Ellen Meiksins Wood - Democracy against Capitalism - 2012



um what I wanted to say is that about the social spending is that well I have no doubt that public spending is a more effective way of dealing with the current crisis than the crazy austerity policies which are now being followed or the privatized Keynesianism that preceded them but I'm not sure that we should think of social spending in the Keynesian manner as simply a form of counter cyclical demand management I mean I have no doubt that it's better than the available alternatives but I'm not sure the argument in favor of social spending should depend on its success in managing economic stability and preventing crisis as I keep saying crisis is endemic to capitalism and there's only so much we can do about it so my point is that even if there are limits to the benefits of social spending as a means of correcting economic instabilities there are reasons to support it as good in itself in a capitalist system that requires and always will require protective strategies against the worst in Justices and exploitation so what I wanted to say is that the mistake isn't to think that there is work that can be done under capitalism of course there's a lot to be done the mistake is to think that capitalism's main problems are caused by democratic pressures interfering with the natural operations of the market the problems of capitalism are there even when Democratic pressures are weak they are there in fact even when the working class is making every conceivable concession the pressures of the market the competition among capitals will create instability and crisis whatever democratic forces do so there's no use constructing our strategies on the assumption that we can eliminate the system's tendency to crisis and there's no use starting from the premise that the problem is the tension between democratic pressures and the requirements of profit and that we have to somehow soften our democratic demands or reach some kind of social con tract between democracy and profit so if we're going to talk about a contradiction between capitalism and democracy the contradiction we should think about is the limitations imposed by capitalism on democracy not you know strakes notion that somehow democracy creates crisis we should think about how capitalism confines democracy to a political sphere that leaves untouched the specific forms of power created by capitalism looked at this way the contradiction between capitalism and democracy requires us to make as many democratic inroads as we can into the so-called economic sphere and that means aiming as much as possible to detach social life from market dependence that means striving for the decommodification of as many spheres of life as possible and their democratization this means removing removing them not just from the direct control of capital but also from the so called impersonal control of market imperatives which support every subordinate every human need and practice to the requirements of accumulation and profit maximization it's one of the paradoxes of our time that everyday governments everywhere are deliberately putting more and more of our lives out of democratic reach to be ruled by market imperatives markets have intruded even into social services that have previously been protected from them as for instance the National Health Service in the United Kingdom has increasingly been subjected to the to market principles which I regard as a capital crime I would first buy new labour and now by the coalition government and of course the consequence of increasing commodification has been not only to narrow the scope of democratic governance but also to increase inequality and all the social ills that follow from it and what we're seeing in the current crisis is governments in the EU in particular doing their best to strengthen the power of markets what this means is that democratic power is being restricted even more than before not by depriving people of political rights but by narrowing the scope of political agency so when oppositional movements come out onto the streets or when people cast their votes against parties that support austerity programs as they've been recently doing or at least when they vote for parties of the left what they're doing isn't just opting for or against this or that policy but trying to widen the scope of democracy by recovering the power surrendered to the market so our freedoms in a capitalist democracy and let me emphasize this again are limited yes limited far more by the economic imperatives of the market than by the actions of the state and markets are subject to no democratic accountability so if democracy has to do with checks on arbitrary power it requires at the very least that our liberties be protected by checking the power of the economy just as we check the power of the state it would be a major democratic advance even if the principles of words of our democracy it's it's liberal rights and freedoms were extended into the economic domain from which capitalism has excluded them it would be good for example if what are now called social and economic rights were treated as no less basic entitlements than civic and political rights in a liberal democracy but we should have no illusions about the possibility of compelling the market to operate according to principles other than its natural imperatives however much we regulate it what it wherever the market prevails so will the compulsions of profit maximization so to extend rights and liberties in to the economic sphere into the economic spaces from which they're excluded requires that the provision of certain basic goods and services is not dependent on the maximization of profit and in to extend democracy in other words requires decommodification but of course