Die Neue Zeit
27th October 2009, 04:40
[This is not intended to be some sort of sick parody to Paul Cockshott's excellent article "Democracy or oligarchy?" (as posted by Q). Recent discussions in the Learning forum have compelled me to post this.]
The slogan "For a democratic and social republic" goes all the way back to 19th-century worker-class movements. However, let us look at the etymology of the words "democratic" and "republic," first starting with "democratic":
http://www.revleft.com/vb/class-strugglist-democracy-t112457/index.html
The Greek word demokratia is a much more emphatic word than “democracy” in two very personal ways. First, I considered substituting the word “democracy” in the title of this chapter section and in other areas of this work with this Greek word. Second, upon reading the word demokratia for the very first time, I initially regretted not having used it at all, much less commented on it, in my earlier work. Does the word demokratia, unlike “democracy” and its politically correct connotations, actually present its own separate challenge to overcoming the crisis of theory regarding strategy and tactics (thereby meriting a separate chapter in that work)? In 2005, however, the British left-wing reformist Tony Benn noted that demokratia meant merely “people power” (implying the possibility of elites leaning upon it at times) and not “rule by the people” – demarchy. Regardless of the answer to this question, I decided against using that word and especially the –kratia suffix, given the sufficiency of the term “class-strugglist democracy.”
On the other hand, the word "republic" comes from the Latin res publica, or "public thing." This was once associated with the Roman Republic. Nowadays, it is associated with bourgeois-constitutionalist states without hereditary kingships.
Long forgotten, however, is the association of the "public thing" with the radical (albeit left-bourgeois) republicanism of Jean-Jacques Rousseau and of the American Radical Republicans who were to the left of Abraham Lincoln himself.
What exactly were the history and details of this radical republicanism?
http://www.revleft.com/vb/classical-economic-rent-t103272/index.html
In light of the recent economic crisis, Professor Michael Hudson, a former Wall Street economist, invoked classical political economy to elaborate upon the aforementioned historical development. Contrary to popular myth, even Adam Smith, best known for conceptualizing “free markets,” meant for it to mean something completely different from the definition used by the modern bourgeoisie. “Free markets,” according to classical political economy, were to be free primarily from economic rent derived from special privilege – the economic core of feudalism – thereby ensuring that income and wealth would be obtained only through personal labour (the role of workers) and through personal enterprise (the role of “industrial” capitalists and petty proprietors). Taxation, therefore, would be based primarily on the collection of this economic rent – most obviously ground rent, but more importantly monopoly rent and interest – and its application towards public purposes.
The political debate at that time was between the position of reducing governments as a means to minimize the collection of economic rent for non-public purposes (as opposed to the vulgarized sloganeering of “small government” that is heard today) and the position of increasing the role of governments as a means to achieve the exact same purpose. In his article on Orwellian doublethink being applied to the government bailouts, Hudson wrote:
All this history of economic thought has been as thoroughly expunged from today’s academic curriculum as it has from popular discussion. Few people remember the great debate at the turn of the 20th century: Would the world progress fairly quickly from Progressive Era reforms to outright socialism – public ownership of basic economic infrastructure, natural monopolies (including the banking system) and the land itself (and to Marxists, of industrial capital as well)? Or, could the liberal reformers of the day – individualists, land taxers, classical economists in the tradition of Mill, and American institutionalists such as Simon Patten – retain capitalism’s basic structure and private property ownership? If they could do so, they recognized that it would have to be in the context of regulating markets and introducing progressive taxation of wealth and income. This was the alternative to outright "state" ownership. Today’s extreme "free market" idea is a dumbed-down caricature of this position.
[…]
As public relations advocates for the vested interests and special rentier privilege, today’s "neoliberal" advocates of "free" markets seek to maximize economic rent – the free lunch of price in excess of cost-value, not to free markets from rentier charges. So misleading a pedigree only could be achieved by outright suppression of knowledge of what Locke, Smith and Mill really wrote. Attempts to regulate "free markets" and limit monopoly pricing and privilege are conflated with "socialism," even with Soviet-style bureaucracy. The aim is to deter the analysis of what a "free market" really is: a market free of unnecessary costs: monopoly rents, property rents and financial charges for credit that governments can create freely.
[…]
Reformists and more radical socialists alike sought to free capitalism of its egregious inequities, above all its legacy from Europe’s Dark Age of military conquest when invading warlords seized lands and imposed an absentee landlord class to receive the rental income, which was used to finance wars of further land acquisition. As matters turned out, hopes that industrial capitalism could reform itself along progressive lines to purge itself of its legacy from feudalism have come crashing down. World War I hit the global economy like a comet, pushing it into a new trajectory and catalyzing its evolution into an unanticipated form of finance capitalism.
