobilization of the labour movement
Structural obstacles
1 Dependency on the capitalist sector
2 Economic consequences of high investment rate
3 Political consequences of high investment rate
4 Ecological limits to economic expansion
⇒ Dependency on capitalists’ investments
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 19 / 27
The rise of reformism in historical context
1 The preconditions for the parliamentary strength of SocialDemocracy were given by the structure of the political economy.
2 Despite exceptional parliamentary strength of Social Democracy inNorway and Sweden, comparable quantitative development ofwelfare-state policies and employment in several other advancedeconomies.
3 SAP 1920-2012 shifted between administrative versus reformistperiods depending on the politico-economic conjuncture.
4 Establishment of welfare states and full employment policies onlyafter Second World War.
5 Destruction of the Great Depression and the outcome of WWIIaltered the balance of forces between state apparatuses, workers,capitalists, and peasants in Europe, and enabled therefore thebreakthrough of the reformist project.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 20 / 27
The rise of reformism in historical context
1 The preconditions for the parliamentary strength of SocialDemocracy were given by the structure of the political economy.
2 Despite exceptional parliamentary strength of Social Democracy inNorway and Sweden, comparable quantitative development ofwelfare-state policies and employment in several other advancedeconomies.
3 SAP 1920-2012 shifted between administrative versus reformistperiods depending on the politico-economic conjuncture.
4 Establishment of welfare states and full employment policies onlyafter Second World War.
5 Destruction of the Great Depression and the outcome of WWIIaltered the balance of forces between state apparatuses, workers,capitalists, and peasants in Europe, and enabled therefore thebreakthrough of the reformist project.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 20 / 27
The rise of reformism in historical context
1 The preconditions for the parliamentary strength of SocialDemocracy were given by the structure of the political economy.
2 Despite exceptional parliamentary strength of Social Democracy inNorway and Sweden, comparable quantitative development ofwelfare-state policies and employment in several other advancedeconomies.
3 SAP 1920-2012 shifted between administrative versus reformistperiods depending on the politico-economic conjuncture.
4 Establishment of welfare states and full employment policies onlyafter Second World War.
5 Destruction of the Great Depression and the outcome of WWIIaltered the balance of forces between state apparatuses, workers,capitalists, and peasants in Europe, and enabled therefore thebreakthrough of the reformist project.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 20 / 27
The rise of reformism in historical context
1 The preconditions for the parliamentary strength of SocialDemocracy were given by the structure of the political economy.
2 Despite exceptional parliamentary strength of Social Democracy inNorway and Sweden, comparable quantitative development ofwelfare-state policies and employment in several other advancedeconomies.
3 SAP 1920-2012 shifted between administrative versus reformistperiods depending on the politico-economic conjuncture.
4 Establishment of welfare states and full employment policies onlyafter Second World War.
5 Destruction of the Great Depression and the outcome of WWIIaltered the balance of forces between state apparatuses, workers,capitalists, and peasants in Europe, and enabled therefore thebreakthrough of the reformist project.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 20 / 27
The rise of reformism 1945-1975
Workers
Industrial capital
Finance capital
Figure : Balance of forces circa 1890.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 21 / 27
The rise of reformism 1945-1975
Workers
Industrial capital
Finance capital
Figure : Balance of forces circa 1950.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 21 / 27
The rise of reformism 1945-1975
Workers
Industrial capital
Finance capital
Figure : Balance of forces circa 1950.
New balance of forces with high levels of investment:
High rates of capita growth
Full employment
Implementation of welfare-state policies
Rising real wages
Initially proceeding without the collapse of business confidence.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 21 / 27
The rise of reformism 1945-1975
1965 1970 1975 1980 1985 1990 19955
10
15
20SWE
Pro
fitk
vo
t (%
pe
r å
r)
Figure : Decline in average profitability...
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 22 / 27
The rise of reformism 1945-1975
1965 1970 1975 1980 1985 1990 19955
10
15
20SWE
Pro
fitk
vo
t (%
pe
r å
r)
Figure : ... as a consequence of high level of investment
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 22 / 27
The rise of reformism 1945-1975
High investment level ⇒ full employment
1940 1950 1960 1970 1980 1990 20000
10
20
30
40
50
60
70
80
90
Arb
ets
Instä
llels
er
pe
r m
iljo
n a
nstä
llda
Figure : Sweden is a part of an international wave of labour militancy
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 23 / 27
The decline of reformism 1983-1990
1 ⇒ Crisis of profitability and confidence for owners of capital.
2 No coherent strategy to address the declining scope of reformistpolicies that follow from the dependency on investments in thecapitalist sector.
3 Two most ambitious attempts: LO:s wage-earner fund proposal(1976) and the reform offensive by the French Socialist party(1981) fail due to the demobilizing effects of the strategy.
4 Organized representatives of financial capital take the lead:
Low inflation and high real interest rates are prioritizedCapital mobility and labour reserves in the East are opened upPrivatization and cuts in tax-financed services...