a truly democratic economy in which power really did belong to the people would definition mean the end of capitalism [Applause] first of all I obviously want to thank Misha for his very generous words I think I caught them all it's a great pleasure for me and I've got distinct honor to like I can't think of anybody whose name I would rather be giving a lecture under and then Rosa Luxemburg I wish I could take credit for having more in common with her than just being a female Jewish Marxist but at least I think I can say that I'm working in their tradition in the sense that I look upon socialism not only as the antithesis of capitalism but as the highest form of democracy and that is the spirit in which I want to talk today brings me to the title of the lecture which as you will have noticed is democracy against capitalism which also happens to be the title of the book which Mischa displayed and I should say that I was asked to speak on this topic and that I was a bit hesitant because I've this is an old book and I've written and talked about this so many times I'm afraid that I'm going to bore everybody silly but I'm hoping at least to introduce some surprises even if it requires my apparently maybe apparently contradicting myself I want to start with one of the arguments that's being made about the current situation in the EU and elsewhere in the advanced capitalist world which is that the crisis is rooted in the contradictions of something called Democratic capitalism I don't know if you're familiar with this argument but you may be because it comes from one of your countrymen a co-director of the Max Planck Institute Wolfgang's Blake I'm not sure what kind of attention he's getting here in Germany but Mazar Gyu man to be making the rounds else where for instance the new left review has been giving slake a lot of favorable attention which frankly I find a bit puzzling but anyway I'm going to say a little bit about him because it seems to me that his argument is symptomatic of a larger problem in our understanding of the relation between capitalism and democracy so I'll start with just a few comments on it and then proceed with my own fix argument sounds fairly straightforward it starts by suggesting that democratic capitalism contains a fundamental contradiction which is the source of capitalist instability and crisis the contradiction is a simple one since democratic governments have to rely on electoral support they have to make concessions to their electorates and these concessions mean that governments regularly take actions which are contrary to the demands of the market and capitalist profit now this may sound like a familiar argument and in some ways it is so let me just be clear about what's new in it there have been lots of arguments in the past I'm sure you're familiar with them that attribute crises of profitability to the strength of trade unions class struggles wage demands inflexible labor markets and so on and there's been lots of debate about how this affects the economy in general which I won't repeat here lots of people even on the Left have used this as an argument for urging workers and trade unions to make concessions to capital in times of crisis or to avoid crisis by making their economies more competitive and so on in fact the idea of so-called progressive competitiveness was essential to the Third Way it's a new labor in Britain to agenda 2010 in Germany and in general to the neoliberal shift of social democracy but what I what I think is new and interesting about stakes argument is that he seems to be going even further than before and he prepared as I'm told was one of the brains behind agenda 2010 but he seems in some respects to have gone even further than the old assumptions of the Third Way or progressive competitiveness he isn't just saying that working-class demands or trade union struggles can affect profitability he's talking about the electoral demands of democratic politics and what governments do to maintain their electability and he's saying not just that workers demands can affect profitability but that the electoral pressures of democracy are the main source of capitalist crisis so for example here's how he explains the current crisis the explosion of debt we've been seeing what some people have called privatized Keynesianism which is at the root of the current crisis according to this argument is supposed to have been a concession to democratic pressures and that means above all The Consumerist desires of the electorate democratic capitalist governments in other words have created this crisis by satisfying the demands of their of their voters either explicit demands or anticipated demands they've allowed and encouraged this crazy structure of debt to satisfy the consumers desires of the voters and this is just one example of Democratic capitalism's fundamental contradiction which produces crisis by constantly allowing Democratic pressures to go against the requirements of markets now this argument may seem plausible and some people even regard it as as quite critical of capitalism and I think quite a few people on the Left find it attractive including the new left review but let me start straight away by saying that I find it fundamentally unconvincing and politically questionable I don't want to spend a lot of time debating with slake but my main objective here isn't to explain the origin of this or any other crisis I've never pretended to be an economist and I'm not going to start now I want to make a more general argument about the relation between capitalism and democracy but I think it may help to clarify my own view if I begin by saying well you know in a sense my argument is just the opposite of stakes but I should say that I'm hoping to see a more elaborate critique of fake from someone