Die Neue Zeit
21st June 2010, 00:42
Compensation and Capital Flight
"The difference between these demands and the muddleheaded reformist slogan of 'nationalization' lies in the following: (1) we reject indemnification; (2) we warn the masses against demagogues […] who, giving lip service to nationalization, remain in reality agents of capital; (3) we call upon the masses to rely only upon their own revolutionary strength; (4) we link up the question of expropriation with that of seizure of power by the workers […]" (Leon Trotsky)
As elaborated upon earlier, despite the broad economism inherent in that Trotskyist sacred cow known otherwise as The Transitional Program, there are a number of points in that “transitional” approach worth salvaging.
One of those points deals precisely with the question of indemnification. Given the extremely depressed period in which the Trotskyist sacred cow was committed to written form, only the most primitive dimension of the question of indemnification was considered, one not too dissimilar from either the very first accumulations by dispossession that jump-started bourgeois-fied commodity production (most notably land enclosures) or the combined agricultural kolkhozy proliferation, artificial depression of wages, and extensive GULAG labour that made so-called “socialist primitive accumulation.”
As noted by Karl Kautsky in The Social Revolution, however, there are other ways to effect non-compensatory expropriations:
Direct confiscation would complete this quickly, often at one stroke, while confiscation through taxation permits the disappearance of capitalist property through a long drawn out process proceeding in the exact degree in which the new order is established and its benevolent influence made perceptible […] Confiscation in this way loses its harshness, it becomes more acceptable and less painful. The more peaceably the conquest of the political power by the proletariat is attained and the more firmly organized and enlightened it is, the more we can expect that the primitive forms of confiscation will be softened.
In the 1970s, German-born Swedish economist Rudolf Meidner outlined a similarly protracted plan to increase the level of working-class savings and to translate it into social investment for sustaining real wage growth and at least the limited Keynesian definition of “full employment.” Companies with more than fifty employees would have been required to redistribute, on an annual basis, twenty percent of company profits as non-tradable shares to be held by wage-earner funds organized on a regional and not union-level basis. Naturally, the Swedish bourgeoisie mobilized well-funded opposition towards this decades-long plan to peacefully liquidate them as a class within decades.
In September 2008, the market-socialist David Schweickart outlined a more immediate, more direct, yet perfectly legal way to effect non-compensatory expropriations:
Let us imagine a quick transition from the deeply irrational, ultimately unsustainable economic system we presently inhabit to a democratic, socialist economy, one in which enterprises are run democratically, and economic stability no longer requires keeping our capitalists happy. Suppose we do get a financial meltdown on the scale of the Great Depression. And suppose we had a government newly elected, determined to effect this transition.
The first thing would be to assure everyone, a la Franklin Delano Roosevelt, that there's nothing to fear but fear itself. I mean, we are not talking about a meteor crashing into the earth, or an incurable plague, or a nuclear war. Pieces of paper have suddenly lost their value. Our resources are still intact. Our skill base is still intact. There's no reason for ordinary people to lose their jobs or see their incomes plummet-no material reason, that is.
What next? Well, since the stock market has tanked, let the government step in and buy up those now near-worthless shares of the publicly-traded non-financial corporations. (The price tag may well be less than Paulson's $700b. The government can print the money, if need be. In a depression it's essential to stimulate the economy by pumping money into it.) Suddenly our government has controlling interest in all the major corporations. (Notice, these assets are not "expropriated" by the government. They are paid for at full market value.)
The more primitive forms of non-compensatory expropriations should not be ruled out, however. The most obvious case comes in the form of confiscatory measures against capital flight, or to quote the Communist Manifesto, “confiscation of the property of all emigrants and rebels.”
REFERENCES
The Death Agony of Capitalism and the Tasks of the Fourth International by Leon Trotsky [http://www.marxists.org/archive/trotsky/1938/tp/index.htm]
The Social Revolution, Volume II: On the Day After the Social Revolution by Karl Kautsky [http://www.marxists.org/archive/kautsky/1902/socrev/pt2-1.htm] [http://www.marxists.org/archive/kautsky/1902/socrev/pt2-2.htm]
Beyond Pension Capital: The Swedish 'Wage-Earner' Funds by Joe Guinan [http://www.voiceoftheturtle.org/show_article.php?aid=330]
Rudolf Meidner, 1914-2005: A Visionary Pragmatist by Robin Blackburn [http://www.counterpunch.org/blackburn12222005.html]
Bailout!: A Case for Economic Democracy And Clearing the Path to Socialism by David Schweickart [http://www.zcommunications.org/bailout-a-case-for-economic-democracy-and-clearing-the-path-to-socialism-by-david-schweickart]
"The difference between these demands and the muddleheaded reformist slogan of 'nationalization' lies in the following: (1) we reject indemnification; (2) we warn the masses against demagogues […] who, giving lip service to nationalization, remain in reality agents of capital; (3) we call upon the masses to rely only upon their own revolutionary strength; (4) we link up the question of expropriation with that of seizure of power by the workers […]" (Leon Trotsky)
As elaborated upon earlier, despite the broad economism inherent in that Trotskyist sacred cow known otherwise as The Transitional Program, there are a number of points in that “transitional” approach worth salvaging.