It was unanticipated largely because most reformers spent so much effort advocating progressive policies that they neglected what Thorstein Veblen called the vested interests. Their Counter-Enlightenment is creating a world that would have been deemed a dystopia a century ago – something so pessimistic that no futurist dared depict a world run by venal and corrupt bankers, protecting as their prime customers the monopolies, real estate speculators and hedge funds whose economic rent, financial gambling and asset-price inflation is turned into a flow of interest in today’s rentier economy. Instead of industrial capitalism increasing capital formation we are seeing finance capitalism strip capital, and instead of the promised world of leisure we are being drawn into one of debt peonage.
[…]
Shifting the tax burden off wages and profits onto rent and interest was the core of classical political economy in the 18th and 19th centuries, as well as the Progressive Era and Social Democratic reform movements in the United States and Europe prior to World War I. But this doctrine and its reform program has been buried by the rhetorical smokescreen organized by financial lobbyists seeking to muddy the ideological waters sufficiently to mute popular opposition to today’s power grab by finance capital and monopoly capital. Their alternative to true nationalization and socialization of finance is debt peonage, oligarchy and neo-feudalism. They have called this program "free markets."
Particular attention should be paid towards his mention of “Social Democratic reform movements,” which before the war demanded the “socialism” defined by Hudson above. Shortly after that inter-imperialist war, the political spectrum of political economy, including the position of “social democracy” itself, shifted from the classical center to the price economics of the so-called “neo-classical” (marginalist) right-wing, with Austrian pseudo-economics at the far-right. This shift demonstrated irrefutably the inconsistency of the classical liberal position of socializing economic rent while retaining private ownership over properties that generate economic rent. Meanwhile, the spectre of fascism, mistakenly called “corporatism” by the Italian Fascist tyrant Benito Mussolini (mistaken only in the sense that fascism is actually a subset of corporatism), rose to haunt Europe. While Trotsky emphasized the small-business owners, the artisans, and the lumpenproletariat as being the social base of fascism, he erroneously downplayed the role of the classical economic rentiers – a mistake not made by the very “Stalinized” Comintern that he criticized for its programmatic observation of “social fascism”:
The merging of industrial capital with bank capital, the absorption of big land ownership into the general system of capital organisation, and the monopolist character of this form of capitalism transferred the epoch of industrial capital into the epoch of finance capital. “Free competition” of the period of industrial capitalism, which replaced feudal monopoly and the monopoly of merchant capital, became itself transformed into finance capital monopoly. At the same time, although capitalist monopolist organisations grow out of free competition, they do not eliminate competition, hut exist side by side with it and hover over it, thus giving rise to a series of exceptionally great and acute contradictions, frictions and conflicts.
[...]
In squeezing enormous sums of surplus profit out of the millions of colonial workers and peasants and in accumulating colossal incomes from this exploitation, imperialism is creating a type of decaying and parasitically degenerate rentier-class, as well as whole strata of parasites who live by clipping coupons.
[...]
Side by side with social democracy, with whose aid the bourgeoisie suppresses the workers or lulls their class vigilance, stands Fascism.
[...]
The combination of social democracy, corruption and active white terror, in conjunction with extreme imperialist aggression in the sphere of foreign politics, are the characteristic features of Fascism. In periods of acute crisis for the bourgeoisie, Fascism resorts to anti-capitalist phraseology, but, after it has established itself at the helm of State, it casts aside its anti-capitalist prattle and discloses itself as a terrorist dictatorship of big capital. The bourgeoisie resorts either to the method of Fascism or to the method of coalition with social democracy according to the changes in the political situation; while social democracy itself, often plays a Fascist role in periods when the situation is critical for capitalism.
Social corporatism, indeed! Nowadays, the only material difference between rent-based “social democracy” and its other corporatist twins is its dedication to capture a small slice of the private economic rent for various “social justice” issues that tend to be diversionary from class interests or, in older socialist language, “sops.” On the other hand, in Finance Capitalism Hits a Wall, Hudson praised “Stalinist Russia and Maoist China” for purging rentier income in developing their respective economies, and wrote:
But the question must now be raised as to whether only socialism can complete the historical task that classical political economy set out for itself – the ideal that futurists in the 19th and 20th centuries believed that an unpurified capitalism might still be able bring about without shedding its legacy of commercial banking indebting property and carving infrastructure out of the public domain.