who really knows what he's talking about which is Robert Brenner my friend but I am going to shamelessly borrow what I know about his argument just very briefly in my remarks my brief remarks about take first I think that consistently leaves the impression that without the pressures of democratic demands markets will correct themselves and produce a natural equilibrium I mean he seems on the face of it to be critical of right-wing economists like Hayek and Friedman who insist on that natural equilibrium but it's hard to see how stakes own argument can avoid it I mean you know just look how much emphasis he places on Democratic pressures as the cause of capitalist crisis which seems to imply that in the absence of such pressures capitalism has no serious tendency to crisis and this seems to be transparently wrong it seems to me clear that the inherent logic of capitalism produces crisis even when Democratic pressures are weak and even when working class struggles are more or less dormant anyway that makes argument doesn't hold up historically I mean if we look at the present crisis from a historical point of view the kind of privatized Keynesianism he's talking about clearly did not begin as a concession to democratic pressures it was a response to the pressures of capital at a time of declining profitability the decline started with the end of the long post-war boom sometime after the profitability of American capital in particular had been challenged by competition from Germany and Japan the response to the end of the boom was what we now called neoliberalism set in motion by Reagan and Thatcher and that brought with it a tax we all know on the labor movement extracting huge concessions from workers the deregulation of markets and so on and the ultimate effect was to reduce aggregate demand which would be countered by what Brenner has called asset price Keynesianism the stock market bubble the encouragement of increasing indebtedness and so on instead of genuine growth in the really continent in in the real economy there was this so-called bubble na mix the striking thing is that this all started at the very moment and in the very place the very places that Democratic pressures were particularly weak and the working-class especially in the United States was at one of its lowest points in fact the policy of encouraging private debt was at the heart of the neoliberal program it emerged as a form of demand management to replace public spending at a time of weak aggregate demand in other words this privatized Keynesianism was designed to enhance capitalist profit without social spending and of course reducing taxes for the rich so it seems completely perverse to describe that neoliberal strategy as a response to democratic pressures well I don't want to go anything on anymore about this so let me just make clear my conviction that Democratic demands are not the source of capitalist crisis and that we can't construct a political agenda on the assumption that the cause of crisis is the incompatibility between democratic demands and the needs of the market on the basis of that kind of analysis it's very hard to avoid some version of progressive competitiveness or some variation on the third way or agenda 2010 it seems to me a well never mind that what I want to do now is to make my own argument about the relation between capitalism and democracy and maybe make a few general suggestions about the political implications we should draw from it the first thing I'll say is that there is no fundamental contradiction between democracy and capitalist at least not in the sense that steak suggests those of you who know that my book democracy against capitalism may find this surprising because it seems to contradict my argument in the book about the fundamental antagonism between capitalism and democracy and I'll come back to that in a minute but for the moment let me stress that there is no necessary contradiction between capitalism and democracy as we know it on the contrary capitalism is the one is the is the one the only system of class relations that can tolerate political democracy of course in the current financial crisis democratic governments in Greece and in Italy were set aside for a time and there's no question that this was convenient for the implementation of austerity programs largely for the benefit of bankers but the crisis was not caused by democratic pressures and Greece and Italy certainly didn't end up where they are because they had too much democracy of course I don't deny that there are moments when capital may find it useful to suppress democracy the point I want to make is that capitalism has been and remains the one system of class exploitation in which political democracy the extension of the franchise together with civil rights and liberties can leave class domination fundamentally intact to put it another way capitalism is the only system in which the exploitation of labor can be insulated from democratic pressures it's the only system which can tolerate a substantial degree of democracy precisely because the appropriation of surplus labour is substantially protected from the intrusions of democracy this doesn't mean that all capitalist systems have been democratic but it does mean that capitalism can be democratic in a way no other class society has ever been before I go on to elaborate what that means let me make clear what it doesn't mean I don't simply mean that democracy in capital is is so empty and formal that it has no significance at all I mean one standard Marxist conception of where's what democracy used to be that it's bogus and basically meaningless because it doesn't confront the fundamental inequalities of class power which really determine political outcomes now of course my own view of democracy and capitalism