One of those points deals precisely with the question of indemnification. Given the extremely depressed period in which the Trotskyist sacred cow was committed to written form, only the most primitive dimension of the question of indemnification was considered, one not too dissimilar from either the very first accumulations by dispossession that jump-started bourgeois-fied commodity production (most notably land enclosures) or the combined agricultural kolkhozy proliferation, artificial depression of wages, and extensive GULAG labour that made so-called “socialist primitive accumulation.”
As noted by Karl Kautsky in The Social Revolution, however, there are other ways to effect non-compensatory expropriations:
Direct confiscation would complete this quickly, often at one stroke, while confiscation through taxation permits the disappearance of capitalist property through a long drawn out process proceeding in the exact degree in which the new order is established and its benevolent influence made perceptible […] Confiscation in this way loses its harshness, it becomes more acceptable and less painful. The more peaceably the conquest of the political power by the proletariat is attained and the more firmly organized and enlightened it is, the more we can expect that the primitive forms of confiscation will be softened.
In the 1970s, German-born Swedish economist Rudolf Meidner outlined a similarly protracted plan to increase the level of working-class savings and to translate it into social investment for sustaining real wage growth and at least the limited Keynesian definition of “full employment.” Companies with more than fifty employees would have been required to redistribute, on an annual basis, twenty percent of company profits as non-tradable shares to be held by wage-earner funds organized on a regional and not union-level basis. Naturally, the Swedish bourgeoisie mobilized well-funded opposition towards this decades-long plan to peacefully liquidate them as a class within decades.
In September 2008, the market-socialist David Schweickart outlined a more immediate, more direct, yet perfectly legal way to effect non-compensatory expropriations:
Let us imagine a quick transition from the deeply irrational, ultimately unsustainable economic system we presently inhabit to a democratic, socialist economy, one in which enterprises are run democratically, and economic stability no longer requires keeping our capitalists happy. Suppose we do get a financial meltdown on the scale of the Great Depression. And suppose we had a government newly elected, determined to effect this transition.
The first thing would be to assure everyone, a la Franklin Delano Roosevelt, that there's nothing to fear but fear itself. I mean, we are not talking about a meteor crashing into the earth, or an incurable plague, or a nuclear war. Pieces of paper have suddenly lost their value. Our resources are still intact. Our skill base is still intact. There's no reason for ordinary people to lose their jobs or see their incomes plummet-no material reason, that is.
What next? Well, since the stock market has tanked, let the government step in and buy up those now near-worthless shares of the publicly-traded non-financial corporations. (The price tag may well be less than Paulson's $700b. The government can print the money, if need be. In a depression it's essential to stimulate the economy by pumping money into it.) Suddenly our government has controlling interest in all the major corporations. (Notice, these assets are not "expropriated" by the government. They are paid for at full market value.)
The more primitive forms of non-compensatory expropriations should not be ruled out, however. The most obvious case comes in the form of confiscatory measures against capital flight, or to quote the Communist Manifesto, “confiscation of the property of all emigrants and rebels.”
REFERENCES
The Death Agony of Capitalism and the Tasks of the Fourth International by Leon Trotsky [http://www.marxists.org/archive/trotsky/1938/tp/index.htm]
The Social Revolution, Volume II: On the Day After the Social Revolution by Karl Kautsky [http://www.marxists.org/archive/kautsky/1902/socrev/pt2-1.htm] [http://www.marxists.org/archive/kautsky/1902/socrev/pt2-2.htm]
Beyond Pension Capital: The Swedish 'Wage-Earner' Funds by Joe Guinan [http://www.voiceoftheturtle.org/show_article.php?aid=330]
Rudolf Meidner, 1914-2005: A Visionary Pragmatist by Robin Blackburn [http://www.counterpunch.org/blackburn12222005.html]
Bailout!: A Case for Economic Democracy And Clearing the Path to Socialism by David Schweickart [http://www.zcommunications.org/bailout-a-case-for-economic-democracy-and-clearing-the-path-to-socialism-by-david-schweickart]