Going round in circles
Gerry Gold says a pamphlet on the economic crisis by Chris Harman of the Socialist Workers Party is depressingly anti-theoretical and concludes with a reformist programme that assumes capitalism will always be with us.
Early in 2007 it emerged that holders of sub-prime mortgages in the United States had been missing payments. This was the form in which the worst-ever crisis for the capitalist system brought itself to the attention of the world, presenting an unprecedented opportunity for the system’s opponents.
But, as the recession turns to slump, with house repossessions mounting and global corporations throwing millions out of work as they cease production, the Socialist Workers Party finds itself in crisis, tearing itself apart as its members stream away, shattering the self-belief proclaimed on its website:
At the beginning of the 21st century humanity faces poverty, war and environmental destruction. In the SWP we believe we have to seize the opportunity to put an end to the barbarity of capitalism and fight to create a different kind of society. There has rarely been a better or a more necessary time to show that another world is possible.
This is the kind of mission statement that has attracted many thousands of young people to the SWP over the years. Some have stayed loyal; many have left disillusioned. Now the party faces the possibility of its own destruction. Why this should be so can be discovered in the 30-odd pages of a pamphlet which appeared in October 2008. Capitalism’s New Crisis, what do socialists say? was written by Chris Harman, one of the SWP’s key theoreticians and a leading member of the party.
For as long as it has existed, the SWP has attracted as many people as possible to the banner of political change through social revolution whilst ensuring that they are prevented from achieving it, by presenting it as something for the far-off future. In all that time the method they use has hardly changed. And this pamphlet is no different.
This is how they do it: Lacking predictive or analytical skills, the leaders’ sensory apparatus is tuned to detect events as they surface, and, if they see that sufficiently large numbers of people are being stirred to action, they turn the organisation towards the source of the stimulation, moving in to assume leadership. Time after time, newly radicalised groups of people have found their path blocked, as the more experienced politicos seize control. The sudden change in direction often causes a crisis within the SWP. This time it could be terminal.
With this pamphlet, the first of the clues to the SWP’s method is its timing – more than 18 months after the sub-prime crisis began to make its appearance, and long after the effects began to be felt in the UK and throughout the world in bank failures, repossessions, growing unemployment and – most significantly – the beginnings of a rapid shift in consciousness. Large numbers of people suddenly became receptive to the idea that things couldn’t go on as before.
Just 18 months earlier, in May 2007, in the SWP’s journal Socialist Review, Harman was arguing against Gordon Brown about the length of the uninterrupted period of growth, failing to notice that it had already ended. In June, a letter in reply from economists Rob Hoveman and Graham Turner warned of the dangerous explosion of credit growth and the beginnings of mortgage defaults. The warning went unheeded.
In July 2007 there was a long article from Harman about climate change, the result, he said of capitalist production, and likely to destabilise it, but with no hint of a crisis arising from within the economic system itself. In September’s edition, Harman was at last obliged to acknowledge the sudden seizing up of the credit markets in August which shook the world. How did he react? He wrote: “As we go to press the financial panic that made the headlines across the world in August seems to have subsided.”
How much more wrong could he be? The one-way connection between Harman‘s sensory apparatus and his accumulated, previous knowledge – the latter dogmatically imposed on the former – led him to characterise the event thus: “It was a rerun in slightly different conditions of the stock exchange panic of 1987 and the collapse of the hedge fund Long Term Capital Management in 1998.”
Nothing to worry about then.
Attributing this crisis like the previous ones to “financial chicanery”, “a reflection of more fundamental imbalances within the world system which could not be ignored for ever”, he remained impervious to the unprecedented scale of the rapidly deepening collapse, not imminent, but actually underway. True he was able to predict in general that things might not go on forever, but he once again dismissed the possibility to the unknowable distant future, declaring:
A point was bound to arise when such a balancing act could not work any more …The fear on 17 August was that this point had already been reached. The action of the US Fed the next day postponed the day of reckoning, but no one knows for how long.