is inspired by Marx but if Marxism had nothing more to tell us about capitalist democracy than the idea that class inequality matters it really wouldn't be worth very much it's obvious that political processes in bourgeois democracy are affected by class inequalities but to say this is hardly enough to distinguish Marxism from other accounts of how liberal democracy works in capitalist societies I mean what serious liberal political scientist would deny that in capitalist societies where there are huge inequalities of wealth those inequalities can make a big political difference Marx's view of bourgeois democracy was rather more interesting of course he knew that democracy in bourgeois society was compromised by class inequalities and of course he believed we had to go beyond where a democracy but he was also keenly aware that it at least since ancient democracy there had never been a society in which inequalities of wealth had less effect on political outcomes than they did in bourgeois democratic societies he understood perfectly well of course that those class inequalities have less effect on political outcomes in societies where workers enjoy certain civic rights and liberties such as the freedom of speech and Association which allow them their own forms their own organizations trade unions newspapers political movements and so on and he thought those rights and liberties were critical and he urged working-class movements to struggle for them tea and to use them to their maximum advantage in this by the way of course was Rosa Luxemburg view of bourgeois democracy – okay so according to you know Marxism bourgeois democracy has real value at the same time democracy never has had the effect feared by the propertied classes throughout the centuries it never did and still doesn't threaten the inequalities of property in fact inequalities have grown deeper and liberal democracy has remained consistent with the grossest inequalities of wealth and power despite enfranchised working-class majorities so here's the basic paradox of democratic capitalism democracy in capitalism is real and not simply an illusion subordinate classes have political rights of a kind they've never enjoyed before those rights do indeed mean something in the sphere in which they operate and disparities of wealth though they clearly have political consequences have less effect on political rights than in any other system and yet all this unprecedented political power leaves the relations of class domination and social inequality essentially intact the distinctive characteristic of capitalism as Marx pointed out is that exploitation does not require in capitalism does not require privileged access to what he called extra economic power the kind of powers that feudal lords had when they appropriated the labor of peasants or states had an enriched state office holders had in enriching themselves by means of Taxation the power of capital over labor doesn't depend on that privilege possession of extra can empower it depends on the property listeni subdirector do sirs and the imperative to sell their labour power for a wage just to gain access to the means of survival and self reproduction so I want to emphasize two essential things the first has to do with the relation between classes those who labor and those who appropriate the labor of others capitalism is unique because unlike any other system before it it the capitalist doesn't need direct coercive force to get access to the workers labor workers aren't legally dependent on capitalists there not slaves or serfs they're not in a conditions of debt bondage or peonage they're obliged to work for capital not because they're compelled by the capitalist superior force but because they need to sell their labor power for a wage just to gain access to the means of labour them set itself so this means that economic and political power have been separated in wholly new ways I don't mean that the capitalist market can exist without support from the state if anything capitalism needs intervention by the state in some ways more than any other system just to maintain social order and the conditions of accumulation but the economic power of capital is separate from political power in two senses the capitalists power over workers doesn't depend on privileged access to political or legal rights and possession of political and legal rights by workers doesn't free them from economic exploitation and that's what I mean when I say that capitalism is the only system of class exploitation in which the power of capital and the exploitation of labor can be insulated from democratic pressures the second major point is that the capitalist system is driven by certain inescapable imperatives certain compulsions the economic imperatives of competition profit maximization constant accumulation and the endless need to improve labour productivity these are real imperatives they're not just choices made by greedy capitalists their conditions for the survival of capital and what I want to say is that much of human life is driven by these imperatives they drive not just production in the allocation of labour and resources but many aspects of life outside the so-called economy so what I'm saying is that much of human life and an increasing range of social practices are governed by forms of power outside the political sphere and by market imperatives not by political agency all aspects of life that become market commodities are outside the reach of democratic accountability commodification commodification subjects social life to the abstract requires the requirements of the market it determines the allocation of labor leisure resources patterns of production consumption and the disposition of time itself and all these human practices answer not to the will of the