Precisely because the aforementioned conception of "socialism" has non-Marxist origins, it is appropriate to deem it as being economic republicanism. To sum up some of the features of this particular order that was abandoned along with the radical-left elements of the bourgeoisie (most prevalent in the French revolution):
http://www.revleft.com/vb/all-nothing-mentality-t120362/index.html?p=1579412
1) “Public ownership of basic economic infrastructure, natural monopolies (including the banking system) and the land itself” (Marxist-turned-Left-Georgist Michael Hudson: http://www.globalresearch.ca/index.php?context=va&aid=12418) – I would also add Hudson’s musings on the broadcast spectrum: http://www.counterpunch.org/schaefer02142004.html (his sympathies towards his limited definition of “socialism” are more radical than either Henry George on land or Hyman Minsky on banks, and his sympathies towards the working class are greater than the elitism of John Maynard Keynes himself).
2) Economic rent should be taxed at optimal levels (land value taxation even if the land is publicly owned, for example).
3) The country’s entire tax burden is on the shoulders of rentiers (landlords, financial speculators, etc.), “industrialists” (Hudson’s description of entrepreneurial capitalists), and perhaps unproductive labour (many self-employed who cheat on their tax returns), as well. This means that productive labour has no tax burden, whether directly (payroll taxes, lotteries, etc.) or indirectly (consumer goods and services, including flat monthly premiums charged by Western governments for public health insurance). Contemporarily speaking, calls for a Tobin tax on financial speculation are cheap compared to Keynes's “substantial Government transfer tax on all transactions.”
4) A more prominent role for co-ops in the capitalist economy, which can only come by means of public assistance (Lassalle).
5) Typical welfare state benefits and perhaps more, both economically and politically (living wages, shorter workweeks, “right to the city” stuff).
Also prioritized above the welfare state are "public, anti-inheritance appropriations of not some but all the relevant productive or other non-possessive properties (that would otherwise be immediately inherited through legal will or through gifting and other loopholes) towards exclusively public purposes" and "confiscatory, despotic measures against all capital flight of wealth, whether such wealth belongs to economic rebels on the domestic front or to foreign profiteers." Together, these coincide more or less with the first six allegedly "transitional" measures in the Communist Manifesto.
Compared to the cheap welfarism of even the most interventionist of post-WWII combinations of "social" plus mere "people power" - that is, social democracy - this economic res publica, or economic republicanism, should be part of any class-strugglist minimum program.
The slogan "For a democratic and social republic" goes all the way back to 19th-century worker-class movements. However, let us look at the etymology of the words "democratic" and "republic," first starting with "democratic":
http://www.revleft.com/vb/class-strugglist-democracy-t112457/index.html
The Greek word demokratia is a much more emphatic word than “democracy” in two very personal ways. First, I considered substituting the word “democracy” in the title of this chapter section and in other areas of this work with this Greek word. Second, upon reading the word demokratia for the very first time, I initially regretted not having used it at all, much less commented on it, in my earlier work. Does the word demokratia, unlike “democracy” and its politically correct connotations, actually present its own separate challenge to overcoming the crisis of theory regarding strategy and tactics (thereby meriting a separate chapter in that work)? In 2005, however, the British left-wing reformist Tony Benn noted that demokratia meant merely “people power” (implying the possibility of elites leaning upon it at times) and not “rule by the people” – demarchy. Regardless of the answer to this question, I decided against using that word and especially the –kratia suffix, given the sufficiency of the term “class-strugglist democracy.”
On the other hand, the word "republic" comes from the Latin res publica, or "public thing." This was once associated with the Roman Republic. Nowadays, it is associated with bourgeois-constitutionalist states without hereditary kingships.
Long forgotten, however, is the association of the "public thing" with the radical (albeit left-bourgeois) republicanism of Jean-Jacques Rousseau and of the American Radical Republicans who were to the left of Abraham Lincoln himself.
What exactly were the history and details of this radical republicanism?
http://www.revleft.com/vb/classical-economic-rent-t103272/index.html
In light of the recent economic crisis, Professor Michael Hudson, a former Wall Street economist, invoked classical political economy to elaborate upon the aforementioned historical development. Contrary to popular myth, even Adam Smith, best known for conceptualizing “free markets,” meant for it to mean something completely different from the definition used by the modern bourgeoisie. “Free markets,” according to classical political economy, were to be free primarily from economic rent derived from special privilege – the economic core of feudalism – thereby ensuring that income and wealth would be obtained only through personal labour (the role of workers) and through personal enterprise (the role of “industrial” capitalists and petty proprietors). Taxation, therefore, would be based primarily on the collection of this economic rent – most obviously ground rent, but more importantly monopoly rent and interest – and its application towards public purposes.