In October 2007, Turner was back, increasingly worried, and looking for anyone that would listen. “Gordon Brown designed a monetary policy that helped to drive the very debt crisis that now threatens to send Britain into recession,” he wrote. Couldn’t be clearer. Harman? He wrote a TV review about Bruce Parry’s programme Tribe.
In November when, after months of research, A World to Win was publishing its timely and prophetic A House of Cards, from fantasy finance to global crash, Harman turned his attention back to the economy with a lecture and generalised, almost timeless warning about falling rates of profit. The sub-title said it all – “No one can predict whether the recent financial crises will develop into a proper recession.”
But the recession didn’t need predicting, it was already under way.
How did we put it? In the Introduction to A House of Cards, we talked of the “gathering recession in the US”. Later on we gave a stark warning:
In 1929 the stock market frenzy ended in the Wall Street Crash, ushering in the slump and depression of the 1930s. Capitalism could only restart its growth path after destroying surplus capacity on a scale previously unimaginable. That was achieved by the bombing raids and blitzkriegs of the Second World War. Today, the magnitude of debt swirling around the global economy means that the crisis is far deeper than 1929. Decades of intense globalisation have drawn every part of the world into a single interconnected whole. The multiple causes and consequences of the credit crunch do not just occur in one country and are transmitted around the world. They occur simultaneously in every continent.
In December, Harman was writing about the political row that had blown up over the SWP’s role in Respect, then breaking apart. Though he didn’t make the connection, this looks likely to be the political consequence for the SWP of failing to appreciate the deepening financial and economic crisis. What is certain is that though the SWP failed to notice a change in reality, that change most certainly had an impact on the SWP.
January 2008 found Harman launching a wholly unprincipled attack on Evo Morales and Hugo Chavez, who were wrestling with socialist responses to the impact of the global crisis on the people of Latin America.
And then, suddenly, in February it seemed that Harman had read the newspapers and discovered what everybody else already knew. The recession was under way. Economic crisis: Capitalism exposed ran the headline of his feature article which became the core of the October pamphlet, eight months later.
“One thing is absolutely clear,” thundered Harman in February, “the extreme optimism in the world economy which characterised most mainstream commentary just a year ago” (which as we have shown, he shared) “turned out to be completely wrong.” Unable to make an independent analysis, Harman shows himself to be entirely dependent on, and following behind the commentators in the capitalist press, what he calls “mainstream commentary”.
Suddenly, after months of ignoring it and dismissing it, Harman is now the expert:
The first signs that all was not well were about 18 months ago. US economic growth slowed, causing a sharp increase in the number of mortgage holders who could not afford the interest rates on which the whole business depended and there were a growing number of repossessions.
So it was two whole years from when Harman says - but didn’t notice - the slowdown began, to the publication of the October 2008 pamphlet.
You’d reasonably expect that in those long months and especially in the eight months since the first draft, Harman would find time to use his decades of accumulated knowledge, and apply – and even further develop – Marx’s scientific approach to an analysis of the huge amount of empirical data about the worsening financial and economic crisis that was publicly available from national governments, international agencies like the World Bank, IMF, and United Nations, as well as a host of other public and private think tanks, policy advisors and academics, before synthesising a key publication for the SWP’s existing and potential members and supporters.
Did he heck. It's not how he or the rest of the SWP works.
Instead we get a two-and-a-quarter page impressionistic introduction moralising against greed, delighting in the jobs being lost in the City of London, and uncritically adopting the “mainstream commentators’” assertions that capitalist governments taking emergency action to shore up the capitalist financial system constituted the “biggest refutation conceivable of the free market ‘neo-liberal’ language”.
The following four-and-a-half pages are supposedly about the cause of the crisis, drawing on press comment to reinforce Harman’s insistence that “there is one simple explanation for the cause of the crisis – the greed of those with money to get more money”. This is Harman’s very brief but hardly illuminating explanation for the spectacular 30 year expansion of the financial sector in general, and the much more recent sub-prime mortgage lending in particular.
And then, in 2006, says Harman, it all stopped. Just, apparently, because there was “a small increase in unemployment and a big increase in US interest rates”. No reason is given for these two somewhat ominous economic phenomena. There follows a brief account of events of the financial meltdown, culled from the daily papers, and dealt with much better by some of them.
And then another piece of Harman’s confused and confusing insight. “Finance is not something separate from the rest of capitalism,” he says, sagely. “It is driven by the same blind competition for profit.” The proof? The “boards of the big financial concerns include rich industrialists”. Aha! And “the board of the biggest investment bank, Goldman Sachs, includes directors of General Motors, Mobil Oil…”. The list goes on. Wow, so now we understand. Not. There’s more of this later in the pamphlet but it doesn’t help.
I’m doing Harman an injustice, some might say. What about the next four and three quarter pages of explanation entitled The crisis and capitalism? It’s just a stream-of-consciousness, thrown together, regurgitation of Harman’s abstracted, denatured version of Marx’s explanation of capitalist crisis, spiced up with fragments of Harman’s home-spun “wisdom”. It won’t do.
Marx studied capitalism in minute, empirical detail, as it was developing. His careful, painstaking presentation of the contradictory development of capitalist society, as Marx says in Capital, “reveals the special laws that regulate the origin, existence, development, death of a given social organism and its replacement by another and higher one”.
Harman, hardly without reference to any data, or specific events just asserts that “the history of industrial capitalism has been a history of booms and slumps”, simply explained, he says, by “the competition between capitalists to make profits”.
It’s this lack of a concrete, empirically-driven historical perspective – the exact opposite of Marx’s approach – that prevents Harman and the SWP from ever seeing a way beyond what exists, from ever bringing the seemingly endless struggle of worker against capitalist employer to an end.
It’s not just that the approach is inadequate, or confusing or even just plain wrong. It is, and has been misleading and dangerous for the many thousands of people who have been attracted into the SWP’s ranks over the years and have either left burnt out and disillusioned by unthinking activism, or who have stayed to damage the lives of the next generation.
Harman’s approach ignores the damage and destruction that results from capitalist crisis. According to Harman, even when the crash comes, “the means of producing the things people desperately need continue to exist just as much in the midst of an economic crisis as before”. In his account of the 20th century, he even mentions the war, albeit in passing. What he doesn’t do is to show how the crisis brought on by overproduction produced the destruction of large parts of the means of production, including millions of workers.
In Harman’s pamphlet the unprecedented destruction of capital and humans by the world war never happened. Why so? Because Harman has to justify ongoing militarisation to support and resurrect the long discredited theory of the “permanent arms economy”, a key component of the SWP’s history. This almost mystical extract from the 1967 article by Michael Kidron, the theory’s promoter, sheds more light on the way that the SWP sets out to eliminate difference and contradiction:
The potential revolutionary of tomorrow and the active reformist of today are increasingly indistinguishable, while the instabilities of the permanent arms economy ensure that revolution becomes simply a phase in the activities of all sincere reformists.
If revolutionary and reformist are indistinguishable, it is no wonder that Harman’s formulaic prescription for the solution to the crisis “to struggle to take control of the means of creating wealth into the hands of the mass of the people so that cooperation to produce the things we need replaces competition for profit” is pushed aside in favour of the SWP’s wholly reformist A People Before Profit Charter.
The charter’s series of demands, attached as the end-piece of the pamphlet, rather than acting as a pathway to bringing capitalism to its end, depends on its continuation – preserving the for-profit corporations so they can be taxed, and continuing with the employment contract for a struggle that has no end, that essentially repeats itself in a circular movement. This is a reactionary end to a depressingly anti-theoretical, anti-Marxist pamphlet. Reality is now powerfully intruding into the affairs of the SWP, however, and demonstrating that dogma combined with impressionistic thinking, especially of the left variety, is worse than useless at times like these.