people but to the demands of market of the market and profit so what I want to emphasize is the oddity of capitalism which is that the limits of capitalist democracy aren't so much determined by who actually possesses political rights the limits of capitalist democracy have to do not with how many people have political rights it has to do with the scope of political power what aspects of human life fall directly within its reach and what is placed outside the boundaries of politics the point I'm trying to emphasize is that political rights can be democratically distributed in capitalism but that the sphere of politics in which those rights can operate is circumscribed only in capitalism has it been possible to think about political rights as having little effect on the distribution of social and economic power it's become possible to imagine a distinct political sphere in which all citizens are equal it's become possible to conceive of political equality as abstracted from the inequalities of wealth and economic power outside the political domain in capitalism it's possible to have a conception of political progress and even the progress of democracy without any reference to social outcomes we can even insist on strengthening civil and political rights without any implications for the distribution of wealth and power among citizens and we can talk about the progress of democracy even while accepting gross increases in inequalities of wealth and of course the the corollary I mean in fact the condition of this separate political sphere is a distinct economic sphere human activities that might at one time been regulated by the state or the community are now regulated in the workplace and by market imperatives in fact it's only in capitalism that it's even possible to speak of an economy with its own distinctive laws of operation now this distinctive relation between political and economic spheres the abstraction of political rights from social inequalities and economic domination isn't just reflected in economic theory or in liberal political thought it's also acknowledged in different ways in workers struggles and this has been so for a very long time at least in places with a substantial class of capitalist wage laborers the battle for political rights was far from over in the nineteenth century but by the second half of the century industrial capitalism was advanced enough that capital had gained control of the workplace in the labor process and that effectively completed the established establishment of a more or less separate economic sphere with its own system of power and this changed the targets of working-class struggle and then you know the main issue for working the working class would increasingly be concentrated in the workplace in the confrontation between workers and employers over the terms and conditions of work now the Socialist Left has often tended to lament this development as a decline in working-class consciousness but let's be clear about this the transfer of struggle away from the political domain to the point of production isn't some kind of false consciousness it reflects a reality of capitalism and its distinctive configuration of power and this is something we really have to recognize in our political agenda still even if we recognize the reality underlying the shift from political to industrial struggles we also have to acknowledge the mystifications that capitalism encourages capitalism has made possible a view of the world in which economic forms of power and coercion aren't even recognized as power and coercion in liberal democracies we may be very good at thinking about limiting power in the in the political domain we may be keen to limit the excesses of state power or to safeguard Democratic liberties but we tend to think of Liberty and checks on power as strictly political problems which don't belong in the economy in fact in our conventional language a free economy is one in which economic imperatives are given free rein undisturbed by political interference now I would say that in liberal democracies much more of our lives is regulated and constrained by market imperatives than by state action and this this reality of capitalism this insulation of the economic sphere from democratic pressures also means that political change has no immediate consequences in the transformation of society it means that the translation of political power into economic and social gains is a more complicated business than it's ever been before you can have an enfranchised majority including an enfranchised working class that majority can elect governments and these governments may even be dedicated to govern in the interests of workers but there are far more barriers and mediations between political power and social gains than ever before much maybe even most of human life is now governed by the structures processes and principles of the capitalist economy so it's not enough to say that popular movements of one kind or another could take hold of the state apparatus by peaceful means a peaceful electoral means and could if they chose then bring about major social transformation controlling and transforming the economy with its own structure of power and compulsion requires a massive effort which goes beyond possession of the state well I just I was briefly going to talk about the kinds of non revolutionary politics which are possible even under all these constraints I won't go into that here but I did want to make one little footnote about it which occurred to me when I was writing about the the the kind of you know but social democratic politics which remains possible in a capitalist society up to a point what I wanted to say is that about the social spending is that I well I have no doubt that public spending is a more effective way of dealing with the current crisis than the crazy austerity policies which are now being followed or the privatized Keynesianism that preceded them but I'm not sure that we should think of social spending in the Keynesian manner as simply a form of counter cyclical demand management I mean I have no doubt that it's better than the available alternatives but I'm not sure the argument in favor of social spending should depend on its success in managing economic stability and preventing crisis as I keep saying crisis is endemic to capitalism and there's only so much we can do about it so my point is that even if there are limits to the benefits of social spending as a means of correcting economic instabilities there are reasons to support it as good in itself in a capitalist system that requires and always will require protective strategies against the worst in Justices and exploitation so what I wanted to say is that the mistake isn't to think that there is work that can be done under capitalism of course there's a lot to be done the mistake is to think that capitalism problems are caused by Democratic pressures interfering with the natural operations of the market the problems of capitalism are there even when Democratic pressures are weak they are there in fact even when the working class is making every conceivable concession the pressures of the market the competition among capitals will create instability and crisis whatever democratic forces do so there's no use constructing our strategies on the assumption that we can eliminate the system's tendency to crisis and there's no use starting from the premise that the problem is the tension between democratic pressures and the requirements of profit and that we have to somehow soften our democratic demands or reach some kind of social contract between democracy and profit so if we're going to talk about a contradiction between capitalism and democracy the contradiction we should think about is the limitations imposed by capitalism on democracy not you know strikes notion that somehow democracy creates crisis we should think about how capitalism confines democracy to a political sphere that leaves untouched the specific forms of power created by capitalism looked at this way the contradiction between capitalism and and democracy requires us to make as many democratic inroads as we can into the so-called economic sphere and that means aiming as much as possible to detach social life from market dependence that means striving for the decommodification of as many spheres of life as possible and their democratization this means removing removing them not just from the direct control of capital but also from the so-called impersonal control of market imperatives which support every subordinate every human need and practice to the requirements of accumulation and profit maximization it's one of the paradoxes of our time that everyday governments everywhere are deliberately putting more and more of our lives out of democratic reach to be ruled by market imperatives markets have intruded even into social services that have previously been protected from them as for instance the National Health Service in the United Kingdom has increasingly been subjected to the to market principles which I regard as a capital crime I would first buy new labour and now by the coalition government and of course the consequence of increasing commodification has been not only to narrow the scope of democratic governance but also to increase inequality and all the social ills that follow from it and what we're seeing in the current crisis is governments in the EU in particular doing their best to strengthen the power of markets what this means is that democratic power is being restricted even more than before not by depriving people of political rights but by narrowing the scope of political agency so when oppositional movements come out onto the streets or when people cast their votes against parties that support austerity programs as they've been recently doing or at least when they vote for parties of the left what they're doing isn't just opting for or against this or that policy but trying to widen the scope of democracy by recovering the power surrendered to the market so our freedoms in a capitalist democracy and let me emphasize this again are limited yes limited far more by the economic imperatives of the market than by the actions of the state and markets are subject to no democratic accountability so if democracy has to do with checks on arbitrary power it requires at the very least that our liberties be protected by checking the power of the economy just as we check the power of the state it would be a major democratic advance even if the principles of words about democracy it's it's liberal rights and freedoms were extended into the economic domain from which capitalism has excluded them it would be good for example if what are now called social and economic rights were treated as no less basic entitlements than civic and political rights in a liberal democracy but we should have known visions about the possibility of compelling the market to operate according to principles other than its natural imperatives however much we regulate it what it wherever the market prevails so will the compulsions of profit maximization so to extend rights and liberties into the economic sphere into the economic spaces from which they're excluded requires that the provision of certain basic goods and services is not dependent on the maximization of profit and in to extend democracy in other words requires decommodification but of course a truly democratic economy in which power really did belong to the people would by definition mean the end of capitalism [Applause]




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