The political debate at that time was between the position of reducing governments as a means to minimize the collection of economic rent for non-public purposes (as opposed to the vulgarized sloganeering of “small government” that is heard today) and the position of increasing the role of governments as a means to achieve the exact same purpose. In his article on Orwellian doublethink being applied to the government bailouts, Hudson wrote:
All this history of economic thought has been as thoroughly expunged from today’s academic curriculum as it has from popular discussion. Few people remember the great debate at the turn of the 20th century: Would the world progress fairly quickly from Progressive Era reforms to outright socialism – public ownership of basic economic infrastructure, natural monopolies (including the banking system) and the land itself (and to Marxists, of industrial capital as well)? Or, could the liberal reformers of the day – individualists, land taxers, classical economists in the tradition of Mill, and American institutionalists such as Simon Patten – retain capitalism’s basic structure and private property ownership? If they could do so, they recognized that it would have to be in the context of regulating markets and introducing progressive taxation of wealth and income. This was the alternative to outright "state" ownership. Today’s extreme "free market" idea is a dumbed-down caricature of this position.
[…]
As public relations advocates for the vested interests and special rentier privilege, today’s "neoliberal" advocates of "free" markets seek to maximize economic rent – the free lunch of price in excess of cost-value, not to free markets from rentier charges. So misleading a pedigree only could be achieved by outright suppression of knowledge of what Locke, Smith and Mill really wrote. Attempts to regulate "free markets" and limit monopoly pricing and privilege are conflated with "socialism," even with Soviet-style bureaucracy. The aim is to deter the analysis of what a "free market" really is: a market free of unnecessary costs: monopoly rents, property rents and financial charges for credit that governments can create freely.
[…]
Reformists and more radical socialists alike sought to free capitalism of its egregious inequities, above all its legacy from Europe’s Dark Age of military conquest when invading warlords seized lands and imposed an absentee landlord class to receive the rental income, which was used to finance wars of further land acquisition. As matters turned out, hopes that industrial capitalism could reform itself along progressive lines to purge itself of its legacy from feudalism have come crashing down. World War I hit the global economy like a comet, pushing it into a new trajectory and catalyzing its evolution into an unanticipated form of finance capitalism.
It was unanticipated largely because most reformers spent so much effort advocating progressive policies that they neglected what Thorstein Veblen called the vested interests. Their Counter-Enlightenment is creating a world that would have been deemed a dystopia a century ago – something so pessimistic that no futurist dared depict a world run by venal and corrupt bankers, protecting as their prime customers the monopolies, real estate speculators and hedge funds whose economic rent, financial gambling and asset-price inflation is turned into a flow of interest in today’s rentier economy. Instead of industrial capitalism increasing capital formation we are seeing finance capitalism strip capital, and instead of the promised world of leisure we are being drawn into one of debt peonage.
[…]
Shifting the tax burden off wages and profits onto rent and interest was the core of classical political economy in the 18th and 19th centuries, as well as the Progressive Era and Social Democratic reform movements in the United States and Europe prior to World War I. But this doctrine and its reform program has been buried by the rhetorical smokescreen organized by financial lobbyists seeking to muddy the ideological waters sufficiently to mute popular opposition to today’s power grab by finance capital and monopoly capital. Their alternative to true nationalization and socialization of finance is debt peonage, oligarchy and neo-feudalism. They have called this program "free markets."
Particular attention should be paid towards his mention of “Social Democratic reform movements,” which before the war demanded the “socialism” defined by Hudson above. Shortly after that inter-imperialist war, the political spectrum of political economy, including the position of “social democracy” itself, shifted from the classical center to the price economics of the so-called “neo-classical” (marginalist) right-wing, with Austrian pseudo-economics at the far-right. This shift demonstrated irrefutably the inconsistency of the classical liberal position of socializing economic rent while retaining private ownership over properties that generate economic rent. Meanwhile, the spectre of fascism, mistakenly called “corporatism” by the Italian Fascist tyrant Benito Mussolini (mistaken only in the sense that fascism is actually a subset of corporatism), rose to haunt Europe. While Trotsky emphasized the small-business owners, the artisans, and the lumpenproletariat as being the social base of fascism, he erroneously downplayed the role of the classical economic rentiers – a mistake not made by the very “Stalinized” Comintern that he criticized for its programmatic observation of “social fascism”:
The merging of industrial capital with bank capital, the absorption of big land ownership into the general system of capital organisation, and the monopolist character of this form of capitalism transferred the epoch of industrial capital into the epoch of finance capital. “Free competition” of the period of industrial capitalism, which replaced feudal monopoly and the monopoly of merchant capital, became itself transformed into finance capital monopoly. At the same time, although capitalist monopolist organisations grow out of free competition, they do not eliminate competition, hut exist side by side with it and hover over it, thus giving rise to a series of exceptionally great and acute contradictions, frictions and conflicts.
[...]
In squeezing enormous sums of surplus profit out of the millions of colonial workers and peasants and in accumulating colossal incomes from this exploitation, imperialism is creating a type of decaying and parasitically degenerate rentier-class, as well as whole strata of parasites who live by clipping coupons.
[...]
Side by side with social democracy, with whose aid the bourgeoisie suppresses the workers or lulls their class vigilance, stands Fascism.
[...]
The combination of social democracy, corruption and active white terror, in conjunction with extreme imperialist aggression in the sphere of foreign politics, are the characteristic features of Fascism. In periods of acute crisis for the bourgeoisie, Fascism resorts to anti-capitalist phraseology, but, after it has established itself at the helm of State, it casts aside its anti-capitalist prattle and discloses itself as a terrorist dictatorship of big capital. The bourgeoisie resorts either to the method of Fascism or to the method of coalition with social democracy according to the changes in the political situation; while social democracy itself, often plays a Fascist role in periods when the situation is critical for capitalism.
Social corporatism, indeed! Nowadays, the only material difference between rent-based “social democracy” and its other corporatist twins is its dedication to capture a small slice of the private economic rent for various “social justice” issues that tend to be diversionary from class interests or, in older socialist language, “sops.” On the other hand, in Finance Capitalism Hits a Wall, Hudson praised “Stalinist Russia and Maoist China” for purging rentier income in developing their respective economies, and wrote:
But the question must now be raised as to whether only socialism can complete the historical task that classical political economy set out for itself – the ideal that futurists in the 19th and 20th centuries believed that an unpurified capitalism might still be able bring about without shedding its legacy of commercial banking indebting property and carving infrastructure out of the public domain.
Precisely because the aforementioned conception of "socialism" has non-Marxist origins, it is appropriate to deem it as being economic republicanism. To sum up some of the features of this particular order that was abandoned along with the radical-left elements of the bourgeoisie (most prevalent in the French revolution):
http://www.revleft.com/vb/all-nothing-mentality-t120362/index.html?p=1579412
1) “Public ownership of basic economic infrastructure, natural monopolies (including the banking system) and the land itself” (Marxist-turned-Left-Georgist Michael Hudson: http://www.globalresearch.ca/index.php?context=va&aid=12418) – I would also add Hudson’s musings on the broadcast spectrum: http://www.counterpunch.org/schaefer02142004.html (his sympathies towards his limited definition of “socialism” are more radical than either Henry George on land or Hyman Minsky on banks, and his sympathies towards the working class are greater than the elitism of John Maynard Keynes himself).
2) Economic rent should be taxed at optimal levels (land value taxation even if the land is publicly owned, for example).
3) The country’s entire tax burden is on the shoulders of rentiers (landlords, financial speculators, etc.), “industrialists” (Hudson’s description of entrepreneurial capitalists), and perhaps unproductive labour (many self-employed who cheat on their tax returns), as well. This means that productive labour has no tax burden, whether directly (payroll taxes, lotteries, etc.) or indirectly (consumer goods and services, including flat monthly premiums charged by Western governments for public health insurance). Contemporarily speaking, calls for a Tobin tax on financial speculation are cheap compared to Keynes's “substantial Government transfer tax on all transactions.”
4) A more prominent role for co-ops in the capitalist economy, which can only come by means of public assistance (Lassalle).
5) Typical welfare state benefits and perhaps more, both economically and politically (living wages, shorter workweeks, “right to the city” stuff).
Also prioritized above the welfare state are "public, anti-inheritance appropriations of not some but all the relevant productive or other non-possessive properties (that would otherwise be immediately inherited through legal will or through gifting and other loopholes) towards exclusively public purposes" and "confiscatory, despotic measures against all capital flight of wealth, whether such wealth belongs to economic rebels on the domestic front or to foreign profiteers." Together, these coincide more or less with the first six allegedly "transitional" measures in the Communist Manifesto.
Compared to the cheap welfarism of even the most interventionist of post-WWII combinations of "social" plus mere "people power" - that is, social democracy - this economic res publica, or economic republicanism, should be part of any class-strugglist minimum program.