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 24 / 27
The decline of reformism 1983-1990
1 ⇒ Crisis of profitability and confidence for owners of capital.
2 No coherent strategy to address the declining scope of reformistpolicies that follow from the dependency on investments in thecapitalist sector.
3 Two most ambitious attempts: LO:s wage-earner fund proposal(1976) and the reform offensive by the French Socialist party(1981) fail due to the demobilizing effects of the strategy.
4 Organized representatives of financial capital take the lead:
Low inflation and high real interest rates are prioritizedCapital mobility and labour reserves in the East are opened upPrivatization and cuts in tax-financed services...
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 24 / 27
The decline of reformism 1983-1990
1 ⇒ Crisis of profitability and confidence for owners of capital.
2 No coherent strategy to address the declining scope of reformistpolicies that follow from the dependency on investments in thecapitalist sector.
3 Two most ambitious attempts: LO:s wage-earner fund proposal(1976) and the reform offensive by the French Socialist party(1981) fail due to the demobilizing effects of the strategy.
4 Organized representatives of financial capital take the lead:
Low inflation and high real interest rates are prioritizedCapital mobility and labour reserves in the East are opened upPrivatization and cuts in tax-financed services...
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 24 / 27
The decline of reformism 1983-1990
Workers
Industrial capital
Finance capital
Figure : Balance of forces circa 1990.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 25 / 27
The decline of reformism 1983-1990
Workers
Industrial capital
Finance capital
Figure : Balance of forces circa 1990.
Social-democratic parties carry on with same objectives: winnational-parliamentary elections, but now in the context of
Internationally weakened labour movement
Declining scope of reformist policies
Abandonment of any alternative political economy
What remains is therefore their role as state managers and anorientation towards profit-led capitalist recovery.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 25 / 27
The return of reformist socialism?
Historical changes that weaken the strategy:
The decreasing autonomy of individual nation states
The trend towards smaller workplace units
Rising structural obstacles:
1 Return to high levels of investments lacking a balancingtechnological pattern will reproduce crisis tendency.
2 Welfare policies become increasingly contested due to thelabour-intensive character of services and growing social needs.
3 Exponential growth required for reformist policies increasinglyincompatible with sustainable development.
⇑ Dependency on the capitalist sector
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 26 / 27
The return of reformist socialism?
Historical changes that weaken the strategy:
The decreasing autonomy of individual nation states
The trend towards smaller workplace units
Rising structural obstacles:
1 Return to high levels of investments lacking a balancingtechnological pattern will reproduce crisis tendency.
2 Welfare policies become increasingly contested due to thelabour-intensive character of services and growing social needs.
3 Exponential growth required for reformist policies increasinglyincompatible with sustainable development.
⇑ Dependency on the capitalist sector
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 26 / 27
Conclusions
1 The strategic limitations and structural obstacles of reformistsocialism:
Demobilization of the labour movementDependency on investments in capitalist sector
2 The crisis of European Social Democracy as a long-term result ofclinging to the objective of winning parliamentary elections whilelacking a set of strategies to circumvent the obstacles on theparliamentary road.
3 Each parliamentary advance must be used to strengthen andexpand the extra-parliamentary strength of the labour movement.
4 The question of control of investments and the structure of thepolitical economy must therefore become the central issue inpractical politics.
If the primary goal is to be a ‘party of government’ then all thatremains is the role as state managers and, out of necessity, asguardians of a class-divided society.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 27 / 27
Conclusions
1 The strategic limitations and structural obstacles of reformistsocialism:
Demobilization of the labour movementDependency on investments in capitalist sector
2 The crisis of European Social Democracy as a long-term result ofclinging to the objective of winning parliamentary elections whilelacking a set of strategies to circumvent the obstacles on theparliamentary road.
3 Each parliamentary advance must be used to strengthen andexpand the extra-parliamentary strength of the labour movement.
4 The question of control of investments and the structure of thepolitical economy must therefore become the central issue inpractical politics.
If the primary goal is to be a ‘party of government’ then all thatremains is the role as state managers and, out of necessity, asguardians of a class-divided society.
CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 27 / 27
Conclusions
1 The strategic limitations and structural obstacles of reformistsocialism:
Demobilization of the labour movementDependency on investments in capitalist sector
2 The crisis of European Social Democracy as a long-term result ofclinging to the objective of winning parliamentary elections whilelacking a set of strategies to circumvent the obstacles on theparliamentary road.
3 Each parliamentary advance must be used to strengthen andexpand the extra-parliamentary strength of the labour movement.
4 The question of control of investments and the structure of thepolitical economy must therefore become the central issue inpractical politics.
If the primary goal is to be a ‘party of government’ then all thatremains is the role as state managers and, out of necessity, asguardians of a class-divided society.CMS Stockholm (ABF) On the Limitations of Reformist SocialismOctober 20th 2013 